JEDDAH, 16 March 2006 — A two-day seminar, “The Future of Family Businesses Since Saudi Arabia Joined the World Trade Organization,” ended yesterday with a message for these businesses to be prepared for the challenges ahead. The sessions focused on the strategic dimension for the WTO, the legal and organizational aspects of it, the effect on the Saudi economy after joining, the effect on family businesses and the challenges for small and medium establishments. While most businesses in Saudi Arabia are owned and managed by families with many being small and medium size, the topic of how Saudi Arabia joining the WTO would affect them is very relevant and important for them and for the Saudi economy. Attending the seminar were a large number of businessmen, but very few businesswomen.

“Saudi Arabia joining the WTO caused a huge transition not only in the region but in the world, and it transferred the national Saudi economy to the world economy which means that we will face challenges in big companies entering our market and that requires us to work deligently at restructuring our businesses,” said Dr. Anwar Eshgi, chairman of Middle East Strategic and Legal Studies Center, the organizers of the seminar.

In his presentation on “Family Businesses in the Light of Liberating the Services Sector,” the former Egyptian prime minister, Dr. Ali Lutfi, talked about the effects on the services sector and made recommendations on how to deal with them. “The services sector represents 40 percent of Saudi businesses and it is a large and varied sector,” he said. Dr. Lutfi said that according to the WTO, the services sector includes twelve main sectors that are subcategorized into 155 branch sectors. The importance of the services sector is that in 2006 it generated around $3trillion or 22 percent of world exports. “Developing countries’ share of that is very small,” he said. Dr. Lutfi said that family businesses share some common traits, among them is that the founder and owner tending to dominate in managing and taking decisions, focusing on technical matters related to immediate profit and not on long-term planning, limiting itself to the local market and not planning for the next generation to take over. In order to survive and compete after joining the WTO, Dr. Lutfi recommended several things for family businesses including to develop their abilities and production quality, to merge with other similar companies, to go in partnership with foreign companies, to balance the business financial needs and the family financial needs, to arrange for a smooth power transition within the family, to allow for more than one owner and to involve women in the business to guarantee a continuation of ownership.

Another speaker was Dr. Abdul Aziz Hijazi, also a former Egyptian prime minister, who spoke on the challenges for small establishments and he requested the chambers of commerce and industry to nurture the small businesses more. He also stressed the idea of creating small businesses. Because the majority of the population here are from middle class, he said, “By supporting them we are developing a greater force in the country.” Programs that support these small businesses need to be encouraged and looked after more often. He suggested that displaying successful experiences from people who started from zero and achieved success are worth telling. Dr. Hijazi said that these stories are what motivate us to move forward.

People who establish small business cannot compare and follow rules that apply to large companies and international establishments, “They need to have their own rules and regulations.” He said that abandoning such talents would be a big loss because it would lead to an increase in unemployment. He added that behind each project nevertheless there must be a goal and a target and not just that but also, “a cultural and economic background.”