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“It is always about people”

Interview - August 23, 2013
Bader Al-Kharafi, Chairman of Gulf Cable, Board Member of Zain and Board Member of Gulf Bank, sits down with World Report to discuss regional turbulence and Kuwait’s stability, as well as its youth, potential and foreign relations [Full interview]
Kuwait is blessed with rich natural resources, such as oil. Officially, it holds 10% of the world’s oil reserves; however, most people are unaware that the real figure is actually higher than that. Another thing most people are not aware of is that Islamic Finance was pioneered by Kuwaitis. Kuwait is very rich in traditions, but being traditional is too broad of a statement in this day and age. Considering our angle of ‘Authentic Kuwait’, how would you define Kuwait, and what makes you proud of being Kuwaiti?
To be honest it is not at all about the oil; it is about the people. Kuwait has a unique set of characteristics that sets it apart and well ahead of its neighbouring countries, with its high level of education, rich diversification and the strong relationships it has with the majority of other countries around the world. This really makes us proud to be Kuwaiti. Kuwait prides itself in its broad and all-encompassing level of involvement, be it from a financial perspective or in terms of education, health, volunteerism and charity. Kuwait is involved in many things but since it is situated in the Gulf, a lot of people have the misconception that it is merely an oil exporter.
Turkey is rising at the moment, and the region has always been stigmatised by the lack of democracy and by other political issues. We witnessed this with the Arab uprising in Egypt, Syria and other places. Kuwait is one of the only Arab countries with a democracy, and that is why it has a bit more stability. How do you view stability in the region? Do you foresee turmoil? What do you think needs to happen for the region to remain stable?
You need to introduce a genuine, working form of democracy to all of these countries and make sure that a fair balance between the running party and the opposition exists. If you do not give the opposition a chance to express what they want, they will undoubtedly create chaos and start to rise up with resistance and protests. That is precisely what is happening in the countries you mentioned. Unless a maintainable, and most importantly just and non-corrupt form of democracy is put in place, I do not think that things will settle. 
How long will it take?
I cannot tell you how long it is going to take because we never expected it to reach this point in the first place. I can tell you that as a group investing in Egypt, we were never really tied up with a particular party or any certain regime. We really believed in Egypt as a country with a large population consisting of many educated and highly skilled people. We invested heavily in Egypt, and we have been doing very well since we started there. We are probably one of the few companies that have 100% ownership in our entities in Egypt. The country transformed drastically, but we are still there. There is a real opportunity for work there, regardless of the regime. Even the crisis proved that things could still fare well.
How do you see the regional turbulence affecting Kuwait?
The regional turbulence has definitely affected Kuwait. We are one of the families that are well diversified and we have invested heavily in the Middle East. When the revolts first started in Egypt, we had issues, but now things are better. However, what happened in Syria and Libya really affected the big groups. Ultimately, the entire economy was affected. We hope that things stabilise in the region so we can get our businesses back on track and start performing efficiently. 
We are very well established; if you look at our manpower, we have a lot of Egyptians in the group, and a large percentage of our investments are in Egypt. Then again, you never really know what the agenda is in politics. The Muslim brotherhoods are there, and a lot of people voted for them, but they were probably disappointed by the outcome. They thought things would start moving in a positive and progressive way because they changed the regime. Unlike finance and economics, you can never speculate when it comes to politics.
An article published in the Financial Times last week stated that “we will never build any project in Kuwait the way we are going” (Kamil Al-Kharami). Do you think the perception of Kuwait will affect the private sector and foreign direct investment?
It will definitely affect the private sector. When foreign companies come and invest in Kuwait, they usually sub-contract a lot of those packages into the private sector. We are also involved in petrochemical and oil refineries, and we are one of the main bidders for those projects. So if they stop coming to Kuwait and bringing in the know-how, then we will definitely stop getting involved in these projects, and this will affect the companies that work in that sector.
Regarding their reluctance to approach investments in Kuwait, I must say I really do not blame them. We are hoping to change that image. We have different parties and they are trying to resist any future government projects. They want to monitor every single project, so the Government was a bit hesitant to go through with those projects and pulled out. This resulted in quite a mess. Given the new company laws, we hope that international companies will feel safer. That is what we are trying to push for – guaranteeing their investments here in the region. The new laws are definitely going to help. When the laws come in, we will have to work on the by-laws as well, to make sure that they work in tandem in order to suit foreign investors.
There are two sides to the story. E-quate is a joint venture with Dow and it is very successful.
Yes, and E-quate is partly owned by the private sector. That shows how the private sector is involved, and why we are always pushing for privatisation. I have a very good model in Egypt for privatisation as an example. We acquired a paper factory there, and we were forced to not let people leave. We accepted that term, and with just one year under a private sector management, we grew by 25% compared to when it was operated by the government. That was just by putting the right management in place, and without changing any machinery or having any additional investments. It is just about the right management, and of course, the right vision.
The UK used to be the leader in terms of exports and imports in Kuwait. It has decreased its presence now, and we are seeing Kuwait increasing trade and investment with the US. What is your view on the importance of strengthening bilateral relations between Kuwait and the UK as well as investment?
I agree it is important and it is not like it used to be with the UK, but I would also say that it is not just the United States but rather a slew of different countries. Look at China, for instance. There are a lot of things happening between China and Kuwait, as well as other GCC countries. We have always believed in our relationship with the UK. Many of us were born and educated there, or have lived part of our lives there. We have a good understanding between us, and we believe in the political setup there. Every time we set an example here we, like many others, always refer to British democracy. So a lot of things are very similar between the two countries, and we hope that we will continue in the trend of our similarities with the UK. If you look at the private sector, we still deal with the UK.
Take Zain for instance, we were the ones who pushed for the alliance with Vodafone. We used to work with Vodafone, and then it stopped for a while, and then we came back again. That shows you how important the support we get from UK companies is. It is definitely a mutual benefit. As a group, we are very well-established in the entire region, not just in Kuwait. I think the big names and companies in the UK want this exposure through people who have the required know-how, expertise and professional establishment within the region. So as you said, it is definitely a mutual benefit. 

Zain is the leading telecoms operator in Kuwait and the region, and it has been given many awards. Where is Zain going? What are its priorities?
Zain is the leading telecom company in the region, and like any other leading telecom company, our target is to keep up with, as well as pioneer new technologies. We are probably the first-movers in any technology. We introduced some of the new technologies and services before Europe and some other countries, including the United States. We are investing heavily in technology and always pride ourselves in being the leaders in that respect. 
Looking at things regionally and globally, we are definitely trying to be a leading global player. We have a commercial presence in eight countries across the Middle East and North Africa. At the end of the day, we are still primarily businessman at heart. We are looking at acquisitions and growth opportunities for the company while sustaining our current position. We are considered by many to be the go-to telecom company in most of the regions and countries we operate in.  
Are there any specific plans for expansion, perhaps in Europe?
We are definitely looking for acquisitions and investing in ISPs. This is the trend, providing data to your clients. We will definitely take on anything we think is beneficial for the company. We are not selling at the moment, and we are working towards growth and expansion for the company. We brought highly qualified people into the team. We have a great team now. Since I joined Zain, my target has always been to have the right people with the right skills. That was a quote from my late father; it is always about people. I completely and wholeheartedly agree with that. We have some vacant gaps to fill, but we are getting there. 
Talking about your late father, he was a very well respected man and a living example of how to be successful, moving from a local company to a multinational. What is the biggest lesson you have learnt from him in terms of doing business?
There are many valuable lessons I have learned from my father. Let me highlight the main things that he focused on. The model that he proved time and time again to be vital to success is: people, honesty and making sure you deliver. 
We are known for our credibility, so we will never put our name on something unless we know we can do it at the level of quality associated with us. This, in turn, creates loyalty, and loyalty comes from the people again. If you look at the majority of our team, you might find some people whose length of employment exceeds my life since birth; they remain loyal employees to this very day. That shows you the strong-rooted loyalty of the team. 
You said that you are investing a lot in technology. Steve Jobs said that innovation is what distinguishes a leader from a follower. What is innovation for you?
Innovation is about being the first mover in anything. It is about being a pioneer. I try not to follow. This is my aim really. I try to be the first to introduce things instead of following, although this is in itself quite risky at times. But I am always up for challenges and risks, mainly because I was introduced to the business at a young age. I am mature enough and have experienced a lot of resistance and tough competition. There is a saying in Kuwait – our bones get stronger, and my bones probably got stronger at a much younger age. This is why I like to make sure that I make the first step to become a pioneer, early adopter and be the first to push new technologies and capture the right opportunities.
With so many different roles, how do you manage your time? Where do you spend most of your time?
Again, it starts with people. If I do not have the right team with the right skills, I will not be able to do it. I spend time in all of my companies and I try to have a very well organised schedule. I have a team that helps me organise that. 
Delegate – if you do not trust your team and delegate, you will never move forward. When you see Bader, it is not just Bader – it is Bader and his team. You experienced it – when you wanted this meeting, you dealt with a member of my team, who facilitated things. I divide my time depending on the needs of the companies.
The focus of our report is youth and the empowerment of young individuals. We have seen that the Government is allocating almost 20% of public expenditure in education, and the Ministry of Youth Affairs has recently been established. There have been national youth projects and you are one of the new faces of a new generation of change, and a role model for many young people who will be reading our report. Tell me a bit more about INJAZ and what you think about this new generation of change.  
I definitely believe that the new generation will help further develop Kuwait. The entire purpose of INJAZ is to fill in the education gap and to develop young entrepreneurs’ skills.  I can see a lot of youthful entrepreneurs being people working for me in the company, and that was the whole purpose. Even if they are working for someone else, it brings me pride to see them succeed. I would love to see those faces in the Government as well. We already have that, but it is about the young generation really improving and trying to transform the ever-so-dynamic business language and culture. It is about having them involved in full-swing in the development Kuwait. 
You can see the new graduates doing very well in wherever they represent us. I hope they will become even better than us. This is why we dedicate some of our time, because the future is heavily dependent on today’s youth. It is a very tough schedule, but we try to dedicate some of our time to the younger generation to make sure that the message is delivered directly to us. You can always have people who can explain and tell them theoretically what needs to be done, but it is entirely different when you cut out the messenger and let them get the experience from you directly. This is the difference between theory and application. We are encouraging more volunteers to participate. 
What one thing do you think the UK does not know about Kuwait, but should? 
The UK knows everything! We want them to know about the authentic Kuwait and the people in Kuwait. They probably need to know more about the private sector. I think they have been involved in everything else politically. I would like exposure on the social aspects of Kuwaiti life to replace the abstract views they might have thus far. Again, it is a clash of the theoretical versus the applicable. Sometimes things cannot be taught, but rather must be experienced for the value to be derived. I think they will understand this fully when they visit.