JEDDAH, 1 November 2005 — Dr. Muhammad Al-Kahtani, an economist, expects that many Saudi companies will face huge losses after the Kingdom enters the World Trade Organization (WTO), Madinah newspaper reported.
Al-Kahtani said that the insurance and the agriculture sector would suffer the most. He said that Saudi companies and institutions in the financial sector will find themselves in difficulties when they face American companies and will be unable to compete. The Saudi companies will either enter partnerships with foreign companies, merge with other companies or face bankruptcy. Al-Kahtani admitted that there were problems in the insurance sector. He said, “We do not have insurance companies but only one licensed company. From an economic perspective, there should be complete government support for the insurance sector in preparation for American companies that will enter the Saudi market. These companies have great experience in the insurance sector.” He pointed out that the Kingdom must train people to work in the insurance sector and open colleges specializing in insurance and graduating well-qualified people. Regarding the agriculture sector, Al-Kahtani said, “With the exception of some areas in the south and northwest, the Kingdom is not an agricultural country. I think the country should focus on the industrial sector. If Saudis want to invest in agriculture, they should look at possibilities in countries such as Syria and Sudan. The government should establish a body that looks for places abroad where Saudis can invest; the body should also look at the Arab and Islamic world.
As for banks, he said that the total money in all Arab banks combined does not match that of the seventh largest bank in the world. He said, “We have to keep in mind that big banks are watching and waiting for the moment to enter the market. As for the communication sector, I think we need at least ten more companies to compete in this sector because it is growing. In transportation, I do not think that Saudi companies will lose in this sector because it belongs to foreign companies.”