SAUDI MINISTER OF COMMERCE ON IPR, WOMEN, CHAMBER

C O N F I D E N T I A L SECTION 01 OF 03 JEDDAH 000297

SIPDIS

DEPARTMENT FOR NEA/ARP; EEB/ESC; DRL
DEPARTMENT PLS PASS TO USTR FOR CHRIS WILSON
USDOC PASS TO USCS RIYADH, JEDDAH, DHAHRAN

E.O. 12958: DECL: 09/11/2019
TAGS: ECON ETRD PGOV PREL SA SOCI
SUBJECT: SAUDI MINISTER OF COMMERCE ON IPR, WOMEN, CHAMBER
OF COMMERCE ELECTIONS

REF: JEDDAH 291

JEDDAH 00000297 001.2 OF 003


Classified By: Consul General Martin R. Quinn for reasons 1.4(b) and (d
)


1. (C) Summary. Charge (Ambassador Richard Erdman) met in
Jeddah August 9 with Minister of Commerce Abdullah Zainal
Alireza for a wide-ranging and productive discussion of
economic and political issues. During the 90-minute
discussion Minister Alireza stressed the importance of India
for the Kingdom,s transition to a knowledge-based society,
noting he had just returned from an IT-focused mission there.
He said the Saudi leadership was absolutely committed to a
process of opening up Saudi society, including expanded
opportunity for women, but would do so at a gradual pace that
avoided upheaval and "chaos" that set the country back.
Noting progress in expanding the role of women in the economy
to date, he downplayed recent changes promulgated by the
Ministry of Commerce regarding voting procedures at chambers
of commerce which would appear to threaten women's progress,
affirmed his support for women candidates and board members
in those cities "where society is ready," and said he would
use his authority to appoint women where appropriate. In
response to Charge,s expression of concern about IPR
protections in the Kingdom, the Minister said the Saudi
leadership and he personally were committed to "100 per cent
implementation of commitments;" promised to again stress the
importance of respecting IPR at the next Council of Ministers
meeting; promised to take action on a third-party audit of
SAG computers without delay; welcomed a Microsoft proposal to
fund inspectors and train young Saudis in IPR monitoring; and
expressed interest in taking advantage of the Commercial Law
Development Program for IPR training for judges, while noting
this was primarily a Justice Ministry issue. Alireza welcomed
a USTR visit this fall, proposed raising the TIFA dialogue to
ministerial level, and noted his agreement with the Secretary
of Commerce to hold a Saudi-American forum. Meeting was
joined by CG, EconOff and USCSOff. End summary.

Trip report on India
--------------


2. (C) Minister Alireza opened the meeting by noting he had
just returned from a mission to India that had focused on the
IT sector. India, he explained had growing importance for
Saudi Arabia's next five-year plan, which focuses on a
"knowledge economy." Referencing the Al Aghar ad hoc think
tank of 300 Saudi men and women from the private sector, who
convened five years ago under the leadership of current
Education Minister Faisal bin Abdullah to map out a strategic
vision for the future of the Saudi economy, Alireza spoke of
plans to invest in the Indian information technology (IT)
sector and to import Indian IT professionals to leverage
India's comparative advantage in that domain.


3. (C) Charge commented that at some point in the future
after the oil is exhausted -- in 60, 80, or 100 years, Saudi
Arabia would have to look to new sources of economic growth,
and this meant shifting from reliance on what is under the
ground to reliance on human capital. The Kingdom has only
three to four generations in which to make this transition,
which is all the more challenging because it touches on
sensitive cultural and social attitudes and issues. Alireza
readily agreed, commenting that "We must change. We will no
longer be the gas station for the world. That is behind us."
Charge observed the Saudi economy could never fully develop
or be competitive as long it denied itself the human capital
and contributions of half its citizens. In this regard, a
recent article on the highest scoring students in exams in
Medina, in which 57 per cent of the students scoring 95 or
higher were women, was instructive. If this statistic was at
all reflective of the broader picture, limited opportunity
for women meant the Kingdom was denying itself not only the
talents of half its population, but a solid majority of the
most promising members of the younger generation.

Strong support for women -- but not Kingdom-wide
-------------- ---


4. (C) Alireza said he was pleased by the achievements of
Saudi women and completely agreed that continued progress

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needed to be made in integrating women into the economy. That
said, one had to walk a fine line between support for the
advancement of women generally and recognition of the risks
of permitting vanguard women leaders to move faster than
society at large. "We won't move fast enough to allow society
to disintegrate into chaos or to spark a reaction that sets
back women,s rights," he declared, holding up Iraq as an
example of just such an outcome. Women there, he contended,
had more rights before the war and a Shi'a ascendancy would
further restrict their position in society. "The leadership
knows what it's doing" and favors the expansion of women's
participation in society "in those regions of the Kingdom
which are ready." Medinah, Makkah and Riyadh were examples
of places where society has signaled discomfort with women in
leadership positions at the Chambers of Commerce, he said,
noting societal resistance as the reason why he decided not
to use his power to appoint women to the boards of those
chambers. Conversely, Jeddah was ready -- as demonstrated by
the recent success of Nashwa Taher who presided over the
first Jeddah Commercial Forum (reftel). Alireza also
mentioned his appointment of JCCI board member Olfat Kabbani
to chair a forum this October on "productive families," a
cryptic title evidently intended to reach out to
conservatives while promoting female participation in the
economy.

New Chamber of Commerce election
rules could disadvantage women
--------------


5. (C) Regarding rumors swirling around the format and rules
for upcoming JCCI elections this fall, Alireza said that the
previous practice of slates of candidates running together in
blocs led to post-election infighting among Chamber boards
all over the country, necessitating intervention by the
Ministry. "Inappropriate people" had been elected in some
Chambers simply by allying themselves with the right groups.
Alireza claimed that since he changed the rules to permit
only individuals to run for office, these problems had been
eliminated in those cities which had subsequently held
elections. Asked what would happen if, lacking the support of
powerful slates, no women were elected to the JCCI board this
time around, the Minister more than once emphasized that he
had the power to appoint six board members. When pressed as
to whether he would appoint women if no women were elected,
he repeated this statement. (Comment: This position directly
contradicts the understanding of businesswomen in Jeddah who
believe Alireza has said publicly he will appoint only as
many women as the number who are elected -- just as the
previous minister did four years ago.)

Ready to move forward with government-wide IPR audit
-------------- --------------


5. (C) Charge raised U.S. and U.S. IT sector concerns about
IPR violations in the Kingdom, especially by Saudi ministries
and government entities. Noting the Minister's interest in
building the IT sector in Saudi Arabia with Indian help and
the Kingdom,s ambition to move to a knowledge-based economy,
Charge said improving its record on IPR should be a priority.
IPR protections were especially critical for the IT sector,
and here the Kingdom seriously lagged behind its GCC
neighbors. To attract serious players and be competitive, it
needed to move immediately to improve its record and
performance in this area. In this regard, Charge noted that
in the spring we had proposed the idea of a third-party audit
to ascertain whether any ministries were violating IPR
belonging to U.S. licensors, but had never heard back from
Saudi authorities. In addition, we had raised the idea of
having a U.S IT firm fund IT inspectors, in the process
training a cadre of young Saudis who could at some point take
over this inspection/monitoring function.


6. (C) Alireza responded that he had visited Microsoft's
Redmond, Washington headquarters in May, where he discussed
this very subject with Dorothy Dwoskin, a former Assistant
USTR and now Microsoft's Senior Director of Global Trade
Policy and Strategy. During the meeting, he said, he agreed
to Microsoft sending, at its expense, auditors to the KSA for
three months to begin the audit process and also to train
Saudis to take over after the auditors leave. Asked about

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next steps and timing, Alireza at first said he would need to
sit with the new ministers and set up a committee to see how
to proceed so that no one would be surprised when Microsoft
showed up. Pressing him for concrete action, Charge asked if
a royal directive were feasible. Alireza said a royal decree
was not necessary but he would raise the issue at the next
Council of Ministers meeting and, more formally, send a
letter as Commerce Minister to the government, which would
then send a letter to the royal court which would in turn
circulate it among the ministries. He noted that he is
continually reminding all in the government that every
commitment the SAG has taken under the WTO must be fulfilled
"100 per cent," without any deviation: "What we have
committed to, we will do." Charge welcomed this assurance,
stressing the importance of WTO compliance in attracting
foreign investment, a major Saudi objective.


Special 301 and TIFA Dialogue discussed
--------------


7. (C) Charge also raised the planned out-of-cycle Special
301 review and proposed visit of Assistant USTR Chris Wilson.
Alireza welcomed this visit and, noting a previous discussion
with DCM Rundell, confirmed their desire to elevate the TIFA
Dialogue from the deputy to the ministerial level. He added
that he and the Secretary of Commerce have agreed to co-host
a Saudi/American Forum and that both parties should begin as
soon as possible to plan for this event.


8. (C) Charge raised the judicial training programs in IPR
offered by the Department of Commerce,s Commercial Law
Development Program, noting his prior experience in Algeria,
where such programs had been quite successful. The programs
included both in-country and U.S.-based training, with
trainees offered the opportunity to trail judges, observing
first-hand how such cases are developed and prosecuted in the
United States. Charge observed that we had offered such
training in a letter last April to the Ministry of Justice,
but had never received a response. Alireza expressed interest
in IPR judicial training, while noting this was a Justice
Ministry, not a Commerce Ministry responsibility.
Nevertheless, he asked Charge to forward him a copy of the
letter advising of such training possibilities, implying he
would try to get the Justice Ministry to focus on our offer.


9. (U) Ambassador Erdman has cleared this message.
QUINN