Moving to capitalism is a must especially when the economy is the engine that changes Saudi life, according to Saud Abdulaziz Al-Gusaiyer, CEO of AMJAL Property Development Company, and former CEO of Dar Al-Arkan Real Estate Company.
Al-Gusaiyer, who has been working as a real estate developer for the past 25 years, was one of the first Saudi businessmen who convinced Saudi banks to help young Saudis own homes under the mortgage. “Motivating and supporting the youth will reflect positively on the growth of the Saudi market,” Al-Gusaiyer said in an exclusive interview with Diana Al-Jassem of Arab News.
Al-Gusaiyer’s keen that the Saudi way of life is consistently maintained and sustainable development is achieved through the prudent utilization of resources for increased economic growth.
Rapid change
What changes would make a major impact on the lives of Saudis in the coming 20 years?
I believe that the strong element that is really expected to change everything in our lives is the economy. There is no doubt that the Arab Spring started because of economical needs. Actually, economic changes will leave their impact on everything in our life, especially in social and political areas. The country will move into a capitalist market in the coming 20 years. This move will impact the Saudi market. Actually, we are now a country that is fully dependent on oil and gas. We don’t have human resources to depend upon. Now we are moving to capitalism, as the country will have multiple sources of economy. We need to have multiple sectors and restructure the market people becoming productive. Capitalism is required as it is going to increase the GDP of private sector gradually from 30 percent, which is the current rate, to 80-90 percent. This could happen after the next 20 years. I expect the private sector GDP to be about 60 percent during the coming 20 years. Within this move, many changes will occur on social and political life. These changes are called ‘Knowledge Revolution.’ On social level, I can see our society to be more mature where social and political structure might be changed. These changes are not optional; we are going along that obligatory path.
Role of leadership
What do you think of the leadership roles regarding organizations in the Kingdom? What are the factors/reasons for their current state?
Participation is required from all officials to achieve sustainable development in several sectors. As we are moving toward capitalism, all officials have to contribute in their respective sectors. Both the public and private sectors need to focus on developing the product, regulations and skills. If they don’t boost these three elements any of them would be out of the market. During the past 10 years we witnessed rapid activities of the public sector, but now we don’t. This happened because of the economic movement that the whole of the Middle East is going through.
Challenging tasks
What are the most difficult decisions that need to be applied in the Kingdom in the next 20 years?
Serious decisions, both easy and difficult, need to be applied. During the past four years, we witnessed a gradual movement toward capitalism. For example, mortgage took eight years to be approved. This decision is part of the market movement but our society faced many issues. Such decisions are needed because we are a single source of the economy. We have to keep the same level of Saudi way of life, achieve sustainable development and effectively utilize the resources for sustainable economic growth.
Sustainable development
What goals would you set for the Kingdom’s development and how would these goals be achieved in your current position?
Throughout history, many countries collapsed because they were depending only on natural resources, while their population was rising. The continuously rising population created many problems in housing, jobs, information technology, education, health care and many other sectors. Therefore, my main goals are to achieve sustainability in the Kingdom and diversification of the economy. As a developer of housing and real estate I believe that I did my part and participated to facilitate mortgage system in the Kingdom. I tried to help Saudis to fund themselves and build their homes through bank loans just like what happened in the United States.
Creative project
Give me an example of the most creative project you wish to establish in the Kingdom.
I wish an initiative were launched to develop funding. We have banks that fund, but we are not yet reached the satisfaction and diversity of the equity and funding. We need finance, as it is very important element to achieve capitalism.
KSA in three words
What three words would you use to describe the Kingdom in the coming 20 years and why?
Institutionalism, diversification, and sustainable economy. An institutional system is required in all sectors. In each sector we have regulations and law but we need these regulations to be applied well. Institutionalism can help us to apply laws perfectly.
Regarding the Kingdom’s officials, what characteristics do you think are important for them? How would such characteristics contribute toward the Kingdom’s onward development?
Determination, flexibility, openness and professionalism are the most important characteristics that each leader should have in both the public and private sectors. Nobody is right and nobody is wrong, so leaders have to be flexible and open to adjust to new market changes.
Human rights
How can we all improve human rights in Saudi Arabia? What are your expectations regarding human rights practices?
Saudi Arabia signed many memorandums of understanding with Western countries to outline proper human rights. We claim that we implement human rights, but we do not. We need institutionalism in this sphere also. People have to know their rights. When we institutionalize human rights, people will know their rights. Unfortunately, people in the Kingdom don’t now their rights.
Biggest challenge
What is the biggest challenge facing the Kingdom today?
The biggest challenge is to turn society’s problems into opportunities. For example, we have to offer education that is needed in the Saudi market. The biggest challenge we are facing is to prepare our next generation, make them qualified to work in Saudi market and restructure the market to accommodate the new generation. The Saudi market does not seem to accommodate the number of Saudis studying abroad who will return in the next few years. We need to make our youth the future source of income. When we create many job opportunities that serve the Saudi market, the middle class will grow. Expanding the middle class is paramount because it is a sign of economic growth.
What are the most prominent economic activities in the Kingdom and what are the neglected sectors that need attention?
The most prominent activities are in the areas around oil and gas in addition to real estate. Actually, real estate is the most lucrative investment sector in the Kingdom as it is the safest one for people to invest their money.
In consistency, real estate sector is considered also neglected in terms of its ‘regulations’ where this ector not regulated yet.
Housing growth
There is a huge demand for housing in the Kingdom because of rising young population. The government also has put an emphasis on this sector by allocating SR 250 billion in this budget for housing. Do you believe housing sector needs much more attention from the government and private sectors?
For sure, the housing sector needs more attention. If we don’t solve the housing problem, it will lead to social and political problems. Time is over. As much as we are late, we have to pay more money. We should solve the housing problem itself and not its symptoms. No fast solutions are available; we have to wait for two decades. However, real estate is expensive due to high demand and supply. Saudis buy lands to save their money so the land prices increase. Lack of jobs creates problems of affordability. In Saudi Arabia, we suffer from a strange ‘housing culture.’ In the 1973, the average of house space was 90 square meters. Today, the average of house space is 225-square meters. We are insisting on a housing style that we cannot offer. This culture will be changed during the coming twenty years due to economic reasons. Institutionalism can help in streamlining the nation’s housing system.
Role of SMEs
There is a need to boost small business enterprises (SME) sector in the Kingdom as it creates jobs of all categories. What role do you see for SMEs in the economy?
SMEs are vital. What we need here is to motivate the Saudization and offer jobs for women. SMEs also can create economic resources. We can then determine how many SMEs can mushroom under the umbrella of major companies. Most the well-known international companies were started as SMEs. It is in the interest of SMEs and ultimately the economy if they receive adequate support for both operation and expansion. After all, they are the engine of overall economic development and growth in a free market. In the Kingdom, SMEs lack effective motivation.
Knowledge hunt
Education is always a priority of the Saudi government. What changes do you envisage in our education system to fit Saudi youth in a knowledge-based economy?
School is defined worldwide as a tool of communication between teachers and students. In the Kingdom, we don’t have enough education to meet the needs of the Saudi market. In the past, working in the public sector was the dream of each Saudi individual. School student graduates even with low skills can fit the needs of the public sector. In the private sector, however, we need highly qualified, gifted and skilled students. If we review the experience of other countries in terms of education, we will notice a big difference. People in neighboring Arab countries believe that education is more important than money. This is why they build their children’s character before building a fortune for them.
Fair opportunities
How do you see Saudi women’s contribution in the labor, social and political areas in the coming 20 years?
Saudi women make up half of the society. They are also part of the middle class people. The expected changes in the Saudi economy will certainly raise the need for women’s contribution in the job market.
What’s required in order for Saudi women to actualize your future vision?
Quality education is required to fill gaps in our society. Women can then compete freely in the Saudi market.
Saudi media
What measures and standards are yet to be (and must be) applied to Saudi media and what are your expectations in the next 20 years?
The current problem in the Saudi media is that they only care about profits. The best thing is to have non-profit media associations. Such a step would create professionalism and independency. Media’s main aim should be to improve the society without a profit motive.
Social media
What impact will social media have on the Kingdom’s traditional media?
Traditional media is losing the ground where social media will be a major player in the future. Social media will help spreading knowledge among people fast. As a result, quick knowledge transfers will produce a generation that is considered very educated, smart and not easy to be tricked.
Learning from the past
What are three or four mistakes that have been repeated in the Kingdom during the past two decades? And how could we eliminate these mistakes in order to develop the Kingdom?
Having a single source of income is really a mistake. However, there are three elements that can help us to avoid mistakes. These elements are sustainability, strategy and privatization. Officials only remember the need for sustainability, privatization and strategy when they notice decrease in the income. Once the oil profits are stable, no one will care about these three important elements.
Message to youth
Given that the youth make up the majority of the Saudi population, what message would you want to be conveyed to them? And what else would you say to the rest of the population?
Think globally because the world has become a small village. Let’s observe world markets, raise our standards and increase our competitiveness. My second advice is that youths should not stay at home waiting for jobs. They should venture out and acquire skills. They should work on any salary during their first years in labor market. Once they spend a year or two to gain experience, they can improve their prospects in the job market.
