Page 133 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Silicon from Sand: Essential Background on the GCC 117

The Private Business Sector
The role of the private business sector in Saudi Arabia has been
increasing steadily. This trend is natural when one considers the
underlying forces shaping the economy. First, population growth
has created enormous pressures to create jobs—unemployment
was at 13 percent in 2006, and excess employment in the public sec-
17
tor masks the true scale of the problem. As everywhere, Saudi
Arabia turns toward the private sector to create jobs. In return, the
private sector calls for greater privatization and economic reform.
A second force propelling the private sector is the transfer of
control of major business conglomerates from their founders to
cadres of professional managers working alongside the children of
founders. This second generation of private-sector leadership tends
to be highly educated (often in America), well trained in global
business practices, and eager to drive their businesses and the
broader economy forward. This trend is not specific to Saudi Arabia
but is apparent throughout the GCC countries.
The private sector is driving reform to spur economic growth
and make the Kingdom more business friendly. One segment in
which this is clearly visible is the media, with the growing preva-
lence of satellite TV. Another segment in which rapid growth is
occurring is that of financial services, for which an unprecedented
number of banking and insurance licenses were issued in 2006.
More fundamental is the role that private business leaders are play-
ing in reshaping the country’s business regulations to conform with
global standards: Saudi Arabia’s WTO accession in 2005 would not
have been possible without the involvement of private-sector
leaders in framing the reforms. As the Kingdom shifts toward a
more open posture, private business leaders are at the forefront.

QATAR: THE UPSTART
Qatar is a tiny state with huge ambitions. The upstart of the GCC,
Qatar is pursuing a development strategy that draws on lessons
learned from its neighbors and actively seeks to avoid pitfalls that
have caught other GCC economies. Although the number of Qatari
citizens is less than the number of people in a single US congres-
sional district, the state has become a serious actor in the global
economy due principally to its abundant natural gas reserves.