ARI-Gulf Research Center Focus Group Meeting at the Jeddah Chamber of Commerce and Industry

JCCI headquarters, 4 January 2009
The ARI-GRC representatives were the same at the JCCI focus group meeting. On the JCCI side, participants included board member Dr. Lama Sulaiman, then-chairman of the Jeddah Economic Forum Sami Bahrawi and director of the Khadija bint Khuwailid Center at JCCI, Bassma Al-Omair. The very lively meeting that lasted for some two hours was kicked off by a brief presentation of the ARI-GRC private sector project by Prof. Luciani and an impulse presentation by Steffen Hertog, focusing on past patterns of state-business negotiations in Saudi Arabia on both formal and informal levels. The tone of the discussion was markedly more pessimistic than in Riyadh, which might have to do with the fact that our interlocutors were senior businesspeople rather than chamber functionaries. Although the group members agreed that some of the recommendations coming out of sectoral committees at the chambers are taken on board by government, many others are ignored, and government, although it might have good reasons for not changing specific policies, is often not forthcoming with explanations.

Much of the private sector in today’s Saudi Arabia was described as passive and not interested in interfering with government issues – reflecting the general passiveness in Saudi society, where there is little public activism and most critical observations are made in private.

The size of companies was seen to have a strong impact on how they operate: big ones tend to be well-connected and can therefore succeed in their interaction with the bureaucracy, while smaller ones are often left out of the game, with no one instructingn them how to operate and which exact rules to stick to. Regulations are often intransparent or contradictory.

The one unit at JCCI which claims significant lobby successes is the women’s department (Khadji bint Khuwailid Centre), which has been able to remove administrative obstacles for women in the Ministry of Commerce, which now allows women to operate in all sectors and engage with the bureaucracy directly. The morality police now have to work through the Ministry of Labor if they have specific requests vis-à-vis female-run enterprises. Although obstacles remain and implementation is imperfect, the women’s center full-time concentration on lobbying has made it comparatively successful – while sectoral committees at the chamber, staffed by senior, full-time businessmen, often don’t have the time and resources to fully focus on complex policy issues.

JCCI itself also was still perceived as a reactive player in the policy-making process, and one that does not produce sufficient in-depth research and position papers. Again, participants described the absence of national NGOs and lobbyists – including national associations of specific industries – as part of the problem. They also saw CSCCI as a passive body offering mostly prestige positions on its committees, where some individuals have been sitting for many years. Although CSCCI has its own staff, they tend to be occupied with writing minutes and preparing presentations rather than active policy lobbying or in-depth policy research. The leaders of major committeesare usually big players and hence have individual access to government, but this does not necessarily improve collective lobbying.

Business has been reasonably happy with most of the laws that have been put on the books in recent years. Their execution however has often been patchy and intransparent. In this regard, the chambers of commerce do play an important role, as they follow up on individual cases or unclear procedures with the agencies in charge in order to smoothen transactions. JCCI for example has 300 full-time employees, many of whom are involved with ironing out such issues.

Altogether, the Saudi private sector was described as having no clear political or policy-making project and objectives, and as lacking mechanisms for measuring policy results and follow-up. Business priorities seem to shift from day to day. It is very difficult to get businesspeople to commit serious resources to policy research. The idea was mooted of putting together a comparative benchmarking study on business participation in policy-making in non-Western countries, including Turkey and Malaysia.

One partial success of JCCI based on high-level individual lobbying has been a public-private partnership with the Ministry of Labor, in which JCCI contributes assessments of the expatriate labor needs of individual applicant companies, taking over this function from the Ministry’s own labour offices. The initiative, which is to solve the large problem of administrative bottlenecks in the labour offices, has yet to be fully implemented. As it is a personal project of a few high-level individuals, its sustainability could be endangered by the dropping out of one of them. Some of the participants complained extensively about the lingering administrative opacity and fragmentation in the Saudi state, in the face of which business often is powerless.

In a brief, final debate of corporate social responsibility practices, participants pointed out that charitable giving had a long tradition in the kingdom, but that money has often ended up being used for the wrong ends, for example religious charities that do not add to the country’s development. CSR, it was argued, has also contributed to “laziness” in Saudi society and is confused with sheer PR activities by businesses.