RIYADH, 29 May 2007 — A wakeup call for European investors and entrepreneurs not to miss out on business in the Gulf during the current economic boom was given by Gulf and European speakers at the 2nd Euro-Gulf Forum which concluded here yesterday.
Speaking of his experiences in Jubail and Yanbu as well as in the Saudi General Investment Authority (SAGIA), Prince Abdullah ibn Faisal ibn Turki, former governor of SAGIA, said that Europeans were unfortunately more focused on the big boom development schemes in the Gulf and paid little attention to small and medium enterprises. He mentioned that while some European governments were reluctant to approach the Gulf market today, the same governments benefited from petrochemical sales to their markets by Saudi Arabia in the 1980s. Those deals, he said, did not just have an economic transformation but had a very important political transformation at that time for both sides. The four biggest economies in Europe were greatly supported by positive Saudi contributions, he said. “The same European governments shocked the Saudis by repeatedly refusing to participate in petrochemical programs which were open to all.”
Another problem was that Europeans who sought to invest in the Gulf were only interested in bringing their funds to this area. “We would prefer to have experienced international operators coming here for mainly business reasons rather than for purely financial investments.”
One problem he noted was that some governments lacked commercial representatives in their embassies. He put European entrepreneurs in the region in three categories: “Those who are office people who have had tremendous opportunities but have not done anything. Then there are those who think more developmental than economic. They are 40 years late in their thinking. It is not development anymore. It is opportunities and investments to open up.”
The last type is European investors who have come to the region “who want to reinvent the wheel.” He mentioned how several European companies had promotional sales in the Kingdom, but their efforts were diluted because of insufficient data. “There is too little direct promotion. And I am talking about both sides. Too many things are ignored.”
He stressed the importance for Europeans to focus on medium and small enterprises in the Gulf. “Everyone is looking for the big things,” he said. “I believe that if you do not regulate for all types and all sizes of economic players, then you lose.”
Speaking about energy security, Deputy Minister of Petroleum and Mineral Affairs Prince Abdul Aziz ibn Salman said that the approach of some countries of the world to reduce oil import from the Middle East as a way of reducing oil prices was “illogical. He also said that the stability of the world’s energy sector was the responsibility of all, including both oil exporting and oil importing countries. He made a number of points.
1. There are no heroes or villains in the energy sector. “There are only legitimate shareholders.”
2. Everyone has a role in energy security, both producing nations and importing nations.
3. Problems in the energy sector are global and not regional. “They require global solutions.”
4. The Middle East is not part of the problem, but part of the solution.
5. It would be illogical to substitute alternative fuel for fossil fuel now or in the near future.
