Myth: Difference between Capitalist and Entrepreneur; a Capitalist’s priority is wealth preservation and careful growth. An Entrepreneur is a cowboy!
The COVID19 Pandemic coupled with the Oil Price crash is a double whammy to the economies of the Gulf Cooperation Countries (GCC). The COVID19 Pandemic will destroy a myriad of Small and Medium Enterprises (SMEs). It will also cause a severe contraction in non-oil sectors that GCC economies were trying to diversify in like tourism and aviation. Furthermore, the oil price crash will limit the spending ability of the GCC countries like the previous decade—the golden age!
Historically in the GCC, most of the jobs have been directly or indirectly created by the government; this practice was needed in the past when the economy was nascent. Today, it is no secret that this practice is unsustainable, and responsible governments are smartly decoupling their direct spending to the economy performance through encouraging participation from the private sector (local or foreign).
Alas, governments should not, will not, and cannot continue creating jobs. Reduced future government spending plus contraction of private sector and SMEs will lead to a vicious circle of increasing unemployment. The solution to the economic stress, unemployment, and job creation dilemma is Entrepreneurship. Milestones and successes of humanity in the past century were almost miracles; a major driver to that was Entrepreneurship. By developing a solid, sustainable, and competitive Entrepreneurial Ecosystems, GCC economies will rebound and get tailwind from demographics. Once the Entrepreneurial Ecosystem is alive and healthy, it will create jobs, nurture private sector, and add to the Gross Domestic Product.
It is now that we need the maximum support to develop and focus on the Entrepreneurial Ecosystem in the GCC. It is now that working-from-home (WFH), virtual licenses, and availability of human resources is flourishing. The time is now: “necessity is the mother of invention”. Developing the entrepreneurial ecosystem should not only be a government responsibility; the private sector and the society should contribute, be it financially, providing mentorship, or other entablements for the ecosystem.
Last but not least, the GCC governments and people are not to be underestimate. They will overcome this difficult time and continue building on the Entrepreneurial Ecosystems they have been building over the past 5 years. The GCC over the past half-century has risen from a desert to a world economic powerhouse; it will continue to reinvent itself in the future and maintain an economic powerhouse status.
Disclaimer
The content of this article is informational only and based on information available when created. It is not an offer or a solicitation nor is it tax or legal advice. It does not consider your financial circumstances and objectives and may not be suitable for you.
Author:
Jassim Alseddiqi
Group CEO of SHUAA Capital
