Sunday, 23 September 2012

Faisal J. Abbas

Last year, I wrote an article on the occasion of the Saudi National Day arguing that despite the country’s blessings of economic prosperity, continuous growth and remarkable stability; Saudi Arabia still had an enormous challenge that it needed to overcome. 

The Kingdom’s biggest challenge comes from within, I argued. “Saudis are only now starting to wake up to their present-day demographical realities, having seen the county’s population grow at a staggering rate of 333 per cent in just 34 years,” I added. 

A year later, and as we celebrate another Saudi National Day, I can’t help but repeat myself to emphasize – yet again – what our biggest challenge is. 

Our government, which in 1975 only had to cater for the needs of a population of only seven million, now has to deal with almost four times that number. Furthermore, we are a predominantly young population; this means that most of us are yet to find a job, get married, buy or rent a place to live and of course consume an enormous amount of energy, which is used for air conditioning, transport and to power the massive desalination process which we run to ensure that we all get enough drinking water. 

Now, this would all be manageable if we had an infinite amount of resources. Unfortunately, despite the abundant amount of oil reserves we are blessed with, the reality is whilst our population is growing, our reserves are diminishing in parallel. 

This simple fact has a double-edged disadvantage: Given our demographic growth; more and more oil is going to be consumed locally – rather than exported. Recent estimates suggest that 25 percent of our oil production is channeled towards local consumption. 

On the other hand, exporting less oil will eventually mean the government will have less money to pay for development projects, enhancements and/or expansions on infrastructure and utilities for its people. 

A few weeks ago, a Citigroup analyst raised the prospect of Saudi Arabia turning into an oil importer within a few decades.

"Energy consumption per capita exceeds that of most industrial nations. Oil and its derivatives account for 50 percent of Saudi's electricity production, used mostly (50 percent) for residential use. Peak power demand is growing by 8 percent per year. Our analysis shows that if nothing changes Saudi may have no available oil for export by 2030," noted Heidy Rahman, of Citigroup.

A while before the Citigroup analytical forecast was published; the Saudi government had taken strategic steps towards diversifying its economy and diversifying its energy-mix. 

Massive projects have been announced in nuclear and solar energy, courtesy of the recently announced King Abdullah City for Atomic and Renewable Energy (KA-CARE). 

However, there is probably no better quote to use at this point more than what was recently said by American “financial dignity” and poverty eradication activist, John Hope Bryant. 

“Sometimes, governments have to do more by doing less,” Bryant said during a recent visit to Jeddah. 

Bryant was talking at the launch of “Riyali”; a Corporate Social Responsibility (CSR) program launched by the Saudi SEDCO group to help spread financial literacy among young Saudis. 

Of course, Bryant wasn’t talking about Saudi Arabia’s future energy policies nor was he insinuating that governments shouldn’t make every effort to ensure the long-term well-being of its people; he was merely suggesting the best ways to spread awareness and a sense of financial responsibility among citizens. 

Bryant was also commenting on the findings of a recent SEDCO study commissioned ahead of the announcement of the “Riyali” program. 

It turns out that 89 percent of Saudi youth don’t keep track of their spending; that 46 percent of them also rely on their parents for funding big purchases and that 80 percent of youth’s income is spent on mobile phones and travel. 

The American activist’s view is that young people should rely on themselves and not on their parents or governments to secure their own well-being. He also says that the private sector, through CSR programs, also have a vital role to play. 

“Parents who have worked hard to reach where they are today shouldn’t give their children everything, they should let them work as hard as they did so that they achieve the same results,” he added. 

“Sooner or later, the party is going to end … and you better be ready for it,” was another memorable quote by Bryant. 

And perhaps “the older we get, the wiser we become” shouldn’t just be a run-of-the-mill cliché to admire. 

Celebrating Saudi National Day and contemplating a wiser, more efficient way forward should be two congruent moves; both for the average teenager planning how to spend pocket-money on a micro-level, or the corporate official planning the next, big macro decision.

* Faisal J. Abbas is the Editor-in-Chief of Al Arabiya News Channel’s English website and a blogger for the U.S.-based Huffington Post. He can be reached @FaisalJAbbas on Twitter. A version of this article was published on Sept. 23, 2012 in the Saudi Gazette in an issue marking Saudi National Day.

Find the full original article at the Al Arabiya News, and the Saudi Gazette.



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