The appointment of Abdullah ibn Ahmed Zainal Alireza as commerce and industry minister was wholly unexpected but it is an encouraging development. Alireza is probably the most experienced person in the country for the job. A fervent deregulator and reformer with a reputation for new ideas and getting things done, he comes from one of the leading Jeddah merchant families, has served as chairman of the Jeddah Chamber of Commerce and Industry, has been a Cabinet minister without portfolio, an adviser to the Supreme Economic Council, helped negotiate Saudi Arabia’s accession to the World Trade Organization and for the past five years acted as a roving trade ambassador.
Although very approachable, he neither surrounds himself with yes men nor is he afraid to mince words. Last year, when in the US, he went out of his way to meet New Jersey Rep. Mike Ferguson, who in addition to being a member of the House Energy and Commerce Committee which oversees foreign trade is also a fervent champion of Israel and virulent critic of the Kingdom. There had never been a meeting like it before. Just last month, he could be heard telling an audience in Florida that Saudi Arabia has “an obligation to tell our friend what we feel about parts of America that became drunk on muscular power.”
Such straightforward thinking is certainly required at what is one of the most important ministries in the country. High oil prices can fund the latest boom but industry and commerce are the real keys to Saudi growth. What is needed from the ministry is more support and less red tape. Setting up new industries can involve vast amounts of permits, with businessmen running from pillar to post just to get started. The system has to be streamlined. That must inevitably involve rationalizing what is an overstaffed ministry.
The new minister can help in other ways. There has to be more support for women in industry and trade, more support for young entrepreneurs. The role of the Council of Saudi Chambers of Commerce and Industry needs to be boosted, with less interference from the ministry. Is there any reason why the ministry should still appoint members to CSCCI committees? Why not elect all of them? Many Saudis will see this appointment as a response to public concern about inflation. Indeed it is reported the new minister will give the king his plans on the issue next week.
It would be wrong, though, to imagine that Alireza is going to produce a quick fix. If there were easy answers they would be already in place. Perhaps there will be a more rigorous action against profiteering — but that is only part of the problem, and a small part at that. It would be naive, however, to imagine that he will recommend price cuts or subsidies; that goes against the whole grain of the government’s (and his) commitment to the free market. Nor will there be any depegging from the dollar. He himself was categoric about that in Florida last month: Uncoupling the two currencies would be like Saudi Arabia shooting itself in the foot, he said.
That leaves reducing the money supply, soaking it up by issuing bonds. The government does not want to increase debt by doing so — but it is a proposal the new minister will have to consider seriously.
