RIYADH, 30 January 2003 — A senior bank executive has said that the government needs to refocus the thrust of its Saudization program.
Whereas during the last ten years 800,000 jobs have been provided to Saudis in the service sector, the more productive industrial sector has absorbed only 300,000 nationals over the same period.
David Hodgkinson, managing director of the Saudi British Bank (SABB), was delivering a talk on the challenges facing the banking sector at a function organized by the British Council here on Tuesday night.
Hodgkinson said an important factor for Saudization was to have in place an educational system tailored to the needs of banks and the private sector, explaining that a lack of educational planning in the past had led to expatriate domination of the industrial sector.
The situation could be corrected by changing the emphasis in the school curriculum, he added.
He said the same situation was facing small and medium enterprises (SMEs), where 90 percent of the employees were expatriates.
Another problem facing SMEs was a lack of professionalism, Hodgkinson said, referring to a study of SMEs undertaken jointly by Professor John Presley, the bank’s chief economist, and Muhammed Aba Al-Khail, the former minister of finance and national economy.
The study, which stressed the need for streamlining the financial management of SMEs, also showed that many of them had been set up without adequate planning, research and market studies. There was a lack of financial control and transparency in their operation.
The managing director said banks were trying to remedy the situation by setting up training programs or providing advisory services for small businessmen.
Combined with an inability among SMEs to furnish loan guarantees, these problems prevented banks from helping them out in an effective manner, he observed.
Asked about the level of concern among depositors in view of an imminent war in Iraq, Hodgkinson said that unlike during the 1990 Gulf War there was no run on the banks’ deposits this time, although depositors tended to be in a cautious mood.
Hodgkinson also highlighted the contribution of Saudi women in the banking sector, which was evident from the fact that 230 Saudi women were working at SABB, fully complying to Shariah requirements.
