By John Irish
Selected as one of the amabassadors for the Leaders in Dubai conference in November, Abdulla Al Zamil, head of Zamil Industrial Investment Company took a moment with Arabian Business.
|~||~||~|How do you see the political and business situation in Saudi Arabia?The population proved since September 11 that it stands by the government quite happily. A good example is that we have had several terrorist attacks in the last few months, but this has only brought the population closer with government leaders to fighting terrorism. Business keeps booming. People thought that with such attacks, money would leave the country, but there has been an influx of funds back into Saudi.
How do you assess reforms in Saudi?More needs to be done. Reforms have taken place and the pace faster. Privatisation of the Saudi telecoms company is a positive sign. The government will privatise more and more of their equities in various companies and I think that will make the wheels turn much faster. I’d highlight foreign investment laws, which have made it easier for companies to invest in Saudi. Visa restrictions have been relaxed a great deal and we’re beginning to see tourism visas granted to families not just business officials.
As a business leader what’s your view on the unemployment rate?Let’s put things into perspective. Unemployment in Saudi is not at 30%, but more around 10-15%. We have six million foreign workers in Saudi. The total male working population is about three million, so if we say 10-15%, you only have to find jobs for 300-450 thousand individuals, which means replacing around 5-7% of expat labour. It is achievable, provided there is a match of skills. That is the biggest challenge.
How do you see 2004 for your firm?In the first four months we saw a 30% growth. We expect the boom to continue in 2004 and slow down in 2005. The only concern we have is the stock markets and real estate, but demand for products, I think will continue to rise. However, there is a bubble developing in the stock markets across the region and real estate in Saudi Arabia.
What’s your forecast for steel prices?
Prices have gone up in the last few months, but keep in mind the announcement made by the Chinese PM. When he announces something it’s not a wishful list it’s an order, it says that the Chinese economy is expanding too fast and it has an inflationary effect on the economy and he is pre-empting the slowness of the economy in China. If that happens and I think it will…you already saw it the day he said that. Aluminium went down $300 and copper $500 and steel stabilised in prices. So if the Chinese economy does slow down, then commodity prices will go down.
What about WTO membership?I don’t necessarily think it is positive. It’s coming to the region and we need to be watchful. In the short term, I think we shall see some major impact on small to medium sized businesses. The unfortunate thing is that a lot of these businesses are not realising that. The other unfortunate thing is that the government and chamber of commerce are not doing enough to educate these businesses.
What’s your involvement in Iraq?We sell a lot of our products there. Our main problem is that there’s no direct shipment. The border will open on June 1 and we hope it will enhance trade a lot more. I don’t think things will change politically soon, but from a business standpoint there is business. A week is too long in politics, so you never know how things will turn out, but the demand will always be there.
What do you think the Saudi economy will look like in 5 years time?Our gas initiatives will bring about a tremendous amount of foreign direct investment, which we’re hungry for. I think that whole gas and petrochemicals initiatives will see a boom in infrastructure surrounding those industries. It requires talented manpower, good infrastructure. It’s very much an export orientated industry and will bring in good hard currency which is badly needed.
Leaders in Dubai seems a little US centric, isn’t that a bit odd?[Smiles] It’s a valid point. We’ll see how it goes. Bare in mind the audience is corporate leaders. They don’t tend to have a huge bias against people. Maybe we do against foreign policy, but not against the corporate world.||**||