A journey of poverty and wealth

Alsubeaei established a financial empire rooted in two incentives — utter devotion to God and his persistent resoluteness. The path before Alsubeaei and his generation of pioneers was neither streamed with rivers nor strewn with flowers. He achieved success before Saudi Arabia got the blessings of great wealth through the discovery of oil. A fervent patriot, he played a crucial role in helping shape the emerging Kingdom into a strong and modern state. The astonishing pace of change in Saudi Arabia during the 20th century forms a backdrop to the story of this extraordinary man.
Alsubeaei was born in Qassim in 1915, a year into World War 1. Through hard work, perseverance and strength of character, he rose to power and wealth, becoming an astute businessman respected by his peers, says Huda. Despite his position and power, Alsubeaei has been a modest man of great dignity, compassion and benevolence.
“A man who has walked with kings yet never lost touch with common people,” his daughter says with pride. In her book, which was published in 2010, Huda explains vividly the life and times of Sheikh Alsubeaei whose lineage traces back to the renowned Alsubeaei tribe of Qassim in Central Saudi Arabia.
The year of his birth witnessed the Battle of Jarrab, a confrontation between King Abdul Aziz and Ibn Rashid for supremacy over the Arabian Peninsula. The Saudi king ultimately won the conquest and this led to the formation of modern Saudi Arabia. For Abu Ibrahim, a nickname his friends and relatives fondly called Alsubeaei by, the death of his father was a defining moment.
He had not only to provide for himself but also to bear the heavy responsibility of caring for his younger brother Abdullah and his mother Nurah bint Nasser Al-Ammash. Her family traces its roots to the famed Qahtan tribe of Southern Arabia.
Sheikh Alsubeaei's career evolved concurrent with the Kingdom's economic development and was shaped by the business dynamics of the annual pilgrimage. “His faith drove his business practice with a fervent commitment to Islamic banking,” she points out. The 160-page book has two parts. In the first part, Huda explains about the country's economic setting, growth and prospects of Islamic banking and finance, the social setting for her father's success, his relations with Al-Saud royal family and his strong commitment to family values. Part two focuses more on her father’s business progress as a moneychanger, his charitable and social works and his poems.
The book gives an overview about the evolution of Islamic finance, which is as old as Islam itself. Under Islamic banking, money cannot be simply exchanged for money at varying rates. Instead, it is used to deal in asset-based commodities, which are then transacted for profit, predicated upon the Qur'anic verse: Allah makes trade lawful but prohibits riba (interest).
“The modern success of this ancient system is self-evident, as today, from Jeddah to Jakarta, nearly 300 Shariah-compliant Islamic banks operate within 50 countries with assets in excess of $300 billion,” the book says. Early on, Muslims demonstrated uncommon zest for commerce. The very first utterance of one of the companions of the Prophet (peace be upon him), Abdul Rahman bin Awf, upon his arrival in Madinah from Makkah was, “Show me the way to the marketplace.” That inspired Alsubeaei to become an inimitable businessman.
He began his working life as a laborer and then as a shopkeeper. From that modest beginning he became a trader, moneychanger, an investment banker and now is culminating his career as a revered and successful commercial banking pioneer. Huda sheds light on the economic situation of Arabia before World War II.
Until the discovery of oil, prior to the start of World War II, much of the economy of Western Arabia, the Hijaz and Najd, had resembled that of its early Islamic predecessors. Most of the revenues came from the annual pilgrimage to the Islamic holy places surrounding Makkah and Madinah.
During Alsubeaei’s youthful days, the region was characterized by deep religious conservatism accompanied by tremendous pride in tribalism and family values. Through the 18th and 19th centuries, portions of the Central Arabian Peninsula had been periodically ruled by sundry Saudi dynasties. But in 1980, Mohammed Ibn Rashid, a tribal sheikh from the Shammar tribe, ruled much of the North Central Arabia from the town of Hail in the High Najd, having driven Abdul Rahman bin Faisal Al-Saud, father of King Abdul Aziz, into exile in Kuwait.
In 1901, when his son, Abdul Aziz bin Mohammed Ibn Rashid, threatened Kuwait with a camel-mounted foray into the emirate, the emir of Kuwait called upon Abdul Aziz Ibn Saud to seek reprisal. That plan was fully consonant with the latter’s move to retake the House of Saud’s historic family homeland, Huda says in the book, giving an insight into the history of Saudi Arabia. “Commencing in 1902 with a daring and successful raid carried out by 63 troops on the heavily armed Masmak Fort in Riyadh, then under the control of Ibn Rashid, Abdul Aziz set upon a fateful but ultimately a successful course,” the book said.
Indeed between 1902 and 1906, Abdul Aziz captured much of central Najd, thereby reducing Rashidi sovereignty in their home area of Jabal Shammar, killing Abdul Aziz bin Muhammad Ibn Rashid in a decisive battle in Buraidah.
Alsubeaei arrived in Makkah at a time when King Abdul Aziz and his men were engaged in wresting control of the Hijaz from Sharif Hussein. In this military confrontation, while the Turkish-based Ottoman Empire supported Hussein, the British India Office supported Abdul Aziz and the claim of the Al-Saud to power.
Alsubeaei distinctly recalls the presence of future King Abdul Aziz within Makkah as well as his participation in the pilgrimage at that time. Sheikh Alsubeaei enjoyed great relations with all of Saudi rulers from King Saud to King Abdullah. “In the words of Prince Saad bin Khaled bin Muhammad, what cemented these strong relationships was simple: He respected them and they respected him,” the book said. At the beginning of his business career, Alsubeaei traveled by plane to India and Pakistan with King Saud. There he engaged in commerce transactions in gold, acquiring among other goods like oud. Trade with the Indian subcontinent and elsewhere represented a significant commercial outreach for many of the merchants of western Arabia.
Alsubeaei was unequivocal in his assertion that as a trade outlet India was then a one thousand percent better market than Pakistan, Huda says in her book.
The book also refers to the history of Bank Albilad. In 1977, while Alsubeaei was present at King Khaled’s court, the king proposed converting his money exchange into a full-fledged independent bank, since the Kingdom’s economy at that time was at the apogee of its buoyancy. Nobody knew that King Khaled’s shrewd suggestion would ultimately lead to the formation of Bank Albilad in November 2004, the book says. The initial business of Alsubeaei brothers included selling consumer goods to pilgrims and meeting the need for currency conversions to complete the transactions. Moneychanging was a common ancillary occupation for merchants from the Hijaz and Qassim in their trade with foreigners.
Over time, money changing frequently developed as a separate business in its own right. According to Huda, money changing was a business practiced in the Hijaz, dating back to the earliest Islamic times. It started with the need for a merchant to accept foreign currencies from incoming pilgrims to facilitate the ongoing trade in goods and services.
Her father asserts that many currencies including Syrian, Egyptian, Indian, Iranian, Iraqi, Sudanese and Somali were prominent in this ongoing exchange.
“There were no banks within the Hijaz at that time, apart from Saudi Hollandi Bank, which was established in 1926 and operated as an independent bank,” Huda points out.
Currency exchange was a flourishing business in early 20th century in western Arabia. Operating primarily on a currency arbitrage basis, the moneychangers would buy incoming foreign moneys from the pilgrims and sell them to the bankers in Makkah, with the peak of money changing beginning six months before the onset of pilgrimage. “We would receive great amounts of 1,000 Indian rupee notes as well as Iraqi dinars and Iranian and Turkish currencies,” Alsubeaei said.
Through their unshakable honesty, the Alsubeaei brothers won the trust of their clients, a crucial factor in their success. Their trust was based on the principle of absolute fidelity and public oversight. Thus, personal integrity was a key to success. The varied business and financial enterprises of Sheikh Alsubeaei appear well positioned to meet the dynamic challenges of the modern global market place.
“Today the House of Saud and devout citizens like Alsubeaei are united in their economic vision and a common quest to build a 21st century economic superpower. Given the paramount importance of economic diversification, its quest for a balanced, scientifically-guided economic growth has centered upon a six-fold strategy of developing a highly profitable, economically diverse private sector base, contributing to national economic and financial diversification goals, creating jobs for citizens, capitalizing on its unique sources of competitive advantage and adding downstream value to the natural raw materials available in the country. The centerpiece of Alsubeaei’s religious zeal is his unflinching commitment to strong family values, the book underlines.
From his childhood, he was deeply devoted to his mother, sending to her all that he saved from work in Makkah to Unaizah, Qassim, where she was living. His powerful family commitment, together with his mother’s supplications that he and his brother Abdullah be reunited and her great pride in both of them were among the most important reasons for his success and his continuing care for his loved ones, the daughter says in the biography of her father.
The illustrated book contains a number of pictures showing Alsubeaei’s meetings with King Fahd and King Abdullah, his love toward his grandsons and daughters, his dealings with foreign business leaders, his close relations with friends and old market places of Makkah, where he began his business.
Huda Alsubeaei’s book is worth reading for all those who want to know more about Saudi Arabia’s history, culture and business environment.