How GCC countries are spurring entrepreneurship

How GCC countries are spurring entrepreneurship
Downtown Dubai. Changes in Gulf Cooperation Council (GCC) countries are happening at a rapid pace as states seek to develop the business environment as part of a drive to diversify away from hydrocarbons. (Shutterstock)
Short Url
Updated 23 December 2019

How GCC countries are spurring entrepreneurship

How GCC countries are spurring entrepreneurship
  • GCC countries are seeking to diversify their economies away from oil by growing entrepreneurship ecosystems
  • Success will be measured by the creation and growth of start-ups and SMEs in the years to come

ABU DHABI: In recent years, Gulf Cooperation Council (GCC) member countries have been trying to build robust entrepreneurship ecosystems as part of a common drive to diversify their economies away from hydrocarbons.

In practical terms, this means putting in place venture-friendly markets, friendly policies, funding vehicles, a stimulating culture and a range of support mechanisms.

But creating such an ecosystem is a complex process requiring careful planning and patience. Without universities, corporations, risk capitals and entrepreneurs to act as stakeholders, big ambitions will stay just that.

 

The rebirth of AlUla
Hegra, ancient city of the Nabataeans in Saudi Arabia’s historic AlUla Valley, is emerging from the mists of time to take its rightful place as one of the wonders of the world

Enter


keywords

 

The success of each country will be measured by the creation and growth of startups and small and medium-sized enterprises in the coming years.

The Saudi government in 2016 released Vision 2030, a comprehensive plan for long-term economic growth that aims to move the Kingdom away from state-led growth toward more open market policies. 

The objective is to foster entrepreneurship and allow the private sector to play a leading role in economic development and job creation.

The results so far of the efforts of Saudi Arabia and its neighbors were among the topics of discussion at the recent SALT Conference in Abu Dhabi.

“What I’ve witnessed in the past few months is significant,” said Abdulrahman Tarabzouni, CEO and managing director of Saudi Technology Ventures.




Abdulrahman Tarabzouni. (Supplied)

“You have societal, economic and regulatory changes. The pace and volume of what’s going on in the country is exhilarating.”

Although the changes being introduced across Saudi Arabia have been welcomed by entrepreneurs, they come with their own challenges. 

Tarabzouni said that one has to constantly change and be dynamic enough to embrace and keep up with changes.

“That’s where it becomes interesting because you have the new economy, and a lot of these entrepreneurs are well positioned to take advantage of many of these changes,” he added.

“Capital is coming in, foreign direct investment is steadily increasing, and a lot of large institutions and corporates are putting money to work in Saudi Arabia, even though venture investment was previously considered a risky asset class.”

Tarabzouni said while talent is starting to come in, attracting and integrating them within the ecosystem is still a challenge. 

He singled out Saudi Arabia for praise for its recent decision to open and pave the way for naturalization of top talent in different fields from all over the world.

“This is significant,” he said. “This is a country that’s literally telling the world, ‘I’m here, and I want to open up to anyone who’s going to be part of my transformation story and be a part of my platform’.”




Areije Alshakar. (Supplied)

Besides Saudi Arabia, Bahrain is one of the options people can look at, said Areije Alshakar, director and fund manager at Alwaha Venture Capital Fund of Funds in Bahrain.

“Each country in the GCC offers great opportunities for funds and startups. Bahrain has the right amount of population, the right size and the ability to access decision-makers,” she told the SALT Conference.

“We operate like a team so, ultimately, if you’re a startup looking to penetrate the region, Bahrain is a good testbed to expand in other markets as well because it has a good ecosystem.”

Oman is also emerging at the top of the list, said Abdullah Al-Shaksy, co-founder and CEO of Phaze Ventures, which specializes in energy disruption and logistics. 




Abdullah Al-Shaksy. (Supplied)

He added that the sultanate is going through a major transformation, similar to the one underway in Saudi Arabia, despite being a smaller market that does not get as much coverage.

“We have a very young demographic and a lot of educated young talent. And for the first time, that talent is now moving away from the state sector and into the entrepreneurship sphere,” he said.

“We finally have all the basic building blocks of the ecosystem, our accelerator programs and three venture funds, (which will be) almost four next year.”

Al-Shaksy said that the Oman developments happened in the last three years, in tandem with regulatory reforms and increased corporate interest and participation in ventures and technology investments.

“That has all come together to make Oman a bit of a dark horse in the race,” he said. “We’ve done four deals in Oman. All four are companies that operationalized in the last two years, and their average annual revenues are $10 million. All four companies are now expanding outside, and one of them acquired a company in Kuwait.”

Al-Shaksy said that the transformations have a lot to do with the talents that had hitherto remained untapped because they used to be drawn toward the government sector, but are now empowered to create their own opportunities.

Overall, the GCC region holds a lot of promise and is currently undervalued, underestimated and greatly misunderstood, said Fahad Al-Sharekh, co-founder and general partner of Kuwait’s Techinvest Corp. 




Fahad Al-Sharekh. (Supplied)

“We have a lot of potential and added value that we can bring to any asset class,” he said. “This is the reason many international investors want to come in and set up funds in the region. But it’s still in its infancy and growing, and (still) not enough.”

Al-Sharekh said that the most important building block of the infrastructure of a technology ecosystem is the human talent that makes up the workforce, which these days is likely to consist of coders, programers, software engineers and architects.

“We unfortunately don’t have this (building block) in the region (to the extent needed), because there aren’t enough schools and programs that teach coding,” he added. 

“That’s the impediment, but with more attention, the next thing (governments) will do is try to expedite education initiatives in coding, which will lead to more innovation, ideation and not just mimicking.”

That being said, opportunities in the region are tremendous, with the panelists at the SALT Conference saying the surface has barely been scratched. 

Tarabzouni pointed out that the gross domestic product (GDP) of the Middle East and North Africa (MENA) is $6 trillion, compared to $30 trillion for the US.

The US has 150 unicorns — a tech startup that reaches a $1 billion market value — compared with 25 in the Middle East. 

“But the region only had one Careem to date, so there are (still) 24 missing unicorns that the region, from a GDP and economic-activity perspective, can absorb,” Tarabzouni said.

“It goes back to this circular argument of needing capital but also talent and open markets. Plus you need to fix fragmentation and get the MENA collective bloc to act as a single market for entrepreneurs to be able to address.”

On the upside, Tarabzouni said, changes in the GCC are happening at an incredible pace, and governments’ interest in helping spur entrepreneurial activity and talent inclusion is amazing.

“A lot of this is government-backed, but this industry is all about really long feedback cycles,” he added. 

“But these companies take 10-15 years to create value, and you need patient investors, so I’m optimistic.”

The hope is that going forward, entities from the GCC’s private and public sectors will design and implement initiatives to speed up the evolution of the bloc’s entrepreneurship ecosystem.


Egypt, Russia in talks over Sputnik V vaccine imports

Egypt, Russia in talks over Sputnik V vaccine imports
Updated 16 min 38 sec ago

Egypt, Russia in talks over Sputnik V vaccine imports

Egypt, Russia in talks over Sputnik V vaccine imports
  • The two-dose Sputnik V vaccine has obtained approval from the Egyptian Drug Authority – both doses are designed to be administered within a 21-day period
  • Russian Ambassador to Egypt Georgy Borisenko said that Russia is keen to accelerate the delivery of Sputnik V doses to Egypt

CAIRO: Egypt is negotiating with manufacturers of the Russian-made Sputnik vaccine in a bid to buy enough doses for Egypt’s entire population, Mohamed Awad Tag El-Din, advisor to the president on health affairs, has said.

The move emerged during a meeting headed by Prime Minister Mostafa Madbouly on Tuesday to discuss ways to control the pandemic. The meeting heard that coordination is taking place regarding the supply of monthly doses.

Egypt’s Health Minister Hala Zayed said that the ministry is working on increasing the daily capacity of vaccine centers so that Egypt can inoculate more than 112,000 people per day, adding that there are adequate reserves of medical oxygen in the country.

Negotiations have also taken place with oxygen manufacturers to increase the amount available in Egyptian hospitals and health centers, and to redirect industrial oxygen to the medical sector. Medical gas networks have been upgraded for 40 hospitals affiliated with the ministry.

Zayed also discussed the possibility of manufacturing the Sputnik V vaccine in Egypt in a meeting with Russian Ambassador to Egypt Georgy Borisenko.

Khaled Megahed, health ministry spokesperson, said that the meeting also involved talks on investment opportunities and a potential strategy of using Egypt as a vaccine manufacturing base for all of Africa.

Megahed said that the ministry “endeavors to provide vaccines and prioritize the health of citizens and workers in Egypt.”

The two-dose Sputnik V vaccine has obtained approval from the Egyptian Drug Authority. Both doses are designed to be administered within a 21-day period.

Borisenko said that Russia is keen to accelerate the delivery of Sputnik V doses to Egypt. He added that Russia has given its “full support and cooperation” to Egypt in fighting the pandemic.


Deals signed during Egyptian PM’s Libya visit

Deals signed during Egyptian PM’s Libya visit
Updated 20 April 2021

Deals signed during Egyptian PM’s Libya visit

Deals signed during Egyptian PM’s Libya visit
  • During Mostafa Madbouly’s visit, several agreements were signed between the two governments, most notably on the establishment of power stations in Libya
  • Libya is considered a natural extension of the Egyptian market, due to the geographical proximity and long history of trade exchange and cooperation between the two countries

CAIRO: Egyptian Prime Minister Mostafa Madbouly, accompanied by a team of ministers, visited Tripoli on Tuesday to discuss economic and political cooperation with the Libyan Government of National Unity.

It followed instructions from Egyptian President Abdel Fattah El-Sisi, who is planning a visit to Libya.

During Madbouly’s visit, several agreements were signed between the two governments, most notably on the establishment of power stations in Libya to strengthen its energy networks.

Libya is considered a natural extension of the Egyptian market, due to the geographical proximity and long history of trade exchange and cooperation between the two countries.

Egyptian companies are awaiting government decisions regarding participation in the reconstruction of Libya, which they hope will produce new opportunities in a renewed market.

According to local sources, Madbouly’s visit is focussed on investments in the country, Egyptian labor issues and the reopening of diplomatic missions.

Last month, El-Sisi discussed with the head of the Libyan Presidential Council, Mohamed Al-Menfi, prospects for enhanced cooperation between the two countries.

El-Sisi stressed Egypt’s full and absolute support for the new executive authority in Libya in all fields and for its success in holding general elections at the end of the year.

He said Egypt was fully prepared to provide its expertise to the Libyan government to help restore its national institutions, especially security and police forces, to achieve greater stability.

Since the beginning of the Libyan crisis, Egypt has promoted political settlement by hosting the warring factions in key meetings.


Chemical weapons watchdog weighs measures against Syria

Chemical weapons watchdog weighs measures against Syria
Updated 20 April 2021

Chemical weapons watchdog weighs measures against Syria

Chemical weapons watchdog weighs measures against Syria
  • OPCW members are proposing to strip Syria of its rights at the agency in response to findings government forces used poison gas
  • U.N. director at Human Rights Watch hopes the move will encourage countries to prosecute individuals for criminal responsibility

AMSTERDAM: Members of the global chemical weapons watchdog considered a proposal on Tuesday to strip Syria of its rights at the Hague-based agency in response to findings that government forces repeatedly used poison gas.
A draft document, a copy of which was reviewed by Reuters, was circulated among the 193 members at the Organization for the Prohibition of Chemical Weapons (OPCW).
It was proposed by 46 nations, including the United States, Britain and France.
Syria and its military ally Russia have repeatedly denied using chemical weapons in the decade-old conflict, which has turned the once-technical agency into a flashpoint between rival political forces and deadlocked the UN Security Council.
The Russian and Syrian delegations at the OPCW did not immediately respond to requests for comment.
The draft decision, which must win a two-thirds majority of members attending and voting during a meeting of the OPCW’s governing Conference of States Parties this week, proposes revoking voting rights and banning Damascus from holding any offices within the OPCW.
The draft, which could be put to a vote on Wednesday, said the ongoing use “establishes that the Syrian Arab Republic failed to declare and destroy all of its chemical weapons” after joining the 1997 Chemical Weapons Convention in 2013.
Louis Charbonneau, UN director at Human Rights Watch, hopes the move will encourage countries to prosecute individuals for criminal responsibility.
“While this may be largely symbolic, it’s an important step toward holding the Syrian leadership accountable for their war crimes while confronting the biggest compliance crisis that parties to the Chemical Weapons Convention have ever faced,” he said.
Several investigations at the United Nations and by the OPCW’s special Investigation and Identification Team (IIT) concluded that Syrian government forces used the nerve agent sarin and chlorine barrel bombs, in attacks between 2015 and 2018 that investigators said killed or injured thousands.
Last week, the OPCW’s IIT concluded there were “reasonable grounds to believe” that Syria’s air force dropped a chlorine bomb on a residential neighborhood in the rebel-controlled Idlib region in February 2018. Syria dismissed the findings.


Jordan's public prosecution ends investigation into 'recent events threatening security'

Jordan's public prosecution ends investigation into 'recent events threatening security'
Updated 20 April 2021

Jordan's public prosecution ends investigation into 'recent events threatening security'

Jordan's public prosecution ends investigation into 'recent events threatening security'
  • The results of the investigation for those involved ‘constituted a clear threat to the security and stability of the kingdom’

LONDON: An investigation into recent events that threatened to undermine Jordan’s security and stability has ended, the kingdom’s public prosecution said on Tuesday.
Brig. Gen. Hazem Al-Majali said: “The Public Prosecution of the State Security Court has completed its investigations relating to the events that the kingdom was exposed to recently.”
On April 5, Jordanian Deputy Prime Minister Ayman Safadi announced that more than a dozen individuals had been arrested on charges of undermining the security of the state.
“It became clear from the investigation that it contained different and varied roles and facts for those involved, which would have constituted a clear threat to the security and stability of the kingdom,” Brig. Gen. Al-Majali added.
He also said the State Security Prosecution is working on completing the final stages of the investigation and the legal procedures required to refer them to the State Security Court,” Jordanian news agency Petra reported.


Egypt fires top railway official after deadly train crashes

People gather by an overturned train carriage at the scene of a railway accident in the city of Toukh in Egypt's central Nile Delta province of Qalyubiya on April 18, 2021. (AFP/File Photo)
People gather by an overturned train carriage at the scene of a railway accident in the city of Toukh in Egypt's central Nile Delta province of Qalyubiya on April 18, 2021. (AFP/File Photo)
Updated 20 April 2021

Egypt fires top railway official after deadly train crashes

People gather by an overturned train carriage at the scene of a railway accident in the city of Toukh in Egypt's central Nile Delta province of Qalyubiya on April 18, 2021. (AFP/File Photo)
  • Raslan, who headed the railway authority since July 2018, was replaced Mustafa Abuel-Makarm
  • Country has seen three accidents in less than a month that left at least 29 people dead, some 320 injured

CAIRO: Egypt’s transportation minister on Tuesday said he sacked the country’s top railway official, following three train accidents in less than a month that left at least 29 people dead and some 320 injured.
The firing of Asharf Raslan, head of the railway authority, was part of a wide ranging overhaul of the rundown railway system's leadership amid public outcry over repeated train crashes.
Raslan, who headed the railway authority since July 2018, was replaced Mustafa Abuel-Makarm, the office of Transportation Minister Kamal el-Wazir said in a statement.
The changes included the main departments of the railway authority that manages train traffic in the Arab world’s most populous country.

READ MORE

At least 11 people were killed and nearly 100 injured in a train accident in Egypt on Sunday. Click here for more.

The overhaul was designed to “inject a number of competent professionals” amid efforts to upgrade the poorly-maintained network.
The changes came after a passenger train derailed Sunday north of Cairo, killing at least 11 people and injuring at least 98 others. That followed another train crash in the Nile Delta province of Sharqia last week that left 15 people wounded.
After Sunday’s crash, President Abdel Fattah el-Sissi announced the establishment of an official commission to investigate its causes. Prosecutors also launched their own probe.
On March 25, two passenger trains collided in the southern province of Sohag, killing at least 18 people and injuring 200 others, including children. Prosecutors blamed gross negligence by railway employees for that crash.
The country’s railway system, one of the world's oldest, has a history of badly maintained equipment and poor management.

READ MORE

Saudi Arabia said on Sunday it expresses its deep sorrow for the train accident north of the Egyptian capital Cairo. Click here for more.

The government says it has launched a broad renovation and modernization initiative, buying train cars and other equipment from European and U.S. manufacturers to automate the system and develop a domestic railcar industry.
El-Sissi said in March 2018 that the government needs about 250 billion Egyptian pounds, or $14.1 billion, to overhaul the run-down rail system.
Hundreds of train accidents are reported every year. In February 2019 an unmanned locomotive slammed into a barrier inside Cairo’s main Ramses railway station, causing a huge explosion and a fire that killed at least 25 people. That crash prompted the then-transportation minister to resign.
In August 2017, two passenger trains collided just outside the Mediterranean port city of Alexandria, killing 43 people. In 2016, at least 51 people were killed when two commuter trains collided near Cairo.
Egypt’s deadliest train crash was in 2002, when over 300 people were killed after a fire broke out in an overnight train traveling from Cairo to southern Egypt.