“People have just started realising that we’re in a deep economic malaise that is unlikely to be resolved in the next three years,” muses Ghassan Hasbani, who is sitting in his office in the sprawling Al Mursalat complex in Riyadh. “And it may take another three years on top of that to go back to employment levels that existed pre-crisis. So the crisis started in 2008, and we’re almost four years in. That six or seven years of economic instability before jobs get back to normal — time flies.”
It’s a question that has clearly been bothering Hasbani for some time. He is the CEO for Saudi Telecommunications Company (STC)’s considerable international operations, and of the company’s 160 million odd subscribers, 126 million fall under Hasbani’s direct control. Outside Saudi Arabia, the firm has operations in Kuwait and Bahrain (where it is known as Viva), India, Indonesia, Malaysia, Turkey and South Africa.
But one might well feel justified in asking exactly why a senior telecoms executive takes such a serious interest in global job creation?
Hasbani, who has just got back from the lengthy deliberations at the World Economic Forum (WEF) in Davos, believes that his industry actually holds the key to faster, more sustainable economic growth. At the event, he put forward his belief that telecoms are vital to the success of small and medium enterprises (SMEs), which are the lifeblood of any dynamic economy.
“What is going to help SMEs grow?” he asks. “One is a good legal system that reduces the entry barrier for entrepreneurs, and secondly, it’s about creating enough market in which these SMEs can survive. Telecommunications does two things. First of all, good telecoms infrastructure does lower the barriers for entrepreneurs because it gives greater connectivity for employees and links the centres of economy together in any given country.”
“So an SME can operate with other SMEs in the country, and with larger institutions, much more easily. Secondly, telecom also creates a global market. Because if you can connect through a good international network, instantly you can play globally. You can develop software and sell it, and it’s easier now to advertise across the globe through social networks so you can have the scale instantly.”
Hasbani also lauds the industry as being one of the few industries that attracts large-scale foreign direct investment (FDI). International cashflow into the Arab world has, unsurprisingly, taken a considerable hit during the financial crisis. Between 2008 and 2010, it slipped by 40 percent, a drop in funding that has had a calamitous effect on the region’s employment fortunes. In Saudi Arabia alone, the unemployment rate is 9.6 percent of the local workforce.
“Studies by the OECD in the Mediterranean basin have said that around $700 of FDI put into developmental projects could lead to the creation of one job,” adds Hasbani. “If you look at the amount of jobs that could have been created [in the Arab world, if FDI rates had remained constant], it could have reached up to six million jobs.
“You rarely find a big country or a large conglomerate looking to invest in building roads in Africa, for example, but they would be much quicker and happier to invest in building telecoms companies, because they can get a quick return and a good return.
So telecoms is one of the biggest ways of attracting FDI.”
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