RIYADH, 7 May — Deputy Minister of Commerce for Technical Affairs Dr. Fawaz Al-Alamy has said three ministries and a similar number of government organizations have been putting in strenuous efforts to formulate the e-commerce regulations which should be ready within the next few weeks. Implementation would get under way within six months.
In a special interview on the occasion of the Saudi International Conference and Exhibition for E-commerce which opens at the Riyadh Exhibition Center today the deputy minister said: “These regulations are being produced from scratch. We are relying on the provisions of the UN Committee on International Trade Law (UNCITRAL) for drafting these regulations, which will be in conformity with Shariah.”
The main feature of the regulations, according to Dr. Al-Alamy, will be the electronic signature. Other provisions relate to the security of financial transactions; confidentiality of operations, as well as safeguarding the operations against infiltration by hackers. A technical committee set up to formulate these regulations consists of five members including Dr. Al-Alamy as the chairman. The other members are: deputy minister of finance and national economy; vice chairman of King Abdul Aziz City for Science and Technology (KACST); deputy governor of the Saudi Arabian Monetary Agency (SAMA) and vice president of Saudi Telecom Co. (STC).
The committee, set up by a royal decree five months ago, has held five sessions so far. It has developed a master plan that includes 10 major objectives. They are: 1) Planning and developing the public key infrastructure (PKI) through KACST; 2) To develop the legal framework for payment and delivery through SAMA; 3) To develop the telecommunications infrastructure for conducting transactions; 4) To prepare and issue the rules and regulations for e-commerce, including business-to-business and business-to-consumer (through the Ministry of Commerce); 5) To specify the rules and regulations to secure and protect the information and personal accounts (Ministry of Interior); 6) To implement the IT integrated structure within government organizations to make them capable of becoming an e-government (Ministry of Finance and National Economy); 7) To create an electronic system for the government purchase and procurement program (e-procurement) to be implemented by the Ministry of Finance and National Economy; 8) To create a portal on the Internet with the Council of Saudi Chambers of Commerce and Industry to boost Saudi exports of goods and services; 9) To develop better services for parcel delivery and create a business-to-consumer environment; 10) To train and develop human resources in the field of information technology.
Dr. Al-Alamy said the master plan will be implemented in stages beginning with the announcement of the regulations soon. He added that the main thrust of these regulations is to make online transactions safe and secure for both businesses and consumers.
“Today nine out 10 companies in the US have been exposed to fraudulent acts with the result that they lost $9 billion last year. Therefore, rules and regulations concerning e-commerce must be in place to safeguard the users’ interests,” the deputy minister said. “There is a strong political will in Saudi Arabia to develop e-commerce along with other economic measures. The setting up of the Supreme Economic Council, the Supreme Oil Council, the Saudi Arabian General Investment Authority and the Supreme Commission for Tourism reflect our determination and drive to develop all sectors of the economy in a healthy economic environment while protecting and cherishing our values,” he said.
Asked how they would deal with copyright violations involving intellectual or music piracy, he replied: “We are working on these issues. We don’t know yet, but the legal experts are on the job. We’ll have to rely on the UNCITRAL to find out how they handle such matters.”
Dr. Al-Alamy added that electronic trade will bring down the cost of goods and services and also boost sales. In this context he referred to a proposal for creating an IT park in Riyadh as part of the Kingdom’s ambitious drive to lay the foundation of knowledge-based industry. Dr. Al-Alamy said the growing use of Internet had spawned the birth of Dubai Internet City, the Multimedia Super Corridor in Kuala Lumpur and Silicon Valley in California.
“We need to create an IT park in Riyadh to develop the know-how and lay the foundation for this knowledge-based industry,” he said, adding that the plan is being pursued in conjunction with the Council of Saudi Chambers of Commerce and Industry.
The deputy minister said e-commerce has become an essential tool for survival in the midst of global competition. He cited statistics to drive home the point that 41 percent of the world’s banks may have to close down if they do not provide financial services and transactions through the Internet. In reply to a question on the volume of electronic trade, he said it reached $27 billion in 1997.
“Today it stands at $495 billion and is expected to reach $7 trillion by the end of 2004. Ultimately, it depends on the use of the Internet. Worldwide, 400 million people are on the Internet accounting for 5.5 percent of the total world population. A majority of them are in the US, where 60 percent of the population is online.”
In the Arab world, Dr. Al-Alamy said, 3.5 million people are using the Internet. This number is expected to increase to five million this year, or two percent of the total Arab population. The United Arab Emirates gets the top slot in the Arab world in terms of Internet use, with 24 percent of its population online. This ranks the UAE as the 22nd country in the world, ahead of many industrialized countries, such as Italy (23.5 percent), France (19 percent) and Spain (15 percent). In the Gulf states, the UAE is followed by Bahrain, where 17 percent of the population is surfing on the Internet, while Qatar trails behind with an Internet population of 10 percent.
Referring to the status of Internet use in the Kingdom, the deputy minister said the number has reached 570,000, or 2.6 percent of the Saudi population of over 21 million. This figure is expected to increase by 21 percent in 2004, making Saudi Arabia a major Internet user in the world.
