Identifier
Created
Classification
Origin
06RIYADH2682
2006-04-12 08:25:00
CONFIDENTIAL
Embassy Riyadh
Cable title:  

EP CORPORATE BANKER UPBEAT ABOUT IMPACT OF WTO

Tags:  ECON PGOV SA 
pdf how-to read a cable
VZCZCXRO0385
PP RUEHDE
DE RUEHRH #2682 1020825
ZNY CCCCC ZZH
P 120825Z APR 06
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC PRIORITY 6230
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHLO/AMEMBASSY LONDON 2551
RUEHFR/AMEMBASSY PARIS 0496
C O N F I D E N T I A L RIYADH 002682 

SIPDIS

SIPDIS

DHAHRAN SENDS
PARIS FOR ZEYA, LONDON FOR TSOU

E.O. 12958: DECL: 04/11/2016
TAGS: ECON PGOV SA
SUBJECT: EP CORPORATE BANKER UPBEAT ABOUT IMPACT OF WTO
ACCESSION AND ECONOMIC LIBERALIZATION

REF: 2005 RIYADH 9531

Classified by Acting Consul General Dave Speidel for reason
1.4 (d).

C O N F I D E N T I A L RIYADH 002682

SIPDIS

SIPDIS

DHAHRAN SENDS
PARIS FOR ZEYA, LONDON FOR TSOU

E.O. 12958: DECL: 04/11/2016
TAGS: ECON PGOV SA
SUBJECT: EP CORPORATE BANKER UPBEAT ABOUT IMPACT OF WTO
ACCESSION AND ECONOMIC LIBERALIZATION

REF: 2005 RIYADH 9531

Classified by Acting Consul General Dave Speidel for reason
1.4 (d).


1. (SBU) Zaki Al-Yahya, Eastern Province-based Assistant
General Manager in Samba's Corporate & Investment Banking
Group, painted an upbeat picture about recent developments in
the banking sector in a conversation with EconOff April 10.
As a lender to many of the major EP businesses who serve as
agents and distributors for multinational corporations (MNCs)
like GE, GM, and Schlumberger, Al-Yahya said the potential of
Saudi accession to the WTO had initially concerned him
because he thought the MNCs might choose to eliminate the
middleman (i.e., his clients) and set up their own networks
in the Kingdom. Talking to the MNCs, he said, quickly eased
his concern, as it became clear they intended to keep working
with Saudi partners.


2. (SBU) Speaking in general terms, Al-Yahya expressed his
hope that the WTO's greatest impact in Saudi Arabia would be
in the area of legal reform. Secular in orientation himself,
Al-Yahya lamented the lack of a clear legal code in Saudi
Arabia and the capriciousness of its legal system. He
speculated that reformers in the government might use the
process of bringing the Kingdom's commercial law to
international standards as a starting point for reform in
criminal and other areas of law.


3. (SBU) Noting that HSBC, Citibank, and Deutsche Bank
seemed interested in setting up direct operations in Saudi
Arabia, Al-Yahya welcomed the ongoing liberalization of Saudi
Arabia's banking sector, a process begun before WTO
accession. He brushed aside worries of competition: "They
will choose to enter sectors that are underserved here, where
they have expertise, like brokerage and investment banking.
Right now, for example, there are just a few banks that can
handle an IPO, but there are so many companies that want this
service. They're coming to us, but we're telling them we
can't get to them for another year." Al-Yahya also
identified training and improved standards as additional
benefits of an increased foreign presence in the baking
sector, giving as an example the internal restructuring at
Saudi British Bank undertaken by its new Managing Director,
who came over from minority owner HSBC.


4. (C) Improved training opportunities for young Saudi
bankers was even more critical, Al-Yahya said, given the
decline in standards at Saudi Arabia's educational
institutions. "When my brother graduated from KFUPM 30 years
ago, he went to U.C. Berkeley for graduate school and he had
no trouble adjusting. Now the KFUPM graduates I hire don't
even know how to write a business memo." He expressed
disappointment with the academic direction chosen by the new
Prince Mohammed University (PMU; reftel),scheduled to open
next fall. "We're lending a lot of money to the backers, and
I was upset that they didn't go with one of the top U.S.
schools as a partner in developing academic standards.
That's what they're doing in Qatar and the Emirates.
Instead, it seems like the rector wants to be the power
broker and maintain that control." (Note: KFUPM, or the
King Fahd University for Petroleum and Minerals, is Saudi
Arabia's premier technical university and is public. PMU,
which is private, has contracted with the non-profit Texas
International Educational Consortium for academic program
development and other services. End note.)

(APPROVED: SPEIDEL)
OBERWETTER