Jose Sergio Gabrielli, CEO
Jose Sergio Gabrielli has been the key figure in
unleashing the enormous potential of Brazilian oil giant
Brazil and its state-controlled company Petrobras
have risen to prominence in the global oil industry in the last
couple of years mainly thanks to the discovery of potentially
huge reserves in ultra-deep waters but this is not the
whole story, says Jose Sergio Gabrielli, chief executive of
Gabrielli was appointed financial director of the
Latin American oil giant in 2003, the same year that president
Luiz Inacio Lula da Silva took office. In 2005 Gabrielli took
over as chief executive and president of Petrobras.
We had a clear vision then that Petrobras was
strategically prevented from using its potential,
Gabrielli says in an interview with Emerging Markets. One
of the things weve done has been to unleash
Petrobras growth potential. We increased the number of
exploration areas; we strengthened the corporate vision of an
integrated company; we managed to expand investment in refining
activities; and we redefined investment in research and
Petrobras is now a driving force behind the
long-term shift in global economic and financial power, he
reckons. The gap between the US, the European Union on
one side and the emerging markets is getting narrower,
Petrobras, which operates in 26 countries, has
achieved a giant leap forward in terms of capital expenditures,
from some $5 billion in 2003 to $27 billion in 2008. We
should do more than $30 billion in 2009, says Gabrielli.
Its latest five-year investment plan amounts to $174 billion,
including $28.9 billion in the new so-called pre-salt area,
where new reserves have been found at more than 5,000 metres
below sea level off the Brazilian coast.
Investments in the pre-salt area should gain pace
in the following years, to reach an estimated $111 billion by
2020 by then, the pre-salt output is due to reach 1.85
million barrels per day (which is equivalent to the current
domestic production of Petrobras).
We are very big thanks to the discovery of
the pre-salt reserves. But we are much more than this, he
says. Even before that, we had the vision that we would
become one of the five largest integrated energy companies in
Thanks to its experience in deep water operations
in previous decades, Petrobras has become the global leader in
this operational area with a 23% market share, says Gabrielli
(ahead of Exxon Mobils 14% and others such as Royal Dutch
Shell and Statoil) and features among the three largest
oil companies in market capitalization, he says.
Gabriellis diversified funding strategy has
also helped Petrobras weather the global financial storm.
Raising $31 billion in the first half of 2009 in the
midst of a global crisis, we managed to raise a level of debt
that had never been achieved before in the history of
Jiang Jiemin, General Manager,
The state model is in the ascendancy the world over, and
CNPC is leading the way
When China National Petroleum Corporation (CNPC)
was formed in 1988, it was a step in the dark for
Beijings leaders. Still a year away from the Tiananmen
Square massacre, Chinas economy was poorly formed and
backward, a place where monopolies decried by Adam Smith
as the great enemy to good management
CNPC was created as an agile corporate vehicle,
staffed by politicians, managers and engineers followed
by an overseas-listed division, PetroChina, Asias largest
listed firm by market capitalization, founded in 1999. Other
oil firms followed, notably Sinopec, formed in 2000, which with
PetroChina shares a domestic Chinese duopoly on wholesale and
retail oil products.
CNPC is the granddaddy of them all. The
worlds second largest employer (after Wal-Mart) with 1.1
million staff, its proven reserves amount to 3.7 billion
barrels of oil, sprawled across operations in central Asia,
South America and Africa.
A $4.2 billion August 2005 deal to buy
PetroKazakhstan was, at the time, the largest overseas foray by
a Chinese corporate. This June, the company joined forces with
BP to develop Rumaila, Iraqs largest oil field; in
September it tapped China Development Bank for a $30 billion
loan to fund its continued search for oil.
CNPC is no normal company. It is probably the
nations second-most important corporation, after
International and Commercial Bank of China. Moreover, where it
leads, other follow. Beijings creation of a clutch of
vastly powerful state energy firms with listed divisions
ultimately controlled by their political overlords, has become
the global norm.
Where wholly listed firms with proto-national
affiliations such as ExxonMobil, BP and Total once ruled the
carbon-based world, now the state model is in ascendancy.
CNPCs model has been copied by Russias Gazprom, and
is being mulled over by Brazils aggressive and
One way of viewing these vast Chinese entities is
through the prism of the European joint-stock companies that
once boasted trading monopolies in India, China, and south
Asia. Those purportedly commercial entities flew under various
European flags, and their allegiance was to London, Amsterdam
In much the same way Chinese energy giants compete
often with each other on the open markets for
carbon sources, yet their ultimate lords and masters reside
within Beijings political headquarters at Zhongnanhai
CNPCs role is to ensure Chinas smooth
rise by providing its populace with sufficient oil and gas to
run their cars, homes and factories. Within this enormous,
bureaucratic, nation-building process it may seem odd to
highlight an individual, but someone has to stand on the top of
In this case, the man in question is Jiang Jiemin,
general manager of CNPC and chairman of PetroChina. Jiang, 53,
travels the world, sometimes alone as in August, when he
flew to London to meet senior executives at BP sometimes
with a delegation led by president Hu Jintao or premier Wen
Jiabao. Hes been working in the oil industry for 35
years, and previously worked as vice governor of energy-rich
Jiang is a metaphor for modern China: a highly
qualified functionary who does what he is told, and does it
very well. After he has gone, probably promoted upward into
higher political office, CNPC will continue on its
state-controlled expansionary path for years perhaps
decades or more to come. Elliot
Ali Al-Naimi, Minister of Petroleum &
Mineral Resources, Saudi Arabia
Saudi Arabia sits at the helm of Opec, with
Al-Naimis hand firmly on the tiller. But as guarantor of
stability for world oil markets, he must balance the
kingdoms interests as a producer with those of its
Ali Al-Naimi is not known for his casual
conversation, but then he rarely gets the chance. At Opec
(Organization of the Petroleum Exporting Countries) summits in
Vienna, the Saudi oil minister is invariably surrounded by a
scrum of journalists, ready to report his slightest utterance
on the news wires.
As the voice of the Saudi energy industry, and an
unofficial figurehead for Arab oil and gas producers, Al-Naimi
has an influence over world markets rivalled only by the
chairman of the US Federal Reserve.
His global influence led to Al-Naimi being dubbed
the Greenspan of Energy by Newsweek in 2006.
Naimi chooses his words carefully because he realizes the
impact they have, says Frank Verrastro, an energy expert
at the Centre for Strategic and International Studies in
Washington. He knows the industry intimately; he knows
whom to talk with to get things done.
As the worlds central banker of oil, Ali
Al-Naimis mission is to put Saudi Arabia at the centre of
any debate on the world energy markets. His career spans the
nationalization of the Gulfs oil industries, the
formation and rise of Opec, the oil price spikes of the 1980s
and more recent concerns about peak oil and the environment
dramas in which Al-Naimi has been a lead actor.
As the first Saudi president of what is now Saudi
Aramco, Al-Naimi oversaw the final stages of the
nationalization of the worlds largest oil company as well
as seeing Aramco open its first dedicated engineering centre,
build the first pipelines linking the kingdoms east and
west coasts, acquire its first tankers and bring all oil
Since his appointment as oil minister in 1995,
Saudi Arabias energy policy has been single-minded:
making itself indispensable. Stability in world oil
markets depends on having adequate spare production capacity
for maintaining balance in the market, he said in 2004.
Saudi Arabia is committed to providing a major portion of
the worlds spare capacity.
As the only nation with enough capacity to act as a
swing producer in times of high oil demand, Saudi Arabia sits
at the helm of Opec, with Al-Naimis hand firmly on the
tiller. This has been particularly evident in the past year,
when Saudi Arabia has leaned hard on its fellow producers to
toe the line and meet production cuts to shore up prices.
Conversely, at the start of the decade, when prices
were starting to hurt most consumer nations, Saudi Arabia was
the most obliging of the Opec producers, pushing its production
close to full capacity and earning gratitude from western oil
consumers for its attempts.
This relationship, which requires Saudi Arabia to
balance its interests as a producer with those of its
customers, has required delicate diplomacy. Al-Naimi must play
off rowdier Opec members against Saudi allies such as the
Increasingly, however, Saudi Arabia has looked east
to energy-hungry nations such as India and China, countries
looking for a straightforward commercial relationship with none
of the political preconditions that bother relations with
Washington. Digby Lidstone
Igor Sechin, Deputy prime minister, Russian
Russias deputy prime minister represents the power
behind Russias state-led economic growth model. He has
helped redraw the rules of engagement between private capital
and the state while clipping the wings of the billionaire
Igor Sechin, deputy prime minister, personifies the
siloviki (power people) who have shaped
Russias state-led economic growth model and reined in the
influence of the billionaire oligarchs.
Sechin, regarded as the most powerful man in Russia
after its president and prime minister, oversees industry and
chairs the governments energy sub-committee. He is
president of Rosneft, Russias largest oil company, and of
the power generation company Inter RAO UES.
Russian government is effectively a duopoly of the
siloviki former security services officials who became a
force during Vladimir Putins first term as president
(200004) and market reformers.
Economic policy is shaped in constant tussles between them.
The siloviki were the driving force behind the
break-up of Yukos oil company in 200305 and the jailing
of its chairman Mikhail Khodorkovsky. The rules of engagement
between private capital and the state were rewritten, and the
oligarchs influence on government that had characterized
Boris Yeltsins presidency was drastically curtailed.
Yukoss oil production assets, among
Russias richest, were hoovered up by state-owned Rosneft.
Other oil and metals companies remained in private hands, but
their tax payments soared and their owners henceforth cleared
major strategical decisions with government. The hand of the
siloviki was also seen in the creation during Putins
second term (200408) of state champions such
as the state development bank (Vneshekonombank) and Russian
When the post-Lehman financial crisis hit Moscow,
the siloviki and market reforms in many respects closed ranks,
with little serious disagreement about the initial rescue
operation i.e. banking system recapitalization, the
gradual (rather than at-a-stroke) rouble devaluation and the
recovery impetus package.
Longer-term perspectives are divided, though. The
siloviki see state corporations, state-controlled energy
companies and industrial subsidies as key levers of policy; a
suggestion by deputy prime minister Igor Shuvalov, a market
reformer, that the crisis was a welcome opportunity to rid the
economy of unprofitable firms, provoked hints of displeasure
from the siloviki.
The siloviki keep a low public profile: Sechin was
deputy head of the presidential administration for seven years
before his first ever public appearance, at a Rosneft
shareholders meeting in 2007. And his pronouncements on
economic policy are few and far between. Over the summer he
denounced the role of speculators in the international oil
market (hardly controversial) and reiterated that Russia had no
need for production sharing agreements to develop new
hydrocarbons resources (standing policy for this decade).
Nevertheless, there are few doubts about his
influence. The managers of companies e.g. earlier this
year, Norilsk Nickel, one of the worlds largest metals
producers shiver when he asks state agencies to check on
aspects of their activity. Most journalists believe that he
oversaw the state-orchestrated break-up of Mikhail
Gutserievs Russneft oil company, the shares of which were
seized by bailiffs in 2007. It was to Sechin that foreign
minority shareholders in Timan Oil & Gas turned in August
in a tussle over ownership with oligarch Aleksandr Lebedev.
Some Russia-watchers say the siloviki are motivated
by hopes of building up personal fortunes. Moscow legend says
that Sechins is one of the largest. But it seems fanciful
to imagine that the strategic goal of a strong state is not the
The siloviki will continue to play a cardinal role
in Russias economic policy-making and so a strong hand
will stay on the tiller of the state. Whether the aim of
breaking Russias heavy dependence on oil and gas can be
accomplished this way remains to be seen.
Ratan Tata, Chairman, Tata Group
From a major Indian corporate to a fully-fledged
global conglomerate with the worlds fifth largest
steel company, Tata has revolutionized Indias corporate
Last November Ratan Tata circulated an email to
senior managers at Indias largest industrial group. His
message was stark. He ordered them to reduce operating costs
drastically and put the brakes on expansion. Some of our
companies with substantial foreign operations or those
which have made substantial acquisitions are facing
major problems in raising capital, he wrote.
He was basically saying, run your business
with cash until the storm passes, says Ishaat Hussain,
finance director at Tata Sons, the holding company of the
conglomerate, in an interview with Emerging Markets at Bombay
House, its head office in Mumbai.
This episode highlights some of the challenges
facing Ratan Tata as he oversees a sprawling empire with 114
different companies across seven business sectors as well as
presiding over aggressive, international acquisitions in recent
In June 2008, Tata Motors borrowed $3 billion to
buy Fords Jaguar and Land Rover brands but was hit by a
savage turn in the business cycle the company only
managed to refinance the loan this April, and that just days
before the repayment deadline.
In January 2007, Tata bought Corus, the Anglo-Dutch
steel group, for $13.7 billion, in Indias biggest foreign
acquisition. It catapulted Tata Steel into the worlds
fifth largest steel company.
Analysts praised Ratan Tata at the time for
elevating Indias corporate ambitions by preying on
western firms in western markets and reflecting the
countrys global economic clout.
But can these deals now be seen as wrong-headed
ventures at a time of inflated asset prices and abundant
capital? Do they highlight the dangers for emerging market
corporates as they play western firms at their own game?
In the context of the deepest recession in 70 years, we
certainly did not stress test for this level of downturn and
therefore, going forward when you take on this amount of
leverage, you have to consider a black swan occurrence, which
we didnt, Hussain says. That said, he claims that
in the long run these gambles will pay off.
At a single stroke, these takeovers doubled the
groups annual revenues, with the majority now accumulated
overseas. Three businesses account for most of sales and
profits: Tata Steel, Tata Consultancy Services and Tata Motors.
As of early September this year, the conglomerate accounted for
4.6% of total market capitalization of the Bombay Stock
Under Tatas leadership the group has long
since diversified beyond heavy industry: with Tata tea, Tata
phone networks, Tata computer systems and Tata air
conditioners. The companys diverse products form the
backbone for the economic and social life of the ordinary
Indian. Last year, the Tata Group contributed 3.6% of the
Tatas business approach is to be nimble,
flexible and global. He capitalizes on low-cost production in
emerging markets with the high margins in the West but also
seeks to acquire companies in developed markets to gain their
skills, knowledge and technology.
Nevertheless, Tata has remained focused on the
groups nation-building role when in March he personally
launched the worlds cheapest car, the Tata Nano, to
The groups success is a window into the rise
of the modern Indian, and Ratan Tata remains a formidable role
model for India Inc. So when Tata who owns just 1% of
the group retires in December 2012, corporate India will
be left with big boots to fill. Nevertheless, as an industrial
firm established since 1868 and with two-thirds of the Tata
Groups shares owned by charitable trusts, its a
unique business model to replicate. Sid
Carlos Slim, Chairman, Telmex and America
While other firms in the region have slowed their
overseas investments, Slim continues his aggressive expansion
drive to diversify his business empire
Few think of Mexico as a big foreign investor. Yet,
even amid the financial crisis, Mexican investments overseas
amounted to $3 billion in the first quarter of 2009, more than
any other Latin country.
The wizard of the Mexican transnational corporation
is Carlos Slim, the man behind Telmex and America Movil. It is
not Slims prominence in the Mexican economy as much as
his remarkable foreign acquisitions that make him stand out in
the international arena.
Even while other Mexican and Latin transnationals
slowed overseas investments in the last year, Slim continued
his aggressive expansion. In the middle of the financial
crisis, he showed his clout by becoming one of the main
shareholders of the New York Times and extending the paper a
$250 million lifeline loan. His acquisition of a $134 million
stake in Citigroup did not go unnoticed, either.
Slims portfolio is the model of the
diversified emerging markets transnational. His roster, largely
held through affiliates of Grupo Carso, has included stakes in
Univision, WorldCom, Allis-Chalmers, Altria and such household
names as Circuit City, Saks and CompUSA.
Slims empire is not without critics. Denise
Dresser, a Mexican political scientist, suggests that, more
than business savvy, Mexicos dysfunctional
capitalism allowed him to reach his privileged
The same factors behind Slims success
contribute to the emerging economys laggard development
and persistent income inequality. In a recent World Bank study,
Rafael del Villar, a member of Mexicos Federal
Telecommunications Commission, points to the overall
inequitable effects of a corporation such as Telmex that
has exercised its substantial market power
Slim defends his position to Emerging Markets by
emphasizing a businessmans limited mandate: make
expanding investments, create wealth, promote economic activity
and generate jobs and tax contributions.
This he has done, and many herald his contribution
to Mexicos GDP and outward investment. Less prominent in
Slims stance is a concern for Mexicos dismal income
equality and distribution. He notes: By 2015, our country
must reach an income level that exceeds the less-developed
country threshold of $12,000 per capita. But his vision
is rooted in absolute growth numbers, with little emphasis on
Between Slims undeniable contribution and the
price Mexico has paid in stunted growth and inequality, a
thorough evaluation of the transnational corporation has to
take into account Mexicos economic timeline. Rossana
Fuentes-Berain, a Mexican journalist, says the country is still
at a very immature stage in the process of
capitalism which could, temporarily, have made
less unacceptable the kind of anti-competitive behaviour
through which the likes of Standard Oil and US Steel
contributed to the growth burst of the US economy.
Latin America commentator Alvaro Vargas Llosa notes
that the monopoly-friendly cronyism that facilitated
Slims ascent is leading firms to seek profits elsewhere
and, in the process, catalyze Mexicos investment
positions overseas. The shortcomings of the home economy that
contributed to the rise of Mexicos transnationals now
spur them to become global players. In his wizardly way, Slim
has positioned himself to benefit from Mexicos unique
political economy simultaneously at home and
Jiang Jianqing, Chairman, Industrial
and Commercial Bank of China
How achievable is Jiang Jianqings dream of making
ICBC the worlds most profitable, pre-eminent and
Is Jiang Jianqing the most powerful commercial
banker in the world? Just two years ago, the question would
have been naive, bordering on the ludicrous. But much has
changed since then. Leading global lenders with the world at
their feet in 2007 have been bailed out or part-nationalized;
others stuttered badly or failed altogether.
But the woes of the global financial crisis have
spawned opportunities for a rare few lenders, notably
Beijings largest, Industrial and Commercial Bank of China
(ICBC). ICBC has a modern tradition of breaking barriers. In
late 2006, it completed the worlds largest-ever initial
public offering (IPO), raising $21.9 billion by selling shares
in Hong Kong and Shanghai.
The following October it became the first major
Chinese bank to flex its financial muscle abroad, buying 20% of
South Africas Standard Bank for $5.5 billion. That deal
came with a board seat at Standard for ICBC and direct access
to Africas vast reserves of carbon and commodities.
The bank has continued to fly in the face of the
global recession, posting a 3% year-on-year rise in first half
2009 earnings and a 17.2% rise in assets. In 2008 ICBC became,
if only for a time, the worlds largest listed corporation
by market capitalization.
Founded in 1984, within a quarter of a century it
was the worlds most profitable bank, boasting assets of
$1.6 trillion held across 18,000 branches. Little wonder that
this June chairman Jiang boasted that he wanted ICBC to become
the worlds most profitable, pre-eminent and
Jiangs progression has been steady and
unspectacular. He spent nine years toiling in the wheat fields
of Jiangxi province and the coal mines of Henan during the
Cultural Revolution. He survived the ordeal, returning to
Shanghai to gain a financial degree before joining a local
branch of ICBC in 1984, rising to president in 2000 and
chairman of the board of directors in October 2005.
A technocrat with a political mind he is an
alternate member of the Partys central committee
the 53-year-old Jiang is high on the wish list of any financial
conference organizer, regularly speaking his mind at the World
Yet if there is one cloud on the horizon it has
come, ironically, in the form of the global financial
The 200809 global recession pushed major
Chinese state banks to global prominence, revealing for the
first time their vast underlying financial strength. Like
rivals including Bank of China and China Construction Bank,
ICBC draws its strength from the nature of the Chinese economy,
which funnels business activity upward into the maw of a few
favoured state corporates and banks.
But favouritism comes at a cost. Perturbed by
slowing economic growth in late 2008, Beijing unveiled a vast
stimulus package estimated at $600 billion, and directed its
banks to hose the country with new lending targeting
major infrastructure and construction projects.
Chinese banks flooded the market with $1.1 trillion
in new loans in the first half of 2009. More than $130 billion
came from ICBC alone. In June 2009, BNP Paribas noted that it
knew of no other economy to have created so much credit, so
quickly and cheaply, in the six decades since the Second World
War. Some believe Beijing is ordering its banks to extend loans
as risky as those parcelled out by the likes of troubled Citi,
UBS and RBS between 2004 and 2008.
This raises another set of problems. Aggressive
lending may come at a cost. Earnings in the first half of 2009
showed a sharp corrosion in profit margins, and analysts
believe non-performing loans at all Chinese banks are set to
Under chairman Jiang, Asias largest bank has
thrived. ICBC completed the largest-ever IPO on his watch; in
early 2009 it kept Chinas and perhaps the
worlds economy afloat by aggressively pumping
capital into major state projects.
Yet questions are still unanswered. Jiangs
June 2009 boast remains only partially realized. ICBCs
domestic power has turned it into the worlds most
profitable and pre-eminent bank for now, at least.
Yet the most respected around the globe? That will
only happen when ICBC starts acting like a real bank and not as
a basic infrastructure lender at the whim of the state.
Jacko Maree, Group Chief Executive, Standard
Against a backdrop of the worst financial crisis in a
century, Maree has boosted the financial muscle of
Africas largest bank through ground-breaking
A global financial meltdown and South Africas
worst recession in 25 years. It was against this hostile
backdrop that Standard Bank further extended its franchise
across the globe this year. While beleaguered western banks
were shedding assets left, right and centre, Africas
largest lender acquired 33% of Russias Troika Dialog in
The $300 million acquisition took guts given the
bank had made a $100 million loss during Russias 1998
financial crisis, although that was later recouped. However,
Standards status as an emerging markets lender has
naturally fed its risk appetite, says Jacko Maree, who has been
chief executive at Standard Bank for the past 10 years.
The deal was perfect for us as it played to
our competitive advantages of being emerging markets and
commodities-focused, and Russia is the place to be, he
told Emerging Markets. The acquisition places Standard in a
strategic position in the Russian market via a local player
at a time of depressed asset prices to provide
corporate and investment-banking services to connect African
and Russia clients.
Equally important was the strategic partnership
Standard created in October 2007 when Industrial and Commercial
Bank of China (ICBC) became a 20% stakeholder. The deal seeks
to capitalize on the strong flow of commodities traded between
Africa and Asia, by providing Chinese firms access to foreign
exchange, letters of credit and cash management services in
Africa. Around 65 projects have been completed so far for a
modest $10 million, but Maree predicts that once the global
economy picks up, big-ticket infrastructure projects will
Maree says the crisis has validated Standard
Banks long-standing business strategy to become a
global, emerging markets financial services group. This
is down to the higher relative growth potential of developing
economies as well as the strengthening financial and trade
links between Africa and Asia, the Middle East and Latin
America, he says.
The bank operates in 17 African countries and has
16 subsidiaries outside the continent, with South African
operations contributing 77% to the groups headline
earnings in 2008.
The bank is focusing on expanding its commercial
banking business outside South Africa rather than beefing up
its consumer franchise or investment banking divisions.
We are increasingly trying to link Africa to the world
and capitalize upon the increasing south to south trade and FDI
flows, thanks to a sustained period of rapid industrialization
in places such as India and China, says Maree.
Standard will seek to increase its role as payment
agent for business customers by providing regular bank accounts
to small corporates in underbanked areas while offering cash
management services, trade finance and loans to the larger
Corporate and investment banking has recently grown
in importance to the groups bottom line. In 2008, it
contributed 56% of the groups headline earnings compared
with 34% for its retail operations. But Maree warns that the
emerging worlds thirst for commodities is not necessarily
a blessing for Africa. Learning from history, commodity
booms can be good and bad for Africa benefits only
accrue if governments have the right policies in place and
choose to spread the benefits, he says.
Nazir Razak, Chief Executive, Commerce
International Merchant Bankers
CIMB went from middle-tier investment bank in
Malaysia to being south-east Asias fastest growing
Nazir Razak demonstrates what can be done with
smart management and good governance in emerging markets.
He joined Commerce International Merchant Bankers
(CIMB), then a moderately successful investment bank, aged 23,
in 1989. Within a decade he had become its chief executive.
A decade further, with several mergers behind it,
CIMB has become a powerful universal bank the fastest
growing in south-east Asia and one of the few Malaysian
enterprises that can truly be seen as a regional player.
When he first started piloting the group towards
fixed income and market making after becoming deputy CEO in
1996 aged 30 he spent a year building the risk
management infrastructure; today the head of risk reports
directly into the board, something that is not required by
regulation but he says makes my board comfortable with
the organization.He also made a point of stressing the
positives of confrontation. You need to create a culture
of debate, and of transparency within the organization.
Thats very important, especially in Asian society,
he says. You encourage people to talk, to debate, to
challenge. A lot of the failures and problems in other
organizations happen because people hide.
Has he encountered resistance? Not
resistance. Reluctance. Its uncomfortable, shouting at
one another. But you do need to encourage it. I actually fuel
CIMB is a notable and growing presence in Singapore
and Indonesia, and has more modest operations in Thailand,
Brunei and Vietnam; probably only Singapores DBS could
have a similar claim to being a truly regional Asian bank.
Few Malaysians have done this. Nazir names Air
Asia, and to an extent Sime Darby, Petronas and YTL as other
examples. Its a modest list, but he feels more will
follow. It comes with Asean integration.
When foreign brokers and analysts are asked about
the health of the government-linked companies (GLCs), those
with significant state holdings, they tend to start by citing
CIMB as an example of what can go right before offering less
flattering assessments of many of its peers.
For his part Nazir says being a GLC has been
positive, partly because its useful for a bank to
have such a clear demonstration of its credit standing.
State ownership in the past has given rise to a lot of
constraints and bureaucracy, but since GLC reform in 2004 there
have been huge changes and a vast improvement. I have been
adviser to many of these companies pre-reform and I see first
hand how much more responsive and efficient these companies
Asked about Malaysias economic performance
during his time in senior corporate life, he rates it
mediocre because of structural weaknesses
that have proved difficult to overcome.
At the heart of the banking industry and with the
ear of the national leader, Nazir represents a younger
generation of connected but able executives building well
managed national champions across Asia. Chris