SAUDI ARABIA - Economy
CEO, Omar K. Alesayi & Partners Co. (OMACO)
Amr M. Khashoggi is the CEO of OMACO, a company with investments in Saudi Arabia, Yemen, Egypt, and Nigeria in the automotive services, heavy machinery, food, building systems, packaging, tourism, and real estate sectors. He is also Chairman of Amkest group, Chairman and Partner of Global Gypsum Company, Chairman of Qaderoon Business Disability Network, and Member of the Advisory Board of Effat University in Jeddah. He holds an MBA from Yale University and a BSc. from Menlo College, California.
Since its foundation, Saudi Arabia has always believed in a free economy. The Saudi economy is still driven by oil, though the leadership is working hard to diversify it. However, this will take time, as the world is still, to a large extent, dependent on fossil fuels. Oil revenues have traditionally been reinjected into the country in the form of megaprojects, which in turn lift the rest of the economy. Moving forward, this has to include a step-by-step approach in order to build a more sustainable economy and develop our industries. In order to become a sustainable country, we need success stories based on mutual cooperation between the public and private sectors, such as King Abdullah Economic City (KAEC). Although KAEC is far from completion, it is a successful model of how to work out a effective public-private structure. At present, KAEC is home to more than 100 factories, and the port is set to become the real game-changer in the whole region.
SMEs hold the key to increasing employment rates across the Kingdom. The government has dedicated significant amounts of capital to SMEs, and the SME authority needs to look at the economy and segment it, placing every SME in a segment as part of the supply chain. We need a realistic assessment of how a large company can contribute compared to a small one and tailor solutions accordingly. Both the government and private sector must guide SMEs and help them with themed industrial clusters such as automotive or renewable energy and facilitate their outsourcing of accounting, HR, legal, and other services to specialized companies, allowing SMEs to focus on production. We want SMEs to be innovators and not turn into copycats. Specialization will ensure they do not lose out to bigger players.
Transparency, streamlined regulations, and rule of law are three key aspects that attract international investors to a country. At present, any international investor can set up a company in three days online and engage in investment opportunities posted by the Saudi Arabian General Investments Authority (SAGIA). One needs to look realistically at the market to see whether it is convenient to start a venture from zero or invest in an international business, with the idea of bringing technology to Saudi Arabia. I can identify three main areas for investment: mining, education, and healthcare. Mining is an area of growth; education and training can build and hone the skills and capabilities of our Saudi youth; and investment in healthcare is required to increase the number of all sorts of healthcare providers. Tourism and entertainment are other areas that can lead to attractive returns in the long run.
Undoubtedly, technological innovation will continue to play an increasingly important role in all sectors. However, for the time being, technology’s value lies in improving efficiencies. OMACO, for example, has installed sensors to achieve power savings. Energy has become more expensive because of the removal of electricity and fuel subsidies, so power savings is a crucial area that can witness some concrete improvements. Overall, technology is starting to be seen as a powerful tool to reduce energy wastage. For example, running a machine at full capacity is not efficient, and programmable controls like scanners can help regulate energy use.
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