Abdulhadi Shayif told business leaders that oil-boom money should be used for a massive educational reform program to create the conditions for sustainable economic development. (AN photo by Stephen L. Brundage)

JEDDAH, 12 May 2005 — A leading Saudi banker said funds from the oil-price boom should be invested in massive improvements to the education system in order to sustain future economic development.

Abdulhadi Shayif of the National Commercial Bank told a crowd of businessmen and industrialists that a boom akin to the country’s economic performance in the 1970s was taking shape. He noted more than $100 billion in projects from oil to transportation would heat up the Saudi economy for several years. Rather than concentrate on infrastructure improvements as the country did in the 1970s, he says it is time to develop human resources.

“We have seen poor nations with no natural resources at all, but they have the biggest resource of all, and that is human capital,” Shayif said. “It is with regret I say that we haven’t done much along that line.”

He said with careful planning the boom could be used to create an educated and skilled work force that could reduce the country’s reliance on oil revenues by expanding the private sector.

“You see this boom coming as we saw the last boom coming,” Shayif said. “We forecast it and spent the money on infrastructure — roads, airports, hospitals and schools. We did not invest in people. If you look at the amount of wealth in the first boom, unfortunately a small amount was invested in people. I hope this boom, about which I am very optimistic, is going to be longer and more sustainable and that the contributors to this boom will be more than the government. Today the private sector is in a much better position than it was in the 1970s and 1980s to make a more positive contribution.”

Shayif said the Kingdom needs to make curriculum changes as opposed to building new institutions.

“I will promote not building more universities,” he said. “We have enough quantity. I think we should focus on technical education and professional colleges. We should have more business schools because management is the real essential. A company could have all the resources, but if it doesn’t have proper management it is a failure.”

The NCB general manager related personal experiences of having to screen as many as a thousand job candidates to fill 10 positions.

“This is a shame,” he said.

Shayif’s speech was cautionary, and he warned the business leaders that booms come to an end.

“I’m a firm believer that money comes and goes,” Shayif said. “Oil prices go up and go down, and one day oil will disappear. The only way of having sustainable economic growth is through human capital. I urge the government first and foremost, and I urge the private sector to really focus on investing on quality education. We’ve had enough of quantity education.”

Shayif was the first speaker at the dialogue sponsored by the National Commercial Bank and the Gulf Society for Organizational Learning (GulfSoL), which brought national leaders together to examine the current challenges facing the Kingdom and look for ways that academia, business and industry can team with the government to help chart the brightest possible future for the Kingdom.

“Change begins with changing minds,” said GulfSoL member Salim Al-Aydh, an Eastern Province executive. “The problem is that changing minds can be very difficult to do. We all tend to follow mental maps that tend to lead us in the same directions we have taken before. The only mind I can change is my own, and even this is very hard to do. Changing the mind requires we address both the head and the heart. But change we must if we want our grandchildren to have the same opportunities — even better opportunities — than we have had.”

Also acknowledged at the conference were Eastern Province business people and GulfSol members Ibrahim and Shadia Saihati, owners of Taseco and Saihati Weir, who are training young Saudis at a vocational center they built in Dammam. The center has about 50 students and will serve as a model for a 250-student center under construction funded by a consortium of Eastern Province businesses.

The two-day conference ended yesterday. For more information about GulfSoL, visit www.gulfsol.org.