“We are making investment in self-reliant industries”: Fahd Al-Rasheed Executive Director of King Abdullah Economic City, KSA

Fahd Al-Rasheed, the chief of the King Abdullah Economic City, Saudi Arabia
  • KSA can switch to an economy that does not depend on oil
  • There are a lot of challenges and difficulties faced by private sector companies
  • King Abdullah port is up to the capacity of accommodating 4 million containers by next year

Q: How do you see the overall situation of the Saudi economy, and how did the kingdom manage to pass through 2016 with the least damage?

A: In fact, the Saudi economy is in the process of a change, you have seen the 2030 Vision and the economic transformation program. All economies around the world that are trying to get rid of oil as main resource have faced similar situation. There are a lot of challenges and difficulties faced by private sector companies, employing whether citizens or residents of the kingdom. But I feel that you will start to see the large positive side of this shift emerging in 2017 and 2018 through the fast growth of the private sector and through the use of energy and other facilities.

Q: Many see the challenge of oil prices positively because it gave the Kingdom the motivation to diversify its economy instead depending on oil. What are the further plans to diversify the economy?

A: Dependence on investment in new sectors, such as industries that do not depend on oil, is very important. At King Abdullah Economic City, we are looking for industries that are not dependent on oil, such as the pharmaceutical industry, which is one of the most important industries identified by the vision. We have seen the opening of the Pfizer factory and many others. This valuable foreign investment adds much value to the Saudi economy through the creation of new economic sectors. We also have service sectors such as logistics sector, which depends on the logistics companies as well as the on availability of infrastructure such as ports. We invested in King Abdullah port so it is up to the capacity of accommodating 4 million containers by next year. The last thing in the service sectors is the entertainment industry, this new sector in the kingdom could create jobs significantly and we are investing heavily in it, and we consider it to be a strategic sector for us. We invest today in more than 40 projects in the field of entertainment and tourism and we will open more than half of them by the end of 2017.

Q: As a youth leader, how do you see the plans in Saudi Arabia to support young people coming into the market?

A: The kingdom of Saudi Arabia today offers many opportunities, and I am an output of the kingdom’s investment in young human resources. Today we see that the state has created a Small and Medium Enterprises Authority to help entrepreneurs to open their own businesses or grow them. King Abdullah Economic City has, in collaboration with the Misk Foundation and in cooperation with Babson Global and Lockheed Martin, has established ‘Prince Mohammed bin Salman college for business management and entrepreneurship” to support and train entrepreneurs in the kingdom and to develop the abilities of young leaders to implement the vision of 2030. There are a lot of investments in the field of youth support.

Q: Everyone is talking about the fourth industrial revolution (the internet, smart cities). How do you see the evolution of technology in the kingdom, to which extent it supports the economy?

 A: First, the fourth industrial revolution dramatically affects industry itself. Industry in the Kingdom used to depend on cheap human resources that we import from abroad. Today, because of automation, we will have greater added value in the business. This means that every job will be more valuable and industries will employ more Saudis. You will need more Saudis who hold engineering bachelors and masters. This will greatly help in the settlement of industries in the Kingdom. The second thing, you can see that we have infrastructure in all of our cities but because of population growth; the infrastructure cannot accommodate such large population. We saw how the digital change in these cities gave Saudis the ability to move in the cities easily and reduces the number of cars. This issue has significant impacts on the Kingdom of Saudi Arabia, some of them are known today and some are not.

Q: How do you see the Kingdom’s Vision 2030. To what extent it can take ahead the Saudi economy?

A: 2030 Vision is a comprehensive and transparent vision, which describes the challenges faced by the kingdom as it also shows the opportunities. It focuses on everything, starting from health to entertainment. It even contains when a citizen should go to the gym on average, for example. It is a comprehensive and complete vision. It gave us a compass that will help us to focus on the private and public sectors to achieve the desired aim. Today, I have watched a lot of global opinion polls that show we are heading in the right direction, despite of all the challenges we are facing. There are a lot of challenges, but we are expecting positive results, and we have big hope in our country.

Q: What is the role of the economic city in the support of the Saudi economy and the Saudi youth?

A: We are part of the organization or the structure of Saudi Arabia, and we are a proof to demonstrate that the Kingdom of Saudi Arabia can switch to an economy that does not depend on oil. We have no dependence on oil in the state budget. We depend on logistics and those industries that don’t require energy. These are the industries that can help nations in achieving development. We have seen that we were able to achieve great things in the economic city. Thus, I am confident that this vision will take us to the desired goals.

 Q: How do you look at 2017 despite of all the challenges and wars in the region? A lot of pressures are on the kingdom, how do you see this?

A: Let me tell you about the positive thing that we have. In 2016, as a businessman, I did not know what I should do. We could not even make a prediction for the next year. I saw a lot of colleagues in the private sector who could not move because they do not know whether they are in the growth phase, or in the deterioration phase, and for how long will the deterioration last.

Now we have got a clear idea of what our budgets will be like in the year 2017. Therefore you would see coming up of many private sector companies that have developed efficient programs of growth and they would be implemented in 2017. You will see a big movement in this direction in the coming months and we will see a growth of between two to three percent.