Half the Gold Shops ‘Expat-Owned’

JEDDAH, 24 February 2004 — The recent full Saudization of the gold market has exposed the fact that nearly half the gold shops in Riyadh, Jeddah and elsewhere are illegally owned by expatriates. They got around the law by operating under the nominal sponsorship of Saudis.

“More than 60 percent of jewelry shops in Jeddah are owned by expatriates,” Al-Watan Arabic daily reported yesterday quoting a high-level source. “These expatriates employed their relatives in their shops, and naturally they do not want to implement the Saudization law,” the source said.

Saudi authorities have been inspecting gold markets in various parts of the country to make sure they are run by Saudis. The new Saudization drive came into effect on Saturday as part of the government’s efforts to create at least 25,000 jobs for young Saudis.

According to another report carried by Al-Madinah Arabic daily about 40 percent of jewelry shops in Riyadh belonged to expatriates. The paper pointed out that many shops in the capital remained closed when the law came into force.

Jameel Farsi, chairman of the Gold and Jewelry Committee at the Jeddah Chamber of Commerce and Industry, emphasized the need to combat “the dangerous phenomenon” of Saudis covering up illegal gold businesses owned by expatriates.

Some 10 percent of shops in Thumairy market in Deera, 80 percent of shops in Manfouha, 50 percent in Naseem, 30 percent in Taiba market and 60 percent in Bathaa markets were closed on Sunday, Al-Madinah said.

The shops were shut after authorities warned that violators of the law would be fined twice; after the third violation shops will be closed and the foreign workers deported.

Saudi Arabia’s gold market is estimated at SR15 billion, one of the largest in the Middle East. There are some 6,000 retail jewelry shops with Jeddah having the largest single one with nearly 1,300 shops or 21.7 percent of the total.

According to economist Ihsan Bu Hulaiga, the jewelry sector “was already an almost 100 percent” Saudi affair in the Eastern Province, where a tradition of passing the trade from one generation to another had been kept alive.