Industrial base

While every country in the Gulf is on a bender trying to start industrializing themselves, they are hardly doing anything to seriously push that thought through. Perhaps the only country that is making a serious effort is Saudi Arabia through the Saudi Industrial Development Fund.

Not only do they help find cheap or free land for the projects that they deem of national significance but they fund it with extremely cheap money as well. A fundamental necessity for industrial growth is cheap, immense amounts of land. The second is cheap cash.

Banks don't even want to look at your projects if they feel that you cannot cover your costs. But by its nature, industrial development needs cheap cash and time. These two factors aren't usually what banks are ready to provide easily.

But then this type of business is not made for commercial banks but rather for industrial banks. The funny thing is that while these banks do exist, they usually want the industrial developer to put up a bond to cover the project. The irony of the stance, if correct, is that if the industrial developer could put up the money for the bond, he would not need to go to the bank in the first place.

The question that we never ask is what strategy should the Gulf States use in pursuing this goal? The reason I ask this question is because if we cast a critical eye on what has taken place so far, it would be easy to see that there has not been a serious effort made in the macro outlook while the micro has just followed a haphazard path.

Do we, as Gulf States, want to target the information industry, the heavy manufacturing industry or even a futuristic industry? The reason you should have a plan is so that you can compare where you are with where you should be according to your plan.

If you are diverging away, it will become obvious and you can take corrective action. It also allows you the luxury of vision so that you can say that perhaps the plan you set out was not right and now you need to rethink the situation prior to moving forward. There is no shame in being wrong and learning from your mistakes.

There is everything wrong from being blind by choice and deaf to those who can help you. Now let's seriously think of what we have accomplished in the past 30 years of oil revenue. To be honest, while I congratulate the Gulf States on what we have accomplished in such a short time, I would be remiss if I just stopped there. It is really great to think that we have come a long way from where we first started but the reality is not quite that stellar.

Today all of the economies of the Gulf States can't even supersede that of South Korea (ranked 14th in the world) and just beating Iran. If we removed oil from the equation, we would probably be closer to Botswana (ranked 115th) or Albania (ranked 121st). So while we have a great advantage, what are we doing with it?

In any great society there will always be an agent provocateur. His job is to question things or bring things to light. He doesn't do this for personal gain. On the contrary, when he does this, this usually makes him the bad guy. But he does so because he is driven by the love of his community and society to point the finger at the issues and allow the others who are better than him to solve it.

That, I believe, is my job. I also believe that we need more agent provocateurs to really allow the society to be better. In any business where all the people around the leader just say yes, that business is doomed to failure. It is only the bold leader who allows dissent who will flourish and grow. People who are sure of themselves are never afraid to hear people disagreeing with them.

Mishal Kanoo is the deputy chairman of the Kanoo Group. It is one of the largest family owned companies in the Gulf. The Kanoo family is the 11th richest in the Arab world with a fortune of US$6.1bn.

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Wake up call
Posted by Trojan, Dubai, UAE on 21 May 2008 at 12:08 UAE time


FINALLY! Someone starting to wake up to the reality instead of being enamored with the superficiality of the high rises and the senseless construction.

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