As the elderly King Fahd becomes increasingly disconnected from the Kingdom’s daily affairs, Crown Prince Abdullah continues to consolidate his role as Saudi Arabia’s ruler.
In recent months, Japan has demonstrated the most conciliatory line during multiple rounds of talks on Saudi Arabia's WTO accession. This stand contrasts with the firm position taken by American and EU negotiating teams, which demand that Riyadh remove trade barriers and reduce the scope of subsidies enjoyed by petrochemical producers. This past April, the WTO's deputy director general stated that it was unlikely that Saudi Arabia would join the international trading club during the current year.
While complicated hurdles must still be overcome prior to Saudi Arabia's WTO induction, the direct short-term benefits from trade liberalization are likely to be scant. As import tariffs are inevitably diminished, the long-term advantages will depend on the degree to which the economy's production structure is diversified. Although the process of reducing Saudi Arabia’s dependence on oil has already begun, non-oil exports still represent merely 5 percent of GDP.
© 2000 Mena Report (www.menareport.com)
- S&P downgrade Tunisia over fears of continued political instability
- Sarasin Strategy Outlook: Political risks and policy divergences leave case for compelling valuations undiminished
- 2011 FNC elections represent strong evolution of UAE’s political outlook
- Global: Palestine macroeconomic outlook depends strongly on the political situation
- Saxo Bank Q2 Outlook 2012: European politics is spinning out of control