Today we are lauding the Top 100 Companies in the Kingdom, but if we are to drag ourselves back from the quicksand of economic despair we must quickly focus our attention on the activities of the smaller players in our market as well. It is the small businesses that employ the greatest number of people in a dynamic, booming economy. In Saudi Arabia, unfortunately, we have made it difficult for small businesses to thrive.
Our financial institutions say that lending to small businesses is too risky. The length of the "black list" developed by local banks supports their position to some extent. Yet, our banks lack creativity in servicing larger firms as well. Many of those companies have been turning to offshore lenders to finance new projects. In our bloated bureaucracy, there is no small business administration tasked with the goal of keeping small businesses thriving. Many believe that this is the job of the chambers of commerce but they have woefully inadequate resources and lack mandates for such a great responsibility.
Even more worrying than the small businessmen who cannot get loans are those businessmen who have brought their funds back to the Kingdom in the aftermath of Sept. 11, and now have no productive projects in which to invest. I met with one such gentleman who explained to me that he had wanted to improve a substantial section of beachfront that he owned near the city of Alkhobar. His plan was to create a family recreation area similar to ones available in nearby Bahrain. Despite representations to numerous government officials, he could get no assurance that even if he obtained all necessary permits he would be able to operate his business without harassment. Consequently, the project was shelved. He is not alone.
The majority of companies who would like to develop projects in the areas of tourism and recreation have made no move toward implementing their plans, fearing that they will never be able to operate them in a financially rewarding manner. Why do we not have such simple and harmless amusements as dinner cruises, bowling alleys or roller blading trails? Where are the companies running desert safaris, folklore villages or theme parks? We claim that we want to promote tourism as a new area of growth for our citizens but we won’t provide encouragement to businessmen who want to create basic recreation facilities.
We all know that our economy is sluggish and our per capita income is dropping. Our labor force is growing by about 4 percent per year, one of the fastest rates of expansion in the world. It is impossible with the current bureaucratic system that our economy will expand fast enough to allow all our children to have a decent standard of living. That’s a pity because, up until now, as a nation we’ve come so far, so fast.
It does not have to be this way. We have substantial resources. We have significant talents. Islam has always encouraged compassionate capitalism. Let us not forget that at the foundation of our faith are the words and deeds of a small businessman who became our Holy Prophet, peace be upon him. He preached honesty, hard work, sacrifice and learning — values that somehow lost appeal in our society. This is now reflected in the sad state of our economy. The path back to prosperity for us is clear. We ignore it at our peril.