In an interview for "Banks” states that the project solution is complete and that preparations for implementation are underway. In conditions of geopolitical instability, he adds, the resilience of companies is currently being tested. His companies will pay out 2.4 billion dollars in dividends this year, which, he states, is the result of a decades-long, well-thought-out strategy and consistent work (for comparison, Montenegro's projected budget for this year is 3.78 billion euros).
Resilience in crises, Alabar notes, is based on good planning and financial discipline, and that is the message he sends to domestic businessmen.
Banks: Your companies generate billions of dollars in profits and pay very large dividends. How do you maintain such results despite the current global crisis and conflict?
Mohamed Alabar: You know, when you've been in business for almost 30 years, you really see a lot in life. You see good days, bad days, good business and bad business. So I think it's our responsibility to build companies that can survive. We don't just go into business to make a profit for years, and then, as soon as we hit a rough patch, our companies get into trouble. We need to build companies that are strong, profitable, but also strong enough to survive when the going gets tough. Otherwise, it's not a real company.
For example, this year, a few days ago, while the war was going on, we announced that we would distribute $2.4 billion in profits to our shareholders. Why? Because that profit is made through many years of planning, many years of hard work, years of making sure your company doesn't have too much debt and making long-term plans. When you have a long-term plan, you will also have a year in which you will have some problems, but you have to plan with the awareness that life is full of difficulties and that there will be problems. So the question is, are you prepared to be a normal company even in difficult times.
I personally had problems in 1997 when I was living in Singapore, during the Asian crisis. I also faced the crisis in 2006 and 2007, the financial crisis. Then there was the 9/11 crisis, then the Covid crisis. I really think that we as human beings should learn from all these crises how to build our companies very strongly.
Banks: Is this business strength a consequence of your long-term strategy alone, or is it perhaps also a matter of your country's system?
Mohamed Alabar: My country believes in free enterprise. It believes in pure capitalism, which means you should run your own business. I run a private company, I don't take on too much debt, I work with low overhead, I plan for the long term, and I hire the best people. But more importantly, I sell the best product. We are obsessed with honest work, quality work, and a great product. Everything is done on a long-term basis.
So that's really the strength of my team, my management and the overall planning. But while we're doing that, we're also very aggressive. We do big projects, but when you do big projects, you have to be careful and you have to know what you're doing. Basically, if you don't know how to run a business, that's not the government's job. They're not going to help you. You have to stand on your own two feet. So that's totally the strength of my staff, my people and our company.
Large companies show their true strength in crises
Banks: How do you balance such large payments to investors and investments in new projects, such as, for example, projects in the Balkans?
Mohamed Alabar: It all comes down to cash flow planning. That means: how much profit have I made each year for the past 28 years, how much have I paid out to shareholders each year, and how much have I kept as a cash reserve in my business to help me grow over time. It's all a combination, and you have to do it every day.
I'll give you a small example. About five months ago, everything was going perfectly and we were reviewing the business. We manage things down to the smallest detail. So we started spending more money on the quality of our construction, but at the same time we reduced the costs in our offices. Maybe sometimes we have too many employees. So we are spending money in the right places, but we don't have money to waste. At the same time, you have to manage every single item of your business very well.
While you're doing that, you always have to have a reserve. There's no guarantee that I'm going to be healthy all the time or that the economy is going to be healthy all the time. We've seen that in our lives. So you don't go into too much debt and you hold a lot of cash. But that cash should be enough so that you can say: I can do four new projects or three new projects. If it's three, then it's just three. We don't go and do seven, because that means you don't actually have enough money for seven projects. It's all a matter of very good planning and you have to follow that planning every day.
Eco Village Šas: project completed, work in preparation
Banks: You have already started a project in Montenegro on Lake Šas, Eco Village Šas. When can we expect the groundbreaking for this project?
Mohamed Alabar: We just finished the project. It's really beautiful. I think our architects and our team did a really great job. I don't know the exact date, but usually from the moment we finish the project to the start of construction, it normally takes about a year, if we don't have any problems with permits and planning. Our partner, Mr. Cungu, is doing a great job supporting us on the ground as well. But I hope we can do it much sooner than that (ed.).
Montenegro has all the foundations for a major investment
Banks: How do you see Montenegro now? As a safe place or as a risky but promising market?
Mohamed Alabar: I think Montenegro is definitely a very safe place to invest. I believe it is also a promising market, because the only thing I see in Montenegro is that it is a beautiful place. It just needs more infrastructure, from ports to improving the airport and highways. But I know that the government is building a lot of highways to connect the country. Besides, the country has all the great foundations for a great investment. That is why I am still here and that is why I will seriously make a big investment in Montenegro.
Banks: So, you have no problems with the business environment in our country?
Mohamed Alabar: No. But you see, I do business in almost 20 countries. Wherever you go, you will always have some problems with the environment and some bureaucratic problems. That's normal. You can't complain. Besides, you as an investor have to try harder. Nothing in life is easy. And the way people in Montenegro treat me and respect me made me love this place and I really want to do something good.
Profit is important, but we must participate in community life
Banks: Through your global experience, what is the role of large investors in times of conflict? In your opinion, do companies have a responsibility to society, not just to profit?
Mohamed Alabar: Yes. For example, in our company in Dubai, we announced that we will not be cutting salaries and we will not be laying off people during this period. We officially announced this because I think the government is trying to protect the country, and we also have to protect our community. So we are serving our customers more and taking care of our staff more, because this is a time when big companies have to behave in a big way. This is a time when you show whether you are a big company or just a company that wants to make money.
We make money all the time, and that's fine. But in these tough times, even if we're not making money, we have to take care of our people and our customers. I really believe that big companies should be big, responsible citizens in the way they do business, not just in business and making a profit. Profit is important, but we have to participate in the life of the community. We have to create economic activity, help people start businesses and thrive. And maybe we need to bring people to invest with us.
As I said, I have 12,000 Egyptian businessmen in Egypt who are my partners. So, it's not just me who makes money, they make money too. We pay taxes, we plant trees, we take care of social housing, we give scholarships to students, we buy things from the market to activate the market, and we bring a lot of tourists to the city. Everyone has to get something. We have to respect the local community. In Egypt they need certain things, in Morocco the local communities asked me for other things, so I do things in Morocco completely differently than, for example, in Thailand. I have to respect that.
Banks: The UAE strongly supports its citizens and economy. Do you think other countries should follow this model? You have brought a system that instills values among people, society, community…
Mohamed Alabar: Listen, I'm an honest man. A lot of people are driven by profit above all else and they'll tell you: I make a profit, I pay taxes and that's enough. Some people believe that, maybe they're right. But at my age I think we have an even greater responsibility. I really believe that. I think God is gracious enough to make me a successful big businessman because I have a responsibility.
We have a responsibility to take care of people, to employ them, to help them start new businesses, to help students learn how to do business, to take care of the environment, to bring more tourists to the cities where we operate. We must work together with communities and mayors and take care of their needs while we operate. We must also promote the areas in which we operate and respect the rules wherever we operate.
You should come to Dubai and see how much we're doing. During this month of war, just through monetary donations, I think we've given something like $70 million to different humanitarian organizations. Because this is the kind of time. And, by the way, my country doesn't need money, they can do all of that themselves. But I really think my mother would look at me and say, "Okay, Mohammed, what have you done? How have you helped people?" I think there are a lot of big businessmen who really feel a responsibility to the community.
The world is no longer stable.
Banks: Do you think the world will learn anything from this difficult period? What are the main lessons you have learned from everything we are seeing in the world these days?
Mohamed Alabar: I've said before that everyone needs to be prepared for the fact that we really do live in an unstable world. I say to everyone: do business, be aggressive, but remember — the world is not stable. One day there's war in Ukraine, one day there's Covid, the next day there's war again. Unfortunately, this world is no longer stable. Next, artificial intelligence is coming to change the world.
So I believe we will learn the lesson that when hardship comes, ordinary people suffer. Rich people are fine, but ordinary people everywhere suffer. I hope that this will bring us all closer together and that we will see if we can reduce the pain. I am sure that politicians also want to reduce the pain, because they feel the pain too. But the first thing is that this world is not stable and we all have to be very careful. Also, can we unite? Maybe six people can unite, maybe 1,000 people can unite, to ask each other for advice and to support each other, so that when difficult times come, we can help and learn.
But businessmen have to build strong companies, because sometimes, as I say, the dark night will come. And when the dark night comes, you have to be ready to take care of your people.
Banks: What key steps do you expect the UAE government to take to maintain its competitiveness and leadership position in this global business environment?
Mohamed Alabar: I just want to tell people that my country has built its reputation on transparency, good rules and regulations, low bureaucracy, no corruption, great infrastructure, good healthcare, education and tourism. It is a darling of the world because thousands and thousands of people come here and the business environment is great. To get people to come and to build that kind of reputation, you can't joke about it. To have the highest number of millionaires and businessmen coming to your country, you really have to be a great place to do business, because these people are very smart and they won't come if you lie.
So, it has proven itself and is going well. Now there is a problem that we are going through. It is now even more proof to the world that our defense systems and our military capabilities are above the gold standard. We know nothing about defense, we are businessmen. But when this happened, we realized that our country has defense systems that it has been building for decades. Our country has not only built good regulations, the absence of corruption, education, healthcare and tourism, but has invested in some of the most advanced defense systems over more than 45 years. That is why we are safe.
That's why you see me so cheerful. Little things happen, but I saw a video of the big store that opened yesterday in the Dubai Mall and it was like Christmas. That tells you how resilient this country is and how confident people are that life is okay.
Alabar to Montenegrin businessmen: don't get too much debt
Banks: Do you have a message for businessmen here in Montenegro? There is a lot going on around the world, and we have had many wars and many crises here in Montenegro: how can they stay calm, how can they be resilient, strong and look to the future without fear?
Mohamed Alabar: I think we are all similar because we are all young countries. We have been around for 40 years, you are similar to us. And we as businessmen all want to grow, we want to get rich quickly, we want to become famous quickly. But the reality is not like that. You can't. It takes time.
So, first of all, success takes time. Unless you go gambling and make some money that way, it takes time. It takes dedication, it takes hard work, and you have to be honest about it. You have to make a good product. Whatever you do, even if you're selling coffee, you have to be honest about the product that you have. And to prove that you're a really good businessman, you have to plan for the long term. It takes time to prove who you are.
And please, don't go into too much debt. Most people go bankrupt because they go into too much debt. Don't go into too much debt. But work hard. Believe in what you're doing. Think long-term. Stick to quality. Surround yourself with great people. Be aggressive. Try harder. It'll be okay. And be prepared so that when problems come, you know what to do.
