Al-Jasser: Knowledge-based economy vital for growth

Al-Jasser: Knowledge-based economy vital for growth
Updated 05 November 2013

Al-Jasser: Knowledge-based economy vital for growth

Al-Jasser: Knowledge-based economy vital for growth

The 5th Annual Saudi International Technology Incubation Conference opened by Economy and Planning Minister Muhammed Al-Jasser in Riyadh on Tuesday, is focusing on the need to develop a knowledge-based economy.
Speaking on the importance of transforming the Saudi economy to a knowledge-based economy driven by creativity, innovation and entrepreneurship, Al-Jasser said such a development would bring an economic renaissance in the Kingdom.
He explained that with the knowledge-based economy, countries such as Japan, Korea and Singapore have made tremendous economic progress without having natural resources.
This year, the King Abdulaziz City for Science and Technology (KACST) and Badir have teamed up with the Technopolicy Network to organize the 5th edition of the conference, which has incorporated the networks of the 10th International Annual Conference. Its aim is to provide stakeholders and practitioners in the entrepreneurship and incubation industry the opportunity to contribute to discussions with international and local expertriates about the importance of science and technology-based businesses within the Kingdom and to consider the latest developments in technology entrepreneurship, innovation and the role that incubators should play.
The conference will help develop knowledge and understanding between policy makers, incubation practitioners and stakeholders about the importance of science and technology-based entrepreneurship and its role in the creation of a knowledge-based economy and a diversified technology industry base, while providing networking opportunities that support the development of the Saudi incubator industry.
The minister pointed out that the spending on research and development in the Kingdom has increased from 0.4 percent to 3.4 percent, which is a remarkable achievement at the regional level. He stressed that the Kingdom has topped in such spending among the Arab countries. At global level, he said, the Kingdom has been ranked 33rd among 139 countries in spending for research and development.
KACST President Mohammed ibn Ibrahim Al-Suwaiyel said scientific research and technological advancement were pivotal elements of the progress and prosperity of nations in various developmental areas as developed countries striving toward progress, had long understood.
In fact, he said, the developed countries have spared no expense on research and development (R&D), dedicating a considerable portion of their GDP (gross domestic product) to this purpose, which has led to the phenomenal scientific and information revolution we witness today. It has also led to the fierce competition, which effectively relies on financial and economic power, as well as the possession of novel and information technology.
“Realizing that any developmental effort has to be based on a solid scientific foundation, our government has dedicated great attention to science and technology. Thus came the conception of KACST in 1397H, to promote and support applied scientific research that contribute to development in the Kingdom, supporting and coordinating the tasks of scientific institutions and research centers in that area, according to the developmental needs of the Kingdom.”
KACST has supported many scientific research projects aiming to serve developmental issues in various sectors. These research projects have yielded good results which have benefited various parties of both the private and public sectors. KACST has also provided scientists, researchers and students in Saudi universities with considerable support and services.
It is also in the process of implementing many research projects in its labs and research centers, which are well equipped. KACST research helps in solving many developmental problems that the Kingdom encounters in different areas of both the public and private sectors.
The studies, consultations and services of KACST reach most of the government's ministries. Including the Ministry of Higher Education, the Ministry of Commerce and Industry, the Ministry of Health, the Ministry of Agriculture, the Ministry of Interior and Ministry of Defense and Aviation.
At the lead of the large institutions which deal with KACST are Saudi Aramco, Saudi Basic Industries Corp. (SABIC), Saudi Telecom Company (STC), Saudi Pharmaceutical Industries & Medical Appliances Corporation (SPIMACO), (the Advanced Electronics Company (AEC), Saudi Electricity Company (SEC), Saudi Arabian Mining Company (Maaden), National Agricultural Development Company (NADEC), Saudi Oger and Almarai.
Nawaaf Al-Sahhaf, CEO, Badir Program for Technology, said KASCT was successful in setting up 11 incubators in major cities, including Makkah, Madinah, Riyadh, Jeddah, the Eastern Province, Qassim and Al-Kharj, which play an important role in supporting the process of economic development.
The other speakers included Saudi Arabian General Investment Authority (SAGIA) Gov. Abdul Latif Al-Othman and Technopolicy Network Chairman Richard Bendis.

Mideast's largest mall operator to expand amid vaccine hopes

Mideast's largest mall operator to expand amid vaccine hopes
Updated 15 April 2021

Mideast's largest mall operator to expand amid vaccine hopes

Mideast's largest mall operator to expand amid vaccine hopes
  • Employs some 43,000 people regionally
  • Revenue fell 7 percent to $8.9 billion last year

DUBAI: The Middle East's largest operator of malls expects revenue and earnings to climb back to pre-pandemic levels by the end of next year and is moving full steam ahead with plans to develop its biggest mall ever.
In a wide-ranging interview with The Associated Press on Thursday, Majid Al Futtaim CEO Alain Bejjani said business is steadily rebounding amid vaccine rollouts in some countries of the region, kicking 2021 off to a relatively strong start.
“We’re not out of the woods across the markets, but things are improving,” Bejjani said. “Going back to the pre-pandemic levels— to 2019 level— in my opinion, will happen by the end of 2022 in terms of financial results."
The company's plethora of retail and leisure holdings include the iconic Mall of the Emirates in Dubai, hundreds of VOX cinema screens and more than 350 Carrefour grocery stores in the Middle East and beyond. Named after its Emirati billionaire founder, the company's largest markets are the United Arab Emirates, Saudi Arabia and Egypt, but its reach extends as far as Pakistan, Kenya and Uzbekistan.
The company's projections of a rebound and its plans for expansion reflect the faster than anticipated recovery of Middle East economies from the coronavirus pandemic, though uneven vaccine distribution remains a concern.
Majid Al Futtaim, which employs some 43,000 people regionally, saw its revenue fall by 7 percent to $8.9 billion last year and earnings drop by 19 percent to around $1 billion due to coronavirus lockdowns and restrictions. The hardest-hit side of the business was its leisure and entertainment arm, where revenue fell by 49 percent to $380 million and earnings plummeted by 122 percent, resulting in losses of $25 million.
Despite last year's slump, Majid Al Futtaim plans to unveil 30 new movie theater screens this year in Saudi Arabia, is developing it’s biggest mall project ever in Riyadh, and is opening what will be the largest mall in Oman at the end of 2021.
“Every country has had their own set of challenges to deal with. The reality is the fastest recovery is the UAE... and we expect very fast recoveries in other markets like Saudi Arabia,” Bejjani said. “We have also seen Egypt being very resilient.”
The United Arab Emirates has rapidly rolled out COVID-19 vaccines, which are free of charge for citizens and residents. Saudi Arabia is also expanding its vaccination rollout and has offered all residents free coronavirus treatment since the start of the pandemic.
It's not back to business as usual just yet, though. Majid Al Futtaim— like many businesses globally— is having to adjust to new realities, including the potential imposition of so-called “digital passports." In Bahrain, for example, where Majid Al Futtaim operates 30 cinema screens, only people who've been vaccinated or recently recovered from COVID-19 will be allowed into cinemas, gyms and other select spaces soon.
Bejjani said the company is “very supportive of any measure” that gives customers the feeling of being safe.
“Whenever there is an additional regulation, that actually gives people even more certainty, I think this is a plus, whether it is the vaccine passport, whether it is something else,” he said. “At the end of the day, what’s important is that people want to go back to normal. People want to go back to consumption.”
The company's rapid growth and expansion since its inception in 1992 mirrors that of its home base of Dubai, where a frenetic construction boom has transformed it from a fishing village into one of the most talked about modern cities in the world. The company's economic rebound is also closely tied to that of Dubai's, where the International Monetary Fund expects the country's overall economy to grow this year by 3.2 percent.
At the height of the pandemic last year, Dubai imposed a 24-hour curfew and government-mandated permits were needed to leave the house. Even then, Majid Al Futtaim's Carrefour supermarkets remained busy.
Because the United Arab Emirates imports most of its produce, meat and poultry, Majid Al Futtaim’s policy of stockpiling a three months’ supply of basic goods proved crucial when nervous shoppers in Dubai rushed to stock up on goods during the first days of growing restrictions on movement.
In the wake of 2020, Bejjani said the company is in conversation with the government of the UAE to increase stockpiles of certain products up to six months. The company is also working with 6,000 local farmers to increase production of fruits and vegetables, while also supporting farmers as far away as Kenya to ensure a diversified supply of fresh food for its UAE stores. A half dozen Carrefours in the UAE began growing their own lettuce and herbs in hydroponic farms last year, Bejjani said.
The company's Carrefour business across the region saw earnings grow by 14 percent to $440 million last year, even as revenue slightly fell. That was due in part to the company's overall 188 percent increase in online sales as people moved toward grocery delivery services.
By the end of last year, the company also saw more visitors returning to its malls and cinemas.
Majid Al Futtaim’s crown jewel in Dubai is the Mall of the Emirates, home to an indoor ski slope and the world’s busiest Carrefour supermarket. A recent walk through the mall showed it's cafes, restaurants and stores teeming with visitors. Still, there were also many shuttered storefronts - evidence of the economic slowdown that had hit Arab Gulf oil exporting nations even before the pandemic.
The region's many sprawling luxury malls aren't just for shopping, though. They offer an escape for millions of people seeking respite from the long summer months. Bejjani said despite some store closures across its malls, there continues to be “big demand” in the Gulf for more entertainment and retail spaces.

ESG investing makes business sense: Saudi PIF chief

ESG investing makes business sense: Saudi PIF chief
Updated 15 April 2021

ESG investing makes business sense: Saudi PIF chief

ESG investing makes business sense: Saudi PIF chief
  • The PIF has already incorporated ESG principles into its $400 billion worth of global investments as the sector gains in prominence throughout the region

RIYADH: Saudi Arabia’s Public Investment Fund (PIF) Governor Yasir Al-Rumayyan said that environmental, social, and governance (ESG) programs made solid business sense in the Kingdom and worldwide.
“Such action not only helps in protecting climate but also helps economically,” he said during the Future Investment Initiative (FII) Institute’s ESG virtual event on Thursday.
The PIF has already incorporated ESG principles into its $400 billion worth of global investments as the sector gains in prominence throughout the region.
Al-Rumayyan, who also chairs the FII Institute, said that ESG investing should grow in tandem with the sustainable development goals (SDGs) which were adopted by UN member states in 2015 as a universal call to action to end poverty and protect the planet.
“We need to work together on mobilizing ESG for a sustainable future,” he told delegates.
Developing the renewable energy sector was crucial to reducing emissions, he said, highlighting the Fund’s work with ACWA Power, a leading global player in the renewables sector. The PIF in November increased its stake in the company to 50 percent, part of a move to support the wider renewables sector in the Kingdom.
ACWA Power is planning an initial public offering and heads a consortium that will build and operate renewable power-based utilities at the Kingdom’s flagship Red Sea tourism project.
Al-Rumayyan also referred to the Saudi Green Initiative and Middle East Green Initiative to reduce carbon and contribute to protecting the planet as an example of the Kingdom’s progress, which were announced by Crown Prince Mohammed bin Salman in late March.
The green initiatives aim to reduce carbon emissions by 60 percent in the region and deliver the world’s biggest afforestation project. The tree-planting project will be double the size of the Great Green Wall in the Sahel region, the second-biggest regional forestry initiative. The initiative will also work to increase the percentage of protected land to more than 30 percent, exceeding the global target of 17 percent per country.
It aims to reduce carbon emissions by more than four percent of global contributions through renewable energy projects that will provide 50 percent of the Kingdom’s electricity production by 2030.
The initiative is expected to eliminate more than 130 million tons of carbon emissions by using clean hydrocarbon technologies.
The PIF governor said such initiatives represented a clear and ambitious roadmap and would contribute to achieving global targets on combating climate change. He said the Kingdom will raise vegetation cover, reduce emissions, and preserve marine life as part of its efforts to deliver a more sustainable future.
Thought leaders in sustainable investment gathered virtually in Riyadh on Thursday to explore one of the hottest topics in the world of finance — the move to environmental, social and governance (ESG) benchmarks by big global investors.
The event, under the auspices of the Future Investment Initiative (FII) Institute, focuses attention on sustainable investment in the post-pandemic recovery, and the role of emerging markets like Saudi Arabia within the new investment philosophy.
ESG investing has recently taken off, attracting hundreds of billions of dollars into funds that pledge to weigh broader considerations when deciding where to put their money, rather than mere cash returns.
Richard Attias, chief executive of the FII Institute, said: “Although ESG has proven its worth, much remains to be done to ensure we use it to its full potential. The low level of inclusion and participation of emerging markets in the development of ESG frameworks is counterproductive to global sustainability.
“Perhaps the most challenging task, and one that we will address during this event, is how we push ourselves to think beyond ESG as a risk management tool and deploy it to create a truly sustainable future,” he added.


More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
Updated 15 April 2021

More than 6,000 Saudi companies operating in Egypt

More than 6,000 Saudi companies operating in Egypt
  • Saudi companies have investments of SR122 billion in Egypt

RIYADH: There are 6,017 Saudi companies in Egypt, with investments of SR122 billion ($32.5 billion), according to data from the Egyptian General Authority for Investments.

The total paid-up capital of these companies is SR82 billion, said Dr. Saleh Bakr Al Tayyar, legal counsel for the Saudi-Egyptian Business Council, citing data from the Authority.

The Kingdom ranks second in the Arab world in terms of participation in foreign projects in Egypt, and in terms of the number of foreign companies invested, he said.

Abdel Wahab, CEO of the Authority, said that obstacles to further investment in Egypt from Saudi companies, will be removed, Al Watan newspaper reported.

Trade between the two countries reached SR26 billion in 2019, Wahab said.

Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
Updated 15 April 2021

Jordan public debt reached 85% of GDP in 2020

Jordan public debt reached 85% of GDP in 2020
  • External debt reached 13.7 billion dinars in 2020

RIYADH: Jordanian public debt surged by 10.6 percent in 2020 to 26.50 billion dinars ($37.4 billion) as the government spent heavily to support its economy during the COVID-19 pandemic.

Jordan’s public debt ended 2020 at 85.4 percent of GDP, up from 75.8% a year earlier, according to Ministry of Finance data. The ministry recently changed its methodology for calculating public debt, excluding obligations from the Social Security Investment Fund, which amounted to 6.67 billion dinars.

The Hashemite Kingdom’s internal debt was 12.78 billion dinars last year, while external debt stood at 13.72 billion dinars, Ministry of Finance data show.

Unemployment rose to 25 percent in the fourth quarter of 2020, with youth unemployment reaching 55 percent, according to International Monetary Fund data.

Jordan responded “quickly and decisively” in its support of the economy during the COVID-19 pandemic and is making progress on its program of economic reforms, IMF Managing Director Kristalina Georgieva said on Monday in a statement to mark the kingdom’s 100th year.

“Timely and targeted fiscal measures have helped protect jobs and the vulnerable, while equitable tax reforms – aimed at tackling evasion, closing loopholes, and broadening the tax base – have helped maintain debt sustainability,” Georgieva said.

However, the country must address high unemployment to deliver durable, jobs-rich and inclusive growth, she said.

Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
Updated 15 April 2021

Saudi Re aims to boost capital to fund domestic, overseas expansion plans

Fahad Al-Hesni, managing director and CEO of Saudi Re. (Supplied)
  • Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year

RIYADH: The Saudi Reinsurance Company (Saudi Re) on Thursday announced plans to increase its capital in order to fund its expansion plans.

Saudi Re’s board recommended increasing the company’s capital from SR 810 million ($216 million) to SR 891 million and converting SR 81 million of retained earnings into capital, giving the company an extra SR 162 million to finance its expansion plans.

Fahad Al-Hesni, managing director and CEO of Saudi Re, said in a statement: “The capital increase will strengthen Saudi Re’s capital base and support the expansion plans in the domestic and international markets. The board’s recommendation comes in line with Saudi Re’s effort to generate better returns and create a greater shareholder value.”

Despite a difficult year in 2020, Saudi Re recorded SR 60.7 million in net profit before zakat, an increase of 2 percent year-on-year.

At the same time, total assets increased 7 percent to SR 2.8 billion and total gross written premiums (GWPs) increased 18 percent to SR 935 million. International business made up the bulk of the GWP growth — up 25 percent year-on-year — while domestic business increased 8 percent.