UPHEAVAL IN JEDDAH CHAMBER OF COMMERCE -- SAUDI

C O N F I D E N T I A L SECTION 01 OF 03 JEDDAH 000050 SIPDIS RIYADH PASS TO DHAHRAN; FOR NEA/ARP E.O. 12958: DECL: 02/01/2019 TAGS: ECON KWBG PGOV PREL SOCI SA SUBJECT: UPHEAVAL IN JEDDAH CHAMBER OF COMMERCE -- SAUDI COMMERCE MINISTER SACKS JCCI CHAIRMAN REF: A. A)JEDDAH 0013 ¶B. B)JEDDAH 0020 ¶C. C)JEDDAH 0029 Classified By: CG Martin R. Quinn for reasons 1.4 (b) and (d) ¶1. (C) Summary. In a move that took Jeddah by surprise, on January 31, Minister of Commerce Abdullah Ahmad (Zainal) Alireza relieved the popular, elected chairman of the Jeddah Chamber of Commerce and Industry (JCCI),Saleh Al-Turki, from his position just seven months shy of the end of his four-year term. In an emergency board meeting February 1, the board elected Mohammad Al-Fadhl from among its membership to serve out Al-Turki's term. The move by the relatively new Minister shocked the local community where the JCCI stands as a leader in civic and commercial affairs and Al-Turki is a respected leader. Widely regarded as the outspoken mover and shaker on behalf of increased participation by women at the JCCI, including the election of the first women board members four years ago, Al-Turki's removal has shaken businesswomen around Jeddah. The effects of the move will be felt throughout the Kingdom since the JCCI currently holds the chair of the Saudi council of chambers of commerce -- a position which rotates every four years. Every chamber thus will be affected by this sudden change of the JCCI chair. End Summary. Major reshuffle in leadership of key Jeddah institution -------------- ¶2. (C) Jeddah awoke February 1 to news reports of Al-Turki's ouster and also that of Sami Bahrawi, the JCCI board member serving as chairman of the Jeddah Economic Forum (JEF). Stories swirled in the press that the recent political tug-of-war over this year's JEF was the cause of the move against Al-Turki. Two factions of the board reportedly met separately late January 31 but neither was sufficiently constituted to act to replace the abruptly ousted Al-Turki. According to Sara Baghdadi, General Manager for Services at the JCCI, the Board is essentially divided into two camps, one made up of the seven appointed members with the other made up of the seven elected members. Former Minister of Commerce Hashim Yamani appointed the current slate of appointees. According to Baghdadi, their allegiance is often to the Ministry, which plays out in their frequent moves to block actions and initiatives of Al-Turki and the elected members. Among the appointees is Ziad Al-Bassem, identified by the the Saudi Gazette (incorrectly, as subsequently became clear) as Al-Turki's likely successor as chairman. In Ms. Baghdadi's view, that result would have boded ill for the JCCI, slowing its reform movement on all fronts. ¶3. (C) The full Board (some participating by phone) met on February 1 and, according to Ms. Baghdadi, the elected members carried the day, choosing from among themselves for all positions left open following the ouster. Mohammed Al-Fadhl, a 1977 graduate of the University of San Francisco and a close friend of Al-Turki, was chosen to succeed him as chairman. The news was welcomed by Consulate contacts since Al-Fadhl is widely believed to support Al-Turki's policies though perhaps in a less provocative manner. Elected members Abdullah Bin Mahfouz and Mazen Baterjee were named as deputies, replacing Ziad Al-Bassem who told the press he plans to protest to the Minister of Commerce. And, contrary to news reports that Abdul Rahman Al-Jeraisi -- not a current member of the board -- was delegated to chair the Council of Saudi Chambers of Commerce and Industry, Baghdadi said that Al-Fadhl will retain that position. Later in the day, Ms. Baghdadi informed PolEconOff that Bahrawi was "back in" as the chairman of the JEF, raising questions as to his role in the whole affair. Interpersonal and interagency factors likely share blame -------------- ¶4. (C) Rumors surrounding the cause of the upheaval will likely abound for weeks. According to Sara Baghdadi, who works closely with all factions and departments in the Chamber, the root of the problem lies in a personality clash between Al-Turki and Minister Abdullah Ahmad (Zainal) Alireza (often known locally as Zainal) which pre-dates the current upheaval. Zainal, a Jeddah businessman, once held the chair of the JCCI and has been Minister of Commerce and Industry less than a year. Another source, Ramzi Ali, an employee of Al-Turki's at his company Nesma and a board member of the American Businessmen of Jeddah (ABJ) group, said that JEDDAH 00000050 002 OF 003 Al-Turki was known for openly criticizing members of the government including Alireza and Deputy Interior Minister Mohammed Bin Naif. The upheaval appears to involve the recent troubles with JEF (reftels). According to a JCCI staffer responsible for the organization of JEF, the JCCI submitted its request to the Ministry of Commerce to move forward with the planning and organization of JEF but the ministry never responded making it impossible for planning to proceed and leading to the eventual and highly embarrassing postponement of the event last month. However, according to Ali, the Ministry of Commerce did act on the request and forwarded it to the Ministry of Interior where it was delayed. The two ministries reportedly fell into a finger-pointing exercise leaving the JCCI in limbo with the event drawing near. Al-Turki's public criticism of both ministers may have led to his demise. In particular, Ali asserted, one does not criticize Mohammed Bin Naif publicly and get away with it. He noted that the Governor of Makkah, Prince Khalid Al Faisal, is a strong supporter of Al-Turki and tried to protect him from the Ministers. To resolve the impasse the King may have been required to step into the fray and Al-Turki's ouster was ordered to calm the troubled waters. (Note: According to Baghdadi, the previous Governor of Makkah, the late Prince Abdulmajid Bin Abdulaziz, was more supportive of Al-Turki's methods which sometimes involved skirting the ministerial bureaucracy in order to achieve results -- including with regard to the organization of the JEF. By contrast, Khalid Al Faisal's style is to play strictly by the rules, which in the end made it difficult for him to provide cover for Al-Turki whose practice was to line up JEF speakers prior to obtaining ministry approval. End Note.) JEF in April or May? -------------- ¶5. (C) The future of JEF is still uncertain, though the "reinstatement" of Bahrawi may signal the intent of the government to support the JCCI going forward. Four potential dates in April and May have been submitted to the Ministry of Commerce, but without a firm date the JCCI is unable to try to rebook speakers or recruit replacements. Still, its staff seems optimistic that the 10th annual JEF will in fact take place this spring. It remains to be seen whether this new board, with only seven months remaining in its term, can pull off the event while also organizing elections. The effects of the global financial crisis, as well as hot spring and summer temperatures in Jeddah, may further hamper efforts to restage the JEF. Reshuffle may have smothering effect on Jeddah businesswomen -------------- ¶6. (C) The impact of the JCCI shake-up on women in the Kingdom has already been felt, according to Baghdadi. She reported that her phone has been ringing off the hook with calls from concerned women who worry that the progress made under Al-Turki will come to an end or worse. Asked why he even took on the fight for women's inclusion in the JCCI and society at large given the lack of a clear upside for him in so doing, Baghdadi said simply that he believed in the cause of women and that was all he needed. His actions have been praised by every Jeddah woman Pol/EconOff has met. Rumors persist that mixing of men and women at last year's JEF was one of the factors underlying Al-Turki's ouster. However, given that numerous mixed events take place at the JCCI on a weekly basis, this may be another red herring. At a previously scheduled meeting of the Arab Women Investors Union at the JCCI on February 2, JCCI board member Olfat Kabbani publicly thanked Al-Turki during her opening remarks for his support for Saudi businesswomen over the past years and for his support for the investment group's first meeting last year. Her remarks were greeted by spontaneous applause by all 100-plus women (and men) present as well as by the honored speaker and event patron, Sheikh Saleh Kamel, president of the Islamic Chambers of Commerce, an international organization. Comment -------------- ¶7. (C) Chambers of commerce in Saudi Arabia are key to helping this country move into the twenty-first century. They have been a social and organizational platform from which Saudi business men and women have encouraged (and benefited from) reforms. They have provided an economic JEDDAH 00000050 003 OF 003 cover for social and political reforms that this country desperately needs. And they have been one of the Kingdom's most important nascent democratic institutions, counterbalancing the many powerful ultra-conservative Saudi entities. Although we remain optimistic that the JCCI will survive this leadership crisis and continue to provide a strong positive influence on the Hejaz region, we will continue monitoring these developments closely and if possible provide discreet support, advice, and assistance. End comment. QUINN