Monday, July 31, 2006

Saudi VS. Dubai Interesting Discussion!

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

Another article that presented some very interesting questions..§ion=0&article=80076&d=31&m=7&y=2006

Will Saudis Emulate Dubai’s Development Bonanza?
Dr. Mohamed A. Ramady

The grass is always greener on the other side. Saudi visitors and businessmen returning from Dubai seem to come back ever more impressed by the phenomenal growth and development taking place in that UAE emirate. They long for the day when the Kingdom emulates Dubai’s apparent success. A major question, however, does Saudi Arabia really want to be another Dubai? Underneath the glitter and the sophisticated marketing and PR, glitches and cracks are beginning to appear in Dubai’s so-called miracle development bonanza. It behooves Saudi Arabia to sit back and take note.

Societies need to balance their economic development with transformation that takes into account internal social cohesiveness and responsibilities for the wider community. While Dubai has undoubtedly provided its native citizens with the trappings of a comfortable welfare state, a luxury lifestyle and seeming guaranteed employment, the desire and obsession to be the number one in many areas has also created social stress and uncertainty about core family traditions and values.

Success is not only measured in monetary value, nor having the tallest building, the biggest shopping mall, the most up-to-date theme park, the deepest undersea restaurant, or other superlatives. Success is also measured by overall social responsibility to others, especially non-citizens who have transformed Dubai through sweat and tears, but, by all accounts are marginalized as evidenced by the recent work stoppages and labor disputes.

The frenzied development boom is also beginning to take its toll on resource allocation in the construction industry as demand for raw material and skilled labor rockets. Inflation rate in Dubai is one of the highest in the Gulf Cooperation Council and rising. Government planners are beginning to cast nervous eyes at future power generation supplies, water resources and an integrated urban transport system to connect all the massive urban development that is taking place or being planned. Few people are debating looming environmental issues in the rush for development at any cost, as long as the profit margin is right. While Dubai is diversifying its client servicing base to countries outside the GCC, yet Saudi investment still plays an important element in Dubai’s development mania. Foreign multinationals establish presence in Dubai to serve the Saudi market, the largest in the GCC. However, even the most aggressive marketing will not hide the fact that profit margins are beginning to erode given the rising cost of doing business in Dubai. This is creating a sharply divided two-class society of the super rich and an underprivileged, subsistence based foreign majority. This is not healthy for long-term social and economic development for any country.

So should Saudi Arabia become another Dubai? The simple answer is that most Saudi businessmen and visitors long for the application in the Kingdom of what Dubai is famous for — a transparent set of rules and regulations in how to conduct business with minimal bureaucracy and red tape. One marvels at the efficiency of Dubai’s application approvals and the courtesy and efficiency of its technocrats compared to the many mindless hurdles in the Kingdom and other Gulf countries. Dubai technocrats enthusiastically embrace change, and e-government is not just another fancy slogan and a PR gimmick, but is made to actually work.

What Saudi Arabia needs is not an entirely new system and set of rules and regulations, but the correct applications of those that exist to serve the interest of the business and wider community, whereby Saudi bureaucrats see themselves as full partners for a better change. The recent stricter application of Saudi driving laws is one example of what can and should be done, as one is often amazed to see how Saudi drivers suddenly and miraculously transform themselves to near-model drivers when they cross the half way line on the causeway to Bahrain, compared to their erratic driving on the Saudi side. The answer is simple — the implementation and application of equitable and transparent Bahraini driving rules and regulations. The Saudi driver is the same person on either side of the causeway, but the application of rules is what mattered.

This is the lesson of Dubai for the wider Arab world and Saudi Arabia in particular. Dubai is a mind-set, which sees things as a glass being half full and nothing is impossible, hence the rush for the tallest, widest, deepest, and biggest, while in Saudi Arabia we often see obstacles and the glass being half empty. Dubai seems to do thing with a passion and a belief, while in Saudi Arabia we seem to only believe if we are prodded. If we can only apply the fairly decent and fair set of rules and regulations that exist in Saudi Arabia today more expeditiously and responsibly, then Saudi Arabia will have the best of both worlds.

Unlike Dubai, Saudi development will create a less hectic, stressed-out and disorientated society that is more caring with a long-term stable, and balanced economic and social development objective. The recent announcements of the mega Saudi projects and economic cities and zones shows that Saudi Arabia can also construct the biggest and tallest, but this is being planned in such a way so as to take care of the unique Saudi identity and cultural environment. In the end constructing the tallest might not be the best as evidenced by the mammoth towers now taking shape surrounding the Grand Mosque in Makkah.

One day Saudi society will rue the day they rushed into this construction race in such a unique site as Makkah, but it is never too late to sit back and ask do we really want to be like Dubai?

(Dr. Mohamed A. Ramady is visiting associate professor of finance and economics at King Fahd University of Petroleum and Minerals.)

-YSH ;)

Personal + Saudi Economy update..

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

Salam All,

Haven't posted in a while.. just got back to Arizona from Boston. Had a good break during our hiatus.. Caught up with my peeps and met some new people.. Weather in Boston wasn't as pleasant, got very humid some days even though the temperature wasn't that high.. At least here in Arizona it's dry heat more similar to Riyadh :)

Funny enough I'm actually looking forward to this semester, not sure whether to add a fifth course to my workload or get a job.. any suggestions?

Another arab news article for those as interested as I am in the Saudi Economy.. :)

Kingdom Embarks on New Mega Projects
Khalil Hanware, Arab News

JEDDAH, 31 July 2006 — Saudi Arabia is embarking on a number of new mega-projects in a wide range of industries. The bulk of them are focused on those sectors of the economy in which the Kingdom has comparative advantages — oil and petrochemical industries. Saudi Aramco’s program to expand crude oil production capacity has been underway for a few years.

According to Samba Financial Group’s mid-year report about the Saudi economy, which was released last week, the total cost of projects currently under way or in advanced planning for execution over the next several years is about SR1.06 trillion ($283 billion). Alone, the oil and gas industry is undertaking about SR259 billion ($69 billion), or one fourth, of the total.

Defense and security purchases projects total SR183 billion ($48.8 billion), accounting for 17 percent of the total. Large real estate developments capture about SR150 billion ($40 billion), or 14 percent of the total investments, followed by mining and minerals development with SR44.63 billion ($11.9 billion) of the total. Other small projects include public utility projects such as electricity, water, and transportation.

“In contrast with the previous periods of intense infrastructure and project activity, much of the current development is financed and owned by the private sector,” Samba Financial Group’s General Manager and Chief Economist Brad Bourland said.

According to Samba estimate out of the total SR1.06 trillion in total project costs, some SR322 billion ($85.8 billion) or 30.3 percent of the required funding will come from the general government budget. Aramco’s project bill amounts to SR304 billion ($81 billion) or 28.6 percent, but some of this is in joint venture with private companies. Petrochemicals giant Saudi Basic Industries Corp. (SABIC) needs about SR102.37 billion ($27.3 billion) to fund its current and future mega projects through 2010. Three mega projects initiated by the investment promotion arm of government, Saudi Arabia General Investment Authority (SAGIA), including SR100 billion ($26.7 billion) for King Abdullah Economic City in addition to two other private projects (an aluminum smelter and an oil export refinery) total SR180 billion ($48 billion).

The Royal Commission of Jubail and Yanbu will require about SR150 billion $40 billion through 2010, much from private sector investment, mainly for new projects and for the expansion of existing infrastructure at Jubail Industrial City-1 and Jubail Industrial City-II.

Some of the mega projects include:

• The SR100 billion King Abdullah Economic City in Rabigh.

• The $10 billion Aramco-Sumitomo Chemical refining and petrochemical joint venture called Petro-Rabigh, collocated with the King Abdullah Economic City

• The SR37.5 billion Aramco-Total export refinery

• The SR22.5 billion Aramco-ConocoPhillips export refinery

• SABIC’s Saudi Kayan Petrochemicals Company (Kayan)

• Maaden’s Ras Al-zour Mining Industrial City and

• The Saudi LandBridge project, aimed at connecting various parts of the Kingdom by rail.

The largest private sector investment in Saudi Arabia will be the King Abdullah Economic City which will be developed by Dubai-based Emaar Properties in collaboration with Aseer and Binladen Group of Saudi Arabia in a joint venture called Emaar the Economic City.

The two similar projects recently announced include the Prince Abdulaziz bin Musaad Economic City in Hail and the Knowledge City in Madinah.

Work continues on Aramco’s $20 billion Crude Oil Expansion Program, which aims at raising Saudi oil production capacity from the current 11.3 million bpd to 12.5 million bpd by 2009. This is the most costly expansion by Aramco in many years.

The Samba report said work on the Gas Initiative has made strides too. This involves exploration for gas in Aramco’s joint ventures with several foreign oil and gas companies, with the intention of supplying gas for local industrial use and power generation, eventually freeing up more crude oil for export. Companies involved in the development include Shell, Total, Russia’s Lukoil, China’s Sinopec, and Repsol of Spain. Total cost of the Gas Initiative is currently estimated by Aramco to be SR41.25 billion ($11 billion).

Recently, Aramco signed joint venture agreements with Total of France and ConocoPhillips of the US to set up two export refineries, one on each coast, that would cost SR22.5 billion ($6 billion) each.

Both refineries, which will produce mainly gasoline for export will use the Kingdom’s heavy crude oil, which is less sought after by international buyers. Terms of the two preliminary agreements are almost identical. Each of the joint venture partners will hold a 35 percent equity stake and the remaining 30 percent will be offered for public subscription.

Aramco will supply crude, and the foreign partner will market the refined products. Locations of the two refineries are Jubail on the east coast for the Aramco-Total Export Refinery and Yanbu on the west coast for the Aramco-ConocoPhillips export refinery. For Saudi Arabia, the two locations will contribute to balanced regional development and maintain flexibility of export routes — one on the Red Sea and one on the Arabian Gulf.

-YSH ;)

Wednesday, July 19, 2006

What u visited in the World..

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

So Apparently this site shows you what percentage of the world you have conquered.. I think 9% isn't too shabby but it also means I have a lot more work to do..

create your own visited countries map
or vertaling Duits Nederlands

-YSH ;)

First Saudi Female to work at NASA!

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

Salamzz People,

In boston for a few days, also heading to NYC this weekend..

Arabic article again (I'm sorry english readers), the gist of it is that a 22 year old Saudi female just joined NASA and she's doing and advanced research program with them..

Arabic readers.. ENJOY!

-YSH ;)

Wednesday, July 12, 2006

The Prince of Saudi's New Economy (interesting read)

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

A very interesting discussion on the current Saudi Economy, lengthy but definitely worthwhile for anyone who's interested in the region..


The Prince of Saudi's New Economy
By Stephen Glain

Angered by repeated demands for a rent increase, Prince Mohammad al-Faisal
al-Saud decided last November to move his holding company out of its
prestigious headquarters in central Riyadh and into a cheaper and larger space
just outside the city center. It sounds straightforward enough, but this was no
routine corporate move.

Al-Faisal was quitting the Al Faisaliah Center, a striking 267-meter pyramidal
tower named after his Al Faisaliah Group, one of Saudi Arabia 's top 20
companies. The property is owned by the King Faisal Foundation, a social
welfare institute established in memory of al-Faisal's great-grandfather, who
ruled Saudi Arabia from 1964 to 1975. The prince suspected that the foundation
was seeking to exploit his royal connections to impose an above-market rent on
Al Faisaliah and extend those terms to other tenants. By removing himself from
such a high-profile royal asset, al-Faisal was choosing business principle over
family loyalty -- a radical notion in conservative, hierarchical Saudi Arabia .
"I'm pushing my staff to watch overhead costs, and people are taking advantage
of us," al-Faisal said in a recent interview in his old office on the tower's
16th floor, shortly before the group moved in April. "This is about principle.
Plus, I'm a little stingy."

Al-Faisal's move is more than an act of family rebellion. It's indicative of a
revolution that is liberalizing and diversifying the Saudi economy, weaning the
kingdom from its dependence on oil and fostering the growth of consumer sectors
that can meet the needs of a rapidly growing population. The economy expanded
by nearly 7 percent last year, according to figures from the International
Monetary Fund and private economists. Although the rise in world oil prices to
$70 a barrel played a big role, the kingdom's nonoil sector grew virtually as
fast as its energy industry, the IMF estimates.

Today's economic boom is the fruit of a deliberate process of deregulation that
enabled the kingdom to join the World Trade Organization last year. Although
the country remains a monarchy, economic reform is making the business culture
more egalitarian. The patrician merchant class, which once handed down
family-owned businesses from one generation to the next, is giving way to a new
class of entrepreneurs eager to tap the country's increasingly liquid capital
markets. Saudi companies have raised $6.8 billion with ten initial public
offerings in the past four years, using the funds to expand operations at home
and in the region. The World Bank last year ranked the kingdom as the
38th-easiest country to do business in, out of 155 countries around the world
-- up from 67th the previous year. The improvement has come thanks to laws that
make it easier to obtain a business license and reductions in tariffs on
imported capital goods. These changes should sustain a continued
expansion of 5 to 7 percent a year over the coming decade, economists say. "The
underlying economic fundamentals are sound," says Abdel Aziz Abu Hamad
al-Uwaisheg, director of media and investor awareness at the government's
Economic Integration Department. "By 2007, when regulators get their act
together and demand a little more transparency, the market will reflect the
real economy."

The economy does have vulnerabilities, of course. Today's oil bonanza could
prove as ephemeral as that of the 1970s, when soaring crude prices triggered a
global recession and a subsequent collapse in the oil market, leading to a
generation of economic stagnation. Even with today's buoyant economy, the
kingdom has a chronic problem with unemployment, which economists estimate may
be as high as 30 percent.

The recent boom and bust in the local stock market, the Tadawul All-Shares
Exchange, also could dampen growth. The market, which soared more than 1,400
percent between March 1999 and February 2006, lost half its value over the
following three months before staging a modest recovery late last month, wiping
out nearly $375 billion in market capitalization and fueling concern that banks
may be dangerously exposed to unmet margin calls. The losses have sparked anger
and despair among many Saudi stockholders, whose ranks swelled from just 50,000
five years ago to an estimated 8.5 million during the boom. The collapse
prompted King Abdullah to fire the head of the Capital Market Authority last
month and install Abdul Rahman al-Tuwaijeri, secretary general of the Supreme
Economic Council, to lead the regulator (see box).

Notwithstanding the risks, most bankers and business executives believe that the
new Saudi economy rests on a firm foundation. Local companies enjoy strong
earnings despite the market crash, and many investors see opportunity amid the
turbulence. Prince al-Waleed bin-Talal, Saudi Arabia 's richest man, said in
March that he planned to invest $2.7 billion in Saudi shares. (He has yet to do
so. "The general feeling is that he's probably waiting for cheaper prices," says
al-Uwaisheg.) Last month, al-Waleed gave a mandate to Citigroup, in which he
holds a 4.3 percent stake, to lead an initial public offering of shares in his
Kingdom Holding Co., which is expected to raise as much as $6 billion.

Abdulmuhsin al-Akkas, the country's Social Affairs minister, believes the
country has undergone a lasting change in business mentality. He recalls
hosting a conference in 1990, as a prominent businessman, with the aim of
persuading Saudis to develop their businesses into publicly listed companies.
"It was rejected completely," he says. "But today people want to go public.
This is a huge change, and it's here to stay." The Saudi market remains among
the region's most dynamic despite the stock market crash, says Hassan Heikal,
co-chairman and chief executive officer of Cairo-based EFG-Hermes Holding, one
of the Middle East's top investment banks. The firm won a license last month to
open an office in Riyadh , and Heikal says he hopes to be able to sell Saudi
shares to foreigners within a year. "Our largest developing market is in Saudi
Arabia ," he says. "There is a huge shake-up there."

Once dominated by Saudi Arabian Oil Co., or Saudi Aramco, the kingdom's iconic,
state-run oil giant, the economy is increasingly driven by companies like the
Savola Group, a food processor and edible-oil maker that posted a 139 percent
increase in profits last year, to 1.2 billion riyals ($320 million). Savola,
ranked among the top ten companies on the Saudi stock exchange, has over the
past two years opened mills in Syria and Algeria in addition to its operations
in Iran , Jordan , Kazakhstan , Morocco and Sudan . It plans to float up to 30
percent of its edible-oil unit within the next six months.

Another avatar of the new economy is Riyadh-based Jarir Marketing Co., a
retailer that began as a small office-supplies shop on Jarir Street in the
capital in 1979 and expanded to become the largest bookseller in the Gulf,
according to chairman and CEO Muhammad al-Agil. The executive had recently
returned to Saudi Arabia after obtaining a master's degree in engineering from
the University of California at Berkeley when he and four of his seven brothers
decided to open the store. "Most of the big contracts from the oil boom had
been let, so my brothers and I decided we had to do something else to make
money," says al-Agil, who wears a modest cream-colored thobe, the traditional
ankle-length gown worn by Saudi men, with a blue Bic pen protruding from the
breast pocket. The family dispatched one brother to work as an intern at an
office-supplies store in California , where he learned the ropes on purchasing,
finance and distribution. Buttressed by that knowledge, Jarir was
soon boasting gross profit margins of 30 to 40 percent. By the late 1990s the
family had added books to its stores, featuring English as well as Arabic
titles. In 2000 the company floated nearly a third of its shares at 178 riyals
each, then a year later offered an additional 10 percent at 310 riyals. Jarir
is opening new stores in Qatar , Abu Dhabi and Kuwait .

The Al Faisaliah Group epitomizes the new business mentality. For nearly a
decade in his capacity as president, al-Faisal has been working to transform
the group -- founded in the late 1960s by his grandfather, Prince Abdullah
al-Faisal al-Saud -- from a passive owner of a wide variety of assets into a
strategic investor and manager of companies focused increasingly on
fast-growing consumer and service sectors, including media, retailing and
telecommunications. "We're looking at mass retailing for a big, young Saudi
population that is looking for a home, furnishings to go in the home, garments
for their kids and fashion for themselves and new ways to communicate with the
world," he explains.

new generation of Saudi princes who are entering the private sector, once the
domain of civil servants in charge of state-owned companies and private,
small-scale merchants. "Things are changing now," says Jean-François Seznec,
an adjunct professor of Arab studies at Columbia University in New York . "The
divisions are becoming blurred in the sense that a growing number of royal
members are educated and more aggressive in getting involved in the economy."

Comparisons between al-Faisal and the high-profile Prince al-Waleed are
inevitable. Al-Waleed's Kingdom Centre and the Al Faisaliah Center -- the two
tallest buildings in the kingdom -- face each other across Riyadh like rival
pieces on a chess board. But al-Faisal is more workmanlike than the flamboyant
al-Waleed, and his $1 billion-in-revenues group is a fraction of al-Waleed's
empire, which is valued at some $20 billion.
Al-Faisal and his team "are respected for their low-key professionalism," says
Beshr Bakheet managing partner of Riyadh-based Bakheet Financial Advisors, who
lost his treasury director to Al Faisaliah seven years ago. "People don't work
with them because they feel they have to but because they want to. It's unusual
for a prince like al-Faisal to work at all."

That he does work is a product of the deep-seated changes introduced by his
great-grandfather King Faisal in the 1960s and '70s. "Most of the great reforms
that helped shape modern Saudi Arabia , such as labor laws, education for girls
and the introduction of television, took place under King Faisal's reign," says
Jamal Khashoggi, an adviser to Prince Turki al-Faisal, Saudi Arabia 's
cosmopolitan ambassador to the U.S. and one of Mohammad's uncles. "He and his
wife were the first monarchs to send their children abroad to study, and you
can see the results in them."

In addition to the ambassador, al-Faisal's extended family includes Prince Saud
al-Faisal, the Saudi foreign minister, and Khalid al-Faisal, the governor of
Asir province and owner of the relatively liberal Al-Watan newspaper.

The "powerpoint prince," as Mohammad al-Faisal is known because of his love of
computer presentations, grew up as an only child during the 1970s oil boom. At
the age of three, he made his first visit to Europe on a royal tour with his
maternal grandfather, King Khaled, and years later was part of the king's
entourage on a U.S. tour that included stops in New York City and Disneyland.
After his father died in 1983, al-Faisal and his mother moved into the palace
compound with the king's extended family. Then 15, the young prince was an avid
footballer who spent much of his time playing soccer in his bare feet.

Al-Faisal earned a bachelor's degree in industrial management from Dhahran's
King Fahd University of Petroleum & Minerals in 1990, then started a
seven-month internship at Citibank's Geneva headquarters. There he developed an
obsessive devotion to European soccer -- his favorite team was AC Milan -- as
well as a taste for finance.

"He is very disciplined and regimented," says Hamad al-Ammari, a friend and
fellow intern who roomed with al-Faisal in Geneva . "I never played squash so
well as I did playing against Mohammad in Geneva because he's so competitive."

After finishing his mandatory army service -- he interviewed Iraqi prisoners of
war as part of a joint U.S.-Saudi intelligence unit during the first Gulf War
-- al-Faisal applied for a job in the treasury department of Saudi American
Bank, or Samba. He posed a unique challenge to his interviewers: What to do
with a prince who wants an actual job? He was hired only after assuring
recruiters he would stay for at least three years.

As part of an exchange program, al-Faisal spent two years trading
over-the-counter energy derivatives at Citibank's New York headquarters (Samba
was a joint venture between the U.S. bank and Saudi investors at the time).
While there he enrolled at the Harvard Business School , and after graduating
with an MBA, he was offered an assistant general manager's position at Samba's
Geneva branch. That was when al-Faisal's uncle, who sits on the Al Faisaliah
Group board, asked the young prince to be his "eyes and ears" in the family
business. Al-Faisal was both flattered and disappointed by the request. "My
plan was for a career in banking," he says. "I knew nothing about the group and
was never remotely interested in it."

In patrimonial Saudi Arabia , however, appeals from family elders are
nonnegotiable. Al-Faisal signed on as vice president in May 1997 and was made
president a year after that. He inherited an odd buffet of properties that
included a Sony distributorship and the Al Safi Dairy, which had been founded
by his father, also named Prince Abdullah, in 1979. Today it is cited by the
Guinness Book of World Records as the world's largest integrated dairy farm,
with 32,000 cows on 29 square kilometers -- smack in the middle of the desert
an hour's drive from Riyadh .

Al-Faisal's first challenge was to persuade his uncles, who controlled the Al
Faisaliah board, to share control of the dairy with an outsider in exchange for
technology and expertise. The farm is not subsidized by the government, and its
costs are enormous: The dairy herd is fed from a nearby farm that produces
110,000 tons of hay and alfalfa each year, and it is irrigated from wells
nearly 2,000 meters below the desert's surface. "It was clear that we had taken
the business as far as we could on our own," he says. "We needed an alliance."
He obtained his uncles' consent after a series of consultations.

A friend then arranged a meeting in Riyadh between al-Faisal and executives from
France 's Groupe Danone, which was eyeing Saudi Arabia as a gateway to the Gulf
market. Negotiations continued for two years, with Al Faisaliah valuing Al Safi
at a high earnings multiple, as if it were a public company, and the French
viewing it as a private concern. After being assured that Al Faisaliah would
eventually float Al Safi, Danone agreed to pay E150 million (then $136 million)
for a 50 percent stake in 2000. Since that alliance was forged, the dairy has
introduced a raft of new products, including juices and yogurt, that are
distributed regionwide. The operation makes a profit of about $40 million a
year on sales of $400 million. Faisaliah is likely to sell its stake
eventually, says al-Faisal, but given that the farm is a family legacy,
divestment will probably take place at a typically deferential and cautious
Saudi pace.

The big change is taking place elsewhere in Al Faisaliah's portfolio. Since
launching an investment fund in late 2004, the group has bought equity stakes
worth some $450 million in everything from petrochemical plants to Internet
service providers in the region. Al-Faisal says his portfolio is up 50 percent
in value since its launch; it was up 127 percent at the end of 2005.

Among the group's key holdings is a 70 percent stake in Arabian Internet and
Communications Services Co., which operates AwalNet, the leading Saudi Internet
service provider. The company controls 40 percent of the market. Sales have
doubled since AwalNet was launched in 2002, to 100 million riyals a year.
Al-Faisal believes the business will expand rapidly as the country prepares to
deregulate Internet access fees by 2008 and roll out broadband access by 2010,
fueling big growth in numbers of users. AwalNet has received tentative offers
for an alliance from two global telecommunications companies since the
government began allowing foreigners to invest in the industry at the start of
this year (al-Faisal won't reveal their identities).

Al Faisaliah is also investing heavily in two other preoccupations of Saudi
youth: food and fashions. Last year the group purchased a chain of steak houses
as well as Z-Noodle, a chain that specializes in Asian cuisine. As is true of
all eateries in Saudi Arabia , families have a separate seating area from men
to comply with the conservative interpretation of Islam that prevails in the
kingdom. It is a measure of al-Faisal's subtle liberalism, however, that his
restaurant chains separate seating sections by a near-transparent curtain.

Al-Faisal says the group will invest about $200 million over the next five years
to develop a franchise of midlevel fashion boutiques with its own designer
label. The group is negotiating leases for space in the country's major
shopping centers and hopes to open its first shops by the end of the year.
Al-Faisal also wants to exploit an expected wave of home buying as the
country's youth -- more than half the country's 22 million people are under age
21 -- matures and new laws promote the development of a mortgage industry. The
group announced plans in January to open three IKEA-like home furnishing
outlets in Saudi Arabia next year as part of a joint venture and to expand its
outlets throughout the Levantine Middle East within five years. "Leverage is
picking up and will reach critical mass when these young people need to buy
homes," says al-Faisal. "There used to be a closed mentality here, but it's
opening up."

Al Faisaliah is by no means ignoring oil and related industries. In spring 2005
the group bought a small stake in Dana Gas, a natural-gas company based in the
United Arab Emirates , and realized a 300 percent return a few months later
when it sold after the company was listed in Dubai . In late 2004 it invested
50 million riyals in Saudi-based Al Kayan Petrochemicals Co., which plans to go
public on the Tadawul exchange sometime this year.

Like the monarchy, which rules more by consensus than decree, al-Faisal makes
most decisions after conferring with his network of managers and bankers.
Business development is discussed during lunchtime meetings over sandwiches and
bags of potato chips. Fahad al-Hussain, AwalNet's general manager, says he
reports to the board every month, provides an earnings review every quarter and
presents his budget annually. "They set the thresholds, and then we discuss
them," says al-Hussain. "Eventually we reach agreeable targets."

Will this Saudi economic spring last, or will the riches generated by today's
high oil prices be squandered, as previous oil windfalls were? The cautious
optimism expressed by many Saudis comes with a qualifier about the staying
power of King Abdullah. He is 82, and not all his potential successors are
reform-minded. "We are satisfied with the changes," says one business owner.
"But it could all end tomorrow."

To al-Faisal the trend is irreversible. He reels off some of the reforms that
were introduced as part of the drive for WTO membership: tariff reduction,
liberalization of the banking sector and new regulations for the insurance
industry. None of these things was even considered during the excesses of the
gilded 1970s. "People have learned their lesson," al-Faisal says. "We've
reached a tipping point. It's like a volcano. When it explodes you think it was
all of a sudden, but in fact it happens only after a great deal of time and

Kingdom seeks to restore faith in a battered market

The oil money is still flowing, and national reserves are still rising, but
don't bother telling that to the man on the Saudi street. Investors have been
stunned by the crash of the local stock market, which has plunged nearly 45
percent since hitting an all-time high in February.

Blogs and Internet chat rooms, where much Saudi discontent is aired, are filled
with angry denunciations of the rampant speculation that caused the boom and
bust. The collapse has demolished the government's ambition of fostering equity
investment as a means of distributing wealth among less-well-off Saudis:
Abdulaziz Sager, chairman of the Dubai-based Gulf Research Center , calls the
crash "an economic and social disaster." The newspaper Asharq al-Awsat even
reports a rash of wedding cancellations by Saudis who can no longer afford
lavish celebrations. The regime intervened last month in a bid to stop the
rout. King Abdullah sacked the head of the Capital Markets Authority, Jammaz
al-Suhaimi, and named the head of the Supreme Economic Council, Abdul Rahman
al-Tuwaijeri, as the new chief regulator. He promised to privatize the Tadawul
All-Shares Exchange, Saudi Arabia 's stock market, and spend $7 billion to
develop a world-class financial district in Riyadh . And,
extraordinarily, he announced plans for a new risk-free fund -- on which the
state would absorb any losses -- in an effort to lure small investors back into
the market.

Most analysts and bankers are skeptical about the moves. Yasser el-Mallawany,
co-chairman of EFG-Hermes Holding, a Cairo-based investment bank, says the
change at the regulatory authority will have little impact. "The CMA is doing
all the right things," he says. "This switch was mainly symbolic." Asked
whether he thought the risk-free fund would bolster the market, Abdel Aziz Abu
Hamad al-Uwaisheg, director of media and investor awareness at the government's
Economic Integration Department, demurs: "Am I to oppose the king?"

Pressure on the government to sell down its stakes in listed companies to aid
the market's recovery is growing. Nearly two thirds of the market's
capitalization is controlled by the government, which owns big stakes in
everything from hydrocarbon giant Saudi Basic Industries Corp. to the country's
top banks. "The government has to relinquish a large share of what it controls,"
says Prince al-Waleed bin-Talal, the kingdom's richest man. "Sixty percent of
the market is in the government's hands, and another 20 percent is owned by big
investors, so only a fraction of the market actually trades."

Before the government can sell its assets, however, the regulator must draft
rules covering everything from the introduction of mutual funds to improved
corporate governance, says CMA director Abdulaziz Alzoom. "We are aiming to
list more companies, but we also want more surveillance capability, and we want
more trained staff," he says. "This is a huge task ahead of us."

Notwithstanding today's bearish sentiment, foreign banks and brokers remain as
eager as ever to enter the Saudi market, convinced of its long-term potential.
Roughly a dozen firms, including Credit Suisse Group and HSBC Holdings, have
applied for licenses to trade Saudi shares and plan to open offices in Riyadh
in partnership with local firms. Saudi Hollandi Bank, which is the country's
oldest bank and is 40 percent owned by ABN Amro, is forging ahead with plans to
list ten companies on the Tadawul. "This hiccup will not materially alter our
timetables," says Tom Lind, Saudi Hollandi's head of investment banking. "The
measures taken by the Capital Markets Authority show this is becoming a normal,
open stock market, albeit at a gradual pace, and we welcome that." -- S.G.

© 2006 Institutional Investor

-YSH ;)

Jeddah Raceway, INCREDIBLE!

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

Greetings People,

Still in Mesa-Phoenix, working on the movie, the temperature isn't as pleasant as you'd imagine varying from 35-40 degrees Celsius most of the time.. The heat here is very much like Riyadh, luckily I get to sit and melt under a pop-up tent, and i'm constantly bombarded with water and gatorade (not to mention getting misted almost every 10 minutes) so I can't complain much..

Typical work day is 12 hours (usually from 5 am to about 6 pm), so it is somewhat tiring, but the people are great, so it is an enjoyable experience..

This is a link I stumbled upon while reading a Saudi blog..

It is truly amazing..

See for yourself:

-YSH ;)

Thursday, July 06, 2006

Visit Saudi Arabia!

Bismillah Arrahman AlRaheem: In the Name of Allah The Most Beneficient The Most Merciful

Greetings All,

I'm back in Mesa Arizona after spending the last long weekend in San Jose California visiting my good friend and business partner Nick.. I had a great time and caught up with some old friends..

I also saw Devil Wears Prada which I consider Meryl Streep's third Oscar nomination right off the bat..

I found this article, and it answered a lot of the questions about Saudi Arabia that I get asked especially with regards to travel.. so I hope this helps :)



Visit Saudi Arabia, but dress and behave appropriately
By Lara Sukhtian
The Associated Press
DUBAI, United Arab Emirates — Saudi Arabia seems an unlikely destination for fun in the sun.

Yet here was a Saudi prince at a tourism conference in neighboring Dubai, busily trying to sell his country as a vacation spot — provided visitors don't expect alcohol, women come robed, and everyone refrains from eating in public from dawn to dusk during the holy month of Ramadan.

And swinging singles need not apply. Women younger than 40 must be accompanied by their brothers or fathers.

Undaunted, the kingdom of Saudi Arabia, until recently accessible to only a handful of non-Muslim tourists, is opening its doors, beckoning curious world travelers to its mysterious and hidden treasures.

The change springs from the new policies of King Abdullah, who ascended the throne last August after the death of his half-brother, King Fahd.

Abdullah, a reformer, wants to show that his country is more than just the former home of Osama bin Laden and a breeding ground for Islamic extremism.

"He wants to show the world a different face to the kingdom. It's all part of a greater plan to open up the country, to show that though it is Arab and Islamic, it is also modern and moderate," said Mishari al Thaybi, a Saudi writer and analyst for the London-based newspaper Al Sharq al Awsat.

"Tourists are the best ambassadors for any country," Mishari added.

The king, together with the country's tourism commission, wants to wash out the stain left on the Saudi reputation by the Sept. 11 attacks, in which 15 of the 19 hijackers were from the oil-rich desert kingdom.

At a recent tourism exhibition in Dubai, Prince Sultan bin Salman bin Abdel Aziz, secretary-general of the Saudi tourism commission, announced the kingdom was in the process of licensing 18 tour operators to issue tourist visas to non-Muslim visitors from the West and Asia.
For the past six years, since the country first cracked open the door to tourism, Saudi Arabian Airlines had been the country's only licensed operator of tours to an ultraconservative land known for being reclusive.

"It not a problem for us to open up. We just want to make sure we are doing it right," Prince Sultan said.

Saudi officials characterize the number of nonreligious visitors so far as only "a handful," but they hope to boost that to 50,000 a year initially and to 200,000 annually by 2010.

But the opening comes with strict rules.

According to the tourism commission, only single entry visas will be issued. Coed tours will be allowed — as long as a father or brother is with any women under 40. Visitors must follow local customs, and a booklet printed in several languages will be distributed to tourists instructing them on Saudi's strict social traditions.

"The tourists must comply with the social conducts of the kingdom, to know what's allowed and what's not allowed, what to wear and what not to wear," said Saad al-Kadi, adviser to Prince Sultan.

All female tourists will be required to dress according to Saudi tradition: covered from head to toe with only their face, hands and feet exposed. And in the most conservative city, the capital, Riyadh, women must wear a black robe over their clothes. If tourists choose to travel during the holy month of Ramadan, when Muslims fast from sunrise to sunset, tourists will not be allowed to eat or drink in public during fasting hours.

One thing visitors won't do, however, is tour Islam's most holy sites, including the cities Mecca and Medina. They are off limits to non-Muslims.

But there is a lot for tourists to do.

There is an ancient rose-colored Nabatean city carved in sandstone, along with hundreds of cultural and archaeological sites, such as the remains of the Hijaz railway — built in 1900 to allow Muslim pilgrims to travel to Saudi holy cities from other parts of the Ottoman Empire.

Mountains abundant with vegetation and wildlife offer a verdant contrast to the desert, a sprawling expanses where visitors can take excursions.

And there's scuba diving. With more than 1,000 miles of coast along the Red Sea and just under 500 miles of beach along the Persian Gulf, Saudi Arabia is home to some of the world's most spectacular dive sites.

"It is the last untouched tropical coral reef in the world, simply because of Saudi Arabian paranoia. And thank God for it," said Eric Mason, executive manager of Dream Divers in Saudi Arabia. "This place is a divers dream come true."

Mason's company has been offering scuba diving trips for more than three years, drawing coral reef enthusiasts from Europe and Asia.

An avid fan of a country he has lived in for 35 years, this Nigerian born son of an Italian mother and English father calls Saudi Arabia home and says the campaign to boost tourism will improve its image abroad.

"Saudi Arabia is supposed to be a police state, it's supposed to be a hotbed of terrorists. People are frightened of it. They don't understand it. Now they will come and see the truth for themselves," Mason said.

But how will women scuba dive when they are supposed to be draped in a black robe? Both al-Kadi and Mason said there can always be an exception to the rules, as long as its not flaunted.

Copyright © 2006 The Seattle Times Company


-YSH ;)
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