Private sector must ‘step up’ for Saudi Vision 2030 goals, says Crescent’s Badr Jafar

Badr Jafar has been involved in panels on philanthropy and family businesses at Davos, among others. (Courtesy WEF)
Updated 30 January 2019

Private sector must ‘step up’ for Saudi Vision 2030 goals, says Crescent’s Badr Jafar

  • Badr Jafar: The private sector in Saudi Arabia has to step up and take authentic ownership of the Saudi Vision 2030
  • Badr Jafar: From our perspective, what is going on in Saudi Arabia is a tremendous opportunity, and we want to work toward delivering on the Vision 2030 strategy

DAVOS: One of the Arabian Gulf’s leading businessmen believes the private sector in Saudi Arabia must play a greater role in the Vision 2030 strategy to diversify the nation’s economy and reduce its dependency on oil revenue.
“The private sector in Saudi Arabia has to step up and take authentic ownership of the Saudi Vision 2030,” said Badr Jafar, president of Crescent Petroleum and CEO of Crescent Enterprises, the Sharjah-based international conglomerate with interests in shipping, ports, energy and several other industrial sectors.
Speaking to Arab News on the sidelines of the World Economic Forum (WEF) Annual Meeting in Davos, he added: “When people think of a country in the Middle East region, they tend to think of just its government but I like to think of the whole ecosystem, both public and private sector. I believe the private sector has to play a bigger part in both Saudi Arabia and the UAE.”
Jafar acknowledged that there are some critics who doubt the ability of the Saudi government to successfully implement the Vision 2030 transformation, but added: “If there were no skeptics, I think that would tell you the Vision isn’t big enough. There will always be skeptics, and in some ways that is a healthy thing because it adds an element of accountability.”
Jafar said that Gulftainer’s port terminal operations in Saudi Arabia, at Jeddah and Jubail, are being expanded. Gulftainer is a subsidiary of Crescent Enterprises.
“We see ourselves as an Emirati company but also as a part of the Gulf community,” he explained. “From our perspective, what is going on in Saudi Arabia is a tremendous opportunity, and we want to work toward delivering on the Vision 2030 strategy. It is too important to fail and we all have a vested interest in making it succeed.”
He said there will be challenges along the way but that Saudi policymakers should ensure that there is enough flexibility in the economic and political systems to overcome them.
“It is all about building into the system sufficient resilience to cancel out the shocks,” Jafar added. “This is the Middle East; there will always be shocks. But one way to do it is to empower the private sector to take charge of its own destiny.”
Gulftainer, of which Jafar is also chairman, recently pulled off a business coup with its $600 million plan to redevelop and operate the port in Wilmington, Delaware, as a major port facility on the US east coast. The US ports sector has presented challenges to Gulf businesses in the past but Jafar said that Crescent’s pedigree in the UAE, combined with its existing ports business at Canaveral, Florida, and its efficiency record in the industry, had helped ease the deal through.
“We had the acceptance and trust of the local community,” he said.
Jafar has been involved in various sessions at Davos, including panels on philanthropy and family businesses. He echoed the views of WEF founder Klaus Schwab that there should be a new approach to philanthropy based on a coordinated, rather than a collaborative, approach.
“What inspires philanthropists in Saudi Arabia or the UAE is not the same as what inspires them in New York and Beijing,” he said.
He sees a strong affinity between philanthropy and family businesses, especially in the Islamic world where the payment of charitable taxes — zakat — is a religious duty. The top 500 family businesses in the world generate sales in excess of $6.5 trillion, making them the third-largest global economy, and they employ 50 million people, he said.

The above text has been changed to make it clear that Badr Jafar is also CEO of Crescent Enterprises, and that Gulftainer, a subsidiary of Crescent Enterprises, runs port terminal operations in Saudi Arabia, at Jeddah and Jubail. The top 500 family businesses generate sales in excess of $6.5 trillion, rather than being valued at that amount. 

IMF downgrades outlook for world economy, citing trade wars

Updated 19 min 7 sec ago

IMF downgrades outlook for world economy, citing trade wars

  • Growth this year will be ‘weakest since the 2008 financial crisis,’ according to 2020 forecast

WASHINGTON: The International Monetary Fund is further downgrading its outlook for the world economy, predicting that growth this year will be the weakest since the 2008 financial crisis primarily because of widening global conflicts.

The IMF’s latest World Economic Outlook foresees a slight rebound in 2020 but warns of threats ranging from heightened political tensions in the Middle East to the threat that the US and China will fail to prevent their trade war from escalating.

The updated forecast released on Tuesday was prepared for the autumn meetings this week of the 189-nation IMF and its sister lending organization, the World Bank. Those meetings and a gathering on Friday of finance ministers and central bankers of the world’s 20 biggest economies are expected to be dominated by efforts to de-escalate trade wars.

The new forecast predicts global growth of 3 percent this year, down a 0.2 percentage point from its previous forecast in July and sharply below the 3.6 percent growth of 2018. For the US this year, the IMF projects a modest 2.4 percent gain, down from 2.9 percent in 2018.

Next year, the fund foresees a rebound for the world economy to 3.4 percent growth but a further slowdown in the US to 2.1 percent, far below the 3 percent growth the Trump administration projects.

IMF economists cautioned that that even its projected modest gains might not be realized.

“With a synchronized slowdown and uncertain recovery, there is no room for policy mistakes, and an urgent need for policymakers to cooperatively de-escalate trade and geopolitical tensions,” Gita Gopinath, the IMF’s chief economist, said in the report.

Last week, the US and China reached a temporary cease-fire in their trade fight when President Trump agreed to suspend a tariff rise on $250 billion of Chinese products that was to take effect this week. But with no formal agreement reached and many issues to be resolved, further talks will be needed to achieve any breakthrough. The Trump administration’s threat to raise tariffs on an additional $160 billion in Chinese imports on Dec. 15 remains in effect.

The IMF’s forecast predicted that about half the increase in growth expected next year will result from recoveries in countries where economies slowed significantly this year, as in Mexico, India, Russia and Saudi Arabia.

This year’s slowdown, the IMF said, was caused largely by trade disputes, which resulted in higher tariffs being imposed on many goods. Growth in trade in the first half of this year slowed to 1 percent, the weakest annual pace since 2012.

Kristalina Georgieva, who will preside over her first IMF meetings after succeeding Christine Lagarde this month as the fund’s managing director, said last week that various trade disputes could produce a loss of about $700 billion in output by the end of next year or about 0.8 percent of world output.

IMF economists said that one worrying development is that the slowdown this year has occurred even as the Federal Reserve and other central banks have been cutting interest rates and deploying other means to bolster economies.

The IMF estimated that global growth would have been about one-half percentage point lower this year and in 2020 without the central banks’ efforts to ease borrowing rates. “With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot,” Gopinath said.

In addition to trade and geopolitical risks, the IMF envisions
threats arising from a potentially disruptive exit by Britain from the EU on Oct. 31. The IMF urged policymakers to intensify their efforts to avoid economically damaging mistakes.

“As policy priorities go, undoing the trade barriers put in place with durable agreements and reining in geopolitical tensions top the list,” Gopinath said. “Such actions can significantly boost confidence, rejuvenate investment, halt the slide in trade and manufacturing and raise world growth.”

The IMF projected that growth in the 19-nation euro area will
slow to 1.2 percent this year, after a 1.9 percent gain in 2018. It expects the pace to recover only slightly to 1.4 percent next year.

Growth in Germany, Europe’s biggest economy, is expected to be a modest 0.5 percent this
year before rising to 1.2 percent next year.

China’s growth is projected to dip to 6.1 percent this year and 5.8 percent next year. These would be the slowest rates since 1990, when China was hit by sanctions after the brutal crackdown on pro-democracy demonstrators in Beijing’s Tiananmen Square.