Economic diversification and digital transformation take centre stage in the struggle for economic stability, in a region of volatility.
Oil price uncertainty, government protectionism, US monetary tightening, trade tariffs and the effect of geopolitical uncertainty on business and consumer confidence have halted the global economy for the 3rd time since 2008 and are key issues keeping top business leaders around the world on their toes.
Organized by the Dubai-headquartered multi-dimensional media firm Mediaquest, the Top CEO Conference and Awards went to Bahrain for its fifth edition on April 11, 2019, at Al Areen Palace and Spa, where business leaders, and more than 30 expert speakers from across the region and the world, gathered to discuss various topics weaved around the central theme of “Growth in a Volatile Future”.
While volatility could be policy driven, it is often the private sector which is driving change towards non-traditional business models to meet shifting consumer preferences.
Key among this shift is digital transformation with data as key backbone for survival and growth.
Evidence of transformation
In Saudi Arabia, the growth potential is huge, the reform drive is continuing and government spending has grown in a few key areas.
Nasser Bin Sulaiman Al Nasser Group, CEO Saudi Telecom Company (STC) said during the session entitled ‘Future of Growth Amid Volatility’: “There is huge stimulus spending from the government to make sure diversification is happening.”
“Investments in Entertainment, ICT, among others are working at a faster pace than the private sector. 1 million households connected last year with STC and others and legislation has created safe havens for investors.”
With government spending up 25%, Saudi Arabia saw a return to growth of more than 2%, and brought its budget deficit below 3% of GDP. While in the UAE, GDP growth approached 3%, and returned to fiscal surpluses in 2018.
Hisham Alrayes, CEO GFH Financial Group, said the region has been in a volatile situation for the past 15 years.
“I think volatility for us as investment bankers is good, and you want to be a first mover organization to snap the opportunities that arise out of that.”
“One time it is the financial crisis and another time it is technology disruption and other times political, which changes the pattern and you need to be careful about which market to get into, and be competent on studying these specific opportunities.”
How volatility, women empowerment and youth intertwine
Tine Arentsen Willumsen, CEO of The Above & Beyond Group said that the best weapon against risk is actually to explore the opportunities at hand.
“More than half of the well-educated people coming out of universities are women. And it's the same here in my region in Scandinavia - it's 58%, with 70 72% of women participating in our workforce, while in the region here it is more around 22-26%.
“Women's impact on the global economy is estimated at the moment about $28 trillion. That is actually the size of China and India combined, as a growth market. I think the vision 2030 and Saudi, with everything that the governments are working on here, really is looking up for the whole region.”
STC’s Bin Sulaiman said the opportunities and the momentum for a woman hiring in Saudi Arabia has already gathered pace and momentum, where women take up the highest positions up to Minister levels.
“Women’s education has been put at the forefront of the vision and transformation plan. We at STC are hiring executives in the cyber security domain, as head of the sustainability, and head of transformation.”
Lisa La Bonté, Founder and CEO Arab Youth Venture Foundation (UN) said: “By and large, especially in the GCC, the leadership has done a very good job of cultivating quite a lot of economic development, and especially in where we're concerned youth advancement. However, that said, what keeps us awake at night is really the issue that goes to volatility, which is the youth bulge.”
“Depending on the statistics, 60 to 70% of the markets here are comprised of youth under the ages of 25. On average, sometimes in Saudi Arabia, what you see are high unemployment rates and in some cases in some markets in Northern Africa, up to 25% youth unemployment. This is a very potential problem, from a volatility standpoint, that affects economics and affects investment and in fact, effects quite a lot of things.
She added empirical evidence has shown that there's a definite connection between youth unemployment, and all types of extremist types of behaviour, not just violence, but also populism. “You've got disenfranchised or large segment of the population that can't pursue a livelihood and that can't feed their families or can't work. It just creates an enormous amount of potential problems and volatility.”