It has been a long, uphill struggle: 12 years of tough, complex negotiations. But today, finally, the Kingdom’s membership of the World Trade Organization is formally endorsed; in 30 days’ time, Saudi Arabia will become its 149th member. The WTO, the world’s largest trading club, is not so much an organization as a set of rules to ensure fair trade between its members. There are those in the Kingdom who say that it does not need to join, that it is doing fine as it is, that its nascent industries and businesses need protection from the chill winds of international competition that membership will bring. They are wrong. Saudi Arabia needs the stimulus of competition, because without it, it will never develop as a full, integrated player on the world commercial stage.
It is only those who want to sit back, charge high prices and provide indifferent or even bad service who are afraid of competition. They want protection not for their country’s sake but for their own. Competition allows choice, and choice brings down prices and improves quality and service. The changes in the cell-phone business are proof of that. To qualify for WTO membership Saudi Arabia has had to change its commercial rules and practices; opening up the telecoms sector was one such area. The arrival of Mobily was the direct result. That has brought down the price of phone calls. They will come down further when another cell-phone operator arrives on the scene in the next couple of years. That is economic change in people’s pockets.
Change, directly attributable to preparation for WTO membership, can be seen in other areas too. Foreign insurance companies, financial service companies and banks are moving in. The State Bank of India will be opening branches soon, so too the National Bank of Pakistan. That is going to provide stiff competition for existing banks. But customers will benefit — the banks as well. They will be leaner, fitter and better able to compete not just here but throughout the world.
In any event, the Kingdom does not need protection. It has two enormous advantages over most other countries: Oil and gas, and from them a vast array of downstream products. Other countries have their advantages — abundance of water, cheap labor. Saudi Arabia is never going to be able to compete with India or China as manufacturer of cheap goods or with Egypt as a supplier of food. A lot of nonsense has been attached to the debate over WTO membership: The Kingdom will have to import alcohol, pork and pornography. These were scare tactics.
The winds of economic change resulting from WTO membership will continue to blow across the Kingdom. Sponsorship will go altogether in time. The iqama system will be replaced in time by work permits. Investment too will flow in, meaning more jobs. Joining the WTO is not some inconsequential piece of government policy, irrelevant to the population. It has, and will continue to have, real effect on ordinary people’s lives. That is why Saudi Arabia’s invitation today to become the 149th member of the WTO is so important.
