There are few registered businesswomen in the Saudi chambers of commerce and industry and only a small fraction of the number is investing in industry. Most of the businesses registered in women’s names that are actually managed by women are in the services sector. They fall under the “women’s businesses” category: Hair and beauty salons, tailoring shops, clothing boutiques and furniture and beauty products.
There are businesses registered in women’s names that might not fall into that category. However, many of them are managed by male relatives because regulations prohibit men working in the public sector from registering a private business in their own name. There are also many unregistered home-based businesses run by women but the number and nature are unknown.
In the past few years, there has been a trend toward venturing into other services such as training institutes, marketing, PR, graphic and web design as well as catering and food stores.
Rarely, however, are women looking at industry. The obstacles for businesswomen investing, managing and developing any business, let alone an industrial one, are deeply discouraging. However, some women have opened the door and are calling for others to take the step, not least because the potential is enormous.
“The role of Saudi women in industry, whether as investors or employees, is very limited,” says Ulfat Qabbani, a board member of the Jeddah Chamber of Commerce and Industry’s industry committee. “The number of businesswomen investing in industry does not exceed the number of fingers on one hand, and the number of women employees in Saudi factories is very small.” Qabbani herself owns and manages a perfume and frankincense factory, a store and a soap and detergent factory.
There are no accurate statistics on the number of women investing in and managing an industrial business. There are no accurate statistics on the number on Saudi businesswomen in general. The name on the business registration might be that of a woman but it is a man in the family who is generally running it.
An examination of the list of industries registered in Riyadh’s Chamber of Commerce and Industry shows only a small number of women as owners. For the majority of these industries, under ‘general manager’, there is a man’s name. However, in exceptional cases where the owner and manager is a woman, the type and variety of industrial businesses is impressive. They include a clothing factory, a sliding door factory, a metal industries company and a fiberglass plant.
According to a recent study, investment by Saudi businesswomen has reached some SR8 billion, which is around 21 percent of total investment. Women “own” almost 1,500 companies, representing between three and four percent of the total registered businesses in the Kingdom. Overall, there are 5,500 commercial registrations of women’s projects, representing 20 percent of businesses in the retail, contracting, wholesale and transferable industries sectors.
However, the study also claims that Saudi women as a whole have funds of SR45 billion, 75 percent of which is sitting idle in bank deposits. That means there is a large untapped financial resource in the Kingdom that could, with the right incentives, regulations and facilities, contribute to the country’s economic development in a range of sectors and also reduce unemployment. There is also a large untapped labor force. According to official statistics, only 5.5 percent of an estimated 4.7 million Saudi women of working age are actually employed.
“Eastern Province is supposed to have one of the highest number of women in industry, but it is not due to the inadequate implementation of the regulations,” says Hana Al-Zuhair, manager of the Businesswomen Center at Eastern Province Chamber of Commerce and Industry (EPCCI). “There are no statistics on the number of industries owned and managed by women and if there is a factory in a woman’s name, it is only a name. Usually it is a man who manages it.”
The EPCCI is now working through a women’s industry committee to collect data and conduct studies on the opportunities available for women. Explains Al-Zuhair: “We want to activate the decisions made by the government that encourage women to invest in industry, such as easier industrial registration procedures, financing and free plots of land to establish a factory at the industrial cities. It seems that women are either ignorant of these options or fearful of investing in industry, so we need to raise their awareness and inform them of the opportunities.”
It is not only the women who are ignorant of the new regulations that offer them equal opportunities; officials in the relevant ministries are also unaware. “The biggest problem women face here is getting the necessary information and resources, because most of the time, they are told there are no forms for women or that it is not permitted for women to invest in this industry or that,” complains Al-Zuhair. “In spite of all regulations, in spite of government support, in spite of SAGIA trying to encourage women into business, it is very difficult for them to get through the barriers. The Ministry of Commerce promised change. We are still waiting. It is up to women to push,” she says.
Saudi Arabia has to compete with Bahrain and UAE in attracting female investors because these countries offer faster and easier procedures. Whereas it takes weeks, even months, for a woman to register a business in Saudi Arabia, in Bahrain it takes just 55 minutes. Not surprisingly, anecdotal evidence indicates that in Eastern Province, would-be businesswomen have been heading in droves across the causeway, investing in Bahrain instead of Saudi Arabia. Yet it should be easy here. According to Ministry of Commerce and Industry regulations, women should be given the same forms to fill out as men and all industries are open to them. The only additional regulation imposed on female managers in industrial cities is to have all-women staff in a designated female section with separate entry and exit doors.
They would need a male supervisor for the male staff in the men’s section. Naturally, this is a problem for businesswomen. However, most of the time they get around these restrictions by claiming to have a male supervisor managing the factory on their behalf while they are in fact are the managers. An example is of a businesswoman in the Eastern Province who is a co-owner with her husband of an aluminum and metal factory. She is the one managing it.
According to Salman Al-Jashi, chairman of the industry committee at EPCCI: “There is nothing to prevent women from investing in industry if they have the will, but they rarely do. The fact is that they need a male agent to review government procedures at the ministries. This may discourage businesswomen who do not wish to run around government offices.”
There are many industries in addition to the beauty, textiles and garment sectors that ought to attract female investors, such as the pharmaceuticals, electronics and household products industries. “The obstacles that face businesswomen investors in industry are the long-term nature of investments, recruitment problems, especially if staff come from abroad, and the tough competition,” says Ulfat Qabbani. She believes that the best option for businesswomen wanting to invest in industry would be to form alliances or shareholding companies.
It seems that businesswomen are increasingly aware of these options and opportunities in industry. In a recent meeting of the Arab Women Investors Union, there was discussion of joint investment projects, including industrial ones. “We have to invest in industry because it is long-term,” says Hoda Galal Yassa, the Union’s president.
At the upcoming 4th Arab International Forum and Exhibition being held in Cairo on Dec. 3-5, 2006 under the theme “Arab Joint Investment and International Cooperation”, the Union will be presenting feasibility studies for over 70 small and medium factory projects. These are for joint investments among Arab businessmen and women, to be established on land offered free by the Egyptian government. In addition, the Islamic Development Bank has, according to Yassa, expressed its willingness to finance these projects.