Will ChatGPT and AI have an impact on Saudi workforce productivity?

Raymond Khoury believes that ChatGPT and AI can provide tailor-made training programs for employees, access to customized online courses, and foster collaboration and communication amongst team members. (LEAP)
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Updated 05 March 2023

Will ChatGPT and AI have an impact on Saudi workforce productivity?

  • Raymond Khoury, senior partner at Arthur D. Little, shares insights on the beneficial impact of AI technologies

CAIRO: ChatGPT and other artificial intelligence platforms have created a wave of change in the global workforce that could turn out to be a useful tool for Saudi Arabia’s personnel to boost economic development.

AI has raised concerns about replacing manpower with robots and software but as seen with ChatGPT’s massive popularity, embracing innovation can also serve as an opportunity to boost productivity.

Alleviating employees’ fear

According to a survey by Kaspersky, 48 percent of employees in the Kingdom fear losing their jobs to AI. However, in an exclusive interview with Arab News, Raymond Khoury, senior partner at Arthur D. Little, has alleviated these fear by sharing some insights on the beneficial impact of AI and ChatGPT.

“Nurturing the right talent with a strong AI culture is the human dimension that needs to be availed for successfully imbedding AI into operations,” he said.

“With the true value of AI realized through individual or collective team innovation, experimentation, learning and collaboration, organizations need to promote and maintain such an AI culture.”

Khoury went on to explain that the implementation of AI technologies and the use of robots would certainly require human labor that can positively impact Saudi Arabia’s workforce. 

“Looking at career-related skills from a talent management perspective, AI, specifically ChatGPT, can positively impact recruitment and hiring, training and development, upskilling and reskilling, talent collaboration as well as knowledge management,” he said.

Khoury believes that ChatGPT and AI can provide tailor-made training programs for employees, access to customized online courses, and foster collaboration and communication amongst team members.

“ChatGPT and AI will likely affect the Kingdom’s workforce, reshaping and even emancipating it in both the short and long term,” he added. “It will help the workforce to become more productive within the respective organization with increased efficiency as more mundane and repetitive tasks get automated, leaving workers with more time to focus on strategic activities.”

Kaspersky’s survey supports Khoury’s point as 50 percent of employees believe AI increases productivity and 51 percent believe that incorporating robots will open opportunities for employees to retain better positions.

Khoury explained that AI will impact the Kingdom’s public sector as well as healthcare, transportation, energy, utilities, finance and retail.

“For the government, AI will allow for more efficient internal operations and more seamless external constituent service delivery,” he said.

Looking at career-related skills from a talent management perspective, AI, specifically ChatGPT, can positively impact recruitment and hiring, training and development, upskilling and reskilling, talent collaboration as well as knowledge management.

Raymond Khoury, Senior partner at Arthur D. Little

He added that AI can greatly transform healthcare by personalizing treatment for chronic diseases and predetermining outcomes as well as enhance diagnosis which is already implemented in some countries.

“For transportation, AI can be used to optimize road or shipping routes to ensure timely commutes or logistics delivery. Traffic patterns can be used to enable intelligent traffic signals operations, ensuring traffic flows in the least disruptive manner,” Khoury explained.

With regard to the energy sector, innovative technologies can pinpoint various oil and gas exploration activities using certain algorithms to produce a better level of accuracy while in finance, AI can be used to detect fraud on a large scale.

“And for retail, AI can create new opportunities for growth and innovation, particularly in customer segmentation and targeted marketing campaigns. Add to this the use of sensory data and AI tools to analyze and extract marketing insights from shopping mall footfall or supporting business setup decisions at mass transit stations,” he continued.

The flip side

Khoury described the role of AI in creating a positive impact on workers by creating more productive and efficient outcomes by removing mundane and repetitive tasks from employees.

However, on the other hand, the automation of tasks might put employee stability in danger when the human factor is no longer required. 

HIGHLIGHTS

• ChatGPT and AI can provide tailor-made training programs for employees, access to customized online courses, and foster collaboration and communication amongst team members.

• Embedding AI in the operations of Saudi companies and employees will require a holistic approach that clearly defines the strategic objectives, advantages and disadvantages.

• Kaspersky’s survey supports Khoury’s point as 50 percent of employees believe AI increases productivity and 51 percent believe that incorporating robots will open opportunities for employees to retain better positions.

“On the negative side, ChatGPT will most likely replace workers who are entrusted to fulfill mundane and repetitive tedious functions which will get automated,” Khoury said.

He added: “This will push workers to acquire new skills through retraining or upskilling to become more marketable in a more and more AI-enabled digital world.”

To put things into context, Khoury said that ChatGPT recently produced a list of jobs that it will likely replace in the future.

“The above stated affects and their impact will obviously depend on the pace of technological change and the adaptability of both workers and organizations, in both the public and private sectors, to these changes as brought forward by ChatGPT and other future generative AI tools,” Khoury pointed out.

Implementation of AI

Khoury explained that embedding AI in the operations of Saudi companies and employees will require a holistic approach that clearly defines the strategic objectives, advantages and disadvantages.

“Understanding the operational bottlenecks or mundane functions within an organization and knowing how AI can address them with clear articulation of goals and implementation objectives is of paramount importance from the onset,” he said.

“With this foundational step completed, next comes the need to understand which specific AI tools or technologies can help the organization and workers achieve these strategic business objectives, and which best set of AI tools or technologies can be deployed optimally within the organization given its current and planned investments in information and communication technologies,” Khoury explained.

In addition to a strategic roadmap, fostering an optimistic environment for learning and improvement is mandatory to ensure a positive employee and client experience.

“Seemingly intricate, the embedding of AI into organizations’ operations requires solid leadership, a futuristic view, and agility in making timely changes as and when needed, and at times proactively,” Khoury concluded.


Saudi Arabia’s voluntary production cuts support oil prices

Updated 08 June 2023

Saudi Arabia’s voluntary production cuts support oil prices

RIYADH: Oil prices rose on Thursday as tighter supply resulting from Saudi Arabia’s pledged production cut and a potential pause to US interest rate hikes offset worries over demand weakness and a global economic slowdown.

At a recent meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, Saudi Arabia said it will cut its crude output by 1 million barrels per day in July on top of a broader deal to limit supply into 2024 as the producer group seeks to boost flagging prices.

Brent crude rose 25 cents, or 0.3 percent, to $77.20 a barrel by 1328 GMT. US West Texas Interme- diate crude gained 20 cents, or 0.3 percent, to $72.73.
“With the OPEC+ meeting out of the way, focus is now shifting toward the next move the Fed will make when it meets next week,” said Tamas Varga of oil broker PVM.
There is growing consensus that the central bank will skip a rate hike, which could lift oil prices even before falling supply starts draining global oil inventories, Varga added.
OPEC+ cooperation praised
Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman praised their collaboration during a phone call on Wednesday in a discussion of the work of OPEC+, the Kremlin said.
“The topic of ensuring stability on world energy markets was discussed in detail,” according to a Kremlin statement on the Telegram messaging app.
“Both sides praised cooperation within the framework of OPEC+, allowing for the adoption of timely and effective steps to ensure a balance between supply and demand for oil.”
The statement noted the impor- tance of agreements reached at the group’s meeting this week.
UAE ship insurance rules
Tougher requirements for some ship insurers covering the UAE ships are aimed at boosting environmental safety amid growing concerns over unregu- lated shipping, reported the state- run news agency WAM.
The UAE’s Energy and Infrastructure Ministry, in a June 2 circular, announced it would tighten insurance criteria for vessels registered under its flag for insurers that are not part of the leading ship insurers, known as the International Group of Protec- tion and Indemnity Clubs, which cover 90 percent of the world’s ocean-going fleet.
“By prioritizing stringent P&I standards, we ensure the safety, financial security, and environ- mental stewardship of our maritime activities, attracting reputable investors,” said Hessa Al Malek, adviser to the minister for maritime transport affairs.
The WAM report added that the move would reduce the risk of accidents and oil spills, leading to a safer and more secure marine environment.

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Pakistan set for 0.29% GDP growth in FY23, well below target of 5%

Updated 08 June 2023

Pakistan set for 0.29% GDP growth in FY23, well below target of 5%

  • Finance minister says 0.29% GDP growth a “realistic achievement,” anything higher not achievable
  • Fiscal deficit 4.6% of GDP for fiscal year up until April, slight improvement from last year’s 4.9 percent

KARACHI: Pakistan has missed its Gross Domestic Product (GDP) target by 4.7 percent and is likely to post GDP growth of 0.29 percent in the fiscal year ending June 2023, well below the target of 5 percent set last year, according to the country's economic survey launched on Thursday.  

 

This was revealed as Pakistani Finance Minister Ishaq Dar presented the Pakistan Economic Survey 2022-23, a yearly flagship publication of the Ministry of Finance which highlights the trend of macro-economic indicators and development policies and strategies, as well as sectoral achievements of the economy.

Dar will present the annual budget document before parliament tomorrow, Friday. 

Addressing a press conference, Dar called the outgoing year “a difficult year for the economy,” saying the coalition government faced “extreme challenges” when it came to power in April 2022.

Indeed, the country’s economy has suffered record high inflation and an economic slowdown compounded by devastating floods last year and a failure so far to unlock crucial finances from the International Monetary Fund. The IMF had demanded a number of prior actions from Pakistan, including reversing subsidies, a hike in energy and fuel prices, jacking up its key policy rate, a market-based exchange rate, arranging for external financing and raising over 170 billion rupees ($613 million) in new taxation.

The fiscal adjustments have already fuelled Pakistan's highest ever inflation, which hit 37.97% year-on-year in May, but the IMF has yet to release the $1.1 billion funding stalled since November as part of the $6.5 billion Extended Fund Facility agreed in 2019.

 

 

 

“Pakistan has paid a huge political cost of meeting IMF reforms … the structural reforms, the power reforms, gas reforms,  the fiscal reforms … we had to do the pending actions,” Dar told reporters.

“For Pakistan, this political cost was worth it … The revival of this [IMF] program was important because of Pakistan’s credibility.”

Dar said he was hopeful the 9th review of the program would be concluded soon.

“The first priority is to pay off sovereign debts, then food and pharmaceutical imports,” Dar said, adding that the government had repaid $6.5 billion in international commercial loans, with $1.0 billion of that amount being in the form of international Sukuk.

The Economic Survey document said the Pakistan economy lost momentum in the first quarter of the ongoing fiscal year “due to the severe downturn in the global economy and flash floods of July-August 2022 and as a result the economy suffered from significant domestic supply disruptions.”

Pakistan estimated flood damage at Rs3.2 trillion ($14.9 billion) and loss to GDP at Rs3.3 trillion ($15.2 billion), and recorded the need for rehabilitation of damages at Rs3.5 trillion ($16.3 billion). On the international front, the prolonged Russia-Ukraine conflict had adversely affected global growth and inflation remained unexpectedly high, the document said.

The survey report revealed that agriculture sector growth remained 1.55 % as compared to 4.27% last year, industry posted negative growth at -2.94 % against 6.83% last year while manufacturing posted -3.91% against 10.86 % last year and wholesale and retail trade posted -4.46% as compared to 10.3% last year.

Average year-on-year inflation rate for the period up to May 2023 was recorded at 29.2 percent, the survey found.

In April and May, the country’s inflation hit record levels, which were also the highest in Asia.

The survey said Pakistan’s inflation had been driven by international commodity prices, global supply disruptions, flood damage to crops, currency depreciation, and political uncertainty in the country.

The fiscal deficit was 4.6 percent of GDP for the fiscal year up until April, a slight improvement from last year’s 4.9 percent, the survey showed, adding that the primary balance recorded a surplus of 99 billion Pakistani rupees.


Pakistan set for 0.29% GDP growth in FY23 — economic survey

Updated 08 June 2023

Pakistan set for 0.29% GDP growth in FY23 — economic survey

  • Finance minister says 0.29% GDP growth a “realistic achievement,” anything higher was not achievable
  • Fiscal deficit was 4.6% of GDP for the fiscal year up until April, a slight improvement from last year’s 4.9 percent

Pakistan is likely to post GDP growth of 0.29 percent in the fiscal year ending June 2023, the country’s economic survey released on Thursday said, well below the target of 5 percent set last year.

The country’s economy has suffered record high inflation and an economic slowdown compounded by devastating floods last year and a failure so far to unlock crucial finances from the International Monetary Fund.

Finance Minister Ishaq Dar told a news conference on the annual report that 0.29 percent GDP growth was a “realistic achievement” and anything higher was not achievable.

Average year-on-year inflation rate for the period up to May 2023 was recorded at 29.2 percent, the survey found.

In April and May, the country’s inflation hit record levels, which were also the highest in Asia.

The survey said Pakistan’s inflation had been driven by international commodity prices, global supply disruptions, flood damage to crops, currency depreciation, and political uncertainty in the country.

The fiscal deficit was 4.6 percent of GDP for the fiscal year up until April, a slight improvement from last year’s 4.9 percent, the survey showed, adding that the primary balance recorded a surplus of 99 billion Pakistani rupees.

Pakistan’s difficulties have included plummeting foreign exchange reserves, which have shrunk to cover barely a month’s worth of imports, leading the government to enforce measures to curb imports.

The current account deficit had narrowed to $3.3 billion by April — a 76 percent drop over the last year, the survey showed.

The country’s trade deficit to May also declined by 40.4 percent to $25.8 billion, as imports fell by 29.2 percent to $51.2 billion, while exports declined by 12.1 percent to $25.4 billion, the report said.

Remittances of money sent from relatives abroad were down 13 percent for the FY23 until April, to $22.7 billion.


Pakistan to save $1 billion annually through new energy conservation plan — government document

Updated 07 June 2023

Pakistan to save $1 billion annually through new energy conservation plan — government document

  • Planning Minister Ahsan Iqbal this week announced all markets in Pakistan would close at 8pm from July 1
  • The move is part of a larger plan by the government to spur economic growth through the SE4ALL action plan

KARACHI: Cash-strapped Pakistan plans to save $1 billion per year through a new energy conservation plan that calls for, among other measures, closing markets across the country earlier than normal business hours, according to a government document, though Pakistani business leaders have rejected the proposal as “unrealistic” and “illogical.”  

Planning Minister Ahsan Iqbal this week announced that the National Economic Council (NEC) had approved a proposal to close all markets across the country at 8pm from July 1.

The move is part of a larger scheme by the government to spur economic growth through an action plan called Export, E-Pakistan, Environment and Climate change, Energy and infrastructure and Equity and Empowerment or 5Es framework and Sustainable Energy for All (SE4ALL), a brain child of the planning ministry.  

The energy conservation plan and associated implementation roadmap was approved by the federal cabinet in January 2023 while the National Energy Efficiency and Conservation Policy 2023, prepared by the National Energy Efficiency and Conservation Authority (NEECA), was approved by the federal cabinet on May 10, 2023.

“The easy to deploy short- and medium-term administrative measures proposed under this conservation plan could save estimated outflow of USD ($) One billion per annum in terms of energy saving,” a government document seen by Arab News said.

Listing measures under the plan, the document said:

“The closure of commercial markets at 8 pm which will result in annual energy saving of 2.85 billion electricity units and will offer a financial saving of 282 million USD, Ban on the incandescent bulbs which will result in a saving of 1 billion electricity units in a year with a financial benefit of 103 million USD, Mandatory installation of the conical baffles in the water geysers which will save 419 million USD.”

Overall, the long-term implementation of the NEECA policy measures will result in financial savings of $6.4 billion from 2030 onwards, according to official estimates.    

The South Asian nation last attempted to enforce early market closures in June and December 2022 but was met with resistance from traders. This time too, Pakistani traders have rejected the government’s plan, saying it will cause revenue and job losses at a time that the country is grappling with record inflation, fiscal imbalances, and low reserves.

“We strongly reject the government's plan to shut down markets at 8pm,” Kashif Chaudhry, the president of the Markazi Tanzeem-e-Tajran Pakistan, a central body of traders, said in a statement. “The decision has been taken in haste without consulting traders. It is an unrealistic plan.”  

Chaudhry called the plan an “enemy of traders and the public,” and said such “illogical energy conservation plans” had also failed in the past.
 
Atiq Mir, the chairman of the All Karachi Tajir Ittehad, the main business association in the city, concurred with Chaudhry.

“The decision is not practicable,” he told Arab News. “Such decisions were taken in the past and could not be implemented.”  

Retail sector stakeholders said the government’s decision would impact both revenue generation and employment rates.

“I think the decision taken is not realistic under the current economic downturn and would put the livelihood of around three million people at stake,” Rana Tariq Mehboob, the chairman of the Chainstore Association of Pakistan (CAP), told Arab News.

“This decision will hit the economy with around Rs3.6 trillion losses while it is already reeling under the impact of slowdown.”  

Experts also said there was little hope the new plan would be implemented.

“They will not be able to implement this time too,” Ammar Habib Khan, an economist and energy expert, told Arab News. “Due to weak administration and weak enforcement mechanisms, you can’t implement this energy saving action plan … In fact, there is no will to enforce it.”    

Ahsan Iqbal and other planning ministry officials did not respond to Arab News queries about expected measures to enforce the energy saving plan.


Pakistani budget caught between IMF expectations and election

Updated 07 June 2023

Pakistani budget caught between IMF expectations and election

  • IMF program for South Asian country runs out this month with about $2.5 billion in funds yet to be released
  • IMF funds are crucial for Pakistan to avert a balance of payments crisis and avoid defaulting on debt obligations

KARACHI: Pakistan's government will hope to find a balance between reforms to satisfy the International Monetary Fund and measures to win over voters in an imminent election in its budget for the 2023-24 fiscal year to be announced on Friday, analysts said.
Pakistan's IMF program runs out this month with about $2.5 billion in funds yet to be released as it struggles to strike an agreement with the lender, as it grapples with record inflation, fiscal imbalances, and low reserves.
A general election is due by November, which the government will be hoping will end turmoil arising from a protest campaign former premier Imran Khan has led since he was ousted in a no-confidence vote last year.
Former finance minister Miftah Ismail said it was essential for the government to secure IMF funding so there was little chance of an expansionary budget.
"Without the IMF, it would be very difficult for Pakistan to survive the next fiscal year, so I’m sure the government will come up with a budget that is more or less in line with IMF prescriptions," Ismail said.
A staff-level IMF agreement to release $1.1 billion of a $6.5 billion package has been delayed since November.
The funds are crucial for Pakistan to avert a balance of payments crisis, and most analysts believe that even after the expiry of the current program, Pakistan will have to seek a bailout in the upcoming fiscal to avert defaulting on debt obligations.
Central bank reserves can cover imports for about a month.
Inflation surged to 37.97% in the country of 220 million people in May, a record for the second consecutive month and the highest rate in South Asia.
On Tuesday, the planning minister announced that budget targets for development spending would be 1,150 billion rupees ($4.02 billion) in the new fiscal year, while inflation for the year is projected at 21%.
With the general election looming, some analysts believe the government will announce vote-winning measures on Friday, even if the promises have to be scaled back later.
Fahad Rauf, head of research at the Karachi-based brokerage Ismail Iqbal Securities, said he expected a pay rise for government employees and a package for the agriculture sector, with more of a burden being piled on an already narrow tax base, and few if any, meaningful steps to broaden it.
"Banks and taxed industries will continue to feel the heat," Rauf said, adding that he thought a so-called super tax of 10% on more than 15 sectors would be levied again, even though the government said last year it was a one-off payment.
A year ago, the government set a total expenditure target at 9.5 trillion rupees for the 2022/23 year from 8.49 trillion rupees the year plans had to be scaled back after IMF discontent.
Rauf said he expected a repeat of that this year.
Independent economist Sakib Sherani said he too believed the budget would be full of populist pre-election measures that would be unlikely to survive the July-September quarter, given the necessity of more IMF support.