The Pearl Initiative Interview with Badr Jafar, co-founder of The Pearl Initiative
Badr Jafar is a young business executive and entrepreneur based in the United Arab Emirates. He is one of those people whom you instantly like when you meet them: an easy going, friendly, creative and positive young man who has lots of ideas and ambitions for the Middle East, and particularly the Gulf Region. He has the entrepreneurial spirit, and always seems ready to become involved in new ventures. Despite his young age, he has an impressive CV and we are quite sure that through his different actions we have not heard the last of him –– whether it’s in the field of business, fashion or anything else. Educated in the UAE and the United Kingdom, he is the executive director, chairperson or serves as a board member for a number of companies.
Badr Jafar is also the recipient of the Young CEO award in 2009 and the Middle East’s Energy CEO of the Year Award in 2010. In September 2010, he launched the Pearl Initiative at the United Nations Headquarters in New York, a project in collaboration with the United Nations Office for Partnerships to jointly promote corporate governance, accountability, transparency and good corporate social responsibility practices within the Middle East. In March 2011, he was named a Young Global Leader by the World Economic Forum for the Middle East and Africa. We had a chance to meet Badr Jafar in New York to learn more about The Pearl Initiative.
Q: Could you tell us about The Pearl Initiative?
It really started with a conversation I had with Amir Dossal, Executive Director of the United Nations Office for Partnerships. We discussed how we can engage the private sector in the Middle East, more specifically in the Gulf Region, to deal with some of the issues that the private sector faces there, as well as globally. The focus is on promoting a culture of transparency, corporate governance, accountability and good corporate social responsibility (CSR) practices. You are also dealing with things like corruption, because you cannot have good corporate governance without dealing with such issues.
There are a number of government-based initiatives, such as the Dubai Institute of Corporate Governance, the Abu Dhabi Institute of Corporate Governance, etc., but it is not as effective to have a government entity telling the private sector what they are doing wrong. It’s like making rules. If you make rules, people immediately try to break them. It would have a positive impact if it were done by the private sector for the private sector –– if we identified certain issues that have to be worked on now. The situation is getting better, but we still have a lot of room for improvement.
The other element is that the private sector is a very powerful tool for change. It is also primarily motivated by incentives. You cannot just preach that “you have to do these things because you need to be a good boy!” You have to realize the importance of investing in good practices, and therefore expecting a return on your investment. There is an educational element: “if you practice these principles you will be more successful as a business in the future.”
I will give you a small example. If you have transparency and accountability in your company, you will be able to engage more with the capital markets, with the banking sector, with other partners coming into the region. There are big multinationals who will only work with companies that have good corporate governance practices.
The other important aspect of the Pearl Initiative is that it’s all-inclusive –– it’s for any company having business dealings in the Middle East. By doing that you are really including all the major companies in the world, because they more or less all have a presence in the Middle East today –– banks, airlines, etc.
We also know that a lot of big companies have double standards. They follow certain rules in their own country, but when they go abroad they do not apply them. Up to ten years ago, German companies’ bribes on the international market were tax deductable! It’s called double standards, but ultimately it’s corruption. Working with multinational companies that have a presence in the Middle East is extremely important because they have the biggest brands, the biggest banks. You need to make sure that they are on board. If they are not on board, then the local companies will say to themselves: “If I’m going to compete with these big boys, why should I employ good practices when they do not?”
Very quickly, we have managed to engage with the CEOs of many companies. We have developed programmes and concrete initiatives under The Pearl Initiative which will be presented in the next couple of years throughout the Gulf Region. We are co-operating with the United Nations Office of Partnerships, but we are also developing bonds with the World Bank, other UN agencies such as UNDP, and other international institutions such as those of chartered accountants. We do not want to reinvent the wheel. Some of these institutions and organizations have excellent programmes already, and we just need to tailor them for our part of the world. That’s what it’s all about.
Q: What have you achieved so far?
We did a “soft launch” in September 2010. I call it a soft launch because I insisted that we would only carry out the main launch once we have all the basic programmes developed, once we have a curricula, a good number of CEOs, a governing board in place, etc. We plan to do the main launch in the early summer of 2011. In the meantime, we are very busy bringing this all together, working on ideas of programmes, etc. For instance, we have students coming from the University of Cambridge (UK) to work with the American University of Sharjah in Abu Dhabi on accountability for sustainability, alongside the Accounting for Sustainability Project sponsored by HRH The Prince of Wales –– Prince Charles –– concerning many big companies in the UK. The idea is to change the accounting systems to see the full impact on the business, not only the profit but also the full social impact reflected in the accounts. When you look at normal accounts, you have profit and losses, cash flows, and balance statements. You cannot really see how your business is affecting the social factors. You develop a new accounting system to take sustainability into account. It is very good and it makes a lot of sense. Students are our future generation of leaders and need to be engaged. Therefore we work together on programmes with centres of excellence, such as the University of Cambridge and the American University of Sharjah in Abu Dhabi, which is considered as the best centre of excellence in the Gulf Region. “Accounting for Sustainability” ticks a lot of boxes.
This is an example of programmes we are launching. This one will in fact start at the end of March 2011. There will be six students from Cambridge, and six from the American University of Sharjah, and two people coming from Prince of Wales Charity Foundation. The whole team will be about twenty-two people.
Q: What is your motivation for doing all this?
I like to keep myself busy. When I see that there is an opportunity for change in a way that does not require politics or any government support –– although it’s great to work with the government –– we as the private sector have the power to change ourselves.
Q: Are you in the oil business?
We are in a number of different businesses – oil, gas, shipping, medical, etc. The oil and gas company was started by my father, but since I took over with my brother, we have carried out exploration, production and drilling. We have been operations in the UAE, Yemen, Oman, Argentina, Croatia, Egypt and Iraq, France, Tunisia, and others. We have since brought back our focus to the Middle East and North Africa.
Other examples of an industry we are in is port operations. We are the largest private port operator for the Middle East. We have two ports in UAE. We operate also in Kuwait, Comoros and Turkey. We are operating a port in the south of Iraq and various other places as well. Other industries we operate in include logistics operations, medical laboratories, mining processing, aviationetc.
Q: Tell us about the fashion industry?
The first thing I did when I finished my studies at university was to set up a fashion company. We produced scarves and knitwear and our main sales were in the Far East. I eventually sold that company to a Japanese distributor. I still like to follow the fashion industry because it’s a very rewarding industry in the sense that it’s pure marketing. It’s pure brand perception. On a very fundamental level, it’s about people’s minds. It’s very interesting to see that process because no matter how we rationalize, whether you are black, white, young or old, rich or poor, everybody in the world, once a day is aware of their image. It can be as elaborate as: why do I wear this haute couture, wedding dress or tree leaf, or why do I put something on my forehead? In that respect, everybody has a choice when it comes to fashion. If we look at something else that people consider fundamental –– food –– the majority the people in the world today actually do not have a choice about what they eat. If you have such a choice, you are lucky. Most of the time you eat what you can get. A very small portion of the world’s population has a choice about what they eat. Whereas fashion –– you can comb your hair right or left, you can grow your hair long or short. In that respect, everybody has a choice. How do you get from where everybody has a choice to making people buy your product, that was what interested me in the fashion industry.
Q: So what is your next project?
I am working on a number of things. I recently launched a theatre initiative with Kevin Spacey. I’m in the process of launching a music company with Quincy Jones. We want social entrepreneurship. We want to do east-west collaboration, working on women’s issues, etc.
Q: What kind of women’s issues?
Have you heard about the Woman to Woman Foundation? The idea is to try and develop contact to highlight the challenges that women are dealing with in the Middle East and North Africa. We can get excellent results with the minimum of effort. Women make up more than half of our population, so there is no way that we will meet the challenges in the region without their full inclusion and participation. There is lots of work to do.