INTERVIEW: KAUST’s plan to recreate classical Islam’s ‘House of Wisdom’

INTERVIEW: KAUST’s plan to recreate classical Islam’s ‘House of Wisdom’
Illustration by Luis Grañena
Updated 28 October 2019

INTERVIEW: KAUST’s plan to recreate classical Islam’s ‘House of Wisdom’

INTERVIEW: KAUST’s plan to recreate classical Islam’s ‘House of Wisdom’
  • Tony Chan, president of the King Abdullah University of Science and Technology, explains its role in advancing human knowledge — and in supporting the Vision 2030 transformation

DUBAI: The King Abdullah University of Science and Technology (KAUST) throws up some big surprises on a visit to the campus, an hour’s drive north of Jeddah.

Expecting a white-hot furnace of high technology — what staff call the “deep tech heart of the Saudi Arabian economy” — you find yourself marveling at replicas of 1,000 year old inventions — navigational instruments, hydraulic systems and sophisticated chronometers — from the golden age of Islamic learning, in the campus museum.

That juxtaposition is entirely deliberate and appropriate, as Tony Chan, president of KAUST for the past year, explained. “The idea was to recreate the Bayt Al-Hikmah — the House of Wisdom — of classical Islam’s golden age, and to contribute to human civilization,” he said.

Chan, of Hong Kong origin and with a prodigious career mainly spent at US institutions, has been involved with KAUST since before it was formally inaugurated just over 10 years ago, and is in a unique position to describe its long heritage, as well as its modern role as an intellectual power-house for the big changes across the Kingdom’s economy, society and culture as the Vision 2030 strategy progresses.

In some ways, KAUST’s establishment was a herald of the current transformation. It was the first coeducational institutional facility in Saudi Arabia, where women did not have to wear traditional clothing on campus, could drive and watch movies at a cinema alongside men, years before those advances came to the Kingdom.

“We are like a beacon to the world,” said Chan, in reference to the symbolic lighthouse structure that overlooks the KAUST marina on the Red Sea.

With these modern facilities, its cosmopolitan population and its emphasis on technology, the site is reminiscent of the Saudi Aramco “camp” in Dhahran — the American-built town that housed the first foreign oil workers in the 1950s.

Originally funded by a $20 billion government endowment, the project was handed over to Ali Al-Naimi, the former Aramco chief executive and Saudi energy minister, to oversee. Chan says that Aramco built the main part of the campus in 1,000 days, in time for the 2009 opening.

“KAUST has Aramco in its DNA in terms of organizational structure and culture, adapted to an academic environment,” he said.

Aramco is one of the corporates — along with the likes of SABIC, the US chemical company Dow and the aerospace group Boeing — with a presence on the campus. KAUST is as much an environment intended to cultivate entrepreneurial innovation as an institute of learning.

“There is a strong business emphasis here, in terms of encouraging startups and entrepreneurial talent. There is a two-way emphasis — to advance research and education, and to facilitate economic development and human capital, in line with Vision 2030,” Chan said.

Some 2,000 would-be Saudi entrepreneurs pass through the university each year, emerging equipped to play a role in the Kingdom’s fast-changing economy. Research has shown that as many as 30 percent of young citizens want to start their own businesses, rather than go for the traditional jobs in the public sector. KAUST plays a vital tole in encouraging and nurturing this young talent.

It is not a university in the traditional sense, with an annual influx of fresher undergraduates. All of the 1,100 students on campus are postgraduates, as well as 337 research scientists, under the supervision of 159 faculty members on the site at Thuwal.

That environment is designed to encourage intellectual innovation, and to back up the megaprojects under way in Saudi Arabia under Vision 2030.

Because of its location, KAUST is particularly involved in the two big projects in the area — the Red Sea development and NEOM.

The former — underway a couple of hundred kilometers north on the coast — is one of the most ambitious ventures ever taken in leisure and high-end tourism. It will be a self-sustaining resort the size of Belgium, designed to give global and regional visitors a taste of the Kingdom’s seldom-seen ecological and cultural heritage.

“We are working on four areas with them — energy, environment, food and water. And we are involved in their digital aspects too. These are global issues of course, but they are all of especial interest to the Kingdom,” Chan said.

Some of the work with the Red Sea Project is truly groundbreaking, with applications all over the world, he explained. “Sea plants — kelp, seaweed and the rest — are better at absorbing carbon than land plants, so that could provide a solution to global environmental challenges.

One focus of KAUST’s work in the Red Sea involves the project to reduce salinity in the area, a big issue for the Kingdom because of the high levels of salt produced in the water desalination industry. The “brains for brine” initiative could have truly global impact. 

KAUST’s work also has big significance in energy issues. “We’re looking at ways to analyze the wind patterns across the Red Sea, because if you are going to use wind power as a significant part of your renewable commitment, you need to know how the wind works in that particular region,” he said.

“We have a big focus on energy — not just petroleum, but solar and other renewables. Oil is not going away any time soon, but we have to be conscious of the effects of climate change, which affects the Kingdom more than most others,” Chan said.

“Clean combustion is the big thing. We have a research partnership with McLaren, working on fuel mix and aerodynamics to make engines more efficient, and with Volvo and others in our ‘clean combustion’ center,” he added.

A former president of the university — Chan’s predecessor Nadhmi Al-Nasr — is chief executive of NEOM, and the links with KAUST run deep. “NEOM is different from the Red Sea. It’s not a leisure resort so there are far more artificial intelligence, digital and educational angles to it. There is a NEOM centre at KAUST, and I sit on NEOM’s high commission. We have contributed lots of people and talent to NEOM and several run the different sectors involved in the project,” Chan said.

Another major activity at KAUST involves the preparations for the G20 Summit next year, which the Kingdom is staging, the first time the gathering or world leaders will be held in the Middle East. Chan is involved in the scientific sub-grouping of the G20, the so-called S20, and he sees the event, which will take place next November, as a pivotal moment in its history.

“We have become a think tank within the G20 preparations, in the S20 group, working mainly on energy and climate matters. We have the expertise. The Kingdom, and the world, need the expertise. The whole of the Saudi government is involved in the G20 preparations — it will be like a coming out party for the Kingdom,” he said.

Chan’s background encompassed some of the biggest academic institutions in Asia and the US, and he is especially keen to attract global talent to be part of the KAUST community, which has 100 nationalities in the 7,300-strong campus site.

“It has not been hard to attract talent. Usually, the most difficult part is to get prospective talent to make the first visit. I have seen no reaction to the death of Jamal Khashoggi. We are still recruiting from the US and the rest of the world, and there has been no adverse affect from that tragic event,” Chan said.

Attracting that talent will help achieve Chan’s goal — to make KAUST a center of academic excellence along the lines of the biggest and best-known institutions in the world. How will he know when he has achieved that?

“It is not just about ranking in the academic league tables, although that is part of it. We focus on talent development, and on knowledge —adding to the sum of human knowledge. But we do very well on the criteria of ‘citation by faculty,’” he said.

“The most important measure of our success is by the achievements of our alumni. Why are Oxford and Cambridge regarded as so successful? Because Oxford turns out more prime ministers than any other university, and Cambridge more Nobel Prize winners.

“We are still a very young organization. The oldest of our alumni is still under 40, so it will take a while to get the professional recognition. But I am confident it will come.”


Changan sees boom in demand as Saudis fall in love with Chinese car brands

Changan sees boom in demand as Saudis fall in love with Chinese car brands
Updated 28 July 2021

Changan sees boom in demand as Saudis fall in love with Chinese car brands

Changan sees boom in demand as Saudis fall in love with Chinese car brands
  • ‘Prices and technology are among the factors behind rise in popularity’

DUBAI, RIYADH, JEDDAH: A decade ago, if you would have asked a Saudi whether he would consider buying a Chinese car, the answer most likely would have been no, but this has now changed.

Saudi Arabia is emerging as one of the most attractive markets overseas for Chinese car brands as they grab the attention of dealers and drivers in the Kingdom.

Car sales in China, the world’s biggest market, were down 3 percent year-on-year to 2.13 million in May, ending a streak of 13 months of growth, mainly due to a global chip shortage and increased raw material prices. Last year, despite the coronavirus disease (COVID-10) pandemic, the data showed that sales continued to surge, and at the end of 2020, Changan’s share of the market had risen to 4.3 percent, moving it two places up in the annual car brand rankings to eighth most popular.

Mohammed Ramady, an independent economist and former professor of finance and economics at King Fahd University of Petroleum and Minerals, believes Chinese cars are proving popular because they appeal to medium- and lower-income families. He said the data showed that last year, around one in 10 Chinese cars were shipped to Saudi Arabia. A clear example of the growing popularity of Chinese cars in the Kingdom is the experience of the Changan brand. According to sales data compiled by Bestsellingcarsblog.com, the carmaker, which is owned by the Chinese state, captured 2.3 percent of the Saudi market in 2019, making it the 10th most popular car brand in the Kingdom just a few years after it was introduced to Saudi drivers.

Similarly, data from Google showed that searches for the term Changan increased nearly 50 percent year-on-year in the first half of 2021, peaking in January when the brand opened its service center in Riyadh. 

Riyadh-based Wafi Al-Ghanim, marketing communication manager at Almajdouie Changan, the official distributor of the brand in Saudi Arabia, told Arab News there are three reasons the brand has quickly proved so successful: “Prices, quality, and warranty periods.”

“When you think about quality and specifications compared to the price in the car sector, you will definitely find that Chinese cars are far ahead of their counterparts in general, Japanese and Korean cars in particular,” Al-Ghanim said.

Looking to the future, he believes that Chinese cars across the board will continue to see strong growth and by 2022 will have captured 15 percent of the Saudi market, which “in a huge regional market is very good.”

One of the ways to boost sales is physical visibility. In January, Almajdouie built a 2,640-square-meter service center in Riyadh.

“We have had to raise the level of our services to match the high level of Changan cars, as well as to enhance the growing demand for Changan cars in the local market,” Yousef bin Ali Almajdouie, president of Almajdouie Group, said in a press statement at the time.

A report by the China Daily newspaper estimated that around 55,000 Changan cars have been sold in Saudi Arabia up to May this year, but it is not the only Chinese brand that has captured the attention of drivers in the Kingdom.

FASTFACTS

• Last year, despite the coronavirus disease (COVID-10) pandemic, the data showed that sales continued to surge, and at the end of 2020, Changan’s share of the market had risen to 4.3 percent, moving it two places up in the annual car brand rankings to eighth most popular.

• According to data, the carmaker, which is owned by the Chinese state, captured 2.3 percent of the Saudi market in 2019, making it the 10th most popular car brand in the Kingdom just a few years after it was introduced to Saudi drivers.

• An example of the growing popularity of Chinese cars in the Kingdom is the experience of the Changan brand.

Hongqi, one of China’s oldest luxury car brands, this month opened its first sales center in Riyadh, with plans to expand the network to Jeddah and Dammam.

“The market in the Middle East is key for Hongqi. And the Saudi market is crucial in the region,” Ma Zhenduo, general manager of Hongqi’s Middle East division, told Xinhua, the Chinese state news agency. “The sales have exceeded all our expectations across all the models,” said Mohammed Abduljawad, chairman of Universal Motors Agencies, Hongqi’s local partner in Saudi Arabia.

Hatem Khattab, the first marketing manager for FAW Bestune in Saudi Arabia, which sells the Chinese brands FAW, Bestune and Hongqi, told Arab News that the secret to the success of Chinese brands was the combination of price and technology.

“The manufacturers are very good at incorporating the latest technology in their cars. These are economic cars with state-of-the-art technology,” Khattab said. “The reason behind their popularity is their features, and now that they are seen more commonly on the streets, it has had a domino effect. Seeing the cars makes people think they are more reliable. They are affordable as well; we recently had a customer who bought 10 cars just for his family,” he added.

In addition to increased visibility on the roads, Khattab pointed out that Chinese brands also offer more options in terms of the range of models on offer.

“The competition in the automotive market here is huge, and I feel like the Chinese brands stepped up their game to meet the requirement of this cut-throat market. Currently, in Saudi Arabia, we have almost 20-25 Chinese brands as compared to brands of other countries that offer up to 10,” he said. Ramady said engine size was another big catalyst. Western, American, Japanese and South Korean models in the 2,500 to 3,000 cc engine sector still dominate the market, Chinese brands have positioned themselves in the 1,000 to 2,000 cc engine range, which is a growing segment in Saudi Arabia. He believes these models appeal “to a low to middle-income Saudi consumer market, especially during the ongoing COVID-19 pandemic and economic uncertainties, as well as a new niche market for Saudi female drivers owning their first cars.”

The statistics also back this up, according to Motory.com, one of the largest specialized car websites in Saudi Arabia. “Over the last few years, we have seen Chinese cars become increasingly popular with consumers, especially in Saudi Arabia. Online searches for Chinese cars on our Motory.com website have increased by around 400 percent between 2018 and 2020,” a spokesperson told Arab News.

Chinese carmakers saw exports increase by 103 percent year-on-year in the first five months of this year, according to a report by the South China Morning Post, citing data from the China Passenger Car Association. The way trends are going, many will find their way into Saudi garages and carparks, as the Kingdom continues to be a dominant source market. Fahad Al-Arjani, a member of the Saudi Chinese Business Council, echoed the view that technology was at the key factor, as Chinese brands have been “injecting investments in clean energy cars supported by the smartest technologies.” He pointed to the partnership between technology giant Huawei and the state-owned Beijing Automotive Industry Holding Co., Ltd. (BAIC) as an example.

“In addition to developing a highly efficient battery system, as well as emerging technologies, Huawei and BAIC’s first car will offer level three autonomous driving and will include 5G connectivity, which isn’t necessarily surprising given the Chinese company is a leader when it comes to the rollout of this new standard, which will make Chinese cars highly likely to lead the future of this sector for ages,” he told Arab News.


Lucid is ‘key step’ in PIF’s strategy after market debut

Lucid is ‘key step’ in PIF’s strategy after market debut
Updated 28 July 2021

Lucid is ‘key step’ in PIF’s strategy after market debut

Lucid is ‘key step’ in PIF’s strategy after market debut
  • PIF is believed to hold more than 60 percent of the stock after its 2018 cash injection into the start-up, giving it a paper profit of at least $15 billion

DUBAI: Saudi Arabia’s Public Investment Fund (PIF) has already made billions of dollars in profit on its investment in Lucid Motors, the California upmarket electric vehicle (EV) manufacturer, and could earn many billions more over the next five years.

PIF announced its first investment of SR3.75 billion ($1 billion) in Lucid in September 2018.

The sovereign wealth fund congratulated Lucid on its market debut and said on Twitter: “Our investment in Lucid Motors and the production of Lucid Air is a key step in the strategy for long term growth opportunities, supporting innovation and technology development, and doing revenue and sectoral diversification in Saudi Arabia.” Shares in Lucid raced to an 11 percent premium on the opening day of trading on New York’s Nasdaq Global Select Market on Monday, valuing it at more than $24 billion.  

PIF is believed to hold more than 60 percent of the stock after its 2018 cash injection into the start-up, giving it a paper profit of at least $15 billion.

This could go significantly higher if Lucid follows the model of rival EV maker Tesla. Elon Musk’s high-flying company reported better than forecast profits earlier this week, and saw its share price leap 2 percent, giving it a market value of $633 billion.

Lucid is at a much earlier stage of the EV road, but projections made by its management foresee a big rise in sales and profits ahead.

The company sees revenues of $2.2 billion next year after it has begun selling cars in substantial numbers, rising to $22.8 billion in 2026. By then, it will be selling 250,000 cars a year, making a profit of nearly $3 billion and generating free cash of $1.5 billion, according to the forecasts.

Peter Rawlinson, CEO and CTO of Lucid Group, who was a former chief engineer at Tesla, said that the company was “on track” to meet its projections after the Nasdaq debut.

“Lucid Air (the launch model) represents the next generation of electric vehicles and creates new standards for interior comfort, range, efficiency, and power,” Rawlinson said. 

“We are on track to meet our projected deliveries for the next two years, and we look forward to delighting our customers around the world with the best electric vehicles ever created.”

Lucid is likely to face more intense competition in the EV space than Tesla did when it launched its first model more than a decade ago, with other “legacy” manufacturers across the world launching electric products.

But Rawlinson is confident that superior design will give it an edge in the premium market segment. 

“We have got the best car in the world,” he told Arab News earlier this year.

Success for Lucid will be a big boost for PIF’s investment strategy, but it could also have significant industrial and commercial implications for the Kingdom. Lucid is likely to open a showroom in Saudi Arabia and there has been intensifying speculation that it will eventually build a production plant in the Kingdom, too.

Rawlinson said of PIF: “They put their faith in us, that is why we are here today thriving.”


Amazon denies plans to accept bitcoin payments

Amazon denies plans to accept bitcoin payments
Updated 27 July 2021

Amazon denies plans to accept bitcoin payments

Amazon denies plans to accept bitcoin payments
  • The electric carmaker’s balance sheet for the second quarter of 2021 showed a net digital asset value of $1.311 billion as of June 30

RIYADH: Bitcoin traded higher on Tuesday, rising 0.55 percent to $38,379.02 at 5:02 p.m. Riyadh time. Ether, the second most traded cryptocurrency, was down 1.3 percent to $2,298.85, according to data from CoinDesk.

Below is the latest cryptocurrency news:

Amazon has denied a British newspaper report that it plans to accept bitcoin payments this year. “Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true,” an Amazon spokesperson said on Monday. “We remain focused on exploring what this could look like for customers shopping on Amazon.”

According to a report from Bloomberg, the popular stablecoin Tether is under criminal investigation by the US Justice Department. Prosecutors are looking into whether Tether’s executives committed bank fraud, a development with potentially seismic consequences for the broader crypto market. Tether released a statement saying that the Bloomberg report follows a pattern of repackaging old claims as news, but did not deny awareness of the pending charges, according to CoinDesk.

Goldman Sachs is liquidating and settling cryptocurrency traded products for some of its hedge fund clients in Europe, it was reported last week. The investment banking giant has submitted an application to the US Securities and Exchange Commission for an exchange-traded fund (ETF) that would showcase public companies in decentralized finance and blockchain around the world. The filing indicated that the fund plans to invest at least 80 percent of its assets in companies that are developing blockchain technology and digitizing funding. The Securities and Exchange Commission is currently reviewing more than a dozen Bitcoin ETF applications and has approved decisions on several of them, CoinDesk reported.

Tesla released its second quarter earnings report on Monday. The electric carmaker’s balance sheet for the second quarter of 2021 showed a net digital asset value of $1.311 billion as of June 30. It also showed that Tesla owns $1.311 billion in bitcoin. The company did not buy or sell any bitcoin during the second quarter, but it did report a bitcoin depreciation of $23 million. Tesla’s action reaffirms Musk’s prior statement that neither he nor Tesla had sold their coins, according to Bitcoin News.

A survey conducted by the cryptocurrency exchange of the Independent Reserve Asia Pacific found that 43 percent of respondents said they own cryptocurrency, while 46 percent plan to purchase digital assets in the next 12 months.

The survey of 1,000 Singaporeans from a representative background of gender, age and location, also found that two-thirds of respondents in the 26-45 age group said they own cryptocurrency. Nearly 40 percent of respondents described bitcoin as an investment asset and 25 percent described it as a store of value. Three-quarters of respondents aged between 26 and 35 said they believe that cryptocurrency will become more widely accepted. Singapore’s financial authorities have confirmed that they are working with their French counterparts to explore cross-border applications of central bank digital currencies, according to a report by Cointelegraph.


Fitch revises Saudi Aramco’s outlook to stable, affirms IDR at ‘A’

Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative. (Reuters/File Photo)
Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative. (Reuters/File Photo)
Updated 27 July 2021

Fitch revises Saudi Aramco’s outlook to stable, affirms IDR at ‘A’

Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative. (Reuters/File Photo)

RIYADH: Fitch Ratings, the leading global credit rating agency, has revised its Saudi Aramco outlook to stable from negative while affirming the company’s long-term issuer default rating (IDR) at ‘A.’

The revision of the outlook on Saudi Aramco’s IDR is driven by a similar action on the sovereign, the rating agency said in its new report published on Tuesday.


Fitch lifts 6 Saudi banks outlooks to stable from negative

Fitch lifts 6 Saudi banks outlooks to stable from negative
Updated 27 July 2021

Fitch lifts 6 Saudi banks outlooks to stable from negative

Fitch lifts 6 Saudi banks outlooks to stable from negative
  • These ratings follow a similar action on Saudi Arabia’s sovereign rating on 15 July 2021 that was attributed to better fiscal management and an increase in oil prices

RIYADH: Ratings agency Fitch has revised six Saudi banks’ credit outlooks to stable from negative and affirmed their international ratings at BBB+.

The banks are Arab National Bank (ANB), Banque Saudi Fransi (BSF), Alinma bank (Alinma), Saudi Investment Bank (SAIB), Bank Aljazira (BAJ) and Gulf International Bank - Saudi Arabia (GIB SA).

These ratings follow a similar action on Saudi Arabia’s sovereign rating on 15 July 2021 that was attributed to better fiscal management and an increase in oil prices.

“Fitch’s assessment considers the authorities’ strong ability to support the banking system, given large, albeit reduced from their historical levels, external reserves,” Fitch said in the statement.

“It also reflects a long record of support for Saudi banks, irrespective of their size, franchise, funding structure and level of government ownership.”