E-Governance E-Commerce to Be Promoted by Riyadh

RIYADH – The Kingdom together with the other five Gulf states will have only a 0.1 percent share of the $7 trillion global e- business in 2005. This is true despite many initiatives currently in place to redress the situation and to boost Gulf countries’ participation in global online business, according to Dr. Fawaz Alamy, Saudi Arabia’s deputy minister for technical affairs and chairman of E-Commerce National Taskforce.

“In fact, Gulf states lag behind in putting together a workable IT road map, which can help to establish e-governing system and e- commerce infrastructure,” said Dr. Alamy. His quote is taken from a study giving an overview of the growth of IT and e-commerce in the Kingdom and the Gulf states.

The deputy minister said, “The spending on IT in Saudi Arabia and the UAE represents only three percent of their GDP while for other Gulf states it is only one percent.”

The Kingdom, however, has reported substantial progress in terms of its policies and plans to promote -governance and e- commerce concepts. Riyadh has already set up a national Electronic Commerce Standing Technical Committee (ECSTC).

The committee seeks suggestions from an advisory panel composed of a number of private sector representatives. The two groups have been discussing how to enhance support for the adoption of practical e-commerce applications.

The ECSTC, which seeks to develop e- commerce in Saudi Arabia, is composed of officials from various ministries including Saudi Arabian Monetary Agency as well as King Abdul Aziz City for Science and Technology (KACST). The Ministry of Commerce & Industry in addition to the Ministry of Finance have also prepared and distributed two introductory booklets on e- commerce and e-government. The booklets provide substantial information about future plans and policies of the ministries in this regard.

Referring to the efforts of Saudi and Gulf governments to promote e-commerce and the IT industry, while at the same time adopting -governing systems in almost all sectors of the economy, Dr. Alamy said, “The overall IT spending in the GCC totals $3 to $4 billion.”

More efforts are required on this front besides more capital. “Saudi Arabia remains a net importer of IT products with its imports reported to be worth $3.2 billion, while local production totaled $600 million at the end of 2002,” said the deputy minister. “The GCC, states have to control, and reduce the digital divide and have an e-landscape in place,” said Dr. Alamy who also said, “Knowledge-based industries should be created and there should be a lab in every school, which can transform the e-dreams into reality. It was three years ago that Saudi Arabia decided to introduce an -policy and it can now boast that it is one of the 51 countries in the world today to have introduced cyber laws,” he said. It is also near the top in terms of the increase in the number of Internet users.

The Internet penetration rate in Saudi Arabia remains low with the UAE comfort- ably leading the region. The Kingdom has reported a penetration rate of eight percent. Moreover, the growth of the IT sector and the widespread use of Internet in Saudi Arabia has accelerated the demand for application software, which is the key high-growth segment reporting $800 million in annual sales. In fact, the Saudi market for computers, peripherals, software and IT consultancy is among the largest in the Middle East.

US Vows to Ensure Kingdom’s Sentiments Will Be Respected on WTO Accession     1-8-2003

RIYADH – In a boost to the negotiations for Saudi accession to the World Trade Organization, the United States has renewed its pledge to work with the Kingdom and the WTO to ensure that Riyadh’s religious and cultural requirements are respected by the WTO provisions and by its trading partners, particularly with regard to the treatment of goods such as pork and alcohol which are banned here.

“The US will ensure that the WTO does not force any country to import or open its market for goods that are prohibited or banned on moral or religious grounds,” said a report entitled “Saudi Arabia Economic Trends 2002”, prepared and released by the American Embassy here.

The Kingdom has a list of restricted and banned items, which also include night binoculars, pictures that contradict the Shariah, frog meat, dogs, fats of certain animals and intoxicants besides alcohol.

Some of the banned products like alcohol and isotopes can be imported on certain conditions.

These products can be ordered from overseas when the Saudi Health Ministry certifies that they are specifically for medical purposes.

The US Embassy report also gives an overview of the economic situation with special reference to Saudi-US commercial relations and the WTO accession, which is a fundamental component of any long-term Saudi economic reform program.

The report said the Supreme Economic Council established on the initiative of Crown Prince Abdullah, deputy premier and commander of the National Guard, also seeks to reinvigorate the WTO accession process and the economic reform program.

“Though much work remains before the accession negotiations can be concluded. the US feels Saudi accession to the WTO will bring a wide range of benefits to the Kingdom and to the global economy as a whole.”

“Continued progress in domestic reforms that encourage transparency and the rule of law will boost Saudi Arabia’s position in its WTO accession discussions, it said. It said the accession will also require Saudi Arabia to remove protectionist barriers, place a ceiling on tariffs, open further key service sectors for foreign participation and improve intellectual property rights protection. These changes will lead to an open, transparent and rule-based trade regime with greater capital flow from foreign and domestic investors.

Moreover, the WTO membership will entitle Saudi Arabia, on a permanent contractual basis, to all the benefits that have been exchanged among GATT and WTO members during the last 50 years. “Foremost among these is protection against the arbitrary exclusion of exports from Saudi Arabia to other WTO member nations,” said the report adding that as long as Riyadh remains outside the WTO, its economic reform and diversification efforts will be severely handicapped.”

The report said that the annual population growth rate remained above three percent, with nearly 40 percent of the population born after the 1991 Gulf War. About 70 percent of the population are below the age of 30, indicating the growth of a “youth bulge” seeking employment in a country where nationalization or Saudization of its workforce and attempts by the public and private sector to cut dependence on foreign workers have faced many problems.

The report also points out certain short- comings. “The Kingdom must take steps to ensure that there is a transparent and comprehensive legal framework in place for resolving commercial disputes. Foreign investors want convenient access to multiple entry-exit visas without a Saudi sponsor, access to a skilled and motivated workforce and protection of intellectual property that meets international standards,” it said.

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