Job creation, education reforms and building the middle class are the three main concerns of Saleh Hefni, CEO of Halwani Bros.
The Kingdom should address issues related to water and information technology (IT), Hefni told Diana Al-Jassem of Arab News in an exclusive interview at his office in Jeddah.
He emphasizes that creating more employment opportunities in sectors such as tourism and IT are urgently required.
He says Saudization, which involves the replacement of expatriates by Saudis, is a different issue.
He stressed the need for providing special education to Saudi nationals and urgently finding solutions to tackle the growing unemployment of Saudi women.
What, in your opinion, are changes that would have major impact on the lives of citizens in the coming 20 years?
Economic pressures will increase due to the increase of raw material prices in the very near future. We had some increases in 2008 but I expect much more increase during 2013-2014, which will put a lot of pressure on individuals and families among Saudis and elsewhere in the world. Unemployment is the story of our life today. Recent statistics that I looked at confirmed 67 percent as the rate of unemployed women, which is really a disaster. Unemployment among Saudi men will rise in numbers, especially when those who are getting scholarships will start returning to the Kingdom in the near future. So we have graduates from our local universities as well as from abroad. I also think that we would have a social problem with inflation and unemployment, which will make it difficult for Saudis to get married and form families. The number of marriages will decrease while the number of individuals will rise. This will happen because of lack of jobs, low salaries, and inflation. New school graduates earning SR3,000 will not be able to set up a family. This will have a major social impact on our society.
Role of leadership
What do you think of the leadership roles regarding organizations in the Kingdom? What are the factors/reasons for their current state?
Our role as leaders in both the public and private sectors is to develop the sense of risk-taking that is really associated with our organization and external environment. I can give an example since we are talking about Saudization. Saudization is not something that companies have to jump into the bandwagon and hire citizens, but rather it is a national security issue that we have to deal with. Let us look at the unavailability or scarcity of raw materials in the world. For example, the Saudi government banned Brazilian meat due to the mad-cow disease. So I think our role as leaders is to identify the risks that are associated with external environment that affect our business. We should think about overcoming those risks by supporting our government.
Challenging tasks
What are the most difficult decisions that need to be applied in the Kingdom in the coming 20 years?
The most difficult decision is providing new business opportunities. For many years, we have been talking about Saudization. The matter essentially is not about Saudization but about creating job opportunities. We have expatriates who are in jobs. Replacing these expatriates by Saudi nationals is called Saudization. On the other hand, creating jobs is vital. For example, tourism, which is supposed to create jobs 10 times more than manufacturing. Unless we start opening up our economy in terms of tourism, manufacturing, and services, we will not be able to attract young Saudi nationals. For example, if we have a wagon that carries 12 people, no matter how many people it can accommodate, it will still carriy only 12 people. Therefore, I said we have to create job opportunities, which will be more helpful than only Saudization. After all, Saudization has a limit.
Sustainable development
What goals would you set regarding the Kingdom’s development? And how would these goals be achievable through your current position?
The declining size of the middle class in our country is a phenomenon that we have to look at. Recant statistics indicated that a country of our size, economy and population would require approximately 60 to 65 percent in terms of middle class. Today we have only 30 percent. This will have a major social, economic, political and security impact on our country. It is one of the issues that we have to look at and increase the middle class size because they are the driving force of the economy of any nation. Our role as a company is to increase the middle class by ensuring that workers are paid minimum wages as laid down by the Ministry of Labor. Our role is to make sure that our labor force gets a decent standard of living.
Creative project
Give me an example of the most creative project that you wish to establish in the Kingdom.
The whole world is going toward IT. I think we have to follow the development of IT like Dubai and India. I think we have a very smart youth who can handle the IT issue. I really want to see technical corridors in the Kingdom that can attract IT lovers. Our youth have the capability, but policy matters delay such a step. We should think in terms of an IT university. For example, the most 10 jobs sought in 2012 did not exist in 2005. The technology has so much evolved over the past years.
KSA in three words
What three words would you use to describe the Kingdom in the coming 20 years, and why (these 3 chosen words?)
Stability is really needed, especially when political developments are changing countries around us. Secondly, the Kingdom would be crowded. Today our population is increasing at the rate of over 4 to 5 percent. Our cities like Riyadh, Jeddah, and Dammam have between 4 and 5 million people. In 20 years, the five million people will be ten million. Our population of 21 million will double to 41 million, and we are not prepared to handle this population growth in terms of housing, education, airports, roads, and hospitals.
Regarding the Kingdom’s officials, what characteristics do you think are important for such individuals? How would such characteristics contribute to the Kingdom’s further development?
We still see leaders who work individually and don’t work as a team. Team work is really needed. Also needed is the understanding of the challenges locally and internationally. These two major characteristics are needed for our officials.
Human rights
How can we all improve human rights in Saudi Arabia? What are your expectations regarding human rights practices in the coming 20 years?
Children too have their rights. Misuse of children and not giving them proper education are issues that we must look at. We also should look at the rights of spouses. The right to drive is very important and is not a political issue. To be honest, during the era of Custodian of the Two Holy Mosques King Abdullah, we have witnessed several changes and we need to continue with these changes. I think women’s issues have undergone a lot of change during the past 20 years. We have broken the ice in this regard. I think the coming 20 years will witness positive changes in families, especially children and wives, with more control.
Biggest challenge
What is the biggest challenge facing the Kingdom today?
Unemployment is the main challenge that needs a speedy solution. If this problem is solved, all problems in the society will be solved too.
Prominent activities
What are the most prominent economic activities in the Kingdom? What are the neglected sectors that need to be developed?
The most prominent activity is petrochemical industries and we need to continue expanding this sector where it provides new jobs opportunities for Saudis. The neglected sector is water production but we didn’t develop this. The government should concentrate on this in the near future because future wars will be related to water.
Housing problem
There is a huge demand for housing in the Kingdom because of rising young population. The government has also put an emphasis on this sector by allocating SR250 billion in this budget for housing. Do you believe housing sector needs much attention from the government and private sectors?
I think the budget for housing is huge, where the government gives good attention. Actually, I think that we need to move faster. We are slow in executing the strategy. Only 20 percent of our population owns houses, which is a disaster. Not only this but also a substantial portion of the income of individuals goes toward house rents. Our companies should hopefully specify part of their incomes to support individuals. This is done at TATA in India. I hope every private sector does this.
Role of SMEs
There is a need to boost small business enterprises (SMEs) in the Kingdom as it creates various jobs. What role do you see for SMEs in the Kingdom’s economic development?
We still don’t look at the SMEs seriously as the Koreans look at it. For example, LG makes sure that all their parts are produced by trained contacted SMEs. They create small businesses and are available for contracts so they can survive. Here, we start SMEs and let them try to survive. They can’t survive unless they have agreements with big companies. SMEs are the driving force of economy and need much attention from our companies.
Knowledge hunt
Education is always a priority of the Saudi government. What changes you envisage in the education system to fit Saudi youth in a knowledge-based economy?
We want our children to study need-based courses like mass communication, IT, and software development, as these are the driving force of our future. Scholarship is extremely important as they come with special education, which helps in developing the country. I think scholarship graduates will come with an open mind and find opportunities. We also want to diversify in the fields that they study abroad.
Fair opportunities
How do you see Saudi women’s contribution in the labor, social and political arenas in the coming 20 years? And what’s required in order for Saudi women to actualize your future vision?
Women are a major contributors to our economy. I see women more dedicated to their work where they contribute more. They are smart and ready to contribute in all sectors such as media, marketing, finance, and accounting as well as production like in Halwani. It is our role as men to ensure that women get the same opportunities that are available to their male counterparts. I expect the number of women workers to increase in due course.
New media
What impact will social media have regarding change in the Kingdom?
Social media is becoming an issue today. I think it attracts people more than traditional media. It is the driving force of the truth.
Learning from the past
What are three or four mistakes that have been repeated in the Kingdom during the past two decades? And how we could eliminate these mistakes in order to develop the Kingdom?
1. The kind of education system pursued is the biggest mistake. Graduating students in majors that are not needed in the market should be eliminated in the future.
2. Better wealth management is also needed for the wealth of our present and future generations.
3. Changing the Saudization concept to creating job opportunities.
Message to youth
Given that the youth make up the majority of the Saudi population, what message would you want conveyed to them? And what else would you say to the rest of the population?
My message to Saudi nationals is that I am proud of them as they are the driving force of change in the future. I want them to drive the change calmly and don’t neglect their culture and heritage. Inculcate discipline so you won’t have to worry about your career.
Hefni’s top goals:
Major changes:
Pay attention to rising prices of raw materials
Solve unemployment problem
Help Saudi youth to marry and set up families
Role of leadership:
Create jobs
Identify the risks
Challenging tasks:
Providing new job opportunities
Sustainable development:
Increase the middle class size
Creative projects he wishes to have:
IT projects
He describes the Kingdom as:
Stable
Crowded
Human rights:
Pay more attention to children’s rights
Prominent activities:
Petrochemical industries
Neglected sectors:
Water production
Housing needs:
Pay more attention to the needs of middle class families
Views on Saudi media:
New media opens new windows for citizens
The role of SMEs:
SMEs should get more attention to survive
Learning from the past:
Education reforms
Better wealth management
Change the Saudization concept
Message to youth:
Drive the change calmly
Don’t lose your heritage and
culture
Inculcate discipline