KSA moves a step closer to WTO membership

SAUDI Arabia will allow foreign investors to own 60% of local banks’ capital in order to meet the requirements needed to become a member of the World Trade Organisation (WTO). Outside shareholders could previously hold 49%.

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By  Rhys Jones Published  May 22, 2005

SAUDI Arabia will allow foreign investors to own 60% of local banks’ capital in order to meet the requirements needed to become a member of the World Trade Organisation (WTO). Outside shareholders could previously hold 49%. The move follows US president George W. Bush’s promise that Washington would support Saudi Arabia’s efforts to join the WTO before the end of this year. Bush met with Crown Prince Abdullah at his Texas ranch last month. Saudi Arabia’s membership of the WTO will be made official at a meeting in Hong Kong this coming December. “We have reached an agreement on major topics during our talks with the US secretary of commerce and industry and the US negotiating team. Only technical aspects are remaining which could be settled within the coming days or weeks,” said Dr. Ibrahim Al Assaf, Saudi finance minister. Saudi Arabia has 11 banks of which seven are partially owned by foreign investors. The institutions are the Saudi British Bank, Saudi Hollandi Bank, Banque Saudi Fransi, the Arab National Bank, Samba Financial Group, Bank Aljazira and the Saudi Investment Bank with stakes varying between 31% and 40%. Saudi Arabia has enacted and updated a number of laws in recent years in its bid to join the world body. Measures include the opening up of the insurance and telecom sectors for foreign investment. An agreement with the US is the remaining major hurdle before the kingdom’s admission to the WTO. Last month’s Saudi-US meeting, during which Bush reiterated America’s support for the kingdom’s membership to the WTO, is seen as a significant step towards curbing any possible sticking points between the two nations. The remaining technical issues related to WTO agreement with the United States are expected to be resolved within weeks. Saudi Arabia first applied to join the WTO back in 1993. The aim of the Geneva-based trade organisation is to promote free trade, helping to ensure that goods receive equal treatment in global markets.

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