Fighting trade concealment in Saudi Arabia

In Saudi Arabia, Commerce Minister Toufic al-Rabiah has become the most popular minister after he ordered shutting down big stores that were manipulating discount prices, forcing merchants to accept citizens’ right to return goods, and uniting the system of electric plugs, which has caused confusion for the last half a century.

He is now battling real estate developers who sell units on maps before receiving the required permits. This practice has caused problems that the judiciary is unable to resolve when a merchant disappears or goes bankrupt.

These achievements may appear to a distant observer simple, but they are important to citizens. They touch on the basic living needs which are often more important for citizens than issues such as cultural identity, the roots of terrorism or women’s veil, which writers, scholars and experts tend to focus on. Citizens want proper accommodation, jobs, education, health services and decent cost of living.

If these achievements are simple, why did previous ministers fail to do them? Why have other ministries that are supposed to share these tasks with the Commerce Ministry not fulfilled them? A critic said Rabiha did what the consumer protection agency was supposed to do. So why did the agency not do it?

Major confrontation

Rabiha has set himself for a major confrontation by announcing that his ministry will strictly implement the anti-concealment law, which the cabinet adopted years ago but was not properly implemented. He went as far as naming and shaming those breaking the law, setting penalties of up to 2 million riyals ($532,600) and cancelling their commercial registration. It is a war against a disease that has distorted the Saudi economy.

If Rabiha keeps up his efforts and gets governmental services’ full cooperation, then the economy and people’s lives will improve, thus helping to form a new Saudi Arabia. Concealment is so prevalent in the kingdom that it is almost the norm. It has led Saudis to exit the market, and made them lose the skills of commerce and making profit - this latter loss will have a higher cost than just unemployment.

His campaign will put him in confrontation with influential businessmen, as well as small and medium-sized merchants. They will strongly resist, especially since he has begun the battle by using the strongest weapon against them - naming and shaming in a tribal, sensitive society.

Rabiha’s previous battles will seem like a walk in the park compared to this one. Concealment in Saudi Arabia, indeed the entire Gulf, intertwines with the culture of feudalism, influence and authority.

One of those exposed for violating the anti-concealment law had his commercial registration cancelled.

The man was found concealing two Yemeni nationals and Indian national operating a business in watches, food and car maintenance under his name and commercial registration.

Details of the case were advertised in two dailies at his expense. This man could be upset as the minister will likely ask him to also pursue others, maybe bigger violators.

The minister will pursue others involved in similar concealment. These people do not care about how concealment harms citizens and the economy. They will not give up easily because they have been doing this for decades, so to them it is normal.

Rabiha began his campaign with small and medium-sized businesses, which make billions in Saudi Arabia and the rest of the Gulf. It is as if this disease is a condition of belonging to the Gulf Cooperation Council.

However, the Saudi economy feels more pain due to the size of the market and the number of Saudi youths being expelled from it. This abnormal economy of concealment has led to unemployment and deprived youths of experience in business, which is now monopolized by foreign laborers. Hadad and others will say it is unjust to punish them while sparing bigger figures. They will send letters to prominent officials. They want to defeat the war on concealment.

Bigger sharks

We think our economy is prosperous because an official takes a tour at night and sees small shops full of customers consuming cheap products. However, a huge segment is not included within the official’s category of citizens, and he does not know much about them. He does not even know their language. They have established an economy worth billions, and transfer billions to foreign banks, without having any rights, duties or political aspirations.

Meanwhile, more citizens will lose their skills. Even the bigger sharks will gradually lose their skills in commerce and get bored of reviewing accounts. They will settle for whatever amount of money the foreign merchant, with the real experience and relations, gives them. Youths will not lose anything - they have not entered the market in the first place, and have not learnt any skills.

The issue of foreign laborers, who have become the majority of workers in Saudi Arabia and the other Gulf countries, will be a problem in the future. They are not demanding political rights today, but what about after one or two decades? Our region has changed, or rather collapsed, in the past four years, so what will happen in a decade or two?

The issue of concealment and economic distortions is as serious as ISIS.

This article was first published in al-Hayat on January 17, 2015.

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Jamal Khashoggi is a Saudi journalist, columnist, author, and general manager of the upcoming Al Arab News Channel. He previously served as a media aide to Prince Turki al Faisal while he was Saudi Arabia's ambassador to the United States. Khashoggi has written for various daily and weekly Arab newspapers, including Asharq al-Awsat, al-Majalla and al-Hayat, and was editor-in-chief of the Saudi-based al-Watan. He was a foreign correspondent in Afghanistan, Algeria, Kuwait, Sudan, and other Middle Eastern countries. He is also a political commentator for Saudi-based and international news channels.