The 21st century is to be marked with a turn of socio-political and economic events that could spawn unprecedented economic revolution into the 22nd century with enormity and speed as twice as those seen during the Industrial Revolution. The rise of the developing countries like the grouping of the BRICS nations is just the end of the beginning and the tip of the economic revolution ice berg. Unlike in the late 19th and the early 20th century when only a few countries hurdled themselves out of the quagmire following cold wars, world wars, oil shocks and other calamities, the 21st century is breeding vast economies into a wealth of nations.
I depict this viewpoint from an inspiring piece of article i picked from the European edition of Financial Times today. Essentially, this article hoisted my nerve wracked with a little sense of jelousy when i think back that why is my country, South Africa, not moving with the same political will as this country. Notwithstanding, i was filled with a sense of pride that other countries are doing the best for their citizens and that instilled hope in me. The article by Michael Peel, reports that Saudi Arabia is investing $6bn to train professional elite. This investment was spent in a single fiscal year, 2011, on foreign study scholarships for almost 250,000 students and family members. The scholarship covers, not just tuition fees but also other items such as living allowances, medical insurance, and flights to and from home. The spend average about $25,000 a person this year. This is part of a huge public spending programme being rolled out amid turmoil in the wider Middle East. I draw inspiration from the Saudi's minister when he expressed that this education investment could help transform Saudi society by giving a needed boost to its cadres of engineers, lawyers, doctors and IT specialists. That is a socio-economic investment with depth. Coincidentally, just over a week ago, one of the global Italian industrial and enginnering company, Tenaris, presented to us, as part of my MBA Programme, the challenges it faced in setting up its business (manufacturing plant) in Saudi Arabia. Part of their challenge was the cultural "shock" of the Saudi Arabians when it comes to employment. And this is as recent as 2010. The first shock, apart from the challenge in language, which is Arabic, almost the entire workforce in Saudi Arabia is foreign and expats and secondly, no woman is working, that is the culture. There is a shockingly high level of skills shortage that Tenaris has to bring its own worforce across the globe. Due to its strategic innovativeness and global competitiveness as a business, Tenaris, pioneered a few changes in the manner in which Saudi Arabia looks at itself in the context of globalisation, particualrly from business perspective. Tenaris was the first company in Saudi Arabia to higher a woman in its executive and the first to higherl local Saudi Arabians as a private entity in 2010.
The most striking factor, that thrilled me was the expression by the finance minister, Ibrahim al-Assaf, that the wealth in Saudi Arabia, has been spread over the population on housing, welfare, free education, free health, scholarships outside for all citizens. He says the scholarship programme is aimed at correcting a past failure to focus "on the right skills and the right education". Some observers say the scholarship programme could influence the country's political direction when the students come back home. Indeed, economic theory suggests the the rise of economic growth and increment of political stability is attributable to the growth of the middle class and the welfare of the entire population. The programme runs alongside large investments in infrastructure and social benefits. Unemployment benefit payments of $533 a month are due to be implemented after the Islamic new year this week, and public sector workers have received a bonus equal to two months' salary.
While the reforms points to the promising nation, the case of Saudi Arabia is one that has been the subject of economists for centuries. The economy is state led and it faces other drains on its finances, such as its notoriously heavy domestic energy consumption. Subsidies keep petrol so cheap that residents can fill a small car for as little as $10. Saudi Arabia should pursue economic reforms that are sustainable and globally aligned to infuse flexible economic measures resilient to intermittent financial and economic shocks. Economists' analysis may have the essence of truth, by my personal verdict is out: the investment in education will sustain that nation!!!
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