:00:00. > :00:18.Welcome to a special edition of HARDtalk from Saudi Arabia, with me,
:00:19. > :00:22.Stephen Sackur. This country was built on oil-rich is. Now it is
:00:23. > :00:29.having to cope with the oil price crash. I have come to one of the
:00:30. > :00:32.world's it construction projects, King Abdullah Economic City. It is
:00:33. > :00:39.projected to be home to 2 million people, a global city here in the
:00:40. > :00:45.Kingdom of Saudi Arabia. My guest is the CEO of this place, Fahd
:00:46. > :00:47.Al-Rasheed. Due to the economic problems, could his dream the about
:00:48. > :01:10.to turn to dust? Fahd Al-Rasheed, welcome to
:01:11. > :01:15.HARDtalk, and thank you for inviting me to this extraordinary project.
:01:16. > :01:19.How do you feel every day when you come onto what must be one of the
:01:20. > :01:23.biggest voting sites in the world? I love it. There is nothing like
:01:24. > :01:27.coming to a construction site if you are in the business of construction
:01:28. > :01:33.and development. I get an adrenaline shot. How much change to UC day by
:01:34. > :01:40.day, week by week was Mack when our visitors come, they see the big
:01:41. > :01:46.star. I see the small stuff. I see a piece of 40. I see the difference
:01:47. > :01:50.every day. -- floor here. It is important to give people a sense of
:01:51. > :01:55.the scale. It is going to be the same size of Washington, DC. You say
:01:56. > :02:00.it will have 2 million residents. It is extraordinary to build back from
:02:01. > :02:05.scratch in the desert. Absolutely. You have to remember 65% of our
:02:06. > :02:09.population is under 30. Because of population migration, they are some
:02:10. > :02:14.of the fastest-growing cities in the world. We need new urban centres
:02:15. > :02:18.like this. We get people to move here by offering jobs. It seems to
:02:19. > :02:22.me when this dream was hatched, Saudi Arabia was the dominant player
:02:23. > :02:26.in the oil market. The oil price was going up. There was a sense Saudi
:02:27. > :02:36.Arabia could do anything wanted. Things are very different now.
:02:37. > :02:42.KAEC, we like to call it KAEC, when it was launched I King Abdullah ten
:02:43. > :02:46.years ago, the idea was to prepare for a moment where all prices are
:02:47. > :02:50.not so high. When the government needs private sector involvement
:02:51. > :02:56.across the whole economy. And we are here. Despite all of the economic
:02:57. > :03:01.news about oil prices and the economy of Saudi Arabia sometime, we
:03:02. > :03:05.signed up 23 new companies in 2015. When you talk about eating an
:03:06. > :03:10.international hub, you have to persuade people that Saudi Arabia is
:03:11. > :03:15.a good place to do business, and I am not sure the world believes that
:03:16. > :03:21.right now. This is more of an image. I will give you example. It takes
:03:22. > :03:28.the US 60s to get a payment. It takes a story weeks. ! Six years to
:03:29. > :03:32.get a construction permit. What do you believe is the main priority
:03:33. > :03:37.right now? You are talking about a port that you say it will be one of
:03:38. > :03:41.the top ten ports in the world. You are talking about building an
:03:42. > :03:46.industrial base. What is this city's unique selling point? The
:03:47. > :03:51.first ten years we focus on global logistics and manufacturing. We
:03:52. > :03:56.build the port, it will be top ten in the world, and the largest on the
:03:57. > :03:59.Red Sea by the end of this year. We have attracted 120 companies from
:04:00. > :04:04.around the world. We know the concept works and will continue into
:04:05. > :04:07.the future. We are now focused on the residential sector, tourism, and
:04:08. > :04:14.services by culture and education. Tourism? You think Saudi Arabia will
:04:15. > :04:19.be a magnet for tourists? I am confident we will have 1 million
:04:20. > :04:26.people by 2020 visiting the city, and 3.5 million by 2025. Ask me why.
:04:27. > :04:35.I ask the questions. On this occasion, I will. Why? We are
:04:36. > :04:42.already the 74th visited in the world because of Hajj. The
:04:43. > :04:48.pilgrimage. We intend on doubling that. You have laid out some of the
:04:49. > :04:55.vision for me. Let's go to your office and we can challenge you a
:04:56. > :05:01.bit more. Saudi Arabia is entering an age of austerity will stop it
:05:02. > :05:07.seems to me this extraordinary city project is about extravagance, not
:05:08. > :05:12.austerity. I think it is about fundamentals. If you see what we
:05:13. > :05:16.have built, it is based on what Saudi Arabia needs of the region
:05:17. > :05:18.needs. We're talking about ports, we need logistics and transport
:05:19. > :05:24.infrastructure. We talk about industry. We have energy that we are
:05:25. > :05:28.using, and we talk about residents. We need to build 4 million housing
:05:29. > :05:31.units in the country in the next ten years. We're just tapping into the
:05:32. > :05:36.potential in the country. Think back to when this project was conceived.
:05:37. > :05:40.It was a different era. Talking about 2005, King Abdullah was on the
:05:41. > :05:43.throne and it would like Saudi Arabia could be guaranteed to be the
:05:44. > :05:48.dominant oil producer in the world forever. And that the world would
:05:49. > :05:54.always be reliant on Saudi oil. That is not true today. That changes
:05:55. > :05:58.everything, doesn't it? Division of King Abdullah and the government at
:05:59. > :06:04.the time was to create a new project -- the vision. A new development of
:06:05. > :06:10.the rabbit sector -- private sector. I think King Abdullah Economic City
:06:11. > :06:14.was wanted for this moment, when the government can do everything. And
:06:15. > :06:19.the government needs to rely on the private sector. I think it is
:06:20. > :06:23.working. In the end, you can't divorce yourself from economic
:06:24. > :06:28.picture it on the whole. In end, if the Saudi economy is going to slow,
:06:29. > :06:31.fundamentally because the oil price has plummeted, and it does not look
:06:32. > :06:37.like it will rise any time soon, then you have a problem. Not only
:06:38. > :06:43.the regional and Saudi economy, but the global economy. We will grow at
:06:44. > :06:49.4%. It is also about the original picture. You sit on the Red Sea in
:06:50. > :06:54.the middle of a region full of turbulence, turmoil, war, and
:06:55. > :07:00.uncertainty about the future. That is a terrible problem as well. I
:07:01. > :07:05.think people forget the Middle East has challenges for the last three
:07:06. > :07:12.years. You can talk about the war in Iraq, Iran, the US and Iraq in the
:07:13. > :07:17.90s, sorry, the Gulf War in the 90s, the second Gulf War in the beginning
:07:18. > :07:20.of 2000, an Arab Spring, we are kind of use to it. Saudi Arabia has been
:07:21. > :07:26.the stable place throughout all that. You have been in the country
:07:27. > :07:33.and have seen. Does this look like a country in turmoil? I have talked to
:07:34. > :07:37.a lot of people. They talk about uncertainty and challenges facing
:07:38. > :07:41.Kingdome unlike any they had seen before. It comebacks to this point
:07:42. > :07:45.about whether investors will see this as the time to get involved
:07:46. > :07:50.with a speculative venture such as your new city. I think what you are
:07:51. > :07:57.seeing today is a different era for Saudi Arabia. An era that will see
:07:58. > :08:00.reform, a restructuring of the economy, but I think what people are
:08:01. > :08:05.most worried about is the pace of change. We are seeing today a
:08:06. > :08:10.dynamic government, that is willing to take and make the hard decisions.
:08:11. > :08:14.It used to take 12 months and it now takes one month to get things done.
:08:15. > :08:20.I think people are not used to this pace of change. Neither internally
:08:21. > :08:23.or externally. You tell me this is very much a private sector project.
:08:24. > :08:28.But in the end, they have been several occasions, such as 2008 with
:08:29. > :08:32.the global financial crisis, and again in 2011, when you had to go to
:08:33. > :08:35.your government and play for emergency loans because you were
:08:36. > :08:40.running out of cash. This is what we call a private- public partnership.
:08:41. > :08:47.You cannot build a city without the government. This cannot be the
:08:48. > :08:51.Kingdome of Saudi Arabia or region. No project of this scale can work
:08:52. > :08:58.without working with the government. That is precisely the point. Let me
:08:59. > :09:04.quote you from a leaked memo was in Time magazine a few weeks ago. It is
:09:05. > :09:10.not highly confidential and gives strict instructions for the stopping
:09:11. > :09:13.of all new projects, for all public sector purchasers including new
:09:14. > :09:18.vehicles and other equipment. That is the mindset of the government
:09:19. > :09:22.today, a government you still ultimately rely on to Beagle
:09:23. > :09:27.backstop. I think today if you look the private sector and what is
:09:28. > :09:33.happening, 2015, despite all of the challenges, we signed 23 companies,
:09:34. > :09:38.ourselves in the residential area where healthy, and over the next ten
:09:39. > :09:42.years we will develop 40 projects. Our current business plan includes
:09:43. > :09:47.170 projects, a five times increase in development. Numbers prove it. It
:09:48. > :09:52.is not about sentiment. I know you like numbers. The marine traffic
:09:53. > :09:58.index that I looked at for November of last year, it showed on any event
:09:59. > :10:02.day, you had an average of three or four vessels import, whereas the
:10:03. > :10:09.port of Jeddah literally as we sit here down the coast, the port of
:10:10. > :10:14.Jeddah had 44 vessels import with another 42 en route. If you go to
:10:15. > :10:19.the UAE and a bunch of other ports including Dubai, they are also much
:10:20. > :10:28.busier than your Newport. -- new board. These numbers don't show the
:10:29. > :10:33.potential of our port. We have three of the top five shipping lines in
:10:34. > :10:36.the world moving there. I am confident about the future and we
:10:37. > :10:40.will continue to build to make this one of the top 20 ports in the
:10:41. > :10:43.world. So far we have focused on the global and regional economic
:10:44. > :10:54.context. Let's switch wreckers and talk about -- focus, the climate of
:10:55. > :10:58.Saudi Arabia in a new city. Is not your biggest problem that the
:10:59. > :11:03.outside world's perception of Saudi Arabia is that it is deeply
:11:04. > :11:08.conservative, and repressive, and that is not an atmosphere in which
:11:09. > :11:12.people want to invest, want to live, and establish new businesses and
:11:13. > :11:17.lives? If that is the picture, that is the wrong picture. I think Saudi
:11:18. > :11:23.Arabia for the longest time is seen with a static lens. What I see is a
:11:24. > :11:28.dynamic Saudi Arabia that is changing rapidly. I don't think we
:11:29. > :11:35.in the country understand the pace of change. Ten years ago, there was
:11:36. > :11:40.no woman on a boat. You could not be a CEO if you were a woman.
:11:41. > :11:49.Definitely not in our Parliament. All of this changed very rapidly.
:11:50. > :11:59.Today, 20% of our accountants are women. Frankly the biggest change of
:12:00. > :12:03.all would be if my female colleagues working on the HARDtalk programme
:12:04. > :12:08.were able to come to my city and drive themselves here, but that is
:12:09. > :12:14.not possible. You cannot insulate yourself from the deep conservative
:12:15. > :12:21.in this country. To say collections that have been held, and women
:12:22. > :12:25.elected... Local council elections. This is nothing to do with who
:12:26. > :12:30.wields the power. If you look at the power today, there are more
:12:31. > :12:38.graduates women than men. The world does not understand. I would put it
:12:39. > :12:41.to you, Fahd Al-Rasheed, you are a particular kind of Saudi. You are
:12:42. > :12:48.educated in the United States. You have been to business school. You
:12:49. > :12:50.are open-minded. And you are not representative of the religious
:12:51. > :12:53.establishment in this country. You were frankly not representative of
:12:54. > :12:58.the mindset of the ruling family either. I don't think I am
:12:59. > :13:02.representative of anything except myself. Today, Saudis are not one
:13:03. > :13:08.form of person. We are very different. Talking about people
:13:09. > :13:13.graduating, we have 160,000 people around the world graduating. They
:13:14. > :13:19.will come and change the country in fundamental ways. Let's talk about
:13:20. > :13:22.the change, then. Let's be specific. You are telling international
:13:23. > :13:28.investors to come here, live here, make this place their future. Will
:13:29. > :13:33.there be a presence of the religious police here? I don't think that is
:13:34. > :13:38.the issue. It is an important issue. For example, a talented young was
:13:39. > :13:41.this woman what's to come here as part of a team establishing a new
:13:42. > :13:48.company wants to believe she will have a good life here. Will she be
:13:49. > :13:52.able to insulator herself from the rules that govern life in Riyadh?
:13:53. > :13:56.Can she be of a different life? Can she do the things she would do if
:13:57. > :14:00.you lived in the United States or Europe or many other parts of the
:14:01. > :14:08.world? You should remember we are still in Saudi Arabia, and Saudi
:14:09. > :14:12.Arabia today is a dynamic place. We ourselves are struggling between
:14:13. > :14:17.modernity and tradition. We have the highest use of social media today in
:14:18. > :14:24.the world. Looking at what the company will be in 30 or 40 years, I
:14:25. > :14:30.don't know. What would you like to look like in 30 or 40 years?
:14:31. > :14:37.I think we will have all of this useful energy coming back into the
:14:38. > :14:41.country. Women are taking their place in society. The Saudi press
:14:42. > :14:47.only if you will, what it means to be Saudi, is still not clear because
:14:48. > :14:52.we are by the way a society which has a different strata of people on
:14:53. > :14:57.income, religion, 30% of the population is not Saudi. So the
:14:58. > :15:02.country itself is a young country. What it will look like in the future
:15:03. > :15:07.will be the dynamism. Maybe you're being a bit diplomatic and tactful,
:15:08. > :15:12.but is your message to the rulers of this kingdom that they need to
:15:13. > :15:18.accept change? I think they are leading change to be honest.
:15:19. > :15:23.Really? Yes. You often say in public, you say we are going to be
:15:24. > :15:27.an island of change. We're going to bring the world to Saudi Arabia and
:15:28. > :15:31.Saudi Arabia to the world. You compare yourselves here in this new
:15:32. > :15:37.city to do by. There's a fundamental difference. In Dubai, the
:15:38. > :15:43.authorities there have accepted all sorts of different lifestyles. They
:15:44. > :15:47.have attracted Western money, Western tourists, Western business
:15:48. > :15:51.people, because they have been so flexible. Are you telling me that
:15:52. > :15:56.you can achieve that here? Dubai is a bit different because of the
:15:57. > :16:02.model. They have to attract people from all over the world. You say you
:16:03. > :16:05.want to do that? We do, we want to attract foreign investment
:16:06. > :16:10.definitely. And we have done so. But my point is we have huge potential
:16:11. > :16:13.in the country, is huge needs in the country for the Saudi population
:16:14. > :16:19.that are not addressed. We don't need to attract people to tourism
:16:20. > :16:24.here... These are not the same people that go to give by. We will
:16:25. > :16:30.have about 30 million people for Hajj, they are already coming, we
:16:31. > :16:33.have these as and we want a conservative family orientated
:16:34. > :16:38.approach. That is exactly the target market. The other target is Saudis
:16:39. > :16:42.themselves. They also need a destination so we will build zoos,
:16:43. > :16:49.golf courses, theme parks, hotels for those people. But you're going
:16:50. > :16:54.to do it in a very traditional Saudi way? I hope so, we have to. You're
:16:55. > :16:58.in Saudi Arabia, there's a sense of place. On the golf course you're
:16:59. > :17:03.going to build here, will women and men golfers be able to play
:17:04. > :17:07.together? Definitely, why not? I don't know why not but I know it's
:17:08. > :17:11.difficult for women to play golf in this country partly because of the
:17:12. > :17:16.clothing laws. We will figure that out. We're building a new industry.
:17:17. > :17:21.But again, it's not about the tactics, it's about the direction.
:17:22. > :17:25.How can we create a new place in Saudi Arabia that is respectful of
:17:26. > :17:28.the Saudi tradition that at the same time is modern, but reflects the
:17:29. > :17:33.local condition and local needs and the target markets we are looking to
:17:34. > :17:38.serve. One of the key points made by the deputy crown Prince, as he
:17:39. > :17:42.delivers what he calls his economic transformation model, is to ensure
:17:43. > :17:49.that more jobs are done by Saudis and fewer jobs are done by
:17:50. > :17:53.foreigners in Saudi Arabia. I think construction is one area that he's
:17:54. > :17:56.been looking at. You've taken me on a quick tour of construction,
:17:57. > :18:02.there's an awful lot going on, but I did notice that many of the workers
:18:03. > :18:06.I saw an Saudis. Is that going to change? The challenge with this is
:18:07. > :18:12.that we have opened our economy, unlike most countries in the world,
:18:13. > :18:16.to foreign workers and they get paid an amount of money that is
:18:17. > :18:22.reflective of their economic opportunity of their country. That
:18:23. > :18:27.is the challenge, that is below what a Saudi would make. We will change
:18:28. > :18:30.that over time by training Saudis. They are now accepting jobs that
:18:31. > :18:36.they used to not accept to be honest with you. You can look at our port
:18:37. > :18:42.operations room, today they are all women from villages around us. It
:18:43. > :18:46.took a year to train them. We are big believers that Saudis when
:18:47. > :18:50.trained properly and helped to get a job they will do it. It's partly
:18:51. > :18:55.about a mindset. Are you saying that you believe Saudis in King Abdullah
:18:56. > :19:00.Economic City are going to be prepared to do the construction
:19:01. > :19:04.work, to do the garbage collection, to do some of the most basic
:19:05. > :19:10.labouring tasks which for decades in this country have been done by
:19:11. > :19:15.overseas expat workers? I don't see a reason why they can't do it. Have
:19:16. > :19:20.you told this to your Saudi neighbours? It seems to me this
:19:21. > :19:24.isn't a society right now that accept that. Despite the austerity
:19:25. > :19:28.the government is now talking about you still get huge subsidies and you
:19:29. > :19:34.still live off oil resources and I don't think most Saudis feel the
:19:35. > :19:37.need to do the kind of jobs you are talking about. This is a
:19:38. > :19:42.generalisation, I know where it's coming from but I know Saudis that
:19:43. > :19:45.will do any job. Everyday we train them and we have programmes that
:19:46. > :19:51.train Saudis from the villages around us. Go to the hotels, they
:19:52. > :19:54.are working different jobs. It's all about the environment you offer. If
:19:55. > :19:58.you offer the right environment and you select properly then you will
:19:59. > :20:03.see they will do the job. What about sustainability. We haven't talked
:20:04. > :20:08.about that. It's an extraordinary view here. Essentially beyond the
:20:09. > :20:12.fancy housing complex and this beautiful office headquarters,
:20:13. > :20:19.you've got desert. It does seem odd in a way building a vast new city in
:20:20. > :20:24.the middle of the desert, adding goodness knows how much carbon
:20:25. > :20:29.emissions to the atmosphere, when the world's governments have just
:20:30. > :20:36.pledged themselves to decarbonise in the world, me. How are you going to
:20:37. > :20:40.justify this project -- the world economy. We are very careful about
:20:41. > :20:44.building sustainable and. When this project was launched ten years ago,
:20:45. > :20:48.it looked like Venice, the master plan was beautiful, it had nothing
:20:49. > :20:53.to do with the environment in which we exist. Then I was in New York
:20:54. > :20:58.during hurricane Sandy and I saw the full power of nature and what nature
:20:59. > :21:02.will do to you if you try to actually over engineer and over
:21:03. > :21:07.cement and over concrete the place. When I came back I said, this is not
:21:08. > :21:11.going to work. We have to make it and ecological the friendly city so
:21:12. > :21:16.we removed all the canals, allowed water to flow where it wanted to.
:21:17. > :21:20.Ideally we focused on conservation a lot. I think conservation is the
:21:21. > :21:25.most important form of sustainability. It will cut 40% of
:21:26. > :21:32.our carbon output if we just focus on this area. Now we are saying the
:21:33. > :21:37.world is changing. We are on our fourth master plan by the way. And
:21:38. > :21:41.we just agree that KAEC that the master plan we have, is probably the
:21:42. > :21:47.most modern master plan in the world, should be scrapped. The
:21:48. > :21:50.reason for this is I don't know yet how the Internet things, the
:21:51. > :21:55.driverless car, the sharing economy should change how our city will
:21:56. > :22:01.not. We are building great cities today but they are not 21st-century
:22:02. > :22:04.cities. We don't understand how a 21st-century city should look.
:22:05. > :22:11.You've just scrapped your master plan, so that means you have no plan
:22:12. > :22:15.master plan should not be so exact master plan should not be so exact
:22:16. > :22:19.about what you do, it should tell you what you shouldn't do. Coming
:22:20. > :22:22.back to this point about how you reduce emissions and make this as
:22:23. > :22:26.close to carbon neutral as you can. I was expecting, given we are in
:22:27. > :22:31.Saudi Arabia, where the sun is almost always shining, I was
:22:32. > :22:36.expecting to see vast solar arrays to power this place, but I don't see
:22:37. > :22:41.any investment in solar at all. Solar on its own is very effective
:22:42. > :22:45.but it's not effective if not coupled with storage. We are
:22:46. > :22:49.producing new homes for 2017 that will not only have solar panels but
:22:50. > :22:54.will include batteries as well. That's the idea we have. It's not
:22:55. > :22:59.about showing you a showy nice area that has lots of solar panels, it's
:23:00. > :23:03.about conserve, so don't even use what you don't need, and second,
:23:04. > :23:10.actually introduce technologies that actually work both economically and
:23:11. > :23:13.technologically. Back in the day of King Abdullah there was talk of six
:23:14. > :23:18.new economic cities for Saudi Arabia. You're still going. There
:23:19. > :23:22.are one or two others that are still staggering along but a lot of the
:23:23. > :23:27.planning has been shelved. You may be the last one standing and you may
:23:28. > :23:31.not make it either. I believe we will make it first of all. It is
:23:32. > :23:35.happening, so that's not a question in my mind. However, building a city
:23:36. > :23:42.isn't easy, I've learned this the hard way. There are 2470 cities in
:23:43. > :23:47.the world and this is the most competitive space for a city. Each
:23:48. > :23:53.city has its own path, it really needs to be zooming into why it
:23:54. > :23:56.needs to exist. Then you need a committed government or private
:23:57. > :23:59.sector developer to make it happened despite all the challenges. Other
:24:00. > :24:04.economic cities will actually happen I think. Not all of them are on the
:24:05. > :24:09.floor at the moment. But they have just taken a different path to
:24:10. > :24:13.success. I hope I can return, but for now, Fahd al Rasheed, thank you
:24:14. > :24:17.for being on HARDtalk. Thank you for having me.