Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation

Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation
Illustration by Luis Grañena
Updated 13 October 2018

Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation

Grant Thornton’s UAE chief has ringside seat to the Gulf’s transformation
  • As UAE head of Grant Thornton, Hisham Farouk has had a ringside seat to some radical regional changes
  • ‘The region has witnessed material changes to what were key attributes of the Gulf countries’

DUBAI: Grant Thornton is riding just outside the leading pack of the Big Four accounting and consulting giants and, talking to the chief of its UAE business, Hisham Farouk, that’s exactly how the firm likes it.
While the Big Four — PwC, Deloitte, Ernst & Young and KPMG — have been getting increasingly embroiled in battles with regulators over perceived conflicts of interest and other abuses of the auditing system, the 40-year-old Grant Thornton (GT) is happy to leave them to it. In a calculated move, GT recently decided not to bid for any more audit contracts from the biggest firms in its native UK.
Farouk, born in Dubai but of Egyptian heritage, recently became the first Arab to hold a seat on GT’s global board of governors.
“We believe the expectation gap of what is expected by an audit firm and (where) our contractual, market and fiducial responsibilities lie has widened given the economic disparity across the world,” he said. “It is critical that professional service firms and regulators work hand-in-hand to define and agree what the new world-class requirements are and support the changes we are witnessing to create the new norm of economic balance, transparency and regulatory oversight.”
Nowhere is that “new norm of economic balance” more evident than in the Middle East, where GT has a growing business, from its base in the UAE but spreading increasingly to Saudi Arabia and Egypt, the three biggest economies in the region.
“The region is experiencing a very transformational time. The past few years have reshaped the economic and geopolitical landscape significantly. With the oil price recession ... and a significant shift of economic oil dependency, the region has witnessed material changes to what were key attributes of (the) ethos of Gulf countries,” Farouk said.
Such transformations include the removal of subsidies on energy, reviews of benefits structures in the public sector, the introduction of sales taxes, and a shift toward economies less dependent on oil and government spending.
“This has all created the volatility we have experienced over the past few years. GT is very excited about this transitional phase as we experience what the new norm will be like,” Farouk said.


Illustration by Luis Grañena

Illustration by Luis Grañena


Farouk has in the past underlined the potential for the UAE of the approaching Expo 2020 extravaganza. While some commentators think the economic “boom” associated with the Expo has been slow to have an impact, he thinks the real effect is still to come.
“You can surely see Dubai emerging into what it will be with the Museum of the Future, all the real estate developments like Dubai South and Dubai World Central airport. While we may have not witnessed the strength of the public relations effect of Expo yet, I suspect 2019 will be that year. Many expected the benefit to have been in the run-up years, yet we believe that Expo will be showcasing Dubai and the UAE to the world. It will attract a new caliber of companies and people and mark a new dawn for the nation’s presence in the global arena,” Farouk said.
His native Egypt will also benefit from the regional “feel-good factor” of Expo, Farouk thinks. “Watch and discover every opportunity Egypt has yet to offer. It is indeed not only a gateway to 100 million people, but an access point to Africa and the greater region,” he said.
GT has had a presence in Saudi Arabia for years, with offices in Riyadh, Jeddah and Alkhobar, working with corporates and with family offices — a mainstay of its business in the region — as well as being closely involved in one of the most high-profile business situations the Kingdom has experienced: The long-running standoff between the Al-Gosaibi family and entrepreneur Maan Al-Sanea.

The involvement in Saudi Arabia has given Farouk a ringside seat to the great transformation under way in the Kingdom. “Over the past two years, Saudi Arabia is undergoing a very radical pace of change relative to what the world has witnessed before from it. These changes are impacting the fundamentals of its social, economic and political fabric. None of this can be easy and we expect both challenges to be faced there, as well as opportunities,” he said.
Farouk believes that while there is still caution on the part of international investors considering involvement in the Vision 2030 transformation strategy, the fundamentals of the Saudi proposition will prove decisive in the long term.

“We have heard from the media that there is caution still and this is expected as the changes are major and you would expect some social and economic volatility from them. The fundamentals of Saudi Arabia still don’t change, given its population — which is characterized with relatively one of the largest youth populations — and the magnitude of the percentage of global oil production it controls. Globally, emerging markets have not had a strong year and this naturally reflects on Saudi Arabia as well,” he said.
Farouk believes that, with the right focus and leadership, the Vision 2030 goals are eminently achievable. “It will take a concerted effort from all stakeholders, including the public, and yes, I believe anything is achievable if there a sincere alignment between all parties involved. We have seen radical changes take place in Estonia, Rwanda, Singapore and Dubai, so anything is possible if there is clear focus and directive that benefits and prospers the people of the nation.”
Family offices — one of the great investment pools of capital in the Arab world — have traditionally been a focus for GT, and that will continue, even as regional economies are modernizing and their stock markets advertise the attractions of initial public offerings as a way to bring traditional businesses into the 21st century.
“Family offices are living through the changing times and many of them are pivoting to new sectors and services. It’s a critical time as they adjust to the new norm of the economy and market. IPOs have been in the forefront for many of them, and while market confidence is needed to revive capital markets in the region, it is important for many family offices to experience this transitional change prior to being ready for public offering and scrutiny,” Farouk said.
In any case, he believes, people are more important than stock markets or IPOs. “We must appreciate and take care of our people and be aligned with the visions and dreams of our clients. That is our true role in society. I am privileged to lead a team of highly proficient, sincere professionals that want to support the ever-changing world and work closely with our clients to fulfill their ambitions,” Farouk said.
“There are many discussions on how technology will change the face of this earth, but I am a true believer that it is people who create the future.”


Kuwait plans region’s first city for electric carmakers

Kuwait plans region’s first city for electric carmakers
Updated 01 August 2021

Kuwait plans region’s first city for electric carmakers

Kuwait plans region’s first city for electric carmakers
  • Kuwait Ports Authority noted that electric carmakers do not use local distributors or dealers

DUBAI: Kuwait Ports Authority (KPA) has approved a proposal to build the Middle East’s first city to serve electric vehicle manufacturers, the authority said in a statement on Sunday.

The statement does not make clear where the project, called EV City, will be located.

The design and construction tendering process will be during the 2011/22 fiscal year, said KPA General Manager Yousef Al-Abdullah Al-Sabah.

KPA noted that electric carmakers do not use local distributors or dealers and sell their vehicles directly to consumers, adding that it was common for ports to provide certain infrastructure to manufacturers.

“KPA is able to provide all port and logistics services to the biggest global companies manufacturing electric cars,” Sabah said, adding that the project was in line with Kuwait’s Vision 2035 economic diversification plan.

The Public Investment Fund, the sovereign wealth fund of Saudi Arabia, has made huge gains after it invested more than $1 billion in electric carmaker Lucid in 2018.

Lucid Group listed last month after a merger with a blank check company, Churchill Capital Corp IV, in February in a deal that gave the combined company a pro-forma equity value of $24 billion. PIF owns 62.7 percent
of Lucid.


Saudi budget airline expands flights to Bisha

Saudi budget airline expands flights to Bisha
Updated 01 August 2021

Saudi budget airline expands flights to Bisha

Saudi budget airline expands flights to Bisha

RIYADH: Saudi Arabia’s budget airline flyadeal on Sunday launched operations from Dammam to Bisha.

The addition of the new destination to the company’s flight network is part of its expansion plans.

It is a pure low-cost airline, with passengers charged for meals and checked luggage, a model that has so far not had major success in the Middle East beyond UAE-headquartered Air Arabia. The Saudi government owns the airline through state carrier Saudia.

Ahmed Al-Barahim, executive vice president for commercial and customer affairs, vowed to ensure good service for passengers.

He said the airline will continue to expand its fleet and flight network.

Fahd Al-Harbi, CEO of Dammam Airports Co., said healthy competition between airlines will support the Kingdom’s drive to boost domestic tourism.


Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales

Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Reuters/File Photo)
Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Reuters/File Photo)
Updated 01 August 2021

Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales

Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Reuters/File Photo)
  • The value of Saudi Arabia’s oil exports in May increased by 147 percent to just over SR60 billion from a year earlier

RIYADH: Saudi Arabia’s net foreign assets rose 2 percent in June, recovering slightly from their lowest level in more than a decade as the Kingdom’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19).

Data from the Saudi Central Bank (SAMA) showed the foreign assets — a measure of its ability to support its dollar-pegged currency — rose by SR34 billion ($9.1 billion) to SR1.65 trillion from May to June. Total assets increased by SR16.18 billion to SR1.842 trillion, the central bank said on Saturday.

The value of Saudi Arabia’s oil exports in May increased by 147 percent to just over SR60 billion from a year earlier, while non-oil exports rose by 70 percent, the General Authority for Statistics showed last month.

The recent decline in Saudi Arabia’s foreign reserves to the lowest level in a decade was partly due to a lag between import payments and export receipts, the SAMA’s governor told Reuters last month.

The ratio of SAMA’s total assets at the end of July increased by 0.8 percent over the previous month and amounted to SR1.842 trillion. The rise in total assets is due to the rise in investments in securities abroad, which amounted to SR1.13 trillion, an increase of 0.5 percent over the previous month. The value of foreign exchange amounted to SR271 billion, an increase of 0.2 percent.

Net foreign assets declined significantly in 2020 as lower oil income strained finances and officials transferred $40 billion to the Kingdom’s sovereign fund to fuel an investment spree. The indicator — which topped $700 billion in 2014 after an oil boom increased savings — now stands at SR1.66 trillion.

The state’s general reserve declined during the period 2016 to 2020 from SR640 billion to SR358 billion, due to the increase in projects as a part of the Vision 2030 reform plans. The state is pouring significant funds on projects which will be compensated by future income, Zaed Alfaded, a financial analyst, told Arab News. These income streams are expected to increase with the country diversifying its economy away from oil and its price fluctuations, he added.

The government’s current account dipped from SR89 billion to SR52 billion, and then rose again to SR70 billion, as the government spent on its urgent requirements, Alfaded said.

Central bank data showed on Saturday that the issuance of SAMA bills, an indicator of increased lending to local banks, also declined, which Alfaded attributed to the bank’s plans to contain inflation and direct customers to save and invest. 

This strategy, he said, will reflect positively on the markets for trading in financial assets and other investment assets in the Saudi economy.


Saudi Arabia eyes global tie-ups to tap $20bn in cultural opportunities

In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. (Social media)
In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. (Social media)
Updated 01 August 2021

Saudi Arabia eyes global tie-ups to tap $20bn in cultural opportunities

In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. (Social media)
  • Public-private partnership seen as a means to increase sector’s contribution to GDP

DUBAI: Saudi Arabia is seeking partnership with global partners including leading international museums as it sees its culture sector generating $20 billion in revenues and creating 100,000 jobs, while contributing 3 percent to its gross domestic product (GDP), a senior official said.

In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. The Ministry of Culture, which was established three years ago in the hopes of promoting cultural growth and supporting Vision 2030, sees that the sector has already attracted the interest and engagement of private companies both locally and abroad, Rakan Altouq, head of strategy and policy at the Saudi Ministry of Culture, said in an interview on Sunday.

In addition to the public sector, the private sector is a vital contributor to cultural development and Saudi Arabia will benefit from this new strategy, as it will lead to an increase in its economy. As part of the Ministry of Culture, all 16 sectors with 11 dedicated commissions are engaged now to prepare the groundwork for economic activity. 

The Cultural Development Fund, created by the Ministry of Culture last year, is also a vital tool for bridging the financial gap that exists between public and private sector funding for cultural programs. By using the Cultural Development Fund, a bridge of capital will be provided, he said. Through Invest Saudi and the Shareek program that has been announced across the private sector engagement in Saudi Arabia, all of the targets they have developed cannot be achieved without private capital, and they are contributing to creating the right conditions for capital to invest in the culture sector.

Altouq said that the culture sector should not be evaluated in the same way as other more publicly owned sectors. Nonprofit organizations conduct many private activities, such as the visual arts sector, in the country. Further opportunities exist for establishing infrastructure in digital platforms; such investments have already been initiated by media and other regional companies. 

In the museum sector, the ministry has held numerous discussions with its partners around the world. Soon, the dedicated museum of Saudi Arabia will launch its strategy and seek partnerships with other museums around the world. The Museum Commission will launch its own communication strategy in the coming months to further develop that.

In the national cultural strategy, three main aspirations are outlined: Culture as a way of life, culture as an economic growth tool, and culture as an exchange mechanism among cultures.

As a first step, culture has been developed as a lifestyle in Saudi Arabia through connecting local communities to ensure that all citizens and residents have access to an extraordinary range of diverse cultural offerings in the region while preserving the rich cultural heritage. As for the culture for economic growth, culture will be seen in creative industries, which will allow Saudi Arabia to witness an increase in its GDP by 3 percent by 2030. Lastly, culture for global exchange is engaging the Kingdom and participating in international platforms such as the G20 and UNESCO.     


Saudi Arabia’s Digital Government Authority approves first regulatory framework

It will work on developing the digital capabilities and talents of public sector employees. (Supplied)
It will work on developing the digital capabilities and talents of public sector employees. (Supplied)
Updated 01 August 2021

Saudi Arabia’s Digital Government Authority approves first regulatory framework

It will work on developing the digital capabilities and talents of public sector employees. (Supplied)
  • The framework is the first milestone after the approval of the Saudi Cabinet in March to launch the authority

RIYADH: Saudi Arabia’s Digital Government Authority (DGA) on Sunday said its board of directors approved the first regulatory framework of the digital government.

“The regulatory framework developed by DGA for the digital government will be the basis on which the authority will develop future regulations for the digital government,” DGA Gov. Ahmed Mohammed Al-Soyyan said in a statement. “The framework includes a set of principles, policies, standards, and user guides.”

He added that the DGA is seeking to issue regulations, policies, and standards that contribute to creating a regulatory environment, which enables reaching advanced levels of maturity in the government digital transformation, unify and institutionalize the concept of government policies and standards, provide recommendations to government agencies during implementation, and ensure the adoption of unified tracks for the development of government digital services.

The framework is the first milestone after the approval of the Saudi Cabinet in March to launch the authority. Abdullah Al-Swaha, the Saudi minister of communications and information technology and chairman of the National Digital Transformation Unit, told Arab News’ sister publication Asharq Al-Awsat in an earlier interview that the DGA will help in achieving key objectives, most important of which is augmenting returns on government digital assets and investments. It will also work on developing the digital capabilities and talents of public sector employees.

The framework is based on eight essential principles, including the “Once-Only Principle,” “Digital by Design,” and the “Mobile First.” In addition, it encompasses the Digital Government Policy, which enables and accelerates the sustainable digital transformation of the government sector and enables the successful implementation of the strategic directions of the digital government, DGA said in the statement.

The Digital Government Policy is supported by five sub-policies, including digital governance, it added.

DGA said in the statement that it aims to support the efforts of the government agencies through developing plans, programs, indexes, and measurements related to the works of digital government and integrated digital government services, as well as the government digital market platform. DGA is also responsible for regulating operational, administrational processes, related projects and monitor compliance, it said.