It has been a long and exhaustive process to get in, 12 years in all, negotiating multilateral agreements with the World Trade Organization and bilateral ones with individual members. Every one of the 148 members had to agree to Saudi membership. Most had quite different trade issues to discuss and resolve before they would let the Kingdom in.

What interested Thailand was not necessarily what interested India or Australia; what concerned the EU was not the same as what concerned the US. Each round of negotiations was different and had to be resolved to both parties’ satisfaction.

Approval of Saudi membership had to be unanimous.

That is why it took so long.

Finally last month, it was all over; negotiations were completed and membership agreed in principle.

That was then formalized at WTO’s meeting in Geneva on Nov. 11 and becomes effective on Dec. 11.

But this is not the end of the road. Nor the beginning of a new one. Membership marks recognition that Saudi Arabia has reformed and that its reforms meet WTO requirements. But economic reform is a ongoing process.

It will continue.

Ever since its founding a century ago, Saudi Arabia has believed in the market. Its economy is based on private enterprise. It adheres to the basic principles of the multilateral trading system in the formulation and conduct of its trade policies.

Today, as the Kingdom joins the WTO as a fully-fledged member, it takes a degree of pride in its existing position as a major international trading nation — the world’s 13th largest exporter, the 23rd largest importer of goods, and the 36th largest importer and exporter of services.

In fact, the ratio of our total trade amounts to two-thirds of our GDP.

Saudi Arabia lives by trade — as it always has. Therefore, the Kingdom’s need to become a full-fledged WTO member — and its eligibility — is no surprise.

During the last five years, the Kingdom has undertaken an ambitious, wide-ranging program of economic reform and restructuring, in part because of economic necessity and common sense and in part because the reforms were necessary for WTO membership. Today that process of reform nears its completion: Nine regulatory authorities have been established, over 42 trade related laws have been promulgated, free trade area agreements have been negotiated, our tariff and trade regime has been streamlined — all to meet the challenges and reap the benefits of globalization in the 21st century.

The aim is to encourage capital investment, create job opportunities for our growing population, ensure meaningful GDP growth and further integrate the economy into the global market.

Although Saudi Arabia is the world’s largest producer, exporter and holder of proven oil reserves, the Kingdom’s oil revenues are being used to expand and diversify the economy in order to reduce dependence on oil exports.

Efforts to promote growth in the non-oil sector have resulted in impressive gains: Real GDP grew by 6.4 percent in 2004 and is expected to grow by four percent in 2005.

The current account surplus was $40 billion in 2004, or 18 percent of our GDP.

The objective has been to capitalize on the vigor and vitality of the private sector by ensuring its prominent role in the development of our economy.

A major cornerstone of economic reform was the decision to privatize state-owned entities. Some 20 major sectors have been identified and are currently being prepared for privatization. They include telecommunications, postal services, port authorities, domestic aviation, education, electricity generation and distribution, sewerage, water desalination and railways.

Another important initiative has been the encouragement of foreign investment. The Kingdom enacted a new Foreign Investment Law which allows for market access on a most favored nation and national treatment basis. The Negative List, which prevented foreign involvement in certain sectors, has been reduced and made more transparent. The gas sector has also been opened to foreign investment, as seen by agreements in the past year and a half with international oil and gas companies (Royal Dutch Shell, TotalFinaElf, Lukoil, Sinopec ENI and Repsol). This represents a vital step and a vigorous start to international investment in gas exploration and development in the Kingdom.

Saudi Arabia’s economic reform agenda is exhaustive and comprehensive. It includes:

• The establishment of new institutions;

• The promulgation of new and effective laws and regulations;

• The strengthening market mechanisms and;

• The further liberalization of the trade regime.

Institutional restructuring, which underpins our economic reform program, is designed to organize and streamline the decision-making process. This is being achieved through the creation of:

• The Supreme Council for Petroleum and Minerals;

• The Supreme Economic Council;

• The Supreme Commission for Tourism and;

• The General Investment Authority (SAGIA).

This was complemented by the recent institutional reorganization of government ministries where Industry joined Commerce, Economy joined Planning, Information Technology joined Telecoms, and Electricity joined Water.

Another facet of the restructuring strategy is the establishment of a number of Regulatory Authorities, including:

• Communications and Information Technology Commission;

• Electricity Services Regulatory Authority;

• Securities and Exchange Commission;

• Industrial Cities and Technology Parks Authority and;

• Food and Drugs Authority.

I should add that Saudi Arabia received favorable sovereign ratings this year from Standard and Poor’s rating services.

The Kingdom also signed an Agreement on Trade and Investment with the United States in July 2003.

Furthermore, the enactment of the Capital Markets Law will facilitate the licensing of non-bank financial intermediaries. Based on international best practice, the application of this law will result in the restructuring of the Saudi capital market, thereby promoting greater efficiency and transparency. The law is integral to the government’s stated aim of privatization, leading to increased participation by citizens in the capital market and thus the nation’s economy.

Two important initiatives, with far-reaching implications, were taken in 2003. These were:

First, the creation of the GCC Customs Union on Jan. 1, 2003 by the Gulf Cooperation Council to standardize customs duties in the six member countries. As a result, Saudi Arabia approved the reduction to five percent of customs duties for goods formerly charged at 12 percent and seven percent. The GCC further agreed to the single-port-of-entry principle; most related laws and regulations should be harmonized by end of next month.

Second, in January 2003, the Kingdom initiated the Arab Reform Charter to encourage greater economic integration in the region. The initiative calls for the implementation of the Great Arab Free Trade Area (GAFTA). This is due to result in unified tariffs and duties by the end of 2005.

There has been tremendous progress in economic reform and restructuring and it has definitely strengthened our position in market access negotiations and ensured that our accession to the WTO has been much sooner than it might have been.

We submitted our initial offers on goods and services to the WTO in September 1997. The first revision of the offers was submitted in August 1998 and second revision in June 1999. Since then we have visited 57 countries, engaged in 314 rounds of intensive, bilateral market access negotiations with WTO members that had specific trade issues to discuss with Saudi Arabia, and signed 38 bilateral agreements. To fulfill our accession requirements we have answered 3,400 questions and produced more than 7,000 pages of documentations touching every single aspect of our economic and trade regime.

Today the WTO is proud to welcome the Kingdom as its 149th member — and the Kingdom is proud to be a member.

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(Fawaz Al-Alamy has been Saudi Arabia’s chief technical negotiator in the negotiations to join the World Trade Organization.)