Al-Badr: We can gain from unique tourism industry

Updated 08 January 2013

Al-Badr: We can gain from unique tourism industry

Developing a unique tourism industry, rationalyzing resource consumption and diversifying national revenues are the three main concerns of Badr Al-Badr, CEO at Saudi Hotels & Resorts Co.
The Kingdom should address the issue related to high economic dependence on oil and find solutions for water conservation, Al-Badr told Diana Al-Jassem of Arab News in an exclusive interview.
He emphasized that the Kingdom’s reliance on oil could be reduced by further developing national human resources and by training Saudi nationals to boost human resources.
He stressed the need to strengthen the soft skills of youngsters adding that urgent solutions are needed to tackle the unemployment issue.

Rapid change
What, in your opinion, are changes that would have major impact on the lives of Saudis in the coming 20 years?
Our population is growing faster than the economy, resulting in a very large percentage of youngsters who might become unemployed. High resource consumption on other hand has a serious impact on the environment; leading to shortages in resources such as water and electricity. It seems to me that in the next 20 years, the new generation will be more challenged to maintain living conditions such as ours. If we don’t act now to overcome the difficulties and obstacles, our economy will not prosper, hence our life. If we look at the external factors, we find the leading of powers are shifting from the West to the fast growing East, dominated by China and India. This will also change the face of world business. For example, in the past a person needed to learn English to work worldwide. In the next 20 years, other languages might be in demand. Perhaps in the next 20 years; we will have stronger trade with Eastern countries like China.
Finally, the impact of current wide scale scholarship program should have a positive impact in the two coming decades. It will take some time for the society to absorb the new graduates who also might push to evolve the norms of life and society. From a labor perspective and if the economy doesn’t grow substantially, the ongoing scholarship program will strain employment rates.

Role of leadership
What do you think of the leadership roles of organizations in the Kingdom? What are the factors/reasons for their current state?
Leadership in local organizations of Saudi Arabia is dominated by a traditional style that focuses on relationships rather than performances. Yet we see exceptional leaders in both the public and private sectors who are very energetic and result oriented. They have become role models for our youth. With new leaders coming up, I am very optimistic that the whole leadership style will evolve. We also see more emphasis on leadership education, and training as well as leadership seminars, which indicates that there is a willingness to change and improve.
Challenging tasks
What are the most difficult decisions that need to be taken in the Kingdom in the coming 20 years?
The first difficult decision in my opinion is pursuing education reforms. Our education reforms should be directed toward producing employable human resources. We still have an imbalance. We have unemployment on one hand, and on the other employers are looking to fill vacant positions as they are unable to find qualified and trained Saudi nationals. Many of our youth lack practical training and so don’t possess soft skills like presentation or communication skills and team work. Our schools and universities still emphasize on theoretical knowledge. There is still a room to improve our students as many countries have done it. We need leadership to focus not only on the number of graduates but also on their capabilities.
The second difficult decision is on rationalization of resource consumption. Tough decisions need to be taken regarding domestic oil consumption, exports and use of water. Our country globally is ranked among the top in the use of water even when we have the least of it. The question is not of a decision, but a campaign to address everyone.
We need to be more competitive in the world economy. In the last eight years, Saudi Arabia has taken huge steps toward becoming much more competitive, but now it’s slowing down a bit. Reforms are not continuing as they should be. We have seen changes in some of the company laws and foreign investment laws, and some of these decisions are being reversed or debated.
One last decision needed is about our labor laws. I see the Ministry of labor taking isolated decisions that need to be integrated. I would argue that some of the steps taken would conflict with some others in the Saudi labor market. I still cannot read an overall human resource strategy for the Kingdom.

Sustainable development
What goals would you set regarding the Kingdom’s development? And how would these goals be achievable through your current position?
The main goal of development in Saudi Arabia is to diversify the economy. For us working in the hospitality and tourism sector we care a lot about religious tourism, which could be easily expanded. We should promote the country as a tourist destination for leisure and sight-seeing in addition to religious tourism. In our company, we are participating in building the tourism infrastructure, hospitality, hotels, and resorts. We also help in creating job opportunities for young Saudis. We, as other organizations, face challenges in employing Saudis, but we accept these challenges because we know that there is no other way to succeed than to succeed with Saudi nationals. We provide programs to train Saudis, and provide internships to students to try to work and be exposed to the sector. It is one of our many programs that we do to attract Saudis. One of the main problems that we face with Saudi employees is that they take up a job and then after a few months leave. We need to address this problem jointly with the government. For that we are looking to partner with the government to address employment and Saudization issues.

Creative project
Give me an example of the most creative project that you wish to establish in the Kingdom.
I wish to make the Farasan Island an attractive tourist destination. The island is suitable for tourism, but it is still lacking infrastructure including transportation. We hope we can partner with the government to focus on this island by developing it as a destination.
I would also want to reinvigorate tourism to archaeological areas, and increase the scope of religious tourism. This can be done successfully by reshaping the old ways of pilgrimage and providing places for basic services needed. Furthermore, I wish to make the tourism business attractive for Saudi youth. I notice that despite the availability of enormous opportunities in this sector, young Saudis and even specialized graduates leave this sector to work in other fields

KSA in three words
What three words would you use to describe the Kingdom in the coming 20 years?
I would call the Kingdom in three terms — youth, energy and competition (in global ranking and influence.)
Regarding Kingdom’s officials, what characteristics do you think are important for such individuals? How would such characteristics contribute toward the Kingdom’s further development?
To be successful, they have to be adapting to deal with the prevailing circumstances on the one hand, but have an agenda for change on the other.

Human rights
How can we all improve human rights in Saudi Arabia?
What are your expectations regarding human rights practices in the coming 20 years?
Human rights in Saudi Arabia are based on Shariah, yet unfortunately there are many misapplications and in turn misconceptions about the situation of human rights in the Kingdom. From my point of view, I expect to see more attention paid to workers’ rights and building a healthier relationship between the worker and the employer in the coming 20 years.

Biggest challenge
What is the biggest challenge facing the Kingdom today?
As I said, I believe that the biggest challenge for Saudi Arabia is to maintain its strong economic growth and also diversify its sources of income. I also wish that the Kingdom works toward making tourism its second source of income. The government should make great efforts to promote the tourism sector and raise the proportion of its contribution to GDP. While focusing on tourism, we should also aim at capturing a portion of the spending of Saudis during their seasonal vacations abroad.

Prominent activities
What are the most prominent economic activities in the Kingdom? What are the neglected sectors that need to be developed?
The Kingdom has an economy based on oil where it owns 25 percent of the oil reserves in the world. Therefore, it is natural that the petroleum sector accounts for high levels of budget revenues and export earnings and their contribution to GDP. The government encourages growth in the private sector to ease the Kingdom’s dependence on oil and increase employment opportunities for the ever growing population. These are the reasons for allowing the private sector and foreign investors to participate in power generation sectors and communications. Our emphasis is rightly on religious tourism, but we also need to encourage leisure and vacation tourism to attract visitors from the world over.

Housing growth
There is a huge demand for housing in the Kingdom because of rising young population. The government has also put emphasis on this sector as it allocated SR 250 billion in this budget for housing. Do you believe housing sector needs much attention from the government and private sector?
I believe that much attention is needed to address the housing problem. The most affected in terms of housing are the middle-class people. Such people are faced with difficulties in finding houses, or even suitable hotels and residential units. They also find most houses, hotels and tourist sites unaffordable. Our company is focusing addressing the needs of this middle-class.

Role of SMEs
There is a need to boost small and medium enterprises (SMEs) sector in the Kingdom as it creates various jobs. What role do you see for SMEs in the Kingdom’s economic development?
Tourism provides many opportunities for SMEs. Recently, we saw that the Saudi Commission for Tourism and Antiquities (SCTA) highlight areas of investment suitable for SMEs.

Knowledge hunt
Education is always a priority for the Saudi government. What changes you envisage in the education system to fit Saudi youth in a knowledge-based economy?
Training is needed for Saudi graduates. Unfortunately, we see new graduates unable to hold jobs due to their inadequacy or weaknesses in several skills and training. We suggest the Ministry of Education should include on the job training as part of the syllabus in universities.

Fair opportunities
How do you see Saudi women’s contribution in labor, social and political arenas in the coming 20 years? And what’s required in order for Saudi women to materialize your future vision?
Women have always been important in our society but underrepresented in the economy. Change has come to society; realizing women’s contribution in the labor sector. With this new realization, there are new opportunities open for women. In our sector, we are proud to have a small but growing population of women. While planning for expansion, we do recognize that our industry has to serve all segments of society. Women need to be in leadership positions in our company. Right now, they are in very specific positions and the scope for them in the industry will be expanded in the coming years.

Saudi media
What measures and standards are yet to be (and must be) applied to Saudi media? What are your expectations in the next 20 years? What impact will social media have regarding change in the Kingdom?
The use of new media across the network has led to a decline in usage of traditional media. I believe that the focus has increased on the quality of the news rather than the quantity. The new media has given voice to all, especially to Saudi Arabia that suffered from a ‘controlled media.’

Learning from the past
What are three or four mistakes repeated in the Kingdom during the past two decades? And how could we eliminate these mistakes in the course of the Kingdom’s further development?
General development plans must go in parallel with the budget. Such a step will definitely create a competitive economy compared with other countries and boost the development plans.

Message to youth
As that the youth generation makes up the majority of the Saudi population, what message would you want conveyed to them? And what else would you say to the rest of the population?
Young Saudis should be qualified for the labor market and ready to compete in business. They should prepare themselves to compete not only with the local market requirement but also in the international market.

Shell, Exxon not to seek compensation for end of Dutch gas field production

Updated 30 min 33 sec ago

Shell, Exxon not to seek compensation for end of Dutch gas field production

AMSTERDAM: Energy companies Royal Dutch Shell and Exxon Mobil will not submit a claim for missed revenue due to the Dutch government's decision to halt gas production at the Groningen field by 2030, the Dutch ministry of Economic Affairs said on Monday.
"A lot of gas will be left in the ground," Economy minister Eric Wiebes said at the presentation of his deal with the oil majors responsible for extracting Groningen gas.
"That gas is the property of the oil companies, but they will not submit a claim and the government is not required to compensate them."
The Dutch government in March said it would end gas production at the Groningen field by the end of the next decade, in an effort to stop a string of relatively small, but damaging earthquakes caused by gas extraction.
This will leave around 450 billion cubic meters (bcm) of gas in the ground, Wiebes said, with an estimated value of approximately €70 billion ($81.5 billion).
The decision to halt Groningen production forced the government to broker a new deal with Shell and Exxon Mobil, whose 50-50 joint venture NAM is responsible for the field.
NAM will be required to pump as much gas as the government says is needed in the coming years. In return, it will see its share of the revenue from Groningen rise from 10 to 27 percent, Wiebes said, starting this year.
As part of the deal, NAM will also contribute a total of €500 million to strengthen the economy in the Groningen region.