Mohammed Alardhi is the executive chairman of Investcorp, chairman of Muscat Stock Exchange MSX and chairman of Royal Jet
September 07, 2021
Countries of the GCC region have come a long way. In diversifying their economies away from oil, they have invested in a wide range of sectors. Over the past decades, regional governments as well as private sector players have channeled resources into digitalising systems to enhance productivity.
Governments’ efforts to support small and medium enterprises, coupled with local talent, can be credited for a crop of tech startups from the region, while global names have also established a presence.
The UAE and Saudi Arabia have added smart city technologies to their infrastructures. Similar advancements are taking place in Oman, that is following suit with the Madinat Al Irfan smart city project in Muscat.
Private sector organisations in the region have also adopted the latest and most efficient technologies over the past decade. This trend has accelerated following the Covid-19 pandemic. Due to lockdowns and restricted outdoor access, banking and finance institutions across the region, for example, saw a major increase in people using apps. Existing apps had to be updated to ensure a seamless customer experience. A study by a US tech firm, Avaya, that specialises in cloud communications, pointed to the adaptability of the GCC region’s banking sector to drastic changes in environment. The study said that GCC banks showed a commitment to digitisation and a speed of modernisation that had not been seen before – to counter the aftermath of a downcast global economy.
Another promising trend in the Arab region’s tech space is a markedly higher number of women pursuing education in computer science compared to other parts of the world, according to research conducted by New York University Abu Dhabi.
In the US, for example, women account for 15-20 per cent of computer science students, in contrast to 40 per cent in the Arab region. In Saudi Arabia, 70-80 per cent of students in IT courses are women. A higher percentage of women in any workplace has been proven to be good for the organisation and the people who work there. Offices with a healthy gender balance lead to to enhanced collaboration between teams, boost job satisfaction for all team members, improve staff retention rates and in the long run, increase profitability.
The notably higher representation of women in computer science and tech-related fields is an enormous strength for the Arab region. We must work to create an environment that will enable them to reach their full potential.
Saudi women in a Hajj hackathon to streamline pilgrimage services, prior to the start of the annual Hajj pilgrimage, in Jeddah, on July 31, 2018. AFP
The region’s youth is extremely tech-savvy, with millennials reporting close to 100 per cent mobile phone usage, according to a study published by Think with Google in 2015.
Furthermore, limitations resulting from the pandemic have made professionals and students adapt to increasingly digitalised systems and brought about more innovative thinking to suit the changing times.
As I have written before in these pages, youth is our region’s greatest asset. It will benefit the public and private sectors to harness their talent, resourcefulness and empower their minds. To an extent, it is even the responsibility of tech companies to channel the skills of the youth.
Tech leaders in the region – global giants as well as startups – stand to gain by engaging with young people in the region. Young people tend to have a plethora of ideas on how to develop new technologies. These can allow society to function at its best. The combination of the ideas of young people and technologies that emerge can help make economies healthier. It can also help the population of a region to transition to more prosperous times.
Public and private sector players can collaborate to run structured programmes that involve youth – professionals from technology-related fields as well as those with an interest in innovation.
The tech sector would greatly benefit from amplifying youth voices and paying special attention to female graduates of computer science programmes. There are opportunities to provide formal and informal mentorship, host entrepreneurship workshops, teach professional skills, create spaces that support innovation and invest in up-and-coming businesses in the tech space. Also, as businesses have moved a large percentage of their operations online, there has been a growing trend in the past two years towards international collaboration. Our region must continue to look beyond borders to build synergies with established and emerging players in the global tech arena.
We cannot deny the setbacks that the economies of the GCC region have faced during the recession following the coronavirus outbreak. However, we must remain committed to the larger goals of diversification away from oil. People of the region and young talent have always been our greatest assets. I am confident that with the right planning and optimal use of resources, we will empower them to reach new heights and lead our region into the next era of the digital age.
Favourite car: Koenigsegg Agera RS or Renault Trezor concept car.
Favourite book:I Am Pilgrim by Terry Hayes or Red Notice by Bill Browder.
Biggest inspiration: My husband Nik. He really got me through a lot with his positivity.
Favourite holiday destination: Being at home in Australia, as I travel all over the world for work. It’s great to just hang out with my husband and family.
Sole survivors
Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
One-off Test v Afghanistan:
Nov 27-Dec 1: Blundstone Arena, Hobart
The Ashes v England:
Dec 8-12: 1st Test, Gabba, Brisbane
Dec 16-20: 2nd Test, Adelaide Oval, Adelaide (day/night)
Dec 26-30: 3rd Test, Melbourne Cricket Ground, Melbourne
Jan 5-9, 2022: 4th Test, Sydney Cricket Ground, Sydney
Jan 14-18: 5th Test, Optus Stadium, Perth
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
