Mubadala’s Role in the UAE’s Next 50 years of Evolution

This special episode is produced with Paulson Institute’s Straight Talk podcast. Chairman Hank Paulson interviews H.E Khaldoon Al Mubarak, Managing Director and Group CEO of Mubadala Investment Company, to discuss Mubadala’s role in the UAE’s next 50 years of evolution.

Podcast Transcript

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This special episode is produced by Paulson Institute's a Straight Talk podcast. Chairman Hank Paulson interviews HE Khaldoon Al Mubarak, managing director and group CEO of Mubadala investment company, to discuss Mubadala’s role in the United Arab Emirates’s (UAE) next 50 years of evolution and global progress. HE Khaldoon Al Mubarak has led Mubadala through significant evolution for almost two decades. In addition to his commercial responsibilities, he's a member of the Abu Dhabi’s Executive Council and a founding member of Abu Dhabi Supreme Council for financial and economic affairs. He is also the presidential special envoy to China since 2018 and the founding chairman of the Abu Dhabi Executive Affairs Authority, which has provided strategic policy advice to the chairman of the Abu Dhabi Executive Council since 2006.

Let's listen together.

Hank Paulson: Khaldoon, welcome to the podcast. You are a man of many talents and many responsibilities, so I'm really looking forward to today's discussion. Now, let's start at the beginning. You grew up in Abu Dhabi and went to college in Boston at Tufts University. Tell our listeners a bit about how your career path developed.

HE Khaldoon Al Mubarak: First of all Hank, thank you for having me. It's a real pleasure and honor to be part of this podcast. You know, I'm a huge fan of yours all these years. You've been a great inspiration and a great mentor at times, so I really appreciate this opportunity and certainly appreciate the time. Answering your question, my upbringing is not very different from many of my peers here in the UAE. It is a country we'll talk about a bit later. But, I graduated from high school here in the UAE, I went actually to an American school, my family wanted me to understand US culture, so I ended up going to an American high school here in the UAE and then from there on, I went to university in the US.

At that point, I had only been to the States once. I didn't know the East Coast and had never been to the West Coast. It was really an interesting experience because I had no context. Had I known what I have learned over the years later, I don't know if I would have still gone to Boston. The weather was certainly not something I was anywhere near prepared for. I went there because I wanted to go with some of my high school friends, who also got into schools in Boston, than go to the West Coast, although in retrospect, I can tell you right now, I wish I had gone to the West Coast; the weather would have been a lot more easier for me to transition into.

Anyway, I spent some time there, graduated from Tufts, came back and, typically again when you are from the UAE, you graduate and you come back. The main sector back then, which was the biggest employer, was the energy sector - oil and gas specifically, so I ended up joining as a fresh graduate the Abu Dhabi National Oil Company and that's where I started my career. From there on, I was fortunate enough to rise and work with some of the most incredible individuals in the UAE, this has helped me throughout my career and here I am today. I think the journey of being the CEO of Mubadala over the last 20 years, to a certain extent, mirrors the journey of the evolution of the UAE over that same period.

Hank Paulson: It sure all worked out for you. I went to school in Hanover, New Hampshire, which has a weather that at times makes Boston almost seem tropical. The first time I visited Stanford Business School was when I was recruiting for Goldman Sachs; if I had ever visited Stanford before, I might have chosen to study in the West Coast. In any event, it worked out for both of us.

Let's talk a bit about the United Arab Emirates, better known as the UAE. Can you give our listeners a quick primer on the unique governance structure of that country? And then we could talk a bit about how such a small nation became such an important regional player in such a short period and talk about maybe what you see in the next 50 years.

His Excellency Khaldoon Khalifa Al Mubarak
His Excellency Khaldoon Khalifa Al Mubarak
His Excellency Khaldoon Khalifa Al Mubarak

Mubadala Managing Director and Group CEO

As Managing Director and Group Chief Executive Officer of Mubadala, Khaldoon Khalifa Al Mubarak has led the company’s significant evolution for almost two decades. Through organic growth, acquisition and merger, Mubadala has become a $232 billion business with assets in more than 50 countries across six international offices.

HE Khaldoon Al Mubarak: Well just to start, when I was applying to college, I remember one of the college recruiters calling after going through my application and asked where in California Abu Dhabi is. I had to explain that it is in a different country. But that was then, today I think people know the UAE a lot better. When you think about the UAE in the simplest way, it's a federation, very much like the United States. We have seven Emirates, the largest two are well known probably in the US, Abu Dhabi and Dubai. Abu Dhabi is the capital. In terms of the population, we have a population of about the size of the state of Georgia, so about ten million people. We've been blessed with natural resources, which are the foundation of our economic development. In December of this year, the country will be 50 years old and that's an incredible milestone for the country – 50 years of evolution, 50 years of development and 50 years of economic growth that has led to the UAE today being probably the most economically advanced and one of the largest economies in this region, also the largest trade partner of the United States in the Middle East and North Africa. This evolution has started from being a predominantly an oil and gas producer to being today the vibrant, innovative economy and society.

Hank Paulson: Yeah. So that's been a great first 50 years and looking ahead, how do you see the future?

HE Khaldoon Al Mubarak: The last 50 years have been about building the infrastructure and putting the foundation of the country. We were blessed with great leadership; the founding father of the country, Sheikh Zayed bin Sultan Al Nahyan, established the federation, put the country together in partnership with Sheikh Rashid bin Saeed Al Maktoum in Dubai. That partnership led to the establishment of the UAE, that first stage of development, the oil and gas industry evolved and continued to grow with trade and the continuation of the UAE being a trade hub between the East and West, the development of the ports, the airports and the airlines, in complete parallel, the development of the infrastructure of schools, hospitals and universities, in addition to developing human capital. That craftsmanship in constructing the UAE, that was what was focused on in the first 50 years, it was really building that foundation. Today, we have gone a long way, I have images in my office, that I'm sure you've seen Hank, of the country in the 60s, 70s, 80s and 90s and today. Seeing some of these cities and how they've grown is actually incredible.

So today, we sit in a diverse economy with a pretty remarkable infrastructure across the board, from telecommunication to airports, ports, highways, strong human capital base despite the small population. Just recently, this small population sent a mission to Mars amidst the COVID19 pandemic and operated its first peaceful nuclear power plant, in addition to some incredible achievements in diplomacy that have not been done in this part of the world for many years. That's an example of the strength of the human capital built over the past 50 years.

The next 50 years is about taking this solid foundation, this strong competitive position that the UAE is in today, to the next level, turning this country from a highly competitive, well-positioned regional power into a global player that can compete on a global level in manufacturing and innovation while continuing to strengthen the social and human capital fabric.

Hank Paulson: That's really an inspiring vision. As you said, you're based in Abu Dhabi, running a government-owned investment institution, Mubadala. So, tell us a bit about Abu Dhabi's economic progress and your priorities.

HE Khaldoon Al Mubarak: So, I'll talk about Abu Dhabi through the journey that I've had personally with Mubadala. Mubadala is a sovereign fund, wholly owned by the government of Abu Dhabi.

Our founding father, Sheikh Zayed, established a vision of having the wealth coming from the natural resources of the country and investing it with a view of long-term sustainability of wealth distribution for the country. I would say extremely visionary for a country that was just starting.

Hank Paulson: Let me interrupt for one second. Right now, this is a $243 billion sovereign fund. How big was it when it started?

HE Khaldoon Al Mubarak: So, you know, by the way, Hank, the sovereign fund I'm describing is the bigger brother here. That's ADIA. That was the one that was established back then, Mubadala is the smaller one. And that's the one that you just described, Mubadala, which is a $243 billion (AED 894 billion) sovereign fund. This fund was established back in 2002 as another sovereign fund.

Our founding father’s vision I spoke of earlier essentially grew in Abu Dhabi, the ability to manage the state funds to generate a sustainable, risk-adjusted, attractive returns for the government. That vision ultimately led to the creation of another sovereign fund, which was Mubadala, and my role back then was to create something different from ADIA, a vehicle that would invest in innovative new businesses, that would be able to generate a diversified creation of business development and economic activity here in the UAE to help in the evolution and diversification strategy of our economy. That was the beginning of Mubadala, an investment vehicle that would invest in new sectors, new areas that would bring in partners from all over the world to create commercial activity here in the UAE, which would create jobs, the right types of jobs, and at the same time continue down the road of diversifying the economy away from oil and gas. So, we started there.

Outro: Thank you all for listening to this special episode produced by Paulson institute’s Straight Talk podcast. Don’t forget to hit the subscribe button and goodbye.