Connecting Interest with Business Opportunity: A Conversation with Khaled Al-Seif

Published: January 30, 2012

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Editor’s Note:

The 2nd US-Saudi Business Opportunities Forum in Atlanta last month brought together a high level delegation of over 200 Saudi officials and business people with over 1000 Americans to explore the $1 trillion-plus commercial openings available in the coming decade in the Kingdom. The response to the Forum – and what it means for American investment and partnerships in Saudi Arabia – was something distinguished businessman Khaled Al-Seif has been working to see for years. Since at least as far back as 2005, when he helped lead a multi-city trade mission to Atlanta, he has been a steadfast champion of the business-to-business relationship between Saudis and Americans.

SUSRIS was there in Atlanta in 2005 to talk with Mr. Al-Seif about the specific purposes of the trade mission, the development of investment and partnerships in what, then, was emerging as a major expansion of economic opportunity in the Kingdom. He told SUSRIS, “Saudi Arabia is seeing another boom in the making, an economic boom which in my opinion will be wider and deeper than the boom in the 70′s… There are so many opportunities in the private sector now that were not dreamed of ten years ago.” We also talked about the context, beyond the dollars and cents of new deals, of the commitment to build bridges with American business people:

“The business relationship between the United States and Saudi Arabia is an old and historic relationship, which has been very beneficial for both Saudis and Americans. Over the years America has been Saudi Arabia’s primary trading partner. Most of the things you see in Saudi Arabia are a result of this relationship — American technology starting from oil exploration to infrastructure and public works. You even see American influence in our standards due to the success of this relationship over the years. The development that has happened in Saudi Arabia we owe to American companies that have worked hard in the Kingdom. They have gained and we have gained. American exports to Saudi Arabia have provided hundreds of thousands of jobs in the US. Likewise, our economy has benefited from American business involvement so it has been the perfect partnership over all those years. What happened on September 11 was a shame. What was also a shame was how a group of terrorists could have damaged the relationship between Saudi Arabia and the US. Just as we have been business partners we are now partners in the war on terrorism. Saudi Arabia and America are cooperating in the fight against the terrorists and we are winning this war together.

“The trade mission’s purpose is not just to attract investments. Many in the private sector in Saudi Arabia are worried about the relationship with our American partners. We consider American companies very talented and great friends and we worked with them for many years. As I mentioned the United States has been our primary trading partner for decades. We saw the relationship deteriorate after Sept 11, including the business ties. With the upturn in Saudi Arabia’s economic prospects a lot of people from other countries started coming to Saudi Arabia for business. What we are worried about is that others will take the place of the US as our trading partner. So given the history of our partnership with Americans we owe it to the relationship to do just what we are doing now — reaching out to American companies, to our old friends, to tell them what is going on in our country, to tell them about all the exciting opportunities out there and to invite them to come over to Saudi Arabia. What we are really saying to them is that Saudi Arabia again welcomes American business partners and we, as Saudis, will be open to work together. There is a great future and great business to be done there and we would love to do it together.”

Six years later the success of the US-Saudi Business Opportunities Forum in Atlanta has been testimony to the forecast that there is “great business to be done” and that Americans and Saudis are doing it together.

This is part two of the exclusive SUSRIS interview with Mr. Al-Seif conducted on the sidelines of the US-Saudi Business Opportunities Forum in Atlanta, Georgia. You can read Part One [“Change and Reform: A Conversation with Khaled Al-Seif”] at this link.

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Connecting Interest with Business Opportunity: A Conversation with Khaled Al-Seif

[SUSRIS] How does the Business Opportunities Forum in Atlanta compare to last year’s event in Chicago and the other bridge building efforts you have championed in the past.

Eng. Khaled Al-Seif
Eng. Khaled Al-Seif

[Eng. Khaled Al-Seif]I was pleased with the results of the Chicago Forum and I am pleased with what is being accomplished here at the Atlanta forum in all the areas we sought to emphasize – a very high level of participation in terms of the quality of the program and the numbers of participants, the chance to network with future partners and build relationships, and the resources available for developing business opportunities.

I spent time going around to the various workshops so I could see the levels of participation among the American and Saudi business people. What I saw was a very high level of energy, and a lot of enthusiasm for the discussions and opportunities that were presented. I could see that these are very seasoned, professional business people attending and I am hopeful that at the end of the day there are going to be a lot of deals done and increased interest among American companies to come and work with Saudi Arabia.

[SUSRIS] How does this forum compare to similar events in the past?

[Al-Seif] Let’s go back to an earlier interview with SUSRIS. It was at the 2005 Saudi Trade Mission, coincidentally here in Atlanta. That was a stop for the Saudi delegation’s visit to five states. We worked very hard to bring American and Saudi business people together to explore what, at the time, was an exceptional range of opportunities – over $600 billion – in the Kingdom. You may recall it was a very large effort. We brought a large contingent of influential business people from Saudi Arabia ready to talk about the commercial opportunities. We invited a lot of people from around the States, but you remember the size of the audience. It was less than 20 percent of what we see here in Atlanta this time. That simple fact really tells the whole story.

So what has changed? Well, American companies are more interested in doing business in Saudi Arabia. They want to take advantage of the incredible opportunities and there has been a rebound in the strength of the relationship between the people. The problems that may have existed five or ten years ago in the relationship are behind us. I feel quite confident looking forward it will be an excellent relationship filled with mutually beneficial partnerships and strengthened bridges between Americans and Saudis.

I’m also very confident that you’ll see many more American businesses and joint ventures. I saw several companies here that are ready to set up shop in Saudi Arabia. They want to export their products there and they want to work there.

[SUSRIS] The forum keynote speaker, Ms. Lubna Olayan, pointed out some of the frictions in the relationship but she argued that business people continue to seek closer ties. Ford Fraker, a distinguished businessman and Middle East old hand in addition to being the most recent US Ambassador, makes a similar argument that the relationship is more than diplomacy and it is to a large extent the business piece that helps keep the rest of it going. How do you see it?

[Al-Seif] I would agree with that. Business people by nature are driven to find solutions to problems and to find ways to make both themselves and their partners winners. There are many old, established ties that continue, that have prospered down the years of the decades-long relationship between Saudi Arabia and the United States. For a time, as our economy was expanding more American companies were needed but they were not showing up. Now we are more confident that our longstanding American partners – and new partners as well – are going to join in to take advantage of the tremendous economic expansion we are experiencing in Saudi Arabia.

[SUSRIS] Saudi Arabia has shown remarkable financial stability through the global recession doing much better than most other economies around the world. What has the Kingdom has been doing right in this regard?

[Al-Seif] Yes, Saudi Arabia has been isolated from much of the global economic troubles. Today Dr. Mohammad Al-Jasser, the Governor of the Saudi Arabia Monetary Agency led a discussion on shared responsibility in the global financial system. In addition to his expert assessment of the global picture – as you know the Kingdom is a member of the Group of Twenty global economic leaders – he was very clear that Saudi Arabia benefited from what he called “safeguarding the home front,” describing a counter-cyclical approach to fiscal strategy. It focuses on paying down debt during a cycle upswing and employing budget deficits during downturns, as a way to protect the economy.

So what did the government do when oil revenue started to increase – the upside of a cycle in Saudi Arabia? The first thing was to settle the debt and to build up reserves. Then they were able to focus on necessary spending and that’s exactly what the government did after 2008 when there was a recession all over the world that could have negatively affected Saudi Arabia. The Kingdom acted by committing an additional $400 billion to what was in the annual budget. It allowed for, among other things, extra projects including needed schools, universities, and hospitals – you know the things that build the infrastructure of the country. What the government did was very intelligent. It stimulated the economy within Saudi Arabia. It increased the liquidity in the market. Moreover the stimulus wasn’t only aimed at the domestic economy. Because we import a lot of things from overseas it also helped trade volumes. More goods and services were flowing into Saudi Arabia from all over the world.

The Saudi stimulus certainly offset some of the recessionary effects in the global economy. It was a tremendous engine for the Saudi economy and an engine for other countries that export to the Kingdom. The government has continued to stimulate the economy. More funds are allocated for a host of projects. You know they’re going to build the whole railway infrastructure, for example, and this is national wealth. When you build a railway it is there for hundreds of years. No individual can do that.

What do these projects lead to? They are part of the national infrastructure that has secondary and tertiary considerations. They open up many other commercial opportunities and help the country diversify the economy and increase prosperity. For example a national railway facilitates expansion in the mining sector. In the case of mining, Saudi Arabia has some of the largest mineral reserves in the world. The Saudi Arabian Mining Company, Ma’aden, is a world-class operation that brings to market phosphates, bauxite for aluminum production, industrial minerals and gold and base metals. You might have seen the briefing at this forum about the $10 billion joint venture between Ma’aden and Alcoa as well as Dr. Rabiah’s presentation on Modon, the Industrial Property Authority. There’s much more being done and much more for American partners to get involved in: power generation, agriculture, healthcare, education, IT, construction, finance, and so forth.

All of these efforts are made possible and sustainable by the government investment in infrastructure, which in turn was boosted by the counter-cyclical stimulus spending philosophy.

[SUSRIS] Can you talk about this aspect of the economy, not just expansion but diversification?

[Al-Seif] Saudi Arabia has done much in terms of diversifying the economy, so that it does not rely so much only on oil exports. That’s why the Industrial Clusters Program, for example, is very helpful and important. It’s not just a concept it’s an actual program that is pushing development in five fast-growing industrial sectors, that emphasize exports. In addition to mining and production of metals that we talked about the Clusters focus on solar energy, plastics, appliances and automotive. These sectors benefit from Saudi Arabia’s advantages of raw materials and energy to be able to add value and produce exports with great promise. The Industrial Clusters are just one more tremendous area where Saudi Arabia is attracting serious minded business partners from the United States. There is much more, of course, and this forum is filled with discussions about the many sectors where opportunities abound for our American partners to get involved in Saudi Arabia.

There is one more idea that deserves attention and that is the focus on Saudi Arabia as a knowledge-based society that you’ve been hearing about. The primary capital in Saudi Arabia as in any country is the human capital. We have to make sure that all Saudi citizens are well-educated, that they receive the proper education, the proper tools, to become healthy, prosperous and productive citizens in the society, for their well being and for the well being of the country.

[SUSRIS] What are you telling the American businesspeople that you meet here about Saudi Arabia, the ones who may not know so much about it, who have questions?

[Al-Seif] The fact that they are spending their valuable time here at the Forum and investigating the opportunities says much about their motivation to do business with partners in Saudi Arabia. As far as answering questions and providing information it’s all here at the Forum. There are top officials from the American and Saudi governments and business communities presenting detailed, authoritative information on the commercial expansion and openings in the Kingdom and how to get started.

Apart from the Forum I would suggest they do their homework, learn about the sectors and opportunities where they have interest. They should contact the organizers of the Forum, contact SAGIA, the General Investment Authority. They should read your material on SUSRIS about doing business in Saudi Arabia. Then they should come visit, make contacts, and grab some of the opportunities that are there.

Today I had conversations with the U.S. Ambassador in Saudi Arabia and the Commercial Attaché, who are here in the Forum. We feel that it’s time to have one of these US-Saudi Business Opportunity Forums in Saudi Arabia. We should invite American businesses to come over there and see it for themselves. I think we’re going to work on that, to organize a forum in Saudi Arabia, because they’ve got to see it, you know. Seeing is believing.

The opportunities are really great, and the market is very, very hospitable to American businesses. Saudis have always held high the relationship with their U.S. partners. American businessmen will tell you they have been very welcomed in the Kingdom. They’ve been offered all the assistance possible through the government and the private sector. If anybody has any difficulty, they can always get help by calling the Committee for International Trade or the Council of Saudi Chambers of Commerce, and we will give them all the assistance that they need.

[SUSRIS] Thank you for sharing your insights on these important questions.

[Al-Seif] You’re very welcome. Thank you for bringing attention to the Forum and the business opportunities.

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ABOUT KHALED AL SEIF

Eng. Khaled Al-Seif
Eng. Khaled Al-Seif

Khaled Musaed Al Seif is a businessman and a leading member of the business community in Saudi Arabia who manages one of the largest business groups in the Kingdom. He is active in various committees and councils dealing with the promotion of international trade and bridging relations with the West.

Mr. Al Seif previously served as Chairman of the Saudi Committee for International Trade (CIT) at the Council of Saudi Chambers of Commerce and Industry. He has officiated as Co-Chairman of the Saudi-British Joint Business Council since 2007; Member of the Board of U.S.-Saudi Arabian Business Council since 2006, Member of the Advisory Board for Economic Affairs at the Saudi Supreme Economic Council since 2005, Board member of Royal Philanthropic Society for Science (Prince Sultan University) since 1999; Board Member of the Arab-British Chamber of Commerce, London, UK since February 1996; on the Board of Directors of Riyadh Chamber of Commerce and Industry, Riyadh, Saudi Arabia (1993-2001 and 2004-2008); and President and CEO of El Seif Group of Companies, Riyadh, Saudi Arabia since 1975.

As the President and CEO of El Seif Group of Companies, Mr. Al Seif is the Chairman of the following Saudi and International companies: El Seif Commercial Investment Company Ltd; Musaed Al Seif & Sons Company; International Management Development Company; Dana Investment and Development Company; El Seif Engineering Contracting Company, and Marina Towers S.A.L.; and El Seif Holding Company in Lebanon. He is Also a Board Member of some other domestic and international companies which include but not limited to: Saudi Medicare Company; National Power Company; Modern Arab Construction Company: Arabian Medicare Company; Universal Advanced Systems Company; and El Seif Development Company.

Mr. Al Seif holds a B.S. in Civil Engineering from the American University in Beirut.

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