Al-Abdulkarim: R&D, education pave way for Kingdom's success
Al-Abdulkarim: R&D, education pave way for Kingdom's success
Thank you for speaking with Arab News. Can you tell us briefly about the group that you head?
Al-Abdulkarim Holding is the Kingdom’s leading supplier and stocker of electrical, electromechanical, instrumentation and oilfield components. We are headquartered in Dammam and have developed a network of branches and warehouses throughout the Kingdom and abroad. We have been involved in the growth of the national economy by taking a leading role in providing products and services we procure from a long-term partnership worldwide to address the needs of our customers. Our business has continued to evolve over the years and now we encompass regional presence across the Middle East and in the United States, Europe and Asia. Over the years we have diversified into the areas of manufacturing, advanced supply-chain programs and providing products, professional solutions and services in the areas of hydrocarbons, power systems, electrical, laboratory systems, enterprise solutions and training, information technology infrastructure, telecommunications and education. Among our list of clients are such names as Saudi Aramco, SABIC, Saudi Electricity Co., PetroRabigh, Marafiq and Petrofac.
In which areas do you see the potential for growth?
In the field of research and development. With all these investments in higher education, research centers and laboratories and the focus on acquiring nanotechnology, R&D is the right button to press. We have invested heavily into this field and have become one of the largest R&D companies in the region.
What are your views on the localization program called Nitaqat? Did it succeed in achieving what it set out to achieve?
There is no magic wand to solve the issue of unemployment among young Saudis, so one program and one answer is not going to meet the growing demand for jobs. There are hundreds and thousands of young men and women who are seeking good, quality jobs. It is their right to demand jobs. When these young men and women ask as to what we, as businessmen or the private sector, and the government have done for them, what we have planned for them, they are totally justified. They have a legitimate demand. Our job is to meet their demands and to satisfy them by helping them achieve their hopes and aspirations. The government is aware of their situation, and so is the private sector. It has always been the creed of this nation’s leadership to bring forth development and prosperity to its people. But, as I said, there is no magic wand to solve the jobs challenge at once.
The Eastern Province is the mainstay of the Saudi economy. What makes this region unique?
Allah, the Almighty, has endowed this region with the precious oil and gas resource. This is a major contributor to our GDP. Oil and gas revenue provides 95 percent of our GDP. That is not all. All the major borders surround the Eastern Province. That is a huge advantage. This is the reason why we see tremendous growth in the area. Plus, we are located on the sea. That gives us the advantage of conducting sea trade. So there are many reasons behind the rising profile of the Eastern Province…
… including, as you said, steady and visionary leadership?
Of course, our leadership has done a phenomenal job in providing stability. We have achieved tremendous progress in these eight decades. We had virtually nothing. This was a vast, barren desert. Thanks to the late King Abdul Aziz, we became one nation under one leadership. With unity came economic prosperity. Now we have glitzy airports and shiny automobiles. We have a vast road network. Every single town is connected to the power grid. Then we have the ever-expanding railway network. The infrastructure is mind-boggling.
All this is a direct result of good decision-making at the top?
Our leaders showed courage in the early years of the founding of this great Kingdom. The sons of King Abdul Aziz followed pragmatic policies. Today, under Custodian of the Two Holy Mosques King Abdullah and Crown Prince Salman, the Kingdom continues to undergo a massive economic transformation. New avenues are being tapped to diversify our economy. Whether it is tourism or new economic cities the idea is to wean ourselves away from this dependence on oil for revenue. The private sector has been given the incentives to take the lead. All of us are playing our part to make our Kingdom a shining example of development and prosperity.
Saudi Arabia is in the middle of a second economic boom. The first one was in the 1970s and 1980s. What lessons have been learned from the first boom?
Oh, yes; we have learned a lot. There have been thousands of studies comparing the plusses and minuses of the two booms. The one major lesson that we have learned is not to spend all the money at once. That creates inflation. The spending has to be balanced. The government, therefore, has taken pragmatic steps to avoid inflation. That is good and a healthy sign.
We keep hearing about the disturbing political situation in the region. Does it cause any alarm?
Business, economy and politics are interconnected. If the political scenario is not conducive then it does affect business sentiment. This region has its fair share of problems. The world economy is in a bad shape. It is suffering. We in Saudi Arabia are trying to increase investment to make sure that we are on solid ground. We need to constantly ponder about what happens when we run out of oil or gas. What are our plans? You know and I know that an economy that is based on just one product carries huge risk. The question is how can we further diversify our economy.
Talking about oil, Citigroup recently came out with a controversial study that implied that Saudi Arabia may face an oil shortage in 2030 because of huge domestic consumption. What are your views?
These are different studies. I have read about it. We cannot discount any scenario. In any business, one has to have worst-case scenarios and best-case scenarios. We need to plan for any eventuality. We need to take into account different studies and recommendations. Having said that let me state that, yes, God has endowed with a precious commodity, but it is in one of the harshest environments in the world. We have 50 degrees Celsius and 60 degrees Celsius temperatures in summer. That is not normal weather. We have one of the hottest and driest climates in the world. Naturally, we will consume more water, more electricity. When researchers compare our consumption with other countries in the world, they make the mistake of considering us as a country with normal weather. That is not the case. Our high consumption of water and electricity is directly linked to the harsh weather conditions.
These appendages of modern life did not simply spring up here like a plant in rich watered soil, did they?
No, they did not. Hard work, both physical and mental, produced what people enjoy today in the Kingdom. Hard work put every single brick into place and pushed every obstacle aside. The ongoing revolution in education and the government’s thrust on providing technical education and its creation of universities and institutes of excellence and higher learning will result in a new generation of technocrats that will come up with new ideas to propel our country into a new phase of development. There is this new technology that our youth are embracing. They are not what we were. They have the advantage of the latest tools of education. The government has given them scholarships. They have gone and are going to some of the best universities around the world. All this education will stand us in good stead, as this young generation will come up groundbreaking solutions.
And the infrastructure that has been put in place will provide them the ideal platform to score new successes?
Exactly. I am very hopeful, very optimistic. Every year has seen mega projects. We are marching toward our goal of becoming one of the most advanced economies in the world. From nowhere to being a G20 nation speaks volumes about the leadership and the Saudi businessmen.
Financial crime leads to billions of lost business in Middle East, survey finds
- Some 45 percent of MENA respondents in Thomson Reuters victims of fraud, corruption and bribery
- 77 percent of MENA respondents deliberately avoided customers, suppliers, countries or industries viewed as most exposed to financial crime.
LONDON: Middle Eastern companies are losing billions of dollars in business opportunities because of fears about financial crime, according to a Thomson Reuters survey published on Thursday.
Concern about the possibility of severe financial and reputational damage due to regulatory breaches leads foreign investors and firms to shun companies and entire regions where they see “heightened risk.”
In the Middle East and North Africa (MENA), 77 percent of survey respondents said that they deliberately avoided customers, suppliers, countries or industries which they viewed as most exposed to financial crime.
“The impact in terms of lost opportunities at both organizational and national level is difficult to quantify, but likely to impact productivity and economic development,” Thomson Reuters said.
The report was conducted online by an independent third party in March 2018. More than 2,000 senior managers at large global organizations completed the survey, from 19 countries.
In a hard-hitting conclusion, the report said: “For the first time our research has put a price on financial crime: three and a half percent of corporate turnover for the 2,373 large companies in our survey alone. That adds up to a staggering $1.45 trillion.”
Financial crime was said to blight individual lives and undermine the ability of governments to provide key services such as education and health. The IMF has shown that it reduces economic growth and social cohesion.
Che Sidanius, global head of financial crime regulation at Thomson Reuters, said that financial crime caused “incalculable” harm around the world. The proceeds of activities spanning bribery, corruption, fraud, and narcotics trafficking have been implicated in the financing of terrorism, human rights abuses such as slavery and child labor, and environmental crime.
“This has serious economic and social costs in terms of the lost revenues to national exchequers that could be invested in social development, and in terms of the impact on individual lives,” Sidanius said.
Other key findings were that 45 percent of MENA respondents had been a victim of financial crime as opposed to 47 percent globally; 96 percent believed that bribery and corruption was an important issue to tackle; 57 percent indicated that the consequences of bribery and corruption meant less government revenue; only 59 percent said that they fully conducted due diligence; and only 60 percent fully conducted due diligence, the report said.