UAE 2020 BUILDING A PROSPEROUS TOMORROW
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CONTENTS CHAPTER 1 ECONOMY
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18 26 30
1.1 INTERVIEW Interview with UAE Minister of Economy HE Eng. Sultan Bin Saeed Al Mansoori.
1.1 EXPO 2020 Expo 2020 Dubai will be the largest event ever staged in the Middle East.
1.1 TRADE As the region’s largest exporter and importer, the UAE is a vital hub for trade.
1.1 ISLAMIC ECONOMY The UAE is vying to become the global centre of the
CHAPTER 2 KNOWLEDGE
36 40 46 50
Islamic Economy.
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IN FOCUS: RAK ECONOMIC ZONE RAKEZ ranks among the UAE’s fastest-growing free trade precincts.
2.1 INNOVATION The UAE is making rapid progress developing a knowledge-based economy.
2.2 GREEN ENERGY The UAE is investing in the development of peaceful nuclear energy.
2.3 SUSTAINABILITY Emirati authorities are pursuing an ambitious sustainability programme.
2.4 SPACE The UAE is spearheading the next phase of space exploration and colonisation.
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2.5 GENDER EQUALITY The UAE is setting the benchmark for gender equality in the Arab world.
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IN FOCUS: FAB SUISSE Interview with Fouad Hamiyeh, CEO of First Abu Dhabi Bank’s Swiss operations.
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
2.6 HEALTHCARE Advanced healthcare is a major focal point of investment in the Emirates.
CHAPTER 3 TRAVEL & TOURISM
70 74 76 82
3.1 TOURISM SNAPSHOT The UAE is home to a diverse array of world-class tourism attractions.
IN FOCUS: AJMAN TOURISM Ajman ranks among the UAE’s fastest-growing tourism destinations.
3.2 AVIATION The UAE is today one of the world’s most important aviation hubs.
IN FOCUS: AJMAN FREE ZONE Ajman Free Zone is one of the UAE’s best-established economic precincts.
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00 CHAPTER 4 STRATEGY
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4.1 ROAD TO 2030 The next decade will prove pivotal to the UAE’s longterm development.
CHAPTER 5 INVESTMENT
92 96
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CHAPTER 6 BUSINESS
5.1 FDI The UAE is one of the world’s top destinations for foreign direct investment.
5.2 SMEs SMEs and entrepreneurs from around the world are flocking to the UAE.
5.3 FREEZONES Freezones have helped drive the UAE’s economic diversification strategy.
104 110 112
6.1 CULTURE The UAE has established itself as the region’s capital of culture.
6.2 UAE-UK RELATIONS The UAE-UK Business Council promotes ties between the two nations.
6.3 BUSINESS GUIDE A handy ‘how-to’ guide to setting up your business in the UAE.
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Published by GT MEDIA ME Publisher: Khaled Algaay Editor: Aaron Greenwood Art Director: Steven Castelluccia Business Development: Tom Kennedy
An official publication of the Embassy of the United Arab Emirates in London
Published by 20-22 Wenlock Road, London N1 7GU, United Kingdom Telephone: +44 207 608 5137 www.gtmediame.com
Copyright 2019. The entire contents of this publication are protected by copyright. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means: electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher. The views and opinions expressed by independent authors and contributors in this publication are provided in the writers’ personal capacities and are their sole responsibility. Their publication does not imply that they represent the views or opinions of the Government of the United Arab Emirates or GT Media ME and must not be regarded as constituting advice on any matter whatsoever, nor be interpreted as such. The reproduction of advertisements in this publication does not in any way imply endorsement by the Government of the United Arab Emirates or GT Media ME of products and services referred to therein.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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LETTER FROM THE AMBASSADOR
CREATING A BETTER FUTURE
A
s one of the region’s – and the world’s – most innovative economies, the United Arab Emirates is striving to create a better tomorrow not just for its own people, but for all humankind. From developing clean energy
solutions designed to combat climate change, to solving future agricultural challenges and investing in technologies that will ultimately improve the health and well-being of communities around the world, the UAE is creating an economic platform that is unheralded in its scope and ambition. These efforts are attracting the interest of investors and stakeholders from across the globe who share our country’s vision for the future and who want to contribute to its future achievements. From humble beginnings, the UAE now ranks among the world’s most important hubs for trade, commerce and investment. It is a vital international gateway for global firms looking to do business in a dynamic regional market that is home to a growing population of more than 300 million people. The UAE stands at the crossroads of East and West, making it an important cog in the wheels of the global economy and an increasingly influential voice on the world stage. The UAE’s growing global profile will be further enhanced when it hosts the region’s first-ever World Expo next year.
Staged under the theme of ‘Connecting Minds, Creating the Future’, Expo 2020 Dubai will showcase innovative, cutting-edge solutions designed to meet major global challenges. Over the course of 173 days from October 2020 to April 2021, Expo 2020 will welcome an estimated 25 million visitors – more than 70% of whom will travel from overseas. Expo 2020 will provide an unprecedented opportunity to showcase the UAE as one of the world’s most exciting destinations and a global hub for innovation, sustainable economic development, technological know-how, investment and entrepreneurship. As UAE ambassador, I am immensely proud of my country’s achievements to date and truly honoured to share our collective vision for the future with our friends, colleagues and partners here in the United Kingdom. The UK is a vital partner for the UAE and a major source of bilateral trade and investment. I am confident our shared goals and values will only serve to deepen the historic ties between our two great nations and lead to even greater shared success in the future.
HE Mansoor Abulhoul Ambassador of the United Arab Emirates to the United Kingdom
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
DISCOVER DISCOVER THE THE JOURNEY JOURNEY OF OF THE THE UNITED UNITED ARAB ARAB EMIRATES EMIRATES AT AT ETIHAD ETIHADMUSEUM MUSEUM
The United Arab Emirates began its path towards becoming a progressive nation that The United Arab began its path towards becoming a progressive nation that looked forward to Emirates the future. looked forward to the future. This historical journey began on the 2nd of December, 1971. With resolution of December, 1971. With resolution Thisdetermination, historical journey began on shape the 2ndand and its spirit took the vision began to unfold. and determination, its spirit took shape and the vision began to unfold. Discover the story of the historical years leading up to the formation of the Discover theEmirates story of we theknow historical years up to the formation of the United Arab today, nowleading at the Etihad Museum. United Arab Emirates we know today, now at the Etihad Museum.
1.1 | ECONOMY
In this exclusive interview, UAE Minister of Economy HE Eng. Sultan Bin Saeed Al Mansoori discusses the UAE’s highly successful economic diversification programme and its goal of becoming one of the world’s top economies
What progress has been made to date in terms of reaching the economic goals set out by UAE Vision 2021? The pillars of the UAE Vision 2021 National Agenda have been mapped into six national priorities and 52 national key performance indicators (KPIs). These represent the key focus sectors of government action in the coming years. The establishment of a cohesive society and preserved identity; a safe public and fair judiciary; creating a competitive knowledge economy and first-rate educa-
PROGRESS THROUGH
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INNOVA UAE 2020: BUILDING A PROSPEROUS TOMORROW
ECONOMY | 1.1
tion system; world-class healthcare; and a sustainable environment and infrastructure are among these priorities. By following the directives of its wise leadership, the UAE has already accomplished a large number of goals within these areas. However, concerted efforts to achieve the chief goal – to position the UAE as one of the best countries in the world across various fields – continue. In order to accelerate the pursuit of these goals, the UAE has launched a number of pioneering initiatives such as the Executive
Teams of the National Agenda and Government Accelerators. These initiatives bring together various stakeholders who work together to create solutions that expedite the journey towards the set goals. Beyond these initial aims, the UAE is taking a long-term view to economic development. The current stage of progress is being analysed and the evaluation of performance and preparations for the next stages is ongoing. These include new strategies and targets for the future, and the course
of development over the next five decades in line with the UAE Centennial 2071. The UAE economy continues to surpass many internationally recognised developmental milestones, particularly in terms of its competitiveness. Its programme of economic diversification leads the way. The country has also established its leading position in areas including developing an integrated ecosystem to support the SME sector; creating an investment climate and enhancing the ease of doing
VATION
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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1.1 | ECONOMY
business; and continuing to adopt policies of economic openness to ensure it is competitive on a global scale. The most important achievements include the launch of effective strategies in the fields of artificial intelligence (AI), the fourth industrial revolution and blockchain, among others. The latest indicators of economic competitiveness at regional and global levels indicate the strength of economic policies and development programmes implemented by the UAE in various fields. The UAE remains at the forefront of the region and the Arab world. The UAE ranked ninth in the Economic Freedom Index 2019; 11th in the World Bank’s Ease of Doing Business Index 2019; 23rd in the World Economic Forum’s Enabling Trade Index 2016; and 27th in the World Economic Forum’s Global Competitiveness Index 2018-2019. It also ranked seventh in the GESI 2017 Global Entrepreneurship Index, published by GEM; 36th in the Global Innovation Index 2019; 15th in commodity exports; 18th in commodity imports; 21st in service exports; and 17th in service imports, according to the WTO’s World Trade Report 2018.
The UAE’s decision to allow 100% foreign ownership in key sectors of the economy is a first for the Gulf region
The UAE ranked fifth among the world’s most competitive economies in the IMD World Competitiveness Report and first
“The UAE has already established itself as a vital business hub. Around 25% of the world’s top 500 regional companies are based here. These accomplishments further underscore the UAE’s leading position as a prime destination for international investors” – HE Eng. Sultan Bin Saeed Al Mansoori, UAE Minister of Economy
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for business efficiency. What do these achievements mean for the country? Ensuring the UAE economy can compete on a global scale is a key priority. The UAE is working towards building a diversified economy based on knowledge exchange and innovation. The plaudits we have received to date in this regard indicate we are moving in the right direction. As mentioned, the IMD ranked the UAE the world’s fifth most competitive economy in 2019, and the most competitive in the Middle East and Africa. Furthermore, the UAE ranked first globally according to the IMD in terms of business efficiency and management practices, and second globally for government efficiency, business attitudes and values, productivity, and the labour market, respectively. These achievements reflect the success of our leaders’ vision and the policies adopted by the UAE in various areas of development that position the country as one of the world’s leading business hubs.
The UAE has moved to liberalise its economy, allowing 100% foreign ownership in select industries outside free zones, as well as providing 10-year residency visas to investors, entrepreneurs and others. What prompted these moves? The issuance of the new Foreign Direct Investment (FDI) law in the UAE last year marked a major milestone in regard to the provision of incentives designed to attract foreign investment. The legislation provides for 100% foreign ownership of companies operating in 122 key areas of the economy, including agriculture,
ECONOMY | 1.1
other countries in the region and how do they enhance the country’s reputation as a destination for foreign investors?
industry and services, innovation, technology, and scientific research, among others. The FDI law represents a pioneering legislative and regulatory framework that significantly enhances incentives and advantages offered to foreign investors in the UAE and strengthens its position as a safe and attractive investment environment. It accelerates the development of a knowledge economy; boosts confidence among foreign investors; and encourages major international firms to invest in the UAE. Furthermore, the recent introduction of the Gold Card [residency visa] programme by UAE authorities provides investors, businessmen and talented professionals the chance to gain long-term residency status, thereby allowing them to flourish in their respective fields and achieve commercial success.
How do these initiatives differentiate the UAE from
KEY PERFORMANCE INDICATORS
+1.7%
GDP growth 2018 (+1.3% non-oil)
What areas of the UAE’s economy do you expect to drive GDP growth over the coming decade?
70% by non-oil sector
The UAE is well established as a global business hub. Around 25% of the world’s top 500 regional companies are based here. These accomplishments further underscore the UAE’s leading position as a prime destination for international investors. In line with UAE Vision 2021, which aims to create a diversified economy based on knowledge and innovation, the country has made strong progress in key sectors including trade, telecommunications, ICT, tourism, infrastructure, education and healthcare. The UAE boasts an open economic climate and a flexible business environment supported by world-class infrastructure. This has made it a magnet for international investment. In fact, the UAE ranked first in the Arab world and 27th globally in attracting FDI flows in 2018, according to the United Nations Conference on Trade and Development’s latest World Investment Report, three rankings higher than in 2017. Last year, FDI inflows totalled $10.4 billion, while FDI inward stocks totalled $140.3 billion.
30%
by oil sector
UAE real GDP oil / non-oil sector 2018
Our economic policies aim to stimulate key areas of the economy and create an environment that encourages innovation, research and development and respects intellectual property rights. We aim to create a globally competitive digital economy that generates investment in value-added sectors. We want to enhance the role of the private sector in the economy, promote entrepreneurship by supporting SMEs and start-ups, and develop national human resources. We are also focusing on driving growth in established areas of the economy, such as petrochemicals; alternative and renewable energy; oil and gas; transportation and infrastructure; manufacturing; healthcare and education; defence and aerospace, real estate; agriculture and water. We will also continue to focus on encouraging development in vital sectors
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1.1 | ECONOMY
“The private sector is a vital and effective partner in the development of our future economy. It plays an extremely important role in driving economic and social development” – HE Eng. Sultan Bin Saeed Al Mansoori, UAE Minister of Economy such as physical and digital infrastructure, logistics, financial services, foreign trade and wholesale and retail trade including e-commerce, as well as tourism, which includes the development of facilities, resorts and strategic tourism-related projects.
How important is the growth of the private sector to the future of the UAE’s economy? The private sector is a vital and effective partner in the development of our future economy. It plays an extremely important role in driving economic and social development and all economic activities. The sector’s five percent growth last year, and its 70.5% contribution to GDP, are indicative of this fact. The importance of the UAE’s private sector is reflected by the success achieved by many Emirati companies worldwide. UAE firms have achieved success in many countries covering a wide range of sectors that include manufacturing, infrastructure,
aviation, maritime and port operations, logistics services, banking and finance, free and economic zones, renewable energy, agriculture, petrochemicals, construction and real estate, and many others.
Encouraging growth in the SME sector is another major area of focus for the Minis� try of Economy. How do you see the SME sector developing over the next decade? The SME sector is a major area of focus area for future growth, as it is a significant driver of economic diversification. It also strengthens the foundations of a knowledge economy and delivers sustainable long-term growth. SMEs and start-ups have achieved significant progress in many vital sectors of the economy, including healthcare, wholesale and retail trade, ICT, financial services, manufacturing, education, transportation and tourism. There are many initiatives that have been developed according to the policies that regulate this sector. These will help stimulate economic growth significantly over the next decade, by facilitating access to affordable financing and the allocation of 10% procurement contracts. Intensive training programmes and
GLOBAL ECONOMIC BENCHMARKS THE UAE IS ONE OF THE WORLD’S MOST COMPETITIVE ECONOMIES, AS EVIDENCED BY THE FOLLOWING RANKINGS
RANKING
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
GEM GESI 2017 Global Entrepreneurship Index – 2017
7
Economic Freedom Index – 2019
9
World Bank’s Ease of Doing Business Index – 2019
22
World Economic Forum’s Enabling Trade Index – 2016
23
World Economic Forum’s Global Competitiveness Index – 2018-2019
27
Global Innovation Index – 2019
36
ECONOMY | 1.1
partnerships will also enable stakeholders to learn about best practices and global experiences in this regard. These efforts will also facilitate and accelerate funding mechanisms, increase incentives and develop business partnerships across a variety of promising markets, which will stimulate the development of each sector during the next phase of economic growth.
The UAE has earmarked high-tech sectors as key to its economic diversification plan. What government incentives are being offered to potential investors to establish a presence in these areas of the UAE’s knowedgebased economy? The UAE seeks to attract significant investment supporting innovation, knowledge exchange, and research and development by providing a wide range of incentives and facilities. The new FDI Law encourages liberalisation of innovation and knowledge-related activities for investors with a broad package of incentives and guarantees. The package of incentives and facilities launched by the federal and local governments across the UAE, particularly long-term residency visas and the Gold Card system, directly targets these type of businesses and investments. The country’s investment-friendly business environment; its state-of-the-art infrastructure; world-class ICT and e-services; its strategic location and vital links with global markets; are all factors that attract investment. The UAE has launched several strategies and initiatives to further enable the role of innovation in our development process, such as the Innovation Strategy, 4th Industrial Revolution Strategy and Artificial Intelligence Strategy.
The UAE and UK have a very close and historic bilateral trade relationship – how do you expect this relationship to change or evolve post-Brexit? The UAE presents huge growth potential for UK investors and businesses looking to expand locally or beyond UAE shores. The UK is one of the UAE’s most trusted
Tourism is a cornerstone of the UAE’s economic diversification plan
and valued partners and the scope and scale of our bilateral ties continue to grow, thanks to joint efforts of both our governments and strong partnerships in the private sector. Given the shared history of our two nations, it is not surprising that the spirit of cooperation spans vast areas of the economy in terms of trade and investment. The UAE was the UK’s number one trading partner in the Arab world in 2018, accounting for 32% of British merchandise foreign trade and 40% of the total British merchandise exports to the region. The total value of non-oil trade between the UAE and the UK in 2018 reached $11.3 billion, which represented a 9.2% increase compared to 2017. In regard to the European Union (EU), the UAE was the EU’s twelfth biggest trading partner worldwide in 2018, which shows the importance of growing trade and development opportunities between the UAE and the EU.
How has the level of UK investment in the UAE evolved over the last ten years and how do you see the situation evolving over the next decade? The last decade has seen a further deepening of bilateral ties between the UK and the UAE and the establishment of targets in sectors of mutual interest. These range from economic cooperation to strategic alliances and cultural exchanges, as well as other related partnerships. To date, the UK is the UAE’s largest global investor and accounts for about 16.5% of the country’s total FDI inflows, with roughly $20 billion FDI inward stocks. Currently, more than 120,000 British expats live in the UAE, enjoying our high quality of living while also contributing to the realisation of our development goals.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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1.1 | ECONOMY
productive partnerships. Expo 2020 Dubai is also expected to give rise to enormous opportunities for cooperations between our two countries. To date, 1,321 British companies, including 977 SMEs, have registered for Expo 2020 Dubai’s global e-market platform, indicating the growing interest of British entrepreneurs and investors in exploring new commercial opportunities in the UAE. The inaugural International Expo was staged in London in 1851, and the country’s participation in Expo 2020 Dubai is proof that the UK appreciates the event’s positive economic, social and developmental impact on the world. Major UK-headquartered multinationals including BP, Rolls Royce and BAE Systems are among 6,000 British companies with a significant presence in the UAE. In addition, more than 1.5 million British tourists visit the UAE every year. The bulk of British investments in the UAE are focused primarily in financial and insurance activities (37%), followed by mining (31%) and real estate (10%). Platforms such as the first UAE-UK Joint Economic Committee serve as catalysts that drive ever-increasing economic cooperation by allowing direct interactions between the business communities of both countries, whilst also highlighting promising business opportunities across multiple industries. Education, healthcare and life sciences, infrastructure, financial and professional services, energy, Fourth Industrial Revolution technologies, manufacturing, SMEs, security and aerospace have been identified as sectors of the economy in which businesses can explore
Expo 2020 Dubai will present many opportunities for economic cooperation
UAE: THE WORLD’S HOTTEST DESTINATION FOR FDI The UAE ranked first in the Middle East and 27th globally in terms of attracting FDI flows in 2018, according to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2019, three positions up from its 2017’s classification by UNCTAD. Dubai has earned a reputation as the hottest destination for FDI in the Middle East and Africa. Total FDI in the emirate rose 41% year-on-year in 2018 to AED38.5 billion ($10.5 billion), with the United States, India, Spain, China and the United Kingdom accounting for 70% of the total figure. This trend has only accelerated in 2019. According to data from the Dubai FDI Monitor, published by the Dubai Investment and Development Agency (Dubai FDI), foreign investment in the city’s economy totalled AED22.2 billion in the first quarter of this year, marking a massive increase of 304% compared to the same period in 2018.
FDI outflows
$15B
016
FDI inflows
$10.4B
FDI outward stocks FDI inward stocks
$139.4B
UAE 2020: BUILDING A PROSPEROUS TOMORROW
$140.3B
The total volume of UAE investment in the UK has also increased in recent years and particularly following the Brexit referendum. Do you see this trend continuing in the coming years? The level of direct investment from the UAE in the UK economy continues to grow strongly. The UAE’s FDI stocks in the UK reached more than $16 billion in 2018, accounting for about 75% of the total FDI from GCC countries in the UK. There are a number of leading UAE companies that have invested in the UK in recent years through successful projects in a variety of sectors including transport and logistics, economic zones, ports, financial services, tourism and hospitality, energy, ICT and others. Examples of these UAE-based firms that have made significant local investments include ports operator DP World; real estate developers Emaar Properties and Damac Properties; internatioal airlines Emirates and Etihad Airways; Dana Gas; Masdar; Dnata; RAK Ceramics; Mubadala; and The Jumeirah Group. The UK is an important investment destination for UAE firms. Looking forward and in light of the strong trade and investment relations between the UAE and the UK and those between the government and private sectors, we believe there is scope for the development of investment partnerships between UAE companies and the British business community.
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4.2 | MEGAPROJECTS
WELCOMING THE WORLD Expo 2020 Dubai will be the largest event of its kind to be staged in the Middle East, marking a major milestone not just for the UAE but the region. Here, Najeeb Mohammed Al-Ali, executive director, Expo 2020 Dubai Bureau provides key insights into the event and what visitors can expect over its six-month duration
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
Expo 2020 Dubai will be a landmark event for the region. What does it mean to the UAE to host an event of such magnitude? In October 2020, the UAE will host the world’s greatest show, welcoming more than 200 international participants and millions of visitors to a once-in-a-lifetime celebration that seeks to build a better future for us all. Expo 2020 Dubai is the first World Expo to be staged in the Middle East, Africa and South Asia (MEASA),
EXPO 2020 | 1.2
so not only is it an extremely exciting opportunity for the UAE, it is an unmissable event for the region and indeed the entire world. World Expos have long prided themselves on being catalysts for change, showcasing ground-breaking innovations that still impact the world today and sparking discussions that have changed the course of our future, so Expo 2020 Dubai could not come at a more opportune moment. As we face more complex and increasingly diverse challenges – climate crises, food and water insecurity, conflict and a world economy at risk of recession – the need for fresh voices, alternative ways of thinking and nimble action is vital if we are to come up with more creative and effective solutions. The economic and political centre of gravity is shifting eastwards, and the UAE sits at its heart. Expo 2020 will reinforce the UAE’s status as a connecting hub for the globe, where 192 countries will converge, collaborate and strengthen bilateral and multilateral relations. Running from 20 October 2020 to 10 April 2021, Expo also coincides with the UAE’s Golden Jubilee in 2021. Over the past 50 years, the UAE has impressed the world with its rapid growth and groundbreaking achievements, creating a country with a rich history and culture that is a great place to visit, live, work and invest. Some 200 nationalities have found a safe and welcoming home here, including around 140,000 UK nationals. Staging such a large-scale, global event is an unparalleled opportunity to showcase our dynamism and hospitality and highlight our strong vision of the future as we carry this innovative and collaborative spirit forward for generations to come.
Future’, and is based on the firm belief that we can achieve so much more when we work together. That principle cuts across everything we do at Expo 2020 Dubai and will be highlighted during the event when the world’s leading thinkers come together to connect and innovate for a brighter future for us all, but it is also demonstrated in how Expo plans to leave a lasting legacy for the UAE. From the start, the entire Expo site was built not only to host the the main event, but also to create a brand new city once Expo’s doors close in April 2021. That city, known as District 2020, will be a welcoming, dynamic hub for innovation, collaboration and aspiration, and will form an anchor for Dubai’s developing knowledge economy, a key pillar of the UAE Vision 2021 National Agenda. District 2020 will use around 80% of Expo’s built structures – including Al Wasl Plaza, the Sustainability Pavilion and the brand new Dubai Exhibition Centre – to create a 5G-enabled residential community and thriving business hub that will exemplify a future UAE economy based on human potential. Two of Expo 2020’s Official Premier Partners, Accenture and Siemens, have already confirmed they will establish a permanent presence there. In addition, the experience of hosting an Expo is perfect preparation for all manner of future events. Not only are we building a large workforce skilled in construction,
DID YOU KNOW? Expo 2020 is expected to attract 25 million visitors over its six-month duration from more than 190 countries worldwide
operations, leadership and marketing, we are also ramping up our experience in hosting events that will nurture new ideas, act as accelerators for knowledge exchange, spark innovation and encourage partnerships. This will contribute significantly to the UAE’s knowledge economy and create value for years to come.
What kind of economic impact has Expo 2020 had on the UAE’s economy to date and what long-term benefits do you expect it to provide? Expo 2020 Dubai’s aims stretch far beyond hosting a spectacular mega event to impress the world. We are making a long-term investment in the future of our country that will significantly boost the UAE economy, helping spur growth and support jobs for many years to come. An independent report by global consultancy EY, published in April 2019, showed that from 2013-2031 – from when the UAE won the bid until a decade after the Expo closes its doors – Expo 2020 will
Expo’s theme is ‘Connecting Minds, Creat� ing the Future’. How does this reflect the UAE’s drive to create a knowledge-based economy and to position itself as a global hub for innovation? Expo 2020 is an opportunity to address challenges that affect every aspect of our lives – issues best tackled if we join forces to create, innovate and collaborate for positive change. That is the overarching theme of ‘Connecting Minds, Creating the
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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4.2 | MEGAPROJECTS
Above and below: An artist’s impression of Expo 2020’s Al Wasl Plaza
Right: An artist’s impression of the UK Pavilion at Expo 2020
contribute AED122.6 billion to the UAE’s economy and support more than 900,000 job-years. During the six months of the event, Expo 2020 is expected to contribute around 1.5% of the UAE’s annual GDP. The opportunity for the UAE to influence and impress at the world’s largest meeting of minds, and the transformation of the Expo site after the event will create a significant ‘Expo dividend’ that will be felt across a range of business sectors. Expo 2020 will have an impact on the future of the UAE for years to come. By stimulating travel and
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
tourism, supporting economic diversification and leaving a sustainable economic legacy, it will cement the UAE’s position as the leading destination for business, leisure and investment in the region and beyond.
How will Expo 2020 compare in size and scope to previous expositions? Expo 2020 Dubai will be the most international World Expo in its 168-year history. We are predicting 25 million visits over six months, with 70 percent of all visitors expected to come from outside the UAE.
Top right and centre right: The Mobility Pavilion at Expo 2020
EXPO 2020 | 1.2
EXPO 2020’S ECONOMIC IMPACT EXPO 2020 IS HELPING TO ACCELERATE THE UAE’S AMBITIOUS ECONOMIC DIVERSIFICATION PROGRAMME, EXPANDING PRIVATE SECTOR INVESTMENT IN THE ECONOMY AND DELIVERING EMPLOYMENT GROWTH
$33.8B 905,200 1.5% $1.28B Total forecast economic boost from 2013-31
Full-time equivalent job-years from 2013-31
Expo’s contribution to UAE GDP from October 2020 to April 2021
Spending in the UAE’s SME sector from November 2013 to October 2020 Source: Expo 2020 Dubai Bureau
We have 192 countries participating at Expo 2020, making it the most inclusive and international World Expo ever organised. We have invited all countries in the world without exception, in line with our commitment to making Expo 2020 Dubai a truly international event and platform for all of humanity. For the first time, each country will have its own pavilion, providing a deeper, more enriched experience for all nations. Every country, regardless of size, wealth or perceived influence, will have its own dedicated space where it can showcase its culture and progress, create collaborations and seek and provide solutions to concerns relevant to its circumstances and people. In another first, Expo 2020 will band together countries facing similar challenges within the three Expo 2020 subthemes of Opportunity, Mobility and Sustainability, instead of geographical clusters as has been the case at previous World Expos. This will spark more natural dialogue and encourage opportunities for meaningful discussion and cooperation. Expo 2020 Dubai is a once-in-a-lifetime celebration, where we will welcome artists and academics, pop stars and pioneering thinkers, culinary wizards and corporate gurus, tech ninjas and tomorrow’s leaders. We often see Expo 2020 wrongly described as a ‘trade show’. Expo 2020 Dubai will be much bigger than that. Across 173 days, we will host 60-plus live events every day, more than 200 F&B outlets, including 50 cuisines, and thrilling global celebrations, creating a journey of discovery where each and every visitor will be inspired to make a conscious difference.
How many countries will have a presence at the event? How many companies? More than 200 participants will take part in Expo 2020 Dubai, including nations, multilateral organisations, businesses and educational institutions. This includes a record 192 participating countries. We have also announced 11 Premier Partners, six Official Partners and three Official Providers – important collaborations that play a vital role in delivering a successful Expo 2020 Dubai and supporting its legacy. More than 37,000 suppliers from 151 countries
have registered to do business on Expo 2020 Dubai’s Online Market Place, and scores of international companies are already working with Expo across a wide range of sectors. These include several companies from the UK, such as Serco Group, which won a contract to maintain and operate the Dubai Metro, the main method of transportation for visitors to the Expo site; and Laing O’Rourke, whose remit includes building Expo 2020’s Leadership and Media Pavilions. Another Expo 2020 Dubai first is Expo Live, a US$100 million global social innovation and partnership programme helping to develop novel solutions to social and environmental challenges. So far, Expo Live is supporting and funding 120 startups from 65 countries, including six grantees based in the UK.
“The UAE has already established itself as a vital business hub. Around 25% of the world’s top 500 regional companies are based here. These accomplishments further underscore the UAE’s leading position as a prime destination for international investors” –Najeeb Mohammed Al-Ali, executive director, Expo 2020 Dubai Bureau
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1.2 | EXPO 2020
“The UAE and the UK enjoy a longstanding and thriving relationship that spans economic, strategic and cultural interests … the UK really understands the value of Expos – what they can bring to the nations that take part and to the countries that host them” –Najeeb Mohammed Al-Ali, executive director, Expo 2020 Dubai Bureau
the Great Exhibition in 1851, the UK really understands the value of Expos – what they can bring to the nations that take part and to the countries that host them. Every one of the 192 participating countries will play a vital role in creating an inclusive, international, exceptional Expo, and the UAE was delighted to see the UK begin construction on its pavilion in June 2019 – a stunning piece of architecture that will feature an illuminated, continually changing poem, created through visitor input and generated by artificial intelligence. We expect it to be a major attraction at the event and one of the most-visited pavilions at the Expo site, providing a strong platform for the UK to showcase its expertise to millions of visitors from around the world.
With around 12 months to go before the start of Expo 2020, what progress is being made at the Expo site and when do you expect construction to be completed? The UK has confirmed it will have a signif cant presence at Expo 2020, exhibiting under the theme of ‘Innovating for a Shared Future’. How important is the support of countries such as the UK to ensuring Expo 2020’s success? The UAE and the UK enjoy a long-standing and thriving relationship that spans economic, strategic and cultural interests and enables extensive cooperation in the region and around the world. Plus, as host of the first ever World Expo,
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
We are making great progress and it is truly exciting to see the transformation of the Expo 2020 site from barren desert to a global hub for celebration, inspiration and innovation. We have already completed the three Thematic Districts and the construction of the remaining permanent developments are on track to be finished by the end of this year. A key construction milestone during 2019 will be the crowning of Al Wasl Dome, the iconic steel trellis structure that forms
1.2 | EXPO 2020
the beating heart of Expo 2020. Named after the Arabic word for ‘connection’, it will host major ceremonies and celebrations during and after Expo, and the dome will act as an immersive 360-degree projection surface that can be viewed from both inside and outside.
A key theme of Expo 2020 has been prioritising support for smallto medium enterprises – how important are SMEs to the future of the UAE’s economy? SMEs are the driving force of the UAE’s economic development and a key pillar of our Vision 2021 National Agenda that aims to diversify our economy away from oil, creating a world-class, knowledge-based economic, tourism and commercial capital. In line with this vision, Expo 2020 aims to foster innovation and support small businesses. To date, we have awarded 55% of all Expo 2020 contracts, worth AED 3.4 billion (US$930 million) in total, to SMEs, and aim to divert 20% of our total direct and indirect expenditure towards the sector. We have also pioneered a number of initiatives to make it easier for SMEs to do business with the event. These include clearing payments in 30 days instead of the industry standard 90 days, guaranteeing a 50% payment upfront when procuring goods, or 25% when contracting services, and accepting bank cheques instead of deposits. Expo 2020’s Official Banking Partner, Emirates NBD, has also launched a new account designed specifically for SMEs registered on Expo’s Online Market Place, providing these businesses with preferential loan rates, working capital support and low minimum balance requirements. In addition, we aim to have on sale around 5,000 official licensed products developed in collaboration with up to 70 official licensees. Many of these licensees are GCC-based SMEs, providing them with a platform for global exposure that is already paying dividends for several businesses.
What sort of legacy do you expect Expo 2020 to create for the UAE’s economy and society? There is more to Expo 2020 than 173 days of world-class entertainment and enjoyment. Our goal from the very beginning has been to ensure it leaves behind a meaningful and lasting legacy, and we are committed to extending the benefits of Expo 2020 beyond the six months of the event and beyond the UAE to the wider region and the rest of the world. Expo 2020 will create a physical legacy through District 2020, and we have already touched on the economic legacy with Expo’s long-term contribution to growth and employment, but hosting this Expo also presents the UAE with a huge social opportunity to inspire and empower millions of visitors. For example, visitors to the Sustainability Pavilion will experience an emotional journey that addresses the negative environmental impact humankind is having on the planet, while also empowering them to make changes in their own lives, actions that collectively, on a global scale, will help protect and nurture our natural resources. Youth is another crucial element of this legacy, and we are
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
EXPO 2020’S INVESTMENT BOON EXPO’S GLOBAL PROFILE IS ATTRACTING SIGNIFICANT NEW INVESTMENT TO KEY SECTORS OF DUBAI’S ECONOMY
$3.1B $7.35B $18.76B Restaurants & Hotels
Construction
Events Organisation & Business Services
involving them in the journey to 2020, as well as throughout and beyond the event through the Expo Schools Programme, which invites the UAE school community to explore Expo 2020 and its global vision through dedicated thematic journeys. We are providing teachers with learning resources to inspire young minds, and we have already welcomed more than 140 schools and 5,000 pupils to the Expo 2020 Dubai Visitor Centre since October 2018. In line with the UAE’s National Agenda, our Emiratisation strategy encourages UAE nationals to play pivotal roles in delivering Expo 2020, with initiatives – such as the Expo Generation Programme, a fast-track management and leadership training for 350 UAE nationals – that equip candidates with the skills and experience they need to benefit both themselves, Expo 2020 and the UAE. All this, combined with the inclusive and international nature of Expo 2020, can only highlight the UAE’s capacity to bring the world together, promoting collaboration and cross-pollination of thoughts, cultures and ideas. As the first World Expo in the region and the largest event ever to be held in the Arab world, it will showcase the great potential of the region and amplify the UAE’s reputation as an inclusive, diverse, tolerant, safe and cooperative nation. We look forward to welcoming you in October 2020.
1.3 | TRADE
Recognised as the Middle East region’s largest exporter and importer of goods and services, the UAE is a vital hub for trade
T
he UAE’s prime geographical location, modern business environment, and world-class transport and logistics infrastructure has seen the country consolidate its reputation as the region’s largest and most-important trading hub over the past two decades. This is reflected by the fact the country has ranked among the top 20 global exporters since 2007 and has been the leading Arab exporter since 2013. In 2018, the UAE’s merchandise imports and exports totalled AED2.2 trillion (US$599 billion) according to data supplied by the World Trade Organisation (WTO). UAE exports were valued at $346 billion, accounting for 1.8% of total global exports and making it the world’s 16th largest exporting economy. The total value of merchandise imports to the UAE was $253 billion in 2018, accounting for 1.3% of all global imports and making the country the world’s 20th largest importer. The UAE was also the leading exporter and importer of commercial services regionally in 2018, with both worth $71 billion respectively. It was the only country in the region to feature in the top 20 trading nations in 2018.
SIGNIFICANT GROWTH IN NON-OIL FOREIGN TRADE The UAE’s economic diversification strategy has to date proven the most successful in the Middle East and North Africa, and a model for other countries to follow. The government’s efforts to reduce the reliance on oil revenues has seen a boom in non-oil foreign trade over the past decade. According to data from the UAE Federal Customs Authority (FCA), the UAE’s nonoil foreign trade, including direct and free zone trade, and customs warehouses, was worth AED1.628 trillion in 2018. The FCA data revealed that direct
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TRADING
TRADE | 1.3
non-oil foreign trade accounted for 63% (AED1.025 trillion) of the total value, while free zone trade and customs warehouses accounted for 36% (AED592.4 billion) and one percent (AED11 billion) respectively. The UAE’s reputation as the region’s most important business hub was further demonstrated by the 21% year-onyear increase in non-oil trade between the Emirates and Arab states in 2018. Trade exchange with Arab countries increased to AED341.2 billion, while the value of re-exports from the UAE to these countries totalled AED170.1 billion last year. Re-exports to all countries were worth AED478.4 billion compared to AED470.1 billion in 2017. Key commodities exported from the UAE in 2018 included raw and half-finished gold (AED53.4 billion) and raw aluminium (AED18.6 billion). The UAE’s GCC neighbours accounted for a 14% (AED220.9 billion) share
POWERHOUSE of total UAE non-oil foreign trade, split across imports (AED56.5 billion), exports (AED65.8 billion) and re-exports (AED98.6 billion). Saudi Arabia was the UAE’s biggest regional trading partner (AED107.4 billion in receipts), followed by Oman (AED46 billion), Kuwait (AED39.2 billion), and Bahrain (AED28.3 billion). Internationally, Asia and the Pacific Ocean region ranked first in terms of trade, accounting for 39.3% (AED603.2 billion) of the total, while Europe ranked second with 22.4% (AED344.4 billion). China is the UAE’s single largest trading partner, with the value of non-oil trade reaching $43 billion in 2018. The UAE’s non-oil foreign trade with China represented 16% of its total non-oil foreign trade with Asian countries last year. China accounted for 27% of all goods imported to the UAE in 2018 and ranked 11th internationally in terms of receiving
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1.3 | TRADE
Dubai’s Jebel Ali Port is the largest seaport in the Middle East
non-oil exports and re-exported goods from the UAE. The UAE accounted for 16% of Arab non-oil exports to China in 2018. The UK also ranks as one of the UAE’s most important trading partners. In 2018, the UAE was the UK’s number one trading partner in the Arab world, accounting for 32% of British merchandise foreign trade and 40% of British merchandise exports to the region. The two countries are targeting £25 billion-worth of bilateral trade by 2020. “The volume of non-oil trade between the UAE and the UK in 2018 reached $11.3 billion with growth of 9.2% compared to 2017,” explains UAE Minister of Economy HE Eng. Sultan Bin Saeed Al Mansoori, adding that the UAE was the European Union’s twelfth-largest trading partner worldwide in 2018. In regard to the rapidly expanding bilateral trading relationship with the UK, Al Mansoori says the past decade “has witnessed further deepening of ties and the establishment of targets in sectors of mutual interest. These range from economic cooperation to strategic alliances and cultural celebrations to trade exchanges and partnerships”.
NEW INITIATIVES TO SUPPORT UAE EXPORTERS AND INVESTORS Earlier this year, the UAE Ministry of Econ-
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
LOGISTICS SECTOR UNDERPINS GROWTH IN NON-OIL TRADE The UAE’s transport and logistics sector has proven one of its greatest success stories in the past two decades. According to data provided by the UAE Federal Competitiveness and Statistics Authority, the sector’s gross output totalled AED219 billion in 2018, while its contribution to UAE GDP is projected to increase to 8% by 2021. In Dubai, Jebel Ali Free Zone (Jafza) is home to more than 7,500 companies, a significant percentage of which specialise in transport and logistics services. Jafza’s economic contribution is remarkable: in 2017, the free zone generated trade worth $83.1 billion, while Jebel Ali Port & free zone accounted for more than 33% of Dubai’s GDP in 2018. Jafza also accounts for 23.9% of total foreign direct investment flows to the UAE and provides employment to more than 135,000 people.
omy (MOE), in conjunction with the UAE Federal Export Credit company and Etihad Credit Insurance (ECI), announced a raft of initiatives designed to support UAE exporters and investors and spur growth in the country’s non-oil economy. Key to these was a commitment to create a Non-Oil Foreign Trade development plan through to 2023, and an Investment and Internationalisation plan for the UAE’s top 100 exporting companies and top 100 SMEs that export goods and services to international markets. The partners will provide exporters with up-to-date market intelligence and facilitate financing and investment options. They will also offer insurance solutions to UAE-based businesses to boost export opportunities and provide tools to increase their global competitiveness. “This collaborative effort will play a vital role in enhancing non-oil foreign trade and in creating a favourable business environment for exporters [in the UAE],” explains Al Mansoori. According to Saed Alawadi, CEO of Dubai Export Development Corporation and board member and chairman of the ECI’s Executive Committee, the partnership will further strengthen the UAE’s status as “a diversified and resilient economy that also serves as an international business hub”. “The UAE’s growing non-oil trade reflects the government’s continuous efforts in supporting businesses in general, and exporters in particular,” he adds.
ABU DHABI TARGETS GROWTH IN EXPORTS TO KEY MARKETS September’s launch of the Abu Dhabi Exports Office (ADEX) marked a significant moment for the UAE capital in its bid to promote economic diversification. Established by the Abu Dhabi Fund for Development (ADFD), ADEX’s main priority is to provide financing and guarantees to public and private firms looking to import goods and services from the UAE. “ADEX also aspires to contribute to raising the volume of national non-crude oil exports and facilitate entry into new markets,” according to a government statement. “The launch of ADEX aligns with the significant growth of the UAE economy,”
TRADE | 1.3
UAE FOREIGN TRADE Description Imports of Goods (million USD) Exports of Goods (million USD) Imports of Services (million USD) Exports of Services (million USD) Imports of Goods and Services (Annual % Change) Exports of Goods and Services (Annual % Change) Imports of Goods and Services (in % of GDP) Exports of Goods and Services (in % of GDP) Foreign Trade (in % of GDP)
2013
2014
2015
2016
2017
239,000 379,000 61,157 20,422 8 6.1 64.9 100.6 165.5
250,000 375,000 63,744 22,982 9.9 1.8 68.9 99.1 168.1
230,000 265,000 65,650 26,358 -5.7 5.2 74.4 100.9 175.2
225,000 265,900 83,213 63,417 2.7 3.4 75.7 101 176.7
268,000 360,000 84,275 69,571 -1 0.5 72.4 100.4 172.8
Sources: WTO – World Trade Organisation & World Bank (latest available data)
“The volume of non-oil trade between the UAE and the UK in 2018 reached $11.3 billion with growth of 9.2% compared to 2017” – UAE Minister of Economy HE Eng Sultan Bin Saeed Al Mansoori explains Mohammed Saif Al Suwaidi, director general of ADFD. “[ADEX] aims to provide financing solutions to encourage national companies to leverage viable export opportunities and expand their footprint into new markets.” Al Suwaidi says ADEX’s goals are in line with strategic initiatives including UAE Vision 2021, Abu Dhabi Economic Vision 2030 and UAE Centennial 2071, in terms of supporting “the development and diversification of the national economy”. “In parallel with its role of supporting developing countries to achieve sustainable development through the allocation of concessionary loans and management government grants, ADFD also contributes to the long-term prosperity of our nation through offering investment opportunities for national and private sector companies in the country and abroad.” In addition to boosting national exports, ADEX aims to manage accompanying trade risks. The organisation’s financing ratio can reach 100%, depending on the type of transaction involved and the associated risks, it said in a statement.
DUBAI CONSOLIDATES REPUTATION AS A LEADING GLOBAL TRADING HUB International trade is a cornerstone of Dubai’s economy, as evidenced by the fact the total value of the emirate’s non-oil commodity trade reached AED1.3 trillion in 2017. By way of contrast, Dubai’s nonoil trade was valued at less than half this figure (AED576 billion) at the beginning of the decade, according to government data. The value of foreign trade rose 7% in the first quarter of 2019 to AED339 billion, driven by a 30% increase in export values. Dubai’s top four trading partners – China, India, the United States and Saudi Arabia – consistently account for around a third of all foreign trade. In 2016, China replaced India as Dubai’s largest trading partner. India is also the UAE’s third-biggest trading partner, with bilateral trade between the two countries forecast to reach $100 billion by 2020. The value of trade between Dubai and the countries of the GCC reached AED127 billion in 2017, representing a year-on-year increase of 10%. Re-exports accounted for 53% of Dubai’s total trade with the GCC.
According to data published in the Dubai Economic Report 2018, Dubai’s Trade Openness index, which tallies the value of exports, imports and re-exports attributed to GDP, was 321% in 2017, ranking the emirate fourth in the world and first among Gulf and Arab nations. “The Dubai Economic Report confirms that Dubai’s economy is firmly on its ambitious path towards excellence and establishing its position as a financial and business hub, regionally as well as internationally,” comments Sami Al Qamzi, director general of the Dubai Department of Economic Development (DED). “Economic policies being adopted by the government to stimulate diverse economic activities, increasing openness to the world and a developing network of regional and global partnerships are all contributing to accelerating investment inflows to Dubai. “Given the existing regional economic and political climate and its impact on economic activity in Dubai and the UAE, the Dubai Economic Report reinforces that the strategic initiatives launched by Dubai over the past two years, such as Smart City, Innovation Strategy and Islamic Economy, as well as the infrastructure projects being implemented ahead of Expo 2020, have sustained growth in Dubai.” Al Qamzi says that these and other initiatives launched over the past decade by the Dubai government to “accelerate business growth and improve the business environment have also helped to consolidate Dubai’s leadership globally”.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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1.3 | ISLAMIC ECONOMY
SPEARHEADING GROWTH IN THE ISLAMIC ECONOMY
The UAE has established itself as the Middle East capital of the Islamic Economy, making it a vital destination for international firms looking to tap a global market set to be worth more than $3 trillion annually by 2023
ISLAMIC ECONOMY RANKINGS
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WORLD’S TOP FIVE ISLAMIC ECONOMIES 2018/19 ① Malaysia
HALAL FOOD ① UAE
HALAL FINANCE ① Malaysia
HALAL TRAVEL ① UAE
② UAE
② Malaysia
② Bahrain
③ Bahrain
③ Brazil
④ Saudi Arabia ⑤ Oman
MODEST FASHION ① UAE
HALAL MEDIA & PRODUCTION ① UAE
HALAL PHARMACEUTICALS & COSMETICS ① UAE
② Malaysia
② Indonesia
② Singapore
② Malaysia
③ UAE
③ Turkey
③ Singapore
③ Qatar
③ Singapor
④ Oman
④ Saudi Arabia
④ Indonesia
④ Malaysia
④ Malaysia
④ Jordan
⑤ Jordan
⑤ Kuwait
⑤ Maldives
⑤ Turkey
⑤ Lebanon
⑤ Pakistan
UAE 2020: BUILDING A PROSPEROUS TOMORROW
ISLAMIC ECONOMY | 1.3
KEY ISLAMIC ECONOMY DRIVERS RAPID MUSLIM POPULATION GROWTH
70
GLOBAL ISLAMIC ECONOMY GROWTH FORECAST
%G
BN
2017 STRONG GLOBAL INVESTMENT
TH
3
BN
ROW
1.8
2023 GLOBAL TRADE IN ISLAMIC ECONOMY LIFESTYLE PRODUCTS
OVERALL ISLAMIC ECONOMY MARKET $7,000bn SIZE 2017
KEY ECONOMIC SECTORS
$2.11BN $3.07BN 2023
$90bn $131bn $288bn $361bn $3,800bn
(2017)
$271.8 BN US$745M $210.5BN
$5,250bn
IMPORTS
$61bn $87bn
Value of private equity and VC investments (2015-2018)
$209bn
EXPORTS
$270bn $2,440bn
DUBAI ISLAMIC ECONOMY SNAPSHOT CONTRIBUTION OF THE ISLAMIC ECONOMY TO DUBAI’S GDP (2017)
10%
of total GDP
$3,500bn
TOTAL VALUE OF THE ISLAMIC ECONOMY IN DUBAI (2017)
$11.15BN
$274bn $1,860bn
$1,750bn
(+2.4% YoY)
$177bn
“The rise of the [UAE’s] standing [in the global Islamic Economy] highlights the commitment … to the development of the Islamic Economy in Dubai, as well as the success of the UAE’s sustainable development drive, as part of its post-oil economic vision” – HE Eng Sultan bin Saeed Al Mansoori, UAE Minister of Economy and chairman of the Dubai Islamic Economy Development Centre
$1,300bn
$0bn
2017 Halal food Islamic Finance Halal Media & Recreation Halal Cosmetics
2023 Halal Travel Modest Fashion Halal Pharmacuticals
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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A NEW ERA FOR RAS AL KHAIMAH 032
UAE 2020: BUILDING A PROSPEROUS TOMORROW
Ras Al Khaimah Economic Zone (RAKEZ) ranks among the UAE’s fastestgrowing free trade precincts. Here, RAKEZ Group CEO Ramy Jallad discusses the economic zone’s success to date and plans for the future
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RAKEZ was established to support businesses operating in the UAE. What have been the economic zone’s biggest achievements to date? The past two years have been really remarkable for us, with a lot of milestones that we are very proud of. We launched new one-stop-shop service centres – two in Ras Al Khaimah and one in Abu Dhabi – with the goal of allowing our clients to accomplish everything in a single location. We have taken this concept online by introducing RAKEZ Portal 360. It’s a platform where our clients can apply for our wide-ranging services with just a few clicks, from licensing, leasing and visas to other support services. Our clients can also make payments on Portal 360 as well as track the progress of their applications. We opened a new office in Mumbai, India, and appointed Ravi Shastri as our Brand Ambassador to the Indian Business Community. This is because we have a large number of Indian investors in RAKEZ and continuously receive enquiries from prospective Indian clients. Our aim is to engage with Indian investors who are great contributors to Ras Al Khaimah’s development. We also relaunched our Media Zone to attract more creative firms and individual to the emirate. As for new products, we have introduced Freelancer Permits to help education and media professionals carve their own path and become their own boss. We introduced the Social Media Influencer Permit and a couple of promotions to help companies save on set-up costs. We also have the Mubader Package, which is designed to encourage the rise of the next generation of entrepreneurs in the UAE by allowing final-year students and graduates to set up their own business at a price that’s easy on the pocket. Our latest product is the BusinessWomen Package. It’s the first-ever business set-up package in the UAE designed exclusively for women. Our aim with this package is to empower women to live out their entrepreneurial dreams. In terms of awards and industry honours, we were recognised in the fDi Global Free Zones of the Year 2017 awards programme for our cost-effectiveness, and in 2018 for our efforts to reduce red tape for our clients. The Sheikh Saqr Program for Government Excellence (SSPGE) award named us as the Best RAK Government Entity in Offering Services while our Legal Team was recognised by The Legal 500 as one of the region’s most influential in-house counsels in its GC Powerlist: Middle East Teams 2018. Transform Awards recognised us with two accolades for Best Internal Communication during a Brand Development Project and Best Corporate Rebrand Following a Merger or Acquisition.
At launch, RAKEZ was described as “combining two of the fastest growing free zones in the UAE”. What benefits and advantages has this provided clients in the economic zone? RAKEZ brought together two of the UAE’s most succesful investment hubs. This move was a step towards revolutionising the investment landscape in Ras Al Khaimah. Under RAKEZ, the facilities, services, parks, and clients of the two free zones have been consolidated. This has opened up broader benefits and opportunities to global investors looking to establish operations in the
emirate. RAKEZ is one of the region’s few economic Provide cost-effective zones that offers both free premium solutions zone and non-free zone entity formations – enaEnsure efficiency in bling businesses to trade everything we do locally and internationally. This flexibility extends to Offer customised solutions the services we provide, for all investors from offering a variety of Continuously diversify licences including freelancer industries, sectors and permits as well as a range of activities customisable facilities, from shared workstations, offices, Equip our frontliners with warehouses, land for develthe right knowledge and opment and staff and labour tools in order for them to accommodations. What’s cater to our clients worth noting is that the launch of RAKEZ brought a lot of enhancements. We reviewed all of our systems and processes then made improvements as required. We increased our efficiency when dealing with clients and launched new services designed to provide the best customer experience while supporting their growth. The launch of Portal 360 and the opening of our new service centres across the UAE are highlights in this respect. I am also glad to say that our business set-up process takes only one to three days after receiving approvals from third-party entities.
FIVE STRATEGIC PILLARS
1 2 3 4 5
How many businesses does RAKEZ currently host? What is the breakdown of these businesses by sector? RAKEZ is home to more than 14,500 businesses originating from 100 countries and operating across 50+ industries. More than 6,600 of our clients are commercial enterprises, accounting for approximately 47% of our total client population. This is followed by the services sector where more than 4,800 of our clients are flourishing. General trading accounts for 1,200 clients, while more than 770 operate in the industrial sector. The remaining 1,100+ clients are spread across media, e-commerce, education and other sectors.
What specific industry sectors are you targeting for future development? We are currently working hand-in-hand with other government entities to deliver the Ras Al Khaimah 2030 Vision of becoming the preferred investment hub in the region. With this, we have launched the Ras Al Khaimah Industrial Strategy that focuses on attracting investors from 11 key sectors and 40 subsectors, including food manufacturing, pharmaceuticals, business services, automotive parts manufacturing, machinery and equipment, as well as building systems and materials segments. This
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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initiative is set to grow the emirate’s manufacturing GDP to 65% by 2030 based on strategic pillars that include improving Ras Al Khaimah’s business environment and ease of doing business.
How do you scout for new business from international markets? What countries do you currently have offices in and are you planning to expand your presence to new markets? We regularly send trade delegations to key markets and host delegations from a range of countries across the world. We conduct regular investment seminars, which helps us get to know our investors face-to-face and find out more about their specific requirements. Apart from that, we are launching a range of promotions to attract new investors to RAKEZ, while strengthening our relationships with our referral partners by providing them greater incentives. Presently, we have representative offices in Germany and India.
RAKEZ is one of the largest economic zones in the region. How has it helped put Ras Al Khaimah on the map as a major business hub? The birth of RAKEZ is actually a move towards solidifying the position of Ras Al Khaimah on the global economic map. Our comprehensive business solutions, high-quality facilities, first-class services, and overall ease of doing business have greatly enhanced Ras Al Khaimah’s reputation as an ideal place to establish and grow profitable companies. Since RAKEZ was launched, we are being recognised by prestigious award giving bodies, such as the fDi Global Free Zones of the Year. Of course, with this type of recognition, we are helping position Ras Al Khaimah as an attractive destination for investors looking to set up their new ventures. In addition, with more than 14,500 companies operating in more than 50 sectors, RAKEZ is among the key drivers of the emirate’s economic diversification plans as well as being a magnet for foreign direct investment. We have recently developed a strategy to help increase Ras Al Khaimah’s investment volumes and profile, another initiative in line with the emirate’s 2030 Vision. The focus will be on the investor’s journey, supporting them and becoming their strategic partner across main investment phases, such as business case evaluation and business set-up.
How has the formation of RAKEZ helped attract new business to Ras Al Khaimah? When we launched RAKEZ, we had 13,000 companies operating in the zone – a number that grew to over 14,500 this year. I am extremely confident this momentum will continue as we roll out new initiatives designed to attract multinational companies to choose Ras Al Khaimah as their work, live and play destination.
What unique benefits does RAKEZ offer businesses looking to establish a foothold in the UAE compared to other free trade zones in Abu Dhabi or Dubai, for example? RAKEZ furnishes clients with a suite of offerings that help them in their business journey. But you know what sets us apart from other investment hubs? It’s our strong commitment to our investors. This is among the many reasons that encourage investors to set up their
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
“We are blessed to be located in Ras Al Khaimah where living and business costs are up to 50% less compared with other regional destinations. We can offer clients comprehensive solutions at costeffective rates, making us an ideal destination for startups and entrepreneurs” – Ramy Jallad, RAKEZ Group CEO
IN FOCUS
governance according to global standards to allow increased transparency and reduced bureaucracy and provide our clients a seamless experience. Cost-effectiveness is another strength RAKEZ maintains over its competitors. We are blessed to be located in Ras Al Khaimah where living and business costs are up to 50% less compared with other regional destinations. We can offer clients comprehensive solutions at cost-effective rates, making us an ideal destination for startups and entrepreneurs. This quality makes RAKEZ an ideal business incubator to the SME community. Investors who base their companies at RAKEZ save on startup costs while enjoying the business-friendly environment the economic zone has to offer. And of course, the third key benefit that we offer is the ability to tailor our services and offerings to meet the specific needs of our investors.
What is your plan for the long-term development of RAKEZ? What milestone targets have you set in this respect?
business in RAK. We treat them as family and ensure we are right beside them every step of the way. We place the highest value on being a client-focused entity, to the point of making ‘client-centricity’ one of our strategic pillars. We believe clients’ interests should always come first as their growth and development is not only good for Ras Al Khaimah, but for the UAE. With this in mind, we are continuously striving to enhance the level of ‘ease of doing’ business in the environment that we offer to our clients. We are doing our best to simplify our processes as well as offer them quick turnaround time for results. Apart from that, we are making an ongoing effort to implement corporate
All of our future development plans for RAKEZ are aligned to the Ras Al Khaimah 2030 Vision. Among the projects in the pipeline is master planning our industrial zones, which is a huge part of our Industrial Strategy. Within each of our industrial zones, we want to create neighbourhoods of related companies that can support each other through their products and services. We will be promoting and attracting industry clusters in our zones. RAKEZ will also be launching and fully developing the OneRAK initiative, a cross governmental programme that aims to improve the business environment in Ras Al Khaimah by providing a seamless experience for investors and improving ease of doing business in the emirate. OneRAK will be providing clear and accessible information on all required processes, procedures, rates and more. We will also continue enticing more entrepreneurs, startups and small- to medium-sized businesses to Ras Al Khaimah. These firms are the backbone of Ras Al Khaimah’s and the UAE’s economy. Being important players in all value chains, we aim to provide a nurturing business environment that serves as a perfect business incubator for SMEs to become thriving enterprises.
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2.1 | KNOWLEDGE ECONOMY
KNOWLEDGE IS POWER The UAE is making strong progress in its bid to create a knowledge-based economy that promotes innovative thinking and entrepreneurship
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he UAE is already recognised as the most diversified economy in the Middle East. But in a bid to turbocharge economic growth and further reduce its reliance on oil revenues, the government is pursuing an ambitious strategy under the banner of UAE Vision 2021. Launched in 2010, Vision 2021 focuses on six core national priorities: social cohesion, the economy, education, justice, healthcare, and the environment. The UAE aims to meet its strategic goals in each sector by 2021 – the year it celebrates its Golden Jubilee – marking a fitting tribute to the founding fathers who came together to forge the country’s union in 1971. The UAE is investing more than AED300 billion (US$81 billion) in support of the strategy and has made significant progress towards reaching the targets set out in its National Agenda, which is a roadmap for development that was created in consultation with more than 300 officials from 90 federal and local government entities.
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The Agenda aims to raise standards across every sector of the economy, nurture innovation, and improve the well-being and happiness of UAE citizens and residents. With the implementation of the National Agenda and the National Innovation Strategy, the UAE is positioning itself to become one of the world’s most advanced nations, with an economy that values innovation and technological advancement for the betterment of all civilisation. “The National Innovation Strategy is a national priority, a primary tool to achieve our 2021 Vision and an engine for the growth of distinctive skills and capabilities across the nation,” explains HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. “We have always called for creativity in every field; this strategy is a concrete step to implement that vision. These initiatives around innovation will enhance quality of life in the UAE and take our economy to new horizons.”
KNOWLEDGE ECONOMY | 2.1
DRIVING INNOVATION
The National Innovation Strategy focuses on driving the development of six key sectors of the UAE economy
RENEWABLE ENERGY The UAE is investing heavily in developing clean energy solutions to meet domestic power demand and promote long-term environmental sustainability. Under the UAE’s Energy Strategy 2050, the country aims to increase the contribution of clean energy in the country’s total energy mix from 25% to 50% by 2050 and reduce the carbon footprint of power generation by 70%, creating fiscal savings of approximately AED700 billion by 2050. It also seeks to increase consumption efficiency of individuals and corporates by 40%. Abu Dhabi and Dubai are among the world’s solar power pioneers. Abu Dhabi is home to the world’s largest concentrated solar thermal power plant, located at Madinat Zayed, about 120km south-west of Abu Dhabi City. The 100MW plant, known as Shams, features 258,000 parabollic solar mirrors. In July this year, UAE authorities also launched the world’s largest single-site solar farm, Noor Abu Dhabi. The plant features a remarkable 3.2 million solar panels and generates 1.177 gigawatts of power. “Abu Dhabi is investing and incubating a new energy industry, domestically and internationally,” comments Dr. Sultan Ahmed Al Jaber, CEO of Masdar, the Abu Dhabi-based clean energy authority. “From precious hydrocarbon exports to sophisticated renewable energy systems, we are balancing the energy mix and diversifying our economy – moving toward a more sustainable future. Today, the UAE is the only OPEC nation delivering both hydrocarbons and renewable energy to the international market.”
EDUCATION The UAE is investing heavily in its education sector, having set ambitious targets based on global standards of excellence. “Our interest in the education sectors and making them a top priority, stems from our belief that the progress and welfare of any nation starts with the development of its educational systems,” comments HH Sheikh Mohammed. The country’s education sector is already recognised as the best-performing in the Arab world. Massive government investment and a rigorously enforced international benchmarking regime has seen standards improve dramatically in the past decade. According to Alpen Capital’s GCC Education Industry Report, the UAE allocated 21.2% of its federal budget for 2016 to education, compared to an average 15.6% across the GCC and 4.2% in the US.
2021 TARGET: TOP 10 EASE OF DOING BUSINESS INDEX This World Bank report ranks countries by the ease in which private enterprises operate in their respective market and by government measures supporting business activity.
GLOBAL INNOVATION INDEX Compiled by INSEAD, this index measures the degree of innovation across all facets of a country’s economy.
QUALITY OF AIR TRANSPORT INFRASTRUCTURE A World Economic Forum global ranking of aviation infrastructure.
QUALITY OF WATER TRANSPORT INFRASTRUCTURE A World Economic Forum global ranking of ports & shipping infrastructure.
QUALITY OF OVERALL INFRASTRUCTURE A World Economic Forum global ranking of infrastructure including transportation, telecommunication and power.
HEALTHCARE QUALITY INDEX A Legatum Prosperity indicator that measures the quality of healthcare across all sectors.
UAE 2018 ranking: 11 2021 target: 1
UAE 2019 ranking: 36 2021 target: Top 10
UAE 2018 ranking: 9 2021 target: 1
UAE 2018 ranking: 12 2021 target: 1
UAE 2018 ranking: 15 2021 target: 1
UAE 2018 ranking: 25 2021 target: 20
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2.1 | KNOWLEDGE ECONOMY
HEALTHCARE
TRANSPORTATION The UAE boasts some of the world’s most advanced and technologically sophisticated transport services. Dubai’s Metro is one of the world’s most advanced mass transportation systems, while Abu Dhabi is currently developing the first commercial Hyperloop service in existence, which will enable passengers to travel the 140 kilometre distance between the UAE capital and Dubai in just 12 minutes. The country has also built its formidable international reputation in the sector on the back of globally recognised brands. From infrastructure operators dnata and DP World to commercial airlines Emirates, Etihad Airways, Air Arabia and flydubai, the UAE is synonymous with world-class transportation providers. UAE authorities have committed to further large-scale investments in the transportation sector that will aid macroeconomic growth.
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TECHNOLOGY From cutting-edge telecommunications networks to advanced technology research centres, the UAE already boasts the region’s most extensive knowledge-based infrastructure. Now, thanks to government incentives, start-up businesses and SMEs are flocking to the country in a bid to capitalise on the growth of an ecosystem that is supporting the development of next-generation technologies, from semiconductors and nanotechnology to artificial intelligence and 3D printing applications. Dubai was recently declared one of the world’s most technologically advanced cities in a ground-breaking study published by the IESE Business School at the University of Navarra in Spain. The IESE Cities in Motion report ranks the world’s most advanced and dynamic cities according to criteria including infrastructure development and urban planning, social cohesion, environmental policies, wealth, culture and living standards. Dubai ranked fifth overall in terms of the implementation and integration of technology for the benefit of residents and visitors to the city, beating world-renowned technology hubs including Seoul, London and Eindhoven, but trailing Singapore (1st), Hong Kong, San Francisco and Reykjavik respectively.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
The UAE is already home to worldclass healthcare services. But under the National Innovation Strategy, the country is intent on developing ground-breaking medical technologies that will revolutionise patient treatments. From telemedicine services to smart healthcare applications and biomedical innovations, the UAE is pioneering the next generation of healthcare. Industry regulator Dubai Health Authority recently estimated that the market for 3D-printed medical products in Dubai will reach AED1.3 billion ($350 million) by 2025. It recently announced a range of ambitious goals in the sector, including the stated aim of producing prosthetic limbs based on 3D-printing technologies for less than AED400 ($108) by 2025. According to Alpen Capital, Dubai ranks among the top healthcare destinations globally. “The Emirate has an advanced healthcare system with numerous hospitals and primary healthcare centres offering state-of-the-art medical technologies and services that match international standards,” the analyst says. “The city has also developed two healthcare free zones, Dubai Healthcare City and Dubai Biotechnology and Research Park, to meet the demand for high-quality care.”
KNOWLEDGE ECONOMY | 2.1
“The National Innovation Strategy is a national priority, a primary tool to achieve our 2021 Vision and an engine for the growth of distinctive skills and capabilities across the nation… These initiatives around innovation will enhance quality of life in the UAE and take our economy to new horizons”
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— HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai
WATER
SPACE EXPLORATION
The National Innovation Strategy aims to support the development of innovative solutions for securing water supplies in the UAE and solving the global water scarcity challenge through the development of new, efficient and environmentally sustainable water desalination and purification processes. Through the implementation of a series of Public-Private Partnership (PPP) initiatives, the UAE aims to commercialise the most promising technologies for local and regional implementation. Abu Dhabi’s Masdar Institute is viewed as a world leader in the field of clean-energy desalination production. The organisation is currently trialling a range of cutting-edge approaches to clean-energy desalination. Masdar says at least half the technologies have not been commercialised or used on a utility scale anywhere in the world. “Our aim is to improve energy efficiency for desalination plants and [ensure] all of them are 100 percent-powered by renewable energy in the long run,” comments Mohammed El Ramahi, associate director at Masdar.
The UAE is investing billions of dollars in the creation of a self-sustaining space industry. In addition to successfully launching and operating a network of advanced communications satellites via its Yahsat and Thuraya subsidiaries, the UAE is currently developing the largest space centre in the Middle East and North Africa in Abu Dhabi, which will include a rocket launch site for space exploration. Under the guidance of the UAE Space Agency, the country will launch the Emirates Mars Mission Hope Probe next year, which will study Mars’ atmosphere and climate in a bid to better understand how to better mitigate climate change on Earth. “We are growing our space sector and developing partnerships with space entities all over the world in order to bring about great benefits for our country, the region, and the entire world,” comments Dr Mohammed Nasser Al Ahbabi, director general of the UAE Space Agency. “The space industry has been recognised for its ability to bring social, environmental, and economic benefits to nations around the world.”
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2.2 | ENERGY
CLEAN AND GREEN
The UAE is investing heavily in the development of a peaceful nuclear energy programme that will help spearhead the country’s clean energy agenda, explains HE Eng. Mohamed Al Hammadi, CEO of Emirates Nuclear Energy Corporation (ENEC)
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ocated in the Al Dhafra region of Abu Dhabi, the UAE’s Barakah Nuclear Energy Plant is a landmark development that will eventually supply up to 25% of the UAE’s total electricity requirements. Featuring four APR1400 nuclear reactors, it is the first nuclear power plant in the Gulf region and is scheduled to come online in late 2019 or early 2020. In this exclusive interview, HE Eng. Mohamed Al Hammadi, CEO of the Emirates Nuclear Energy Corporation (ENEC), discusses developments at the Barakah Plant and provides key insights into the UAE’s nuclear energy strategy.
ENERGY | 2.2
What project milestones has the UAE’s Barakah Nuclear Energy Plant project surpassed to date? ENEC has achieved a number of significant project milestones in its development of the facility. First and foremost, ENEC successfully completed construction of Unit 1 in 2018, and has handed over all systems to its subsidiary in charge of operations, Nawah Energy Company (Nawah) for final commissioning and testing. With this strategic milestone achieved, Unit 1 clears the construction phase and is now undergoing the operational readiness preparations required to obtain an operating licence from the UAE’s independent regulator, the Federal Authority for Nuclear Regulation (FANR). With the completion of Barakah Unit 1, we continue to make progress on the other three units. As of March 2019, Unit 2 was 95% complete, Unit 3 was at 91% completion and Unit 4 was 82%. Overall, the Barakah project is 93% complete. Other recent milestones completed safely and successfully include the Structural Integrity Test (SIT) and Integrated Leak Rate Test (ILRT) at Unit 2, the completion of Unit 4’s Reactor Containment Building (RCB) dome and Reactor Coolant Loop (RCL) pipe welding, and the completion of all major construction work on Unit 3’s Turbine Generator and Reactor Pressure Vessel (RPV) internals.
What is the future vision for nuclear energy in the UAE? How much of the energy mix will it comprise? In terms of our long-term strategy, the UAE Energy Strategy 2050 contains a number of policy targets, among them a reduction in carbon dioxide emissions by 70%, an increase in clean energy use by 50% and a 40% improvement in energy efficiency by the middle of the century. In terms of sources of energy for local consumption, the 2050 plan envisions 44% coming from renewables, 38% from natural gas, 12% from clean fossil fuels, and a further 6% from peaceful nuclear energy. At the moment, the vast majority of the country’s energy needs are met by natural gas.
Who are the key project partners in the construction of the nuclear plant and how were they appointed? In 2009, ENEC selected the consortium led by the Korea Electric Power Corporation (KEPCO) for the construction and delivery of four APR1400 nuclear reactor units at the Barakah site as a result of a competitive tender. KEPCO was the obvious candidate for partnership because of its position as a leader in safety, plant reliability and efficiency. KEPCO was chosen following an exhaustive year-long evaluation process by a 75-member team of experts. In 2016, ENEC and KEPCO signed a joint venture (JV) agreement for long-term partnership and cooperation. As a result of the JV, ENEC and KEPCO established two new subsidiary
“One of the government’s most important objectives in establishing a nuclear energy programme in the UAE was to support the expansion of the UAE’s economy… the investment made today will drive economic and social growth in the UAE for many decades to come” — HE Eng Mohamed Al Hammadi, CEO of Emirates Nuclear Energy Corporation (ENEC)
UAE ENERGY STRATEGY 2050: A UNIFIED APPROACH The UAE’s Energy Strategy 2050 is considered one of the world’s first national unified energy strategies based on supply and demand. The strategy aims to increase the contribution of clean energy in the country’s total energy mix from 25% to 50% by 2050 and reduce the carbon footprint of power generation by 70%, creating fiscal savings of approximately AED700 billion by 2050. It also seeks to increase consumption efficiency of individuals and corporates by 40%. The strategy targets an energy mix that combines renewable, nuclear and clean energy sources to meet the UAE’s economic requirements and environmental goals as follows:
≠ CLEAN ENERGY: 44% ≠ GAS: 38% ≠ COAL: 12% ≠ NUCLEAR: 6% According to HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, the combination of renewable, nuclear and clean energy sources will not only meet the UAE’s economic requirements but its long-term environmental goals. The UAE aims to invest AED600 billion by 2050 to meet the nation’s growing energy demand and ensure sustainable economic growth over the next three decades. “Our new energy plan balances between supply and demand and takes into consideration our international commitments in term of environment. It also ensures a comfortable economic environment for growth across the sectors,” said Sheikh Mohammed, adding that the plan took into account forecast economic growth of 6% per annum. “Ensuring the sustainability of energy resources is a guarantee of sustainability of growth in our country. The government has made an achievement by drafting the first unified energy strategy in the country based on supply and demand. He who does not think of energy is not thinking about the future,” he explained. “The Gulf countries are similar in their economic structure, and we hope that we will one day have a unified GCC energy strategy in order to ensure sustainable growth for our people and global influence for our economies.”
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2.2 | ENERGY companies, Nawah Energy Company (Nawah) and Barakah One Company. Nawah serves as the operating and maintenance subsidiary for the Barakah plant, while Barakah One Company is mandated to manage the financial and commercial interests of the project. Through the JV, KEPCO is a minority stakeholder in both companies.
What is the tendering process for new projects at the plant and how can British companies get involved? Tenders are shared on a regular basis with our registered suppliers, and all subsequent proposals are extensively reviewed as a part of our rigorous procurement process. There are several ways for British
“Bringing together the variety of players that can address the energy trilemma is key to solving the challenges the world faces today. The UAE is committed to inspiring action from all people and actors involved, and to thinking more critically about the abundant opportunities the energy sector provides” — HE Eng. Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy & Industry
ABU DHABI HOSTS REGION’S FIRST WORLD ENERGY CONGRESS The 24th instalment of the industry’s most important triennial event brought more than 10,000 delegates to the UAE capital Thousands of experts, pioneers and decision makers from across the global energy sector recently converged on Abu Dhabi for the 24th World Energy Congress. The triennial conference, which is recognised as the largest, longest running and most influential energy gathering in the world, was staged from 9-12 September at Abu Dhabi National Exhibition Centre (ADNEC). It marked the first time the Congress had taken place in the Middle East. The event witnessed an impressive list of energy industry stakeholders and business leaders leading discussions and debates on some of the hottest issues facing the industry. “We are excited to be hosting the 24th World Energy Congress in the UAE,” commented HE Eng. Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy & Industry. “The [event] programme [highlighted] the changing nature of the sector such as the rise of digitalisation and the greater role of entrepreneurs but also energy-engaged citizens in shaping the future of the way we produce and consume energy. Bringing together the variety of players that can
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address the energy trilemma is key to solving the challenges the world faces today. The UAE is committed to inspiring action from all people and actors involved, and to thinking more critically about the abundant opportunities the energy sector provides.” More than 10,000 delegates attended the Congress, gaining valuable insights from more than 250 keynote speakers, 50 global energy ministers and 500 CEOs of major energy organisations. High-profile speakers included Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Industry; Dr. Sultan bin Ahmad Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO; Omar bin Sultan Al Olama, UAE Minister of State for Artificial Intelligence; ,Awaidha Al Marar, chairman of Abu Dhabi Department of Energy; and Saeed Al Tayer, managing director and CEO of Dubai Electricity and Water Authority. Prominent international delegates included Alexander Novak, the Russian Federation’s Minister of Energy; Dan
UAE 2020: BUILDING A PROSPEROUS TOMORROW
Brouillette, Deputy Secretary of US Department of Energy; Megan Woods, New Zealand’s Minister of Energy and Resources; Joao Galamba, Portugal’s Secretary of State for Energy; Khalid Al-Falih, Saudi Arabia’s Minister of Energy, Industry and Mineral Resources; Matthew John Kean, Australia’s Minister of Energy and Environment; and Mohamed Arqab, Algeria’s Energy Minister. Major international organisations with representatives at the event included the United Nations, the World Bank, Friends of the Earth, World Wildlife Fund, General Electric and Petronas. This year’s event focused on key issues relating to the full spectrum of energy output, supply and diversification from oil and gas to renewables and nuclear. It also provided a valuable platform for the UAE to showcase its efforts designed to create a sustainable and future-facing energy sector that embodies the legacy and leadership of the late Sheikh Zayed bin Sultan Al Nayhan, founding father of the UAE.
ENERGY | 2.2
HERE COMES THE SUN Solar is playing a crucial role in the UAE’s clean energy mix Given the UAE’s abundance of sunshine, it is not surprising that solar ranks among the country’s fastest-growing energy sectors. Over the past decade, the country has surpassed a number of major milestones in terms of solar energy production. By 2013, the UAE ranked third in the world in the production of concentrated solar power (CSP), having opened the world’s largest CSP plant – Shams 1 – in Abu Dhabi. By 2014, roughly 140 MW of solar power was being generated in the UAE. The $600 million, 2.5 square kilometre Shams 1 plant has the capacity to feed 100 MW of electricity into the national grid, providing power for up to 20,000 homes, while diverting 175,000 tonnes of CO2 per year from the atmosphere. In July this year, UAE authorities flicked the switch on the world’s largest single-site solar farm, Noor Abu Dhabi. The plant features 3.2 million solar panels and generates 1.177 gigawatts of power. Not to be outdone, Dubai has confirmed plans for a 700-megawatt expansion of Mohammed bin Rashid Al Maktoum Solar
companies to participate, including through the opening of a branch office in the UAE, partnering with a local company or entering into a JV with a local firm.
In regard to the UAE Centennial Plan 2071, what role will nuclear energy play in terms of economic contri� butions, job creation and clean energy supplies? One of the government’s most important objectives in establishing a nuclear energy programme in the UAE was to support the expansion of the UAE’s economy through the provision of clean and reliable electricity generation, as well as the development of a local nuclear energy industry supply chain. The four units that make up the Barakah plant have an operational lifetime of 60 years, which could potentially be extended. This means that the investments made today will drive economic and social growth in the UAE for many decades to come. To date, more than 1,500 local companies have been contracted for the delivery of products and services for the Barakah plant, with contracts worth more than US$3.8 billion. Local contractors include Emirates Steel, National
Park, which will include construction of the world’s tallest solar tower. Situated on the outskirts of Dubai, government authorities anticipate the solar park will cover an incredible 214 square kilometres and generate 5,000 megawatts of power by 2030, effectively reducing carbon emissions in the emirate by 6.5 million tonnes per year. “[This] strategic project supports the vision of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to promote sustainability, and make Dubai a global centre for clean energy and a green economy,” comments HE Saeed Mohammed Al Tayer, managing director and CEO of Dubai Electricity & Water Authority (DEWA). “This vision is supported by the Dubai Clean Energy Strategy 2050 to increase the share of clean energy in Dubai’s total power output to 7% by 2020, 25% by 2030, and 75% by 2050. “Our focus on renewable energy generation has led to a drop in prices worldwide and has lowered the price of solar power bids in Europe and the Middle East,” he adds.
Cement, Dubai Cable Company (DUCAB), National Marine Dredging Company, Western Bainoona Group and Hilalco. The UAE Peaceful Nuclear Energy Programme is also supporting the development of human capital in the UAE by providing a wide range of education and training opportunities along with long-term, high-value jobs. ENEC, Nawah and Barakah One Company currently employ more than 2,800 highly trained personnel, including the operators, engineers, technicians and support staff responsible for the safe operations of the Barakah plant. Around 60% of ENEC, Nawah and Barakah One Company staff are UAE Nationals – professionals who will ensure the long-term sustainability of the UAE Peaceful Nuclear Energy Programme. In addition, the four units of the Barakah Nuclear Energy Plant are expected to prevent the release of more than 21 million tonnes of greenhouse gases every year, equivalent to removing 3.2 million cars from the UAE’s roads every year. This demonstrates the clear benefits of nuclear energy; supplying abundant quantities of electricity around the clock, while producing almost zero carbon emissions.
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2.3 | SUSTAINABILITY
THE FUTURE IS
GREEN F
rom world-leading clean energy projects to cutting-edge waste management and sustainable urban planning, the UAE is pioneering a new era of sustainable economic development authorities believe will have important and positive global consequences in the battle to combat climate change. As set out in its ‘Energy Strategy 2050’, which is considered the first unified energy strategy based on supply and demand, UAE authorities plan to meet 50% of domestic power requirements through clean energy sources by 2050. Abu Dhabi is already a global leader in solar energy production, being home to the world’s largest concentrated solar power (CSP) plant, known as Shams 1.
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The UAE is pursuing an ambitious green agenda at home and abroad, which it anticipates will lay the platform for a new era of economic growth
Earlier this year, authorities revealed plans to develop a new 2GW solar project in the emirate’s Al Dhafra region that will eclipse the record-breaking 1GW Noor Abu Dhabi Plant, which opened in July 2019. Elsewhere, Sharjah has established itself as a pioneer in the development of waste-to-energy production. A joint facility managed by Bee’ah and Masdar currently converts municipal waste into
UAE 2020: BUILDING A PROSPEROUS TOMORROW
energy, creating enough power to supply almost 30,000 homes across the emirate. The facility currently diverts more than 70% of waste from landfills, with the ultimate goal being to reduce Sharjah’s landfill contribution to zero. Meanwhile, ongoing expansion of Dubai’s Mohammed bin Rashid Al Maktoum Solar Park will see the facility generate 5,000 megawatts of power by 2030. This facility and others will help Dubai meet its target of generating 75% of its domestic power requirements from clean energy sources by 2050. “The strategy... will shape the energy sector in Dubai over the next three decades,” comments HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE
SUSTAINABILITY | 2.3
“I believe we have a clear opportunity to embark on a new era of economic growth spurred by global, collaborative investment in climate action. Climate change knows no borders, and neither should we” — Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Climate Change and Environment
and Ruler of Dubai. “It [reflects] our commitment to establishing a sustainable model in energy conservation that can be exported to the whole world and support economic growth without damaging the environment and natural resources. “Our goal is to become the city with the least carbon footprint in the world by 2050,” he adds. This global view of sustainable economic development is reflected in the UAE’s funding of clean energy projects in more than 30 countries worldwide, with investments worth more than US$1 billion to date. Emirate-based initiatives are also leading the way. Dubai Electricity and Water Authority’s (DEWA) AED100 billion Green
Fund, for example, provides low-interest loans to clean energy investors in the emirate, providing a model for future developments elsewhere in the world. “Every investment in the development of clean energy sources is at the same time an investment to protect the environment for future generations,” says HH Sheikh Mohammed. “It is an effort to build our sustainable economic sectors which do not depend on non-renewable energy resources and are unaffected by volatile energy prices. “Through this strategy, which is based on innovation, research and development, we aim to explore the future of the energy sector to unveil initiatives that will make use of the scientific and technological developments in this sector
and take the lead in their development and application.”
INVESTING FOR A GREEN FUTURE The UAE’s ambitious approach to tackling climate change on a global level is also reflected in its investment strategies. In 2017, the UAE established the One Planet Sovereign Wealth Fund Working Group under the auspices of Abu Dhabi Investment Authority – one of the world’s largest investment funds with assets worth approximately $875 billion. Its aim is to incorporate climate change planning and analysis into investment decisions that will encourage sustainable economic growth. “We are integrating climate planning
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2.3 | SUSTAINABILITY
ABU DHABI HOSTS REGION’S FIRST WORLD ENERGY CONGRESS The UAE is investing billions of dollars in renewable energy projects worldwide through its clean energy subsidiary, Masdar Abu Dhabi’s Masdar is a global leader in renewable energy projects and is recognised as one of the largest developers of off-grid solutions on the planet. The firm is present in 25 countries worldwide, and has invested more than US$12 billion in clean energy projects to date in locations spanning the Caribbean to the South Pacific and Asia. Its renewables portfolio expanded 33% in 2018, reaching nearly 4GW of gross capacity either in operation or under development. Together, these projects displace nearly 5.4 million
tonnes of carbon dioxide per year. The total electricity production of all Masdar’s solar and wind projects combined equates to just over 10,680 GWh annually. Masdar’s expanding influence in the renewable energy sector reflects the UAE’s growing role on the global stage and its efforts to enhance economic ties with far-flung areas of the world. In January 2017, the UAE government launched the UAE-Caribbean Renewable Energy Fund, with seed investment of $50 million. The creation of the fund represented one of the largest-ever single investments
in the region’s clean energy sector. It will work to unlock the Caribbean region’s “underutilised wind and solar potential to drive energy security, job creation and socioeconomic development”, HE Mohammed Saif Al Suwaidi, director general, Abu Dhabi Fund for Development (ADFD), revealed. Masdar has also completed more than a dozen solar and wind projects in the Pacific island nations as part of the UAE-Pacific Partnership Fund, which aims to reduce their reliance on costly and environmentally damaging diesel fuel imports.
The UK’s London Array is the world’s largest offshore wind farm currently in operation
MASDAR’S GLOBAL RENEWABLE ENERGY PROJECTS: LONDON ARRAY, UK (630MW OFFSHORE WIND FARM) The London Array is the world’s largest offshore wind farm currently in operation. Inaugurated in July 2013, the plant powers more than half a million homes and displaces about 925,000 tonnes of carbon dioxide emissions per year.
DUDGEON, UK (402MW OFFSHORE WIND FARM) The Dudgeon Offshore Wind Farm, located 32 kilometres off the coast of North Norfolk, was completed in 2017. The facility features 67 6MW wind turbine generators that produce enough electricity to power 410,000 homes across the UK.
into the management of more than $3 trillion-worth of assets through the One Planet Working Group,” explains Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Climate Change and Environment. “I believe we have a clear opportunity to embark on a new era of economic growth spurred by global, collaborative investment in climate action. Climate change knows no borders, and neither should we.”
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GEMASOLAR, SPAIN (20MW): The world’s first utility-scale solar power plant to combine a central tower receiver system and molten salt storage technology enabling electricity supply 24 hours a day, Gemasolar can generate electricity for up to 15 hours without solar irradiation.
Dr. Al Zeyoudi says investments in environmentally sustainable initiatives will not only improve the lives of millions of people worldwide, but will auger in a new era of ‘green’ economic development in fast-growing markets. “We can save seven million lives each year [worldwide] by eliminating sources of air pollution. In 2019, climate change is not just about the planet, it is also about people. But, more than that, it is
UAE 2020: BUILDING A PROSPEROUS TOMORROW
TAFILA WIND FARM, JORDAN (117MW): The first commercial utility-scale wind power project in the Middle East, the Tafila Wind Farm has increased Jordan’s total power capacity by 3% and provides power for 83,000 homes across the kingdom.
the best investment case we have ever known,” he explains. “For so long, climate action has been seen as a challenge. We should be positive and consider the opportunities that lie ahead. 2019 is the year to focus on the economic opportunities of climate action, to show that climate action will create jobs and new industries, and to improve the health of our most vulnerable people,” he adds.
EGYPT SAUDI ARABIA
QATAR UAE
Our portfolio currently stands at 18 properties across 4 countries, with many other new projects in the pipeline.
2.4 | SPACE
THE FINAL FRONTIER The UAE is positioning itself as a pioneer in the next phase of space exploration and colonisation, with firm plans to establish a permanent human presence on Mars within the next century. Here, HE Dr Mohammed Nasser Al Ahbabi, director general of the UAE Space Agency, outlines the country’s vast ambitions
The UAE’s space programme ranks as one of the world’s most ambitious in its scope. How have the UAE’s space industries developed to date and what are the country’s key goals for the coming years? One year after our founding father, the late Sheikh Zayed, brought together the seven Emirates with the declaration of union, he was gifted a little piece of rock from the moon. This small but symbolic stone was brought back to earth in September 1972 by the last people to set foot on the moon, Eugene Cernan and Harrison Schmitt. At that time, during our country’s earliest days, no one could have foreseen or predicted where we would be today in our journey to explore space. The UAE’s space sector has grown rapidly over the past decade. Today, we have 10 satellites in orbit, each serving various
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purposes for the benefit of humanity, and four space science and research centres, as well as the region’s largest and most comprehensive space exploration programme. We have also successfully launched our National Space Strategy, Space Policy, Space Law, and National Plan for Promoting Space Investment, to organise and grow our space sector. Industry wise, one of our first major forays into the peaceful utilisation of space came in 1997 with the formation of Thuraya, which is the Arabic word for the Pleiades constellation. This satellite telecommunications company has since gone on to become the largest of its kind in the region, providing coverage in more than 161 countries worldwide. Ten years later, in 2007, Al Yah Satellite Communications Company (Yahsat) was formed, the second Emirati venture of its
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“During our country’s earliest days, no one could have foreseen or predicted where we would be today in our journey to explore space” — HE Dr Mohammed Nasser Al Ahbabi, director general of the UAE Space Agency
kind. This was a reflection of the deep-seated national understanding of space activities as a sound economic investment and a means towards advancing national capacity development across a range of vital and related sectors. In 2018, Yahsat acquired Thuraya, enhancing the company’s future growth prospects.
The Space Agency celebrated a major achievement last year when KhalifaSat – the first remote sensing Earth observation satellite designed and built in the UAE – successfully entered earth’s orbit. What kind of milestone did this represent for the industry and the country in general? The launch of KhalifaSat was a significant achievement for the UAE, as the satellite was entirely designed and built by Emirati
scientists and engineers at the Mohammed Bin Rashid Space Centre (MBRSC). It is currently the most advanced satellite developed by the UAE. Its successful launch demonstrated to the world our nation’s advanced technological capabilities and desire to contribute to international efforts to better understand our planet and mitigate the impacts of climate change. KhalifaSat will send high-quality images to a ground station in the UAE in order to help address global challenges relating to climate change and the environment, disaster control and urban planning. Its launch was also a boon for the space industry worldwide, as the satellite provides high-resolution imagery to local government entities and a number of commercial entities locally, regionally and internationally.
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The space programme recently encountered a set� back when the Falcon Eye 1 satellite was lost during take-off. What lessons can be learned from these types of incidents? Space exploration is always challenging; it involves significant risk no matter how much preparation and forward planning is undertaken. Since the foundation of Thuraya and the beginning of the UAE’s space activities, we have been very fortunate to preside over numerous successful satellite deployments, despite the massive risks and challenges presented by the launch of each and every one them. When it comes to space, nothing is guaranteed as often we are literally delving into the unknown. Therefore, it is crucial that we understand all the risks, do our best to prepare for every outcome, and communicate with our stakeholders transparently about the significant dangers associated with space. The history of space exploration and commercial space activity is littered with failed missions, and yet both still garner the interest and passion of people and nations all over the globe.
The UAE plans to send a probe to Mars by 2021. How is the Mars programme progressing and what are the key challenges associated with achieving this goal? The Emirates Mars Mission’s Hope Probe, which is scheduled for launch next year, aims to study the Martian atmosphere and climate, and help us understand how to better mitigate climate change on Earth.
We are currently on schedule to launch the Mars Hope Probe in 2020, roughly coinciding with the country’s hosting of the International Astronautical Congress. We have made great progress on the Hope Probe; last year the Emirati development team successfully completed the design phase and is now in the midst of assembling and testing its systems and equipment. As mentioned earlier, there will always be challenges associated with any space exploration project of this magnitude, but we are working closely with experts from around the world and taking advantage of our own cutting-edge facilities to ensure the probe is developed in accordance with the highest international standards.
The UAE’s first astronaut, Hazza Al Mansouri, recently returned from his successful mission to the International Space Station (ISS). How crucial are experiences such as these to the longterm development of the UAE’s space programme, and ultimate� ly, attempting a manned trip to Mars? These experiences are essential to the continued development and advancement of our human spaceflight capabilities, and more generally, our national space programme. Hazza Al Mansouri’s trip to the ISS counted as the first UAE manned mission to space. It marked a major milestone for our national space programme and in developing our space exploration capabilities. These experiences are significant for us given our ambitious, long-term goal of establishing a human settlement on Mars within the next century. We are constantly preparing our youth to become the future leaders of the space sector through our training and education programmes and collaborations with international space agencies. As a part of our Mars 2117 project we aim to bring the inter-
2020: MARS MISSION COUNTDOWN After years of development, the UAE’s Emirates Mars Mission’s (EMM) Hope Probe is set to blast into space in July 2020 and enter Mars’ orbit in the first quarter of 2021. The probe’s arrival on the Red Planet will coincide with the UAE’s Golden Jubilee, marking an incredible milestone for the Emirates just 50 years after its foundation. The Hope Probe will launch from the Tanegashima Space Centre in Japan, with a carrier rocket similar to that used for the launch of satellites. The probe is expected to collect more than 1,000 Gb of data focused mainly on geographic and atmospheric information. One of its primary goals is to discover the causes of loss of hydrogen and oxygen gases, the two main constituents of water, from the upper layer of the Martian atmosphere. The probe will also break new ground becoming the first to take a global picture of the Martian atmosphere. “[The launch of the Hope Probe] will be a major achievement for Arabs and Muslims in the realm of space exploration, and will restore the glory of our forefathers, in the service of humanity,” says Al Ahbabi. The launch of the probe will mark a major milestone not just
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national community together to establish a settlement on the Red Planet by 2117, so traveling to the ISS is a stepping stone along this journey.
The UAE is positioning itself as a space pioneer in the Middle East. What kind of economic and social benefits will a thriving space industry bring to the country and the region as a whole? We are growing our space sector and developing partnerships with space entities from across the world in order to bring about great benefits for our country, the region, and the entire planet. The space industry has been recognised for its ability to create social, environmental and economic benefits for nations around the world. Recently, the UAE launched the Arab Space Cooperation Group as an initiative to develop the space sector in the region, and empower the Arab world within the global space sector. The organisation aims to promote knowledge exchange between the UAE and other Arab countries in order to develop joint projects, ultimately contributing to the growth of the regional space industry. As part of the initiative, the UAE will launch Satellite 813 within the next three to four years, which will benefit the entire region by helping to tackle environmental challenges. The UAE Space Agency is also committed to inspiring the next generation of children and students to pursue STEM education and develop advanced skills applicable
for the UAE’s space programme, but for the Arab world. There have been just 26 successful missions to Mars to date, most notably by the United States, Japan and the European Union. The Hope Probe is the first to be developed and launched by an Arab nation. “We are approaching an historic Arab and Islamic achievement in space exploration with the final preparations to launch the Hope Probe. These preparations are being supported and guided by the wise leadership and by the sons of Zayed who seek to raise the UAE’s flag through this ambitious project, the largest of its kind in the region to explore another planet,” comments Dr. Ahmad Belhoul Al Falasi, Minister of State for Higher Education and Advanced Skills and Chairman of the UAE Space Agency. “The Hope Probe will be a milestone in the UAE’s record of achievements. It is a confirmation to the whole world that the UAE has entered the global space exploration race and is determined to hold a leading position among the developed countries in this difficult and complex field. Only countries with people armed with science, ambition, a spirit of challenge and achievement can enter this field.”
“The Hope Probe… is a confirmation to the whole world that the UAE has entered the global space exploration race and is determined to hold a leading position among the developed countries in this difficult and complex field” — Dr. Ahmad Belhoul Al Falasi, Minister of State for Higher Education and Advanced Skills and chairman of the UAE Space Agency
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“When it comes to space, nothing is guaranteed … the history of space exploration and commercial space activity is littered with failed missions, and yet both still garner the interest and passion of people and nations all over the globe” — HE Dr Mohammed Nasser Al Ahbabi, director general of the UAE Space Agency
to not only the aerospace sector but numerous other industries. We are working closely with local schools, universities, astronomy centres, regional partners and international space entities to organise campaigns and provide unique educational opportunities to young people across the UAE. This will undoubtedly positively contribute to our country’s social and economic growth and development. Apart from our ongoing educational outreach activities, we also recently launched a ‘National Plan for the Promotion of Space Investment’, which seeks to encourage investment in the UAE and regional space industries. The plan promises to transform the nation into a regional hub for commercial space activities and advanced research and development.
What international agencies is the UAE Space Agency partnering with for space exploration and other initiatives? What kind of benefits does international cooperation with the likes of NASA offer? The UAE Space Agency has partnered with more than 25 space entities, including major international space agencies and organisations and companies, to collaborate in areas of research, education, technology, space flights, and space legislation. International collaborations are essential for transferring
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knowledge to the UAE in order to help achieve our ambitious longterm goals. NASA is one of our most significant partners and has supported us in advancing the space sector in the UAE and developing Emirati talent. In 2018, we signed an MoU with NASA for cooperation in human spaceflight, which gives UAE astronauts the chance to be trained at NASA facilities and launched into space aboard US vehicles. Moreover, highly qualified Emirati students had a chance to be part of a paid internship programme with NASA, where they worked alongside students from the United States and exchanged knowledge and expertise. In addition, the UAE is a member of major international space organisations and alliances, such as the Committee on the Peaceful Uses of Outer Space (COPUOS), the United Nations Office for Outer Space Affairs (UNOOSA), International Space Exploration Coordination Group (ISECG), Group on Earth Observations (GEO), and the International Astronautical Federation (IAF). The UAE also recently joined the Space Climate Observatory (SCO) initiative, which highlights the UAE’s position in the space industry at an international level.
2.5 | FEMALE EMPOWERMENT
EQUALITY IN ACTION
The UAE is setting the benchmark for the Arab world in promoting gender equality
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A
s one of the Arab world’s most progressive countries, the UAE has implemented a series of government-led initiatives designed to empower the country’s female population and ensure women are granted the same opportunities as men across all facets of government, business and society. Since the UAE’s foundation in 1971, women have been recognised as equal partners in national development by UAE authorities. The founding father of the UAE, the late HH Sheikh Zayed Bin Sultan Al Nahyan, made women’s empowerment a top priority of the first UAE Government. Sheikh Zayed once said: “The woman is half of the society; any country [that] pursues development should not leave her in poverty or illiteracy. I am on the woman’s side; I always say this in order to uphold her right to work and participate in the building process of her country”. The Constitution of the UAE guarantees equal rights for men and women, ensuring both genders enjoy the same legal status, claim to titles, access to education, the right to practice professions, and the right to inherit property. Women are also guaranteed the same access to employment, health and family welfare facilities. Since HH Sheikh Khalifa bin Zayed Al Nahyan came to power in 2004, the issue of women’s empowerment has gathered momentum, while more recently, HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, has been at the forefront of promoting equality, having launched the Emirates Council for Gender Balance at the UAE Government Summit in Dubai in 2015. The council oversees the implementation of best practices and processes to ensure federal institutions meet their respective gender balance targets. The council carries out several functions, including reviewing legislation, policies and programmes to achieve gender balance in the workplace. It also works with other influential organisations such as the General Women’s Union (GWU) to draft comprehensive strategies to encourage the participation
of women and empower them in all areas of society. Also in 2015, government authorities announced a series of initiatives designed to establish the UAE as one of the world’s top 25 countries for gender equality by 2021. At the forefront of this goal is the National Strategy for Empowerment of Emirati Women in the UAE (2015-2021). The strategy, whose launch coincided with International Women’s Day 2015, aims to provide a general framework for all public and private institutions, as well as civil society organisations, to ensure women are provided with equal opportunities to succeed in their chosen professions and other endeavours. In announcing the strategy, which itself was an update on a previous initiative launched in 2002, HH Sheikha Fatima bint Mubarak, Chairwoman of the GWU, President of the Supreme Council for Motherhood and Childhood, and Supreme Chairwoman of the Family Development Foundation, revealed its primary goal was to make Emirati women “major partners in the achievement of UAE Vision 2021”. ‘’We [anticipate] the strategy will contribute to [creating a positive] future for our people and country through partnerships with federal and local government departments, civil society organisations, and regional and international organisations,” she said. “[The strategy] provides a framework for setting up work plans that will contribute to positioning the UAE among the advanced countries in the area of women empowerment.
FNC REPRESENTATION On 28 August this year, the UAE celebrated Emirati Women’s Day, which is an annual event that recognises the contributions of Emirati women to the country’s success to date. The celebration coincided with the 2019 Federal National Council (FNC) election, which earlier this year established a 50% quota for the parliamentary participation of women, following a resolution by UAE President HH Sheikh Khalifa bin Zayed Al Nahyan. The ruling marked a significant de-
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velopment not just for the UAE, but the entire Arab world, establishing a new benchmark for the promotion of gender equality throughout the region. Describing it as “a significant milestone in [the] UAE’s political development journey”, Sheikha Fatima said the ruling would “boost citizen engagement in public life” and help “the FNC connect with people’s issues and concerns”. “The country’s leadership has always been keen on empowering women across various fields, including the legal and diplomatic domains, in addition to enhancing their contribution to the country’s foreign and economic representations in a way that will ultimately reflect positively on women’s contribution to serving their society, regionally and internationally,” she added. The 40-member FNC is composed of eight members each from Abu Dhabi and Dubai; six each from Sharjah and Ras Al Khaimah; and four from Ajman, Umm Al Quwain and Fujairah respectively. The most-recent sitting president of the FNC is Amal Al Qubaisi, who is the first
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22,000 45B 21% Emirati women own businesses in the UAE with investments exceeding...
AED
of the total number of female-owned GCC businesses are Emirati
female leader of a national assembly in the Arab world. Al Qubaisi made history in 2006 as the first woman elected to the FNC, and in 2011, was appointed deputy speaker of the council. Nine female ministers also currently serve in the UAE federal cabinet, which is the highest percentage of any sitting parliament in the MENA region. Key representatives including Noura bint Mohammed Al Kaabi, who is Minister of Culture and Knowledge Development; Minister of State Maitha Salem Al Shamsi; Minister of Community Development Najla Mohammed Al Awar; Minister of State for International Cooperation Reem bint Ibrahim Al Hashimy; and Minister of State for Tolerance Sheikha Lubna Al Qasimi, who was named the ‘most powerful Arab woman in government’ by Forbes in 2017.
KEY MILESTONES The UAE leads the region in terms of gender balance, according to the United Nations Development Programme’s (UNDP) global Gender Inequality Index (GII).
To celebrate Emirati Women’s Day, five Emirati female first officers at Emirates airline flew to five continents on the same day
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According to data from the UAE Businesswomen Council, Emirati businesswomen hold investments worth more than AED12 billion ($3.26 billion) in sectors of the economy ranging from finance, real estate and tourism, to construction and related services. According to WEF’s Global Gender Gap Report 2018, the UAE was one of the MENA region’s best-performing countries in terms of closing gender gaps, achieving a total score of 64%.
FLYING HIGH Emirati women are playing an increasingly important role in the UAE’s aviation sector Emirati women are helping shape the future of the UAE’s aviation sector, which is one of the cornerstones of the country’s economic diversification programme. One of the UAE industry’s true pioneers, Captain Aysha Mohammed Al Hameli has helped spearhead the role of women in this vital sector of the UAE economy. Captain Aysha made history at the age of 17 as the UAE’s first female pilot, then in 2009, she became the first UAE Representative to the ICAO Council, as well as the youngest Permanent Representative in the entity’s history, a position she has held for the past decade. UAE airlines are also promoting equality across all facets of their operations. UAE flag carrier Etihad Airways employs 380 Emirati women in senior management roles; 16 as pilots; and 160 as aircraft engineers and technicians. More than than 1,100 Emirati women are employed by Emirates Group, while to mark this year’s Emirati Women’s Day, five Emirati first officers at Emirates airline flew to five continents on the same day. “Emirati women are icons of tolerance, exemplifying the core values held by our community via their care, determination, ability to nurture future generations, and pursuit of success in their various fields of work,” comments Sheikh Ahmed Bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline & Group. “Their hard work and talent have helped build our company and nation, and I’d like to take this opportunity to thank all Emirati women for setting new benchmarks and continuing to make us proud.”
It also ranks among the world leaders REGIONAL LEADERSHIP The UAE is a leader in promoting gender in promoting literacy and participation equality in the MENA region. In Octoin secondary and higher education. ber, the FNC launched the ‘Arab Charter According to official data, 77% of on Women’s Rights’ during a special Emirati women enrol in higher educaceremony held under the patronage of tion and comprise 70% of all university Sheikha Fatima. graduates in the UAE. According to a governWomen account for 66% ment statement, the charter of the UAE’s labour force “is considered an excepand have a significant prestional and qualitative move ence in industries including towards the advancement education, health and bankand empowerment of Arab ing, where they outnumber women, securing their rights their male counterparts. and ensuring their active parIn the UAE banking ticipation in attaining their sector alone, 38% of emcountry’s development goals ployees are Emirati women. Minister of State for Tolerance and objectives”. Around a third of Emirati Sheikha Lubna Al Qasimi In a speech delivered on women are employed in her behalf by the UAE Minsenior management posiister of Tolerance, Sheikha tions, and 15% of women Fatima said: “The Arab work in highly skilled Charter on Women’s Rights technical fields. is a source of pride that Women account for highlights the principles of 20% of the UAE’s diploequality, equal opportunity, matic corps, with several and joint action among all employed as ambassadors, elements within a nation to including the UAE PerMinister of Culture Noura bint attain progress and prosperimanent Representative to Mohammed Al Kaabi ty in Arab society. the United Nations, Lana “The Charter, in my view, embodies a Nusseibeh, Ambassador to Spain Hessa collective will to engage women in sociAl Otaiba, Ambassador to Montenegro etal development,” she continued. Hafsa Abdullah Mohammed Sharif Al “Arab women should, with utmost Ulama, and Consul General to Italy in determination, take on all opportunities Milan Noura Mohammed Juma. and possibilities they deserve to realise Furthermore, as of 2015, 12,000 Emitheir enormous potential. rati women owned 22,000 businesses “The launch of the Charter is an exin the UAE, with investments exceeding pression of our confidence in the future. AED45 billion. It also relays a clear message: Societies Emirati businesswomen also account succeed through achieving gender equalifor 21% of the total number of female ty and the empowerment of women.” business owners based in the GCC.
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PIONEERING VOICES How much has the UAE changed over the years in terms of supporting and empowering women and promoting gender equality? What do you think has prompted these changes? The empowerment of women is part of the UAE’s national history. From the earliest days of the union, the late founder, HH Sheikh Zayed, emphasised the importance of empowering and supporting women in all aspects of social and public life. Educational reform alongside a growing national awareness helped promote greater cultural exchange and growing interest in the arts, sciences, environment, economics, and technology. The fruition of this is not only an extraordinary list of innovative ministries, but also notable policy changes that have led to greater roles for women across all sectors and in key positions of government.
Women are now playing an increasingly influential role in UAE politics, business and society – what are your thoughts on this ongoing evolution? The increasing role of Emirati women in politics and business is testament to the earlier generation of Emiratis who understood the significance of these changes. While Emirati women have always played vital roles in their societies, what we have seen is an expansion of these roles, supported by the state, to allow women to experience new sectors and modern spaces at the same time as Emirati men.
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Dr Sara Alqaiwani*, a UK-based academic and political advisor who rose to fame as the UAE’s first operatic vocalist, discusses the UAE’s pioneering approach to promoting women’s rights in the Arab world Today, the UAE is taking a leading role in the Gulf region in terms of developing national strategies designed to empower women. Do you think its approach can be applied to other countries in the region? I believe that the UAE leads by example. My academic research on the history of women’s rights in our region highlights how countries pursue different paths and policies in response to specific internal and external factors. This leads to an objective understanding that female empowerment in one place or community may require a different set of bargains and strategies than another. Even so, the UAE model can offer a great deal of inspiration. The UAE has been at the forefront of advancing the region’s sustainable development goals while enabling and empowering women to fulfil their potential. The UAE’s Federal National Council and Arab Parliament recently launched the Arab Charter on Women’s Rights – a historical document and source of pride that highlights the principles of equality and joint action among all elements within a nation to attain progress and prosperity in Arab society.
You are well-known for your artistic endeavours as the first female Emirati opera singer. How has the UAE’s arts and creative scenes evolved over the past decade? I was the first operatically trained Emirati. I just happened to be female. At the time, there were no other Emirati students of opera. Even today, the absence of professional conservatories means that any serious Emirati vocalist would have to study their craft abroad, and for numerous years, to achieve a professional level by international standards. Having said that, there has been remarkable growth in the cultural
FEMALE EMPOWERMENT | 2.5 infrastructure and institutional support for the arts across the UAE. The state’s vision and support for international festivals and collaborative projects has put the UAE on the map as a cultural hub. The championing of young artists has been another heartening aspect, one that will mature with deeper appreciation of the necessary progression and dedication that a professional career needs. Encouragement and support should include critique and humility to prevent clumsy or premature appropriation of professional tiles on those who are not yet ready, as this misrepresentation ultimately does their efforts a disservice.
What major projects have put the UAE on the map as an arts and culture hub and how would you like to see this further evolve? The UAE has championed the arts in many different and complementary ways. The UAE Ministry of Culture has expanded the country’s cultural footprint with the development of museums, galleries, cultural districts, and festivals. Organisations like [Abu Dhabi-based film and entertainment firm] Image Nation have challenged boundaries by releasing original content to global audiences. ADMAF has tirelessly grown its domestic and international portfolio. Art Dubai has elevated the concept of an art fair, bringing together an extraordinary plethora of galleries and artists from the international circuit. The Abu Dhabi Festival has delivered an unparalleled selection of the world’s best performing artists and created extraordinary opportunities for artistic collaboration. Imagine what it was like for me, a young Emirati, whose first opera CD was a Renee Fleming album, to share the stage and sing Mozart with this operatic legend just over a decade later. Dubai Opera House was another watershed moment in the evolution of our cultural scene. I selfishly look forward to an amplification in its classical, operatic, and ballet programming. I imagine this will naturally evolve as audience awareness and appreciation grows with time. Here, the importance of arts education in growing and engaging audiences cannot be overstated.
What challenges did you face in reaching your own personal and professional goals? I first moved to London to earn degrees from Imperial College and the London School of Economics and Political Science (LSE). Separately, with a base in Europe, I could
audition for some of the best international institutions and teachers for the study of music and opera. Without these experts, it would not have been possible to achieve what I did by the time I was completing my PhD. Those years were somewhat paradoxical: my PhD at LSE on Nationalism, Revolution and ‘Feminism’ in Egypt and Iran, offered both the flexibility to travel and a major conflict in my career goals. It is no coincidence that some of my best professional engagements as a musician took place during those years (singing at Paris Opera House Palais Garnier in 2012; singing with Renee Fleming and The Dresden Philharmonic in 2014; performing in Spain at the 2014 Santander Festival). However, I had this huge life project going on at the same time. In the end, I had to stop performing and put all my energy into producing a PhD that I would be proud of. I am happy to say that I did. This led to a guest-teaching contract with LSE, and sometime later, a position with the UAE Embassy in London. In some ways then, my goals have been fluid and responsive to change; on the other, they have stayed the same: challenge my assumptions, elevate my understanding, and hone my skills whether I am teaching political history to university students, working with diplomats, or singing Mozart or Debussy. I have been able to do these things by resisting voices who pushed me to ‘choose’, by emphasising the organic connection between art and politics, and by building the space and strength to trust that it was in the intersection of these different roles, and not in their contraction, that I would make my best contribution.
“The increasing role of Emirati women in politics and business is testament to the earlier generation of Emiratis who understood the significance of these changes... I believe that the UAE leads by example”
You are currently working as a Senior Political Researcher and aide to the UAE Ambassador in London, and teach at LSE. What are your thoughts on the UAE’s growing role on the world stage and the potential for strengthening bilateral relations with the UK, post-Brexit?
This will be my third year teaching two courses at the LSE: a post-colonial nationalism course covering Asia, Africa and Latin America, and the history of the Arab-Israeli conflict. Teaching at a world-leading university is undoubtedly a source of pride, but being an Emirati academic in the UK can also be quite lonely. I hope for more exchange between our academics, as we witness the growing contribution of UAE nationals abroad who are flying the UAE flag as much as their counterparts back home. Academic teaching is one channel I use to engage our voice in global discourses with youth from around the world, with gifted students who will go on to become a new generation of future leaders, politicians, and scholars. The UAE’s influence, therefore, is broadening to incorporate new international spaces where Emiratis are beginning to use their voices more authoritatively, contributing as individuals to bilateral and international perceptions. I think the history of the Trucial States, the UAE, and UAE-UK diplomacy is unique. I think it is partly because of this that the UAE-UK relationship remains quite special. Whatever the outcomes of Brexit, this historic relationship will continue as political changes uncover new avenues and opportunities for both countries to explore together.
* Dr Sara Alqaiwani is a UK-based Emirati academic and senior political researcher and advisor at the UAE Embassy in London
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As one of the world’s only AA-rated financial institutions, First Abu Dhabi (FAB) Bank’s reputation is second to none. Recently appointed FAB Suisse CEO Fouad Hamiyeh provides insight into the organisation’s European Private Banking operations and its role as a bridge between Europe and the MENA region
IN FOCUS
How long has FAB had a presence in Switzerland and how has its Private Banking business grown over the past decade? With over a decade of experience in the Swiss market, FAB Suisse is a strategic hub for our Wealth Management division, complementing our broader international presence. Outside the UAE and the Middle East and North Africa (MENA) region, FAB Group is present in Europe (Switzerland, UK and France), the United States and Asia. Earlier this year, we launched operations in Saudi Arabia, further growing our already expansive presence in the key Gulf Cooperation Council (GCC) and MENA markets.
1ST $188B AA-
FAB’s overall ranking among financial institutions in the UAE & Middle East (The Banker)
Total assets (2019)
You were recently appointed CEO of FAB’s Swiss operations – what are your plans to take the Private Banking business forward? We are implementing a sophisticated growth strategy to respond to the needs of a new generation of private banking clients. This strategy is designed to capitalise on FAB’s strong reputation in the marketplace and its status as one of the few AA-rated banks worldwide. Clients increasingly seek a long-term trusted relationship with their bank centred on candid advice and genuine insight. This is why FAB Suisse continuously invests in its employees and is committed to attracting professional, focused and trustworthy senior advisors to our team who will help deliver growth for our clients and the Group. Our understanding of our clients’ financial needs also helps us increase our market share in our target markets by offering them suitable investment solutions.
What differentiates FAB from other Private Banks operating in Switzerland/Europe? Few other Swiss private banks have the strength of resources or capabilities that FAB Suisse has to serve its clients in their home markets. FAB Suisse supports our clients’ various corporate and family financing requirements, while also acting as trusted advisors guiding their private offshore investments and meeting all Swiss private banking regulatory requirements. Our in-depth knowledge and experience of the UAE and MENA markets, in addition to our specialised products and services covering areas including Islamic Finance, make us the ideal partner for clients who require tailored financial solutions. We are also committed to recruiting the very best talent and supporting their ongoing personal and professional development. Of course, we are a business, but our team is not simply numbers driven. We always put our clients’ interests first. We are committed to building a differentiated quality service for our Private Banking clients, taking a personal and proactive approach to managing their wealth. We take the time to get to know our clients and understand their ambitions, creating solutions for every stage of their private banking requirements. We understand our clients’ culture and speak their language.
FAB is the Middle East’s only AA-rated bank and was also named the safest bank in the region by Global Finance in 2018. Yes, we are one of a handful of AA-rated banks worldwide, placing us as a trusted partner for private banking clients across the world. FAB is also the largest bank in the UAE and the second largest in the MENA region by total assets and market capitalisation, under-
Rating by Moody’s, S&P Global and Fitch Ratings, the strongest in the MENA region
pinned by a strong balance sheet and solid fundamentals. According to Global Finance’s Safest Bank ratings, based on credit ratings and asset size, FAB is the safest bank in the Middle East; the fourth-safest in Emerging Markets; and the 22nd safest commercial bank worldwide.
How does this status help shape FAB’s approach to private banking internationally and in helping foster client relations in new markets? In the decade since the Global Financial Crisis, investors have grown increasingly concerned about the general safety and security of financial institutions, but especially in the wealth management space, where wealth preservation is key. A strong balance sheet and credit rating provides clients with comfort and surety about their investments.
FAB also operates private banking services based out of London, Paris and the UAE. What sort of competitive advantage does this geographic reach provide? Connectivity across prominent financial centres is vital for clients with cross-border investments, such as real-estate financing and other investment opportunities.
What sort of impact do you envisage Brexit having on FAB’s private banking operations? Our expert teams in London, Geneva and Paris collectively provide bespoke wealth management solutions to FAB’s client base. FAB’s Private Banking service in the UK offers individuals – often based in MENA and the GCC – access to local expertise, network, knowledge and financial capacity to successfully pursue high-end residential and commercial real estate opportunities in the UK market. We do not anticipate any change in the scope of our operations or offering.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
063
IN FOCUS
“We are implementing a sophisticated growth strategy… designed to capitalise on FAB’s strong reputation in the marketplace and status as one of the few AA-rated banks worldwide” – FAB Suisse CEO Fouad Hamiyeh
What kind of services do you provide Swiss clients look� ing to invest in the UAE and other GCC markets? For our clients with interests in MENA, having an account with FAB Suisse provides full access to local markets. Our Private Banking team in Geneva provides discretionary, advisory, execution and other investment portfolio services designed to help clients manage their wealth more effectively, no matter where their investment focus is. FAB provides its European clients with unrivalled insight and connectivity between the UAE, GCC and Europe. Our London-based Private Banking team strengthens our ability to offer clients bespoke financial products and services with a particular focus on financing solutions for property investment in the UK.
How much interest is there from UAE and Gulf-based clients in investing in Switzerland? Switzerland is a popular destination among investors and other high net-worth individuals (HNWIs) from the Middle East. Many of these individuals and their families holiday in Switzerland, with some owning property in the country. A large number of HNWIs park part of their liquid wealth in Swiss banks for the sake of diversification. This has particularly been the case for the past few decades. Switzerland benefits from a stable political and economic environment, and the country’s regulatory framework is robust, ensuring the safety, security and confidentiality of all banking clients. We are fortunate that our Private Banking operation in Geneva has a proven track record in providing bespoke wealth management solutions to clients, so we are well-positioned to support all of our clients’ wealth management needs.
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
FAB at a glance The UAE’s largest bank and one of the world’s largest and safest financial institutions
Domestic Domesticacross network network across
Global Global presence across presence across
5
Europe, Americas, Middle East and Africa (EAMEA)
79 76
Emirates Emirates
France | UK | Switzerland | USA I Brazil UAE | Bahrain | Egypt | Kuwait Libya | Oman | Saudi Arabia
UAE in in UAE
#1 #1
Global Finance magazine’s World’s Safest Banks ranking
Note: This map summarises country presence for FAB and its subsidiaries, where the Group currently has active operations. For information about legal presence please refer to note #29 of Sep-end 2019 financial statements
#4 #86
in UAE & Middle East
The Bankers’ Top 10001 World Banks ranking
Largest Bank in the UAE Total Assets USD 215
China / Hong Kong India |Labuan(Malaysia) Singapore | South Korea
Branches/ Branches/ Cash offices Cash offices
77
Continents Continents
Asia Pacific(APAC)
in UAE
#2
in Middle East
Revenue (FY’18) USD 5.3
Customer Deposits USD 130
Net Profit (FY’18) USD 3.3
Bn
Strongest Ratings in MENA
Shareholding Structure2 ADIC PJSC (33.35%) Mamoura Diversified Global Holdings PJSC (3.68%)
LT
Bn
Bn
As of September 2019
in the World (by assets)
1 - by Tier 1 capital strength; July 2019
Bn
Loans and Advances USD 103
World’s Safest Commercial Banks
in the World
Market Capitalisation USD 45
Bn
#22 #108
in Emerging Markets
Aa3
ST
AA-
P-1
Mubadala Investment Company (37.03%)3
AA-
A-1+
F1+
GCC(ex-UAE) 1.26% Foreign(ex-GCC) 11.55% Other UAE companies & individuals 50.16%
10,920Mn
#shares issued
Bn
Outlook
Stable
Stable
Stable
As of 30 September 2019 unless specified otherwise
Listed on ADX ; Bloomberg ticker FAB DH ; Foreign ownership limit of 40% 2 - Based on outstanding shares (net of 20.8Mn treasury shares) 3 – MIC is 100% owned by Emirate of Abu Dhabi; MIC wholly owns ADIC PJSC & Mamoura Diversified Global Holdings PSJC
Robust Financial Metrics – 9M’19 Return on Tangible Equity
16.7%
NPL ratio
3.1%
Liquidity Coverage Ratio (LCR)
146%
Return on Risk Weighted Assets
2.55%
Provision coverage
109%
Basel III CET1
14.2%
Cost of Risk (loans & advances)
49bps
Basel III Capital Adequacy
17.5%
Cost-Income ratio (excl. integration costs) 26.5%
Diversified Business Profile
9M’19
38% Personal Banking
86% UAE
1% Subsidiaries
11% Middle East & Africa
Europe, Americas, (EAMEA)
9M’19
6% Head Office
Revenue USD 4.1Bn
5 Strategic Pillars
3% Asia-Pacific (APAC)
Revenue USD 4.1Bn
Corporate & 55% Investment Banking
Talent Regional Growth & leadership dominance & mobilisation international in PBG relevance in CIB
Mobile centric digitisation
Drive value from scale
Leading UAE and regional bank (in US$ Bn) Banking sector assets
Total Equity
Market Cap
Credit ratings (Moody’s/S&P/Fitch)
FAB FAB
2.57
215
28.2 27.7
44.7 41.8
Aa3 Aa3 // AAAA- // AAAA-
NCB
2.14
133
17.9
36.8
A1 / BBB+ / A-
QNB
3.06
249
25.1
48.7
Aa3 / A / A+
NBK
0.99
95
11.6
20.0
Aa3 / A+ / AA-
AUB
0.56
39
4.7
7.7
NA / BBB / BBB-
Bank Muscat
0.37
32
5.1
3.5
Ba2 / BB / BB+
823
UAE
668
Saudi Arabia
407
Qatar
227
Kuwait5
202
Bahrain Oman5
National Champion4
91
4 – Defined as the largest bank in the country by total assets
Net Profit
5 - As of 31 Aug 2019
Total Assets
Note: All figures and information as on 30 September 2019 unless specified otherwise
Award winning franchise Best Investment Bank in the UAE
2019 Global Finance
Best Equity Bank in the Middle East
2019 Global Finance
Best Bank for Cash Management in the UAE
2019 Global Finance
Middle East’s Best Bank for Asia
2019 Asia Money
Most Impressive Middle East Bank Issuer
2019 Global Capital
Best Bank for Transformation in MEA
2019 Euromoney
UAE 2020: BUILDING A PROSPEROUS TOMORROW
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2.6 | HEALTHCARE
ON THE PULSE U
The UAE is home to one of the region’s largest and most-advanced healthcare sectors
066
AE government authorities have declared healthcare a priority sector of investment and development as part of the country’s Vision 2021 economic diversification strategy. UAE healthcare expenditure totalled US$13.7 billion in 2018, with this figure forecast to rise to $14.4 billion in 2019, marking a year-on-year increase of 5.4%. Looking ahead, according to Business Monitor International (BMI) forecasts, healthcare expenditure will increase to $18.3 billion by 2023 and $26 billion by 2028. Overall healthcare spending is expected to account
UAE 2020: BUILDING A PROSPEROUS TOMORROW
for 3.6% of UAE GDP by 2028, up from 3.4% in 2018. Furthermore, according to the UAE Healthcare Market 2018-2023 report published by Research & Markets, the UAE’s healthcare sector will grow at a compound annual growth rate (CAGR) of around 8.5% from 2018 to 2023. Among its findings, the report notes the UAE government is “extensively expanding and upgrading its healthcare system to develop strong, world-class healthcare infrastructure”. “The government is also encouraging private sector participation to upgrade the existing infrastructure and match the quality of services offered in
HEALTHCARE | 2.6
developed countries… [while] liberalising policies to attract foreign investments, in order to improve healthcare standards and boost the industry [in general],” it adds. In fact, according to data provided by KPMG, UAE government spending accounts for more than two-thirds (66%) of overall healthcare expenditure in the Emirates. In the 2019 federal budget, $16.4 billion was allocated to healthcare spending, up 17.3% from $14 billion in 2018. KPMG notes in its analysis that the overall increase in spending from 2013 to 2017 resulted in 30 new hospitals opening across the UAE during this period, for a total of 137. “As of 2017, this comprised a total of approximately 13,200 hospital beds, representing a CAGR of 4.8% [in overall capacity] during that period.” The UAE Ministry of Health also recently issued a roadmap that calls for 34 pharmaceutical manufacturing factories to be operating in the Emirates by 2020. This sector of the industry is projected to generate AED25 billion ($6.81 billion) in revenues annually by 2025, up from just AED9.5 billion in 2018.
PUBLIC-PRIVATE PARTNERSHIPS SHAPING THE INDUSTRY In line with the goal of Vision 2021 to boost private sector involvement in all areas of the UAE economy, public-private partnerships (PPPs) are expected to take a greater role in shaping future growth in the healthcare industry. According to KPMG forecasts, from 2018 to 2022, private sector healthcare spend will grow at a CAGR of 9.5% compared to the government contribution of 4.4%. The UAE is already home to a large number of major international hospitals. According to Alpen Capital’s GCC Healthcare report, the private sector dominated the country’s healthcare infrastructure landscape by operating nearly 70% of the 115 hospitals in the UAE in 2014, despite government-run hospitals having a higher overall bed capacity. “While the country’s bed capacity grew at an annualised rate of 3.7% since 2009 to reach 11,657 beds in 2014, the bed availability remained almost stable at nearly 13 per 10,000 persons,” the authors noted. Abu Dhabi and Dubai, the UAE’s two largest emirates, have taken significant steps to develop their respective healthcare sectors. As noted in the Alpen Capital report, Abu
16.4 14.4 26 6.8 5.3 500,000 $
BILLION
$
BILLION
2019 UAE government budget for healthcare
Forecast consumer healthcare expenditure in 2019
$
BILLION
Forecast healthcare expenditure in 2028
$
BILLION
$
BILLION
Forecast pharmaceutical manufacturing revenues in 2025
Forecast value of UAE’s medical tourism sector by 2023
Number of medical tourists expected to visit Dubai in 2020
Dhabi was the first emirate to introduce mandatory health insurance for expatriates by linking the requirement to residency permits. Abu Dhabi is also building several new hospitals to meet the growing demand for care, with major private operators including Varned, Cleveland Clinic, Johns Hopkins and Bumrungrad, already present in the UAE capital. According to Ardent Advisory’s GCC Healthcare Sector report, Abu Dhabi presents a strong opportunity for private healthcare investments, “evident from the growing number of PPP initiatives in the Emirate”. “This is owing to [Abu Dhabi’s] efforts to streamline the licensing and permit process for foreign investors by reducing regulatory obstacles,” the report notes. “Better accessibility towards bank financing for the development of healthcare facilities has also The Mohammed Bin Rashid University of Medicine and Health Sciences’ campus UAE 2020: BUILDING A PROSPEROUS TOMORROW
067
2.6 | HEALTHCARE
“The UAE government is extensively expanding and upgrading its healthcare system to develop strong world class healthcare infrastructure” UAE Healthcare Market 2018-2023 report, Research & Markets
played a major role in removing obstacles in the process of raising funds for investment [in the sector].” The report highlights a number of major healthcare facilities recently opened or under development in the UAE capital, including Sheikh Khalifa Medical City – an 838-bed facility spread over 3 million sq ft providing increased medical, paediatric and trauma care – and a US$1.2 billion public hospital with 719 beds located in Al-Ain, which will replace the existing hospital at Al Jimi and is expected to open in early 2020. The country’s largest and most advanced hospital – Sheikh Shakhbout Medical City – is also scheduled to open early next year. The mega facility,
which is located on the outskirts of Abu Dhabi, will replace nearby Mafraq Hospital and will be capable of accommodating up to 2,500 outpatients daily. The 732-bed hospital will feature 18 operating rooms, four wings and cutting-edge robotics technology that will enable doctors to perform complex surgical procedures. According to Alpen Capital, Dubai has emerged as one of the top healthcare destinations globally. “The emirate has an advanced healthcare system with numerous hospitals and primary healthcare centres offering state-of-the-art medical technologies and services that match international standards,” the analyst notes in its GCC Healthcare report.
“The city has also developed two healthcare free zones, Dubai Healthcare City and Dubai Biotechnology and Research Park, to meet the demand for high-quality care.” In July 2017, the Dubai Health Authority (DHA) revealed that 12 new private hospitals will open in Dubai by 2020, bringing the total to 38. Dubai announced mandatory health insurance in 2014, the same year in which the sector generated AED12.8 billion (US$3.5 billion) in revenues, with private healthcare providers receiving 66.6% of this figure. This followed the announcement in 2013 by Dubai’s healthcare authorities of a 12-year strategy to reshape the emirate’s healthcare system, including the $820 million redevelopment of Rashid Hospital, the construction of 40 new primary healthcare centres and three new hospitals. Other emirates are also committing huge sums to expanding their healthcare sectors. In 2018, authorities in Sharjah revealed plans to develop Sharjah Healthcare City, which will boast a number of advanced medical facilities including a 120-bed hospital being built at a cost of $100 million. According to data from Sharjah’s Investment and Development Authority (Shurooq), the emirate’s healthcare market will be worth $2.4 billion in 2019, up from $2 billion in 2016.
EXPO 2020 TO SHOWCASE HEALTHCARE INNOVATIONS As part of their pledge to showcase cutting-edge innovations that will benefit humanity, the organisers of Expo 2020 Dubai have confirmed the event will host a total of nine international medical conferences and specialised seminars at the co-located Dubai Exhibition Centre (DEC). The events, which are expected to attract thousands of attendees from across the world, will showcase advanced medical solutions ranging from virtual reality (VR) to robotics and 3D printing. “The cutting-edge medical conferences and specialist events that will be hosted at DEC during Expo 2020, will serve as an invaluable addition to the UAE’s medical landscape, offering an opportunity for Expo 2020’s international visitors and participants to engage in ground-breaking discussions regarding the global healthcare sector,” explains Najeeb Mohammed Al-Ali, executive director of expo organising committee, Expo 2020 Dubai Bureau.
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UAE 2020: BUILDING A PROSPEROUS TOMORROW
The planned events will further enhance the UAE’s status as one of the world’s premier healthcare industry hubs. The annual Arab Health conference and exhibition, which has been staged in Dubai every year since 1974, is widely regarded as one of the world’s flagship healthcare industry forums. In 2019, the event welcomed more than 84,000 healthcare and trade professionals from 160 countries and 4,150 exhibiting companies from 66 countries. “With total healthcare expenditure across the GCC region forecast to reach US$104.6 billion by 2022 and growing private sector participation expected to fuel long-term growth of the regional healthcare industry, Arab Health provides an important platform for the MENA healthcare sector to build relationships with international stakeholders and facilitates the exploration of new business opportunities in the global healthcare field,” says Ross Williams, the event’s exhibition director.
HEALTHCARE | 2.6
Cleveland Clinic in Abu Dhabi
MEDICAL TOURISM OFFERS LUCRATIVE OPPORTUNITIES Medical tourism is another corner of the healthcare sector that holds great potential in the UAE. Revenues from medical tourism totalled AED12.1 billion in 2018, up 5.5% year-on-year, according to data supplied by Dubai Chamber of Commerce and Industry (DCCI). The DCCI predicts this figure will grow to AED19.5 billion by 2023, on the back of new government-sponsored medical tourism initiatives and the increased involvement of private operators in the sector. According to Alpen Capital, Dubai “is perceived as one of the top destinations for medical tourism, in particular, for cosmetic surgery”. Demonstrating its growth potential, earlier this decade the Dubai government set a target of building 22 new specialised hospitals and attracting more than 500,000 medical tourists by 2020, up from just 325,000 in 2016. Asia consistently ranks as Dubai’s biggest source market for medical tourists, accounting for 37% of the total figure in 2016, followed by the GCC with 31% and Europe with 15%.
Dubai Healthcare City
DHA recently introduced the Dubai Health Experience, which is claimed to be the region’s first dedicated medical tourism portal that enables prospective clients to book their entire ‘medical holiday’ online. Meanwhile in Abu Dhabi, the Department of Health and Department of Culture and Tourism – Abu Dhabi, jointly launched the Abu Dhabi Medical Tourism e-portal, which also enables visitors to review a range of medical procedures and accommodation options available in the emirate. The Department of Culture and Tourism – Abu Dhabi (DCT) recent-
ly signed an MoU with the US-based Medical Tourism Association (MTA), a non-profit organisation that helps develop medical tourism programmes. The partners will promote the UAE capital as a medical tourism destination in markets including China, Russia and the GCC. MTA also opened new offices in Abu Dhabi, ahead of the emirate’s hosting of the World Medical Tourism and Global Healthcare Congress in October this year. The event hosted around 100 VIP speakers from across the industry as well as thousands of delegates from more than 100 countries.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
069
3.1 | TOURISM
A WORLD-CLASS DESTINATION From luxury beachside resorts to mountain retreats and famed cultural institutions, the UAE is home to a diverse collection of tourism attractions
DUBAI The world’s fourth most-visited destination, Dubai is forecast to welcome 20m visitors in 2020
TOURISM
4 15.92M $553 $30.82B th
Most-visited city globally
International visitors in 2018
Average visitor expenditure per day in 2018
Total visitor expenditure in 2018
HOTELS
28 112,381 76% 30.13M New hotels opened in 2018
Guestroom inventory in 2018
Average occupancy rate in 2018
Occupied room nights in 2018
AIRPORTS
DUBAI INTERNATIONAL (DXB)
1ST 89.1M 118M
DXB’s ranking among all air hubs in terms of international passenger traffic
Total passenger traffic in 2018
Predicted passenger capacity by 2023
DUBAI WORLD CENTRAL (DWC)
900K 240M
Total passenger traffic in 2018
Estimated annual passenger capacity when fully operational
070
UAE 2020: BUILDING A PROSPEROUS TOMORROW
EVENTS
261 153,640 $330M 82 18
Successful bids for meetings, conferences and incentives in 2018, delivering...
delegates to Dubai over the coming years and an economic impact of approximately...
to the city
New business events secured in Q3, 2019
Citywide retail events in 2019
Sources: Dubai Tourism, Dubai Airports, Mastercard’s Global Destination Cities Index, Dubai Department of Economic Development (DED), Dubai Festivals and Retail Establishment (DFRE), Dubai Business Events
Tourism is a cornerstone of Dubai’s economy. In 2018, the city welcomed a record 15.92 million international visitors, making it the world’s fourth most-popular destination. These visitors also spend more during their time in Dubai than any other city worldwide. According to MasterCard’s latest Global Destination Cities Index, total expenditure reached US$30.82 billion in 2018. The average visitor spent $553 each day, with this figure forecast to rise 4.18% this year. By way of comparison, second-placed Makkah in Saudi Arabia, reported total visitor expenditure of $20.09 billion and average daily spend of just $135. Dubai is expected to attract 20 million visitors in 2020, the year it hosts the region’s first World Expo.
TOURISM | 3.1
ABU DHABI
The UAE capital is on a roll after welcoming a record 10.27 million visitors in 2018
Abu Dhabi’s reputation as a world-class tourism destination continues to grow, aided by the recent addition of premier attractions including the Saadiyat Island cultural district – headlined by the Louvre Abu Dhabi – and new openings on nearby Yas Island including the region’s first Warner Bros. World theme park. The UAE capital’s hospitality inventory totalled 168 hotels and hotel apartments in 2018, while overnight guest numbers were up 3.94% year-on-year and 13.62% since 2016.
Abu Dhabi’s world-class cultural assets attracted more than 2,672,732 visitors to the emirate in 2018; accounting for more than 25% of total visitor numbers. The recent opening of globally important institutions such as the Louvre Abu Dhabi and the Qasr Al Hosn site, as well as future developments headlined by the Guggenheim Museum, is further enhancing the UAE capital’s reputation as the Gulf region’s capital of culture.
TOURISM
10.27M International visitors in 2018
CRUISE TOURISM Vessels:
135
Cruise passengers:
354,015 (+7.4% y-o-y)
Home port:
126,186 (36% of total)
Port of call:
227,829 (64% of total)
HOTELS
168 32,971
hotels (+10 properties compared to 2017)
Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi)
guestrooms (+2,500 rooms compared to 2017)
52 46
Luxury five-star hotels
Hotel-apartments
HOTEL GUESTS & GUEST NIGHTS Total guests: 5.04m (+3.9% YoY) Hotel guest nights:
13m (+5% YoY)
Average length of stay: 2.6 days Average person/room: 1.6 persons
TOP 5 SOURCE MARKETS FOR HOTEL GUESTS (NO. OF GUESTS/AVERAGE LENGTH OF STAY / Y-O-Y GROWTH)
1. India (415,000 / 2.7 days / +15%) 2. China (410,300 / 1.5 days / +8%) 3. UK (277,600 / 3.7 days / +6%) 4. USA (194,100 / 3 days / +18%) 5. Philippines (182,500 / 1.9 days / +6%)
HOTEL INDUSTRY PERFORMANCE Average occupancy rate: 72%
TOP 5 FASTEST GROWING SOURCE MARKETS
Average room rate:
AED352
1. Russia 56,500 (+38%)
RevPAR:
AED253
2. Morocco 42,800 (+32%)
Total hotel revenues:
AED5.5bn
3. South Korea 39,400 (+32%)
BASED ON NO. OF HOTEL GUESTS (Y-O-Y GROWTH)
Total hotel room revenues: AED2.9bn
4. France 89,900 (+21%)
Total F&B revenues:
5. USA
AED1.9bn
1,941,600 (+18%)
UAE 2020: BUILDING A PROSPEROUS TOMORROW
071
3.1 | TOURISM
SOURCE: Sharjah Commerce and Tourism Development Authority (SCTDA)
SHARJAH
Sharjah has forged a reputation as a family-friendly destination, with a tourism offering that encompasses culture, heritage and eco-tourism attractions as well as leading events
Sharjah has set an ambitious target of attracting more than 10 million visitors annually by 2021 – the year the UAE celebrates its semicentenary. The emirate, which was named the Cultural Capital of the Arab world by UNESCO in 1998 and endorsed as the Islamic Culture Capital of 2014, is home to 20 world-class museums, as well as restored heritage sites, mosques and traditional old souqs.
TOURISM
1.74M $172.3M International visitors in 2018
Total international visitor expenditure in 2018
TOP VISITOR SOURCE MARKETS
FUJAIRAH
REGION
A traditional favourite among families and adventure-seekers, Fujairah is expanding its tourism offering as part of its economic diversification strategy
Europe: 578,524 Russia/CIS/Baltics: 463,993 Asia: 382,919 Africa: 35,252 Americas: 30,737 Australia and the Pacific: 6,229 TOP VISITOR SOURCE MARKETS COUNTRY
Russia: 392,691 Oman: 145,413 China: 122,328 Saudi Arabia: 117,074 India: 113,300 HOTELS OCCUPANCY RATE Hotels: 65% Hotel apartments: 60%
Tourism is a crucial pillar of Fujairah’s economy. In 2018, the emirate welcomed more than 800,000 tourists – a new record – lured by its stunning natural beauty and laidback charm.
HOTELS
TOURISM
1,500
800,000
Current pipeline (2019)
072
UAE 2020: BUILDING A PROSPEROUS TOMORROW
Visitor arrivals in 2018
TOURISM | 3.1
SOURCE: Ras Al Khaimah Tourism Development Authority (RAKTDA)
RAS AL KHAIMAH Ras Al Khaimah welcomed 1,072,066 visitors in 2018, setting a new benchmark for the emirate and marking a 10% increase on arrivals in 2017. RAK has put itself on the map as an adventure tourism destination, thanks to the development of daring attractions such as Jebel Jais Flight – the world’s longest zipline – which attracted more 25,000 passengers in its first year of operations. Future planned developments include a 47-guestroom luxury mountain camp, a survival training academy, hiking trails and the multi-attraction Jebel Jais Adventure Park.
A popular adventure tourism destination, RAK welcomed more than 1m visitors in 2018
TOURISM
TOP INTERNATIONAL VISITOR SOURCE MARKETS
1.072M 537,652
(H1, 2019)
Russia: 50,569 Germany: 33,781
Visitor arrivals in 2018
India: 33,561 UK: 27,934 Kazakhstan: 13,158
Visitor arrivals in H1, 2019
AJMAN Ajman is well placed to reach its target of welcoming 800,000 visitors by 2021
AJMAN HOTEL INDUSTRY PERFORMANCE (2018)
Establishments: 39 Establishment guests: 632,292 (+16% YoY) Guest nights: 1,570,335 (+11% YoY) Total occupancy: +3.5% YoY Total length of stay: 2.5 days (+4.2% YoY) Room nights: 960,000 (+10% YoY) Ajman is home to a diverse range of tourism attractions, destinations and activities. In recent years, the emirate has celebrated the opening of popular attractions including the Heritage District, which is a multi-use precinct located adjacent to Ajman Museum, and Marsa Ajman – a new waterfront destination featuring restaurants and retail outlets, a promenade, the region’s largest interactive fountain and an arena that can accommodate 300 guests.
RevPAR: +6% YoY Total revenue: AED467 million (+2% YoY) Beds: 6,119 (+0.7% YoY) Rooms: 3,784 (+3.6% YoY)
UAE 2020: BUILDING A PROSPEROUS TOMORROW
073
With its stunning beaches and laidback lifestyle, Ajman is one of the UAE’s fastestgrowing tourism destinations. Here, HE Saleh Mohamed Al Geziry, director general of Ajman Tourism Development Department (ATDD), explains the emirate’s growing appeal to international visitors
DESTINATION AJMAN Ajman’s tourism industry is enjoying strong growth. What development goals do you have in place? Ajman is attracting a growing number of tourists each year, and we are confident that we will meet the objectives of Ajman Vision 2021 and welcome 800,000 tourists annually within two years.
How has Ajman’s tourism offering evolved over the last decade? The number of resorts, hotels and hotel apartments has grown in response to the increasing number of visitors that Ajman is attracting. As a result of investment in the tourism sector, new attractions, activities and events have been introduced. ATDD also has a calendar of exciting events and activities.
What are Ajman’s most popular tourism attractions? In addition to stunning beaches and luxurious resorts, Ajman has a wide variety of
074
natural, cultural and recreational attractions for tourists to enjoy, including: Al Zorah Marina: This 100,000 square metre creekside development features a recreational park, a multitude of food and beverage outlets and entertainment options for all age groups. Al Zorah Nature Reserve: With one million square metres of mangrove forest and lagoons, Al Zorah Nature Reserve is home to an incredible variety of marine and plant life and approximately 58 species of birds, including pink flamingos. A popular destination among nature enthusiasts, visitors can opt for one of Quest for Adventure’s guided kayak and canoe tours of the mangroves, creeks and lagoons. Masfout: A small enclave in the Hajar Mountains less than two hours’ drive from Ajman’s city centre, Masfout is a popular retreat for those seeking an escape from the hustle and bustle of city life. Its mountain
UAE 2020: BUILDING A PROSPEROUS TOMORROW
location ensures cooler temperatures and stunning scenery making it an ideal destination for outdoor adventure enthusiasts and nature lovers. Masfout is also ideal for hiking, mountain biking and exploring the nearby wadis. Ajman Corniche: This four-kilometre-long esplanade overlooks the Arabian Gulf and is a popular place to enjoy a stroll. There are also a variety of cafes, restaurants and hotels located nearby. Culinary cruises: Marsa Ajman Floating Restaurant offers tourists magnificent views during a two-hour culinary cruise through Ajman Marina. Rich cultural history: Offerings that celebrate the heritage of Ajman include Ajman Museum, an 18th century fort with artefacts and exhibits that offer an insight into the emirate’s culture and history. Souq Saleh is the place to visit for traditional
IN FOCUS clothing, while the Gold Souq sells both gold and silver jewellery, and there are daily auctions at the Fish Market. Al Zohra Golf Club: Al Zohra Golf Club is set amidst a beautiful natural environment of striking mangroves spread across an area of one million square metres. Boasting a spectacular par-72 championship course featuring pristinely manicured fairways and greens, Al Zohra is surrounded by resplendent sandy areas, an abundance of wildlife and 12 kilometres of waterfront.
What unique features and attractions differentiate Ajman from other tourism destinations in the UAE, such as Dubai and Abu Dhabi? Ajman has something for everyone. It appeals to tourists of all ages and nationalities, but particularly visitors who are interested in luxury beach holidays and heritage attractions. In addition to a stunning coastline and pristine beaches, Ajman is home to mangrove forests and lagoons of Al Zorah Nature Reserve, which has been recognised as a Wetland of International Importance by the Ramsar Convention. Ajman is also known for its hospitality, offering a warm welcome to both domestic and international visitors.
What goals do you have in terms of attracting foreign investors to Ajman’s tourism sector? ATDD has worked to streamline the requirements for investing in Ajman’s tourism sector to enhance its appeal to internal and external investors. When pitching to potential investors we highlight the emirate’s rich and diverse culture and heritage encapsulated by stunning landmarks such as the museum, Masfout and Manama.
What new tourism infrastructure developments do you have planned for the coming years? A multipurpose project adjacent to Ajman Museum, the Heritage District will feature entertainment, retail and F&B outlets. Marsa Ajman is a new waterfront destination that is the light at the heart of Ajman. Offering an amazing selection of restaurants and retail outlets, the choices will be a delight for everyone. Visitors will appreciate the easy parking, relaxing environment and views and the endless activities and regular entertainment on offer.
How will Expo 2020 benefit Ajman’s tourism development strategy? We are optimistic about the impact that Expo 2020 Dubai will have on the tourism industry. With an expected 25 million Expo-related visits between October 2020 and April 2021, some visitors will no doubt be keen to explore other parts of the country. Ajman is less
than two hours’ drive from the Expo 2020 precinct, and just 30 minutes from Dubai International Airport.
What is your long-term goal for Ajman’s tourism sector? ATDD aims to position Ajman as a leading destination for domestic, regional and international tourists. Aligning with the strategic objectives of Ajman Vision 2021, ATDD’s goal is to welcome approximately 800,000 visitors each year by 2021. We are initiating a sustainable tourism strategy that strengthens Ajman’s offering and positions the emirate as one of the UAE’s most authentic and unique destinations. This strategy is designed to deliver economic, socio-cultural and environmental benefits to the emirate. With the help of stakeholders, Ajman seeks to exceed visitor expectations by delivering innovative, high-quality, diverse tourism products and value-added services. Ajman will be a hub that will attract, sustain and facilitate tourism investments positively contributing to the emirate’s economic growth.
“We are initiating a sustainable tourism strategy that strengthens Ajman’s offering and positions the emirate as one of the UAE’s most authentic and unique destinations” HE Saleh Mohamed Al Geziry, director general of Ajman Tourism Development Department (ATDD)
What role can UK companies play in this respect? The United Kingdom is an important market for Ajman. We opened ATDD’s first overseas office in the UK in 2018, appointing Ian Scott Marketing Ltd to introduce the UK travel trade to the emirate’s unique environmental features, luxury resorts and heritage offerings. We also have a number of partnerships and agreements with leading tour operators in the UK.
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Through major ongoing investments in new aircraft and infrastructure, the UAE is consolidatng its reputation as one of the world’s most-influential aviation industry stakeholders
F
rom humble beginnings, the UAE has quickly established itself as one of the world’s largest and most influential aviation players, home to the busiest international airport on the planet and four of its most successful airlines. Emirates – the Middle East’s biggest airline – along with flag carrier Etihad Airways and low-cost carriers Air Arabia and flydubai, boast a combined fleet of more than 500 aircraft. Emirates reported its 31st consecutive year of profit earlier this year – an achievement unmatched by any international rival. More than 133 million passengers passed through the country’s international airports in 2018, with Dubai International (DXB) – the world’s busiest international airport – accounting for 66% of this figure. The UAE is recognised as one of the industry’s
leading proponents of open-skies policies, having signed more than 180 aviation services agreements with countries around the world to date. This strategy has not only aided the growth of the country’s aviation sector but progressed the cause of the industry globally. UAE authorities, who view aviation as a pillar of the national economy, are investing AED85 billion (US$23.14 billion) in enhancing and expanding the country’s aviation infrastructure, with notable projects including the AED30 billion expansion of Dubai World Central (DWC) Airport in Dubai South; the AED28 billion phase 4 redevelopment of DXB; and AED25 billion expansion of Abu Dhabi International Airport, which includes the addition of the state-of-the-art Midfield Terminal Building (see boxout, page 79). “The aviation industry is one of the cornerstones of the UAE’s economic development,” says Saif Moham-
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UAE AIRLINES FLYING HIGH Despite headwinds created by high fuel prices and rising competition, the UAE’s four international airlines continue to post strong results
EMIRATES The world’s fourth-busiest airline and largest in the Middle East continues to excel, reporting strong profits and consistent growth despite facing ongoing pressure to its bottom line. Emirates reported a profit of AED871 million ($237 million) in the 2018-19 financial year, despite operating costs rising eight percent overall. Fuel costs rose a significant 25% year-on-year, which dragged the airline’s earnings down compared to the previous financial year. Emirates Group, which also includes cargo and airport operations, reported a profit of AED2.3 billion, while revenue reached AED109.3 billion, marking a rise of 7%.
AIR ARABIA Sharjah-based Air Arabia reported a 75% year-on-year increase in net profit for Q2, 2019 on the back of rising revenues and passenger numbers. The low-cost carrier’s net profit totalled AED210 million for the quarter, bringing profits for the first half of 2019 to AED338 million — up 47% year on year. The airline flew more than 3 million passengers during Q2, 2019 — up 16% year on year. In April, the airline revealed plans to order an additional 100 narrow-body aircraft from Airbus and Boeing.
FLYDUBAI flydubai’s annual revenue totalled AED6.2 billion ($1.7 billion) in 2018, compared to AED5.5 billion ($1.5 billion) the previous year, marking an increase of 12.4%. Eleven million passengers flew with the airline last year, which was a moderate increase on 2017.
ETIHAD AIRWAYS Flag carrier Etihad Airways continued its turnaround in 2018, reporting a loss of $1.28 billion, which was an improvement on the $1.52 billion loss reported a year earlier. Etihad launched a five-year transformation plan in 2017, and successfully reduced operating costs in 2018 by $416 million.
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“Aviation, tourism and travel have been fundamental in Dubai’s growth story … We recently welcomed our billionth customer at DXB, which was a remarkable milestone”
ABU DHABI INTERNATIONAL AIRPORT PREPARES TO OPEN MIDFIELD TERMINAL BUILDING
— HH Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai Airports, president of the Dubai Civil Aviation Authority and chairman and CEO of Emirates Group med Al Suwaidi, director general of the country’s air regulator, the General Civil Aviation Authority (GCAA). “The national agenda for 2021 aims for the UAE to be the world leader in [terms of] the quality of the air transport infrastructure.” Al Suwaidi estimates that the UAE has invested more than AED1 trillion to date in developing its aviation industry. “The UAE’s aviation [industry] has made unique jumps during the past few years, where the state managed to reach milestones on a par with the leading countries in this sector, whether in terms of the number of flights taking off or landing every day at Emirati airports or the number of passengers,” he says. Revenues generated by the aviation sector accounted for 15% of UAE GDP in 2018, with this figure expected to reach 20% by 2021, driven by increased passenger and aircraft traffic. A recent study by Airport Council International (ACI) World predicted the sector’s economic contribution would exceed AED323 billion by 2030. “Conservatively, we anticipate accommodating 118 million passengers by 2023 at [DXB], and 120 million passengers upon completion of phase two of Dubai World Central, and 200 million passengers upon its completion, all in ultra-modern infrastructures that match, if not surpass, the best in the world,” Al Suwaidi explains. Spearheaded by new infrastructure developments at DXB and DWC and ongoing fleet and route expansion undertaken by Emirates and flydubai, Dubai remains the
UAE’s largest single aviation market. “In Dubai, we continuously strive to be at the forefront of the industry globally and to lead the way with unwavering ambition, innovation and timely investment,” explains HH Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai Airports, president of the Dubai Civil Aviation Authority and chairman and CEO of Emirates Group. “Aviation, tourism and travel have been fundamental in Dubai’s growth story and we believe this investment will yield further dividends by encouraging repeat traffic and enticing connecting passengers to visit Dubai. We recently welcomed our billionth customer at DXB, which was a remarkable milestone.” The development of Dubai’s new AED17 billion Mohammad bin Rashid Aerospace Hub is set to further consolidate this position. The 6.7 sq kilometre facility will house dozens of private and public organisations specialising in aviation maintenance and technical support, education, and research and development. It will also house the E2 Event and Exhibition Centre, which will become a dedicated exhibition zone and the permanent home of the Dubai Airshow and the Emirates Flight Academy. “The Mohammed Bin Rashid Aerospace Hub is committed to making Dubai the region’s aerospace capital by ensuring that we advance through excellence and deliver value that will benefit millions,” comments Khalifa Al Zaffin, executive chairman of Dubai Aviation City Corporation and Dubai South.
More than five years in the making, Abu Dhabi International Airport’s (AUH) new landmark Midfield Terminal Building (MTB) will open later this year. The MTB will transform the airport into one of the world’s most advanced aviation hubs and provide passengers with unprecedented levels of efficiency, comfort and convenience. Built at a cost of more than US$3 billion, the terminal will be capable of accommodating more than 11,000 passengers an hour at peak times. According to Abu Dhabi Airports CEO Bryan Thompson, the opening of the new terminal is an important development for both Abu Dhabi and the region. “We are proud of this magnificent infrastructure that we will start operating soon as the main gateway for Abu Dhabi, and a key transport hub for the region and the world. We are also eager to showcase it to our peers and stakeholders in the aviation community. “We are building future capacity not only for Abu Dhabi, but for the entire region, which will have a tangible impact on the sustainability of the economic growth and development locally and regionally.” The opening of the MTB will mark a milestone in Abu Dhabi’s drive to reach the goals set out in Economic Vision 2030, its ambitious economic growth strategy for the coming decade. The 700,000-square-metre terminal will increase the overall capacity at Abu Dhabi International Airport (AUH) to 45 million passengers annually.
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AVIATION CENTRAL: THE UAE’S LEADING AIRPORTS IN FOCUS DUBAI WORLD CENTRAL AIRPORT (DWC)
More than 133 million travellers passed through the UAE’s international airports in 2018, setting a new record for passenger traffic
DWC, Dubai’s second airport and future global hub, is currently served by 11 passenger carriers operating an average of 146 flights weekly to 31 international destinations. It is also home to 18 scheduled cargo operators that fly to as many as 45 cities worldwide. A major expansion of the airport was completed last year that boosted capacity from 5 million passengers per annum to 26.5 million.
DWC 2018 MILESTONES Total passenger traffic: 900,202 987,986 tonnes of cargo, representing a year-on-year increase of 1.6% A total of 10 passenger carriers operated an average of 21 flights weekly to more than seven international destinations 29,959 flight movements Some 20 cargo carriers operate into DWC connecting the hub to as many as 45 destinations worldwide
DWC FAST FACTS
CURRENT CAPACITY (passengers)
26.5M
DUBAI INTERNATIONAL AIRPORT (DXB)
080
200M+
Q1, 2019 (passengers)
326,680
DXB 2018 MILESTONES Total passenger traffic: 88.8 million 2.64 million tonnes of cargo
The world’s busiest airport by international traffic, DXB’s success is testament to the visionary leadership of Dubai’s rulers, who foresaw aviation as one of the city’s great economic drivers. DXB welcomed 88.8 million passengers last year, up 1.3% compared to 2017. According to official data, DXB received 8.7 million and 14.8 million more passengers than second placed London Heathrow and Hong Kong International Airport respectively, in 2018. DXB’s state-of-the-art facilities include the $1.2 billion Concourse D, which serves all international airlines that operate out of Terminal 1, and Concourse A – the world’s first dedicated A380 facility, which is one of three concourses used exclusively by Emirates Airline.
DXB FAST FACTS
FUTURE CAPACITY (passengers)
2018 PASSENGER TRAFFIC (passengers)
88.8M
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A total of 82 passenger carriers operated more than 7,700 flights weekly to more than 220 airports in 214 cities across 94 countries 408,251 flight movements
Q1, 2019(passengers)
22.23M
2019 FORECAST (passengers)
90M+
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ABU DHABI INTERNATIONAL AIRPORT (AUH) The UAE capital’s main international air hub welcomed approximately 22 million passengers in 2018. However, this figure pales in comparison with the airport’s projected future growth that will accelerate with the opening of the long-awaited Midfield Terminal Building (MTB) later this year. More than five years in the making, the MTB will increase capacity to 45 million passengers a year and will become the primary gateway for UAE flag carrier Etihad Airways and its partners. The MTB will transform the international hub into one of the world’s most advanced and provide passengers with unprecedented levels of efficiency, comfort and convenience. Built at a cost of more than US$3 billion, the terminal will be capable of accommodating more than 11,000 passengers an hour at peak times.
ABU DHABI MIDFIELD TERMINAL BUILDING (MTB) FAST FACTS
GATES
CAPACITY (passengers per year)
45M
65 contact stands
including eight dedicated A380 stands and 14 remote stands
LOUNGES
RETAIL & F&B
8
28,000m2
spanning a total of 30,000 sq metres
HOTEL FACILITIES:
163 rooms
within transit hotel situated inside terminal complex
SHARJAH INTERNATIONAL AIRPORT (SIA) SIA is one of the UAE’s oldest international air hubs, having celebrated its 87th year of operations in 2019. It is home to the Middle East’s second largest lowcost carrier, Air Arabia, and boasts the newest and longest Code F-compliant runway in the region, with Cat-II capabilities. This enables all aircraft, up to and including the A380, to land and take off from the airport with full load capacity during all weather conditions. Airport operator Sharjah Airport Authority recently committed to an airport upgrade programme that will expand capacity to 20 million passengers by 2027.
SHJ 2018 MILESTONES Total passenger traffic: 12 million, up 6% year on year 132,666 tonnes of cargo
13,000 tonnes of sea-air freight, up 27% year on year 81,262 flight movements, up 4.68% year on year
AL AIN INTERNATIONAL AIRPORT (AAN)
AAN, which opened in 1994, is Abu Dhabi’s second international airport. Situated 18km from Al Ain City Centre, the facility features a 4,000m runway and a parallel 4,000m taxiway that can double as a runway as and when needed. Currently, four airlines operate regular flights from AAN, with new carriers and destinations being added in the near future. Airport operator Abu Dhabi Airports Company recently revealed plans to expand AAN to meet forecast traffic growth. The airport enhancement programme will:
• Increase the size of the departure lounge and check-in areas respectively • Expand the existing cargo terminal • Enhance existing office facilities • Establish a new hi-tech airline in-flight catering facility • Improve facilities for ramp operations • Enhance security monitoring capabilities • Establish a new VVIP terminal
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IN FOCUS
BUSINESS CENTRAL AFZ last year marked its 30th year of operations. What develop� ment milestones stand out over the past three decades? For the past 30 years, AFZ has achieved considerable success expanding into a variety of fast-growing industrial and commercial sectors. During this time, we have celebrated a number of important milestones. In 1995, we marked the establishment of AFZ Gate 1, with a total area size of 342,746 sq metres. Then in 2011, we celebrated the establishment of Gate 2 with a total area size of 252,529 sq metres, after which, four years later, we added another 14,462 sq metres of warehousing and office space across three separate blocks. Another major development was the establishment of China Mall in 2006, which has proven a very popular retail destination
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Ajman Free Zone was established in 1988
Established in 1988, Ajman Free Zone (AFZ) is one of the UAE’s oldest and most-successful economic precincts, explains Fatma Salem, AFZ’s acting general manager and a lively social hub that attracts people from across Ajman and further afield in the UAE. In 2012, we launched our representation programme in key countries including the UK, Italy, France, India, Pakistan, Canada and Australia, among others. This helped raised AFZ’s profile in major global markets and promoted the benefits of being based in the free zone to potential international clients.
What are the main sectors AFZ-based companies cater to? Food and beverage (F&B), technology, and retail and education are the four main sectors, with our clients hailing from countries in Europe, Asia, the Middle East
IN FOCUS
and CIS/Russia. In terms of future growth, we are receiving strong interest from prospective clients in Eastern Europe, Africa and Indonesia.
How has business developed in recent years? We have witnessed steady growth across a range of sectors. The first six months of 2019 saw an 8.23% increase in business output compared to the same period last year. In addition, AFZ-based companies account for 32% of Ajman’s total exports and more than 60% of all re-exports.
How many representative offices does AFZ now operate around the world? We now boast representative offices in 15 locations worldwide, in countries including the UK, South Africa, Russia, India, China and Indonesia. Our presence in these markets enables us to interact closely with potential investors and promote AFZ’s many benefits to them. Our digital platform can be accessed anywhere, making the business establishment feasible with our enhanced online system, which is designed to be simple and efficient, whatever the requirement.
Which industry subsectors is the free zone targeting for future growth? We have identified five key sectors that we believe hold strong growth potential. They are technology, retail, F&B, education and healthcare. Technology encompasses Artificial Intelligence (AI), which is rapidly transforming our world with AI-enabled systems that are beginning to revolutionise fields such as commerce, healthcare, transportation and cybersecurity. It has the potential to impact nearly all aspects of our economy and society. Retail remains one of the UAE’s strongest economic sectors, and the shopping experience remains a major attraction for residents and tourists alike, as does the F&B market, which continues to prosper as consumers demand greater diversity and choice, paving the way for established brands and new concepts to exploit that opportunity. Healthcare is another fast-growing area of the economy. In Ajman, in particular, the healthcare sector has witnessed an extended period of strong growth, which is forecast to continue, driven by the gap between supply and demand. The advent of new technologies is transforming the healthcare sector in a way that increases efficiency as well as quality. The UAE’s education sector is also performing strongly. Our aim is to develop the education sector in order to attract advanced learning institutes, research centres, universities, offshore campuses to Ajman. Our goal is to reduce the number of government de-
“Ajman Free Zone plays a very significant role in Ajman’s economy. As well as providing an ideal location for new businesses to establish operations in the emirate, there are a number of commercial communities where our collaboration and support is intrinsic to their success” – Fatma Salem, Ajman Free Zone’s acting general manager
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IN FOCUS AFZ offers convenient access to Ajman Port
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partments that investors in this sector have to deal with to apply for and receive operating licences.
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How important is AFZ to Ajman’s broader economy and its long-term development? AFZ plays a very significant role in Ajman’s economy. As well as providing an ideal location for new businesses to establish operations in the emirate, there are a number of commercial communities where our collaboration and support is intrinsic to their success. They include China Mall – one of Ajman’s biggest retail destinations – and Al Zorah, which is one of the emirate’s most popular leisure and residential projects, for whom we manage a purpose-built, contemporary business centre. Ajman Port is also benefitting from our close association and that has a considerable knock-on effect within the local economy. Ajman has a great deal to offer residents, business owners, workers and tourists alike. We are continually promoting its attributes through our marketing and engagement programmes, both locally and internationally.
How do you envisage the government’s new foreign ownership rules impacting free zones in the UAE? The UAE government is very focused on making the country more investor friendly. It will definitely help in attracting both entrepreneurs and more established businesses to the UAE and will make the mission of free zones easier.
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What benefits and incentives does AFZ offer potential clients and how does it differentiate itself from other free zones in the UAE? AFZ provides investors many advantages. One of the prime benefits is its proximity to Ajman Port, which features 5,200 metres of quay length and 12 multi-purpose berths, providing efficient links with regional hub ports. AFZ also lies within a half hour drive of Dubai International Airport and Sharjah International Airport, providing superb accessibility to global markets. In addition, there is a wealth of fiscal advantages afforded to businesses who locate to AFZ, including exemption from tax and the availability of a very affordable workforce. We pride ourselves on offering world-class services and we recently invested in a highly innovative digitised system aimed at simplifying the business set-up process for our clients. Whether the client company is a one-man start-up, or a division of a multinational firm, we provide them with a tailored package of solutions to suit their requirements, from licensing through to arranging the most suitable business accommodation for their needs.
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The next decade will mark a pivotal period in the UAE’s development, as the country pursues a range of ambitious social and economic agendas
O
ver the next 10 years, the UAE will mark a number of important economic, social and technological milestones, some of which have been decades in the making. The sum of these achievements will form the basis of the UAE’s ongoing economic diversification strategy, one that will see an ever-diminishing reliance on oil to deliver sustainable growth. One of the most ambitious plans currently being pursued is Abu Dhabi Economic Vision 2030, which aims to transform the capital’s economy into one that is knowledge based and places innovation at its core. Abu Dhabi’s drive for a more sustainable and diversified economy is intended to “reduce the relatively high dependence on oil and the cyclical swings which accompany it,” according to the Economic Vision 2030 policy paper. Abu Dhabi is home to the sixth largest proven oil reserves on the planet – around 98 billion barrels – and is the world’s tenth largest producer, at around 2.5m barrels per day, the majority of which is exported. The emirate accounts for almost 98% of the UAE’s total oil reserves. Oil sales remain Abu Dhabi’s primary source of fiscal revenue, generating more than $90 billion annually and accounting for 74% of income between the years 2000
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and 2005. As oil prices rise, this proportion can increase to as much as 84%, contributing to the UAE’s fiscal surplus of $18.4 billion in 2018. However, oil price volatility can have a significant impact on Abu Dhabi’s economic well being, hence the drive to develop of other areas of the economy. Under Vision 2030, Abu Dhabi aims to increase the contribution of the non-oil sectors of the economy to 38% of total GDP by 2030. Creating jobs for Abu Dhabi’s young and rapidly growing population is another key priority. “[Abu Dhabi’s] young National pop-
UAE 2020: BUILDING A PROSPEROUS TOMORROW
ulation presents the opportunity, as well as the challenge, to create attractive, high value-added employment opportunities for the emerging generation,” the Vision 2030 policy paper states. “The drive for diversification as well as the challenge of a burgeoning population delivers a greater need for Abu Dhabi to upgrade the quality of its education system, and to increase the educational attainment rates of Nationals and the overall workforce to move. “To achieve Abu Dhabi’s ambitious economic aspirations, the regulatory and legislative environment must be optimised, importing best practices from around the world and applying them within the local
ROAD TO 2030 | 4.1
ROAD TO
2030 context. Various resources, from infrastructure to human and financial capital, must also be provided as a platform on which the economy can be built. Together, these will constitute the roots of the future economy and the climate in which it can thrive.” Over the past decade, Abu Dhabi has made significant gains in pursuit of Vision 2030, with strong growth reported across key non-oil sectors of the economy, including construction, transport and logistics, and manufacturing. Taking the latter as an example, manufacturing’s contribution to the UAE’s non-oil GDP grew 2.5% to AED122 billion (US$33.2 billion) in real prices in
2018 from AED119.7 billion (US$32.6 billion) in 2017, according to data from the Federal Competitiveness and Statistics Authority. The sector has maintained its steady growth over the past five years, with its gross output increasing five percent year-on-year in 2017, during which the emirate’s manufacturing industries reached a growth rate of 4.8%. In a bid to further stimulate growth in this and other key sectors of the economy, Abu Dhabi’s Crown Prince, HH Sheikh Mohammed bin Zayed Al Nayhan, last year announced a three-year, AED50 billion ($13.6 billion) stimulus package designed to further kickstart non-oil activity in the capital. The stimulus package is designed to drive GDP growth, boost the emirate’s property market and leverage higher oil revenues to finance economic expansion. The cash injection funded the launch of a number of related initiatives, including the establishment of the Abu Dhabi Accelerators and Advanced Industries Council – otherwise known as Ghadan – to identify new technologies and investments that will drive economic expansion; a pledge to create at least 10,000 jobs for Emiratis in the private and public sectors over the next five years; and the promotion of partnerships between the public and private sectors and accelerating projects between the two.
VISION 2030’S NINE PILLARS Launched in 2008, Vision 2030 identified nine pillars that formed the basis of Abu Dhabi’s social, political and economic future: 1.
A large, empowered private sector
2.
A sustainable, knowledge-based economy
3.
An optimal, transparent regulatory environment
4.
A continuation of strong and diverse international relationships
5.
The optimisation of Abu Dhabi’s resources
6.
Premium education, healthcare and infrastructure assets
7.
Complete international and domestic security
8.
Maintaining Abu Dhabi’s values, culture and heritage
9.
A significant and ongoing contribution to the federation of the UAE
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CONSERVATION
INDUSTRY ENVIRONMENT VISION 2030 The Abu Dhabi Environment Vision 2030 policy agenda is integral to the emirate’s plan for sustainable economic development. The agenda outlines five key priorities covering economic sectors ranging from energy and utilities to agriculture, livestock and fisheries. These priorities are: ① Minimising the impact of climate change ② Clean air and tackling noise pollution, contributing to safe and healthy living conditions ③ The efficient management and conservation of scarce water resources ④ Biodiversity, habitats and cultural heritage conserved for current and future generations ⑤ Waste Management – enhanced value creation through optimised material flows and waste management. Discussing the emirate’s vision for environmental sustainability, HH Sheikh Hamdan bin Zayed Al Nahyan, chairman of The Environment Agency – Abu Dhabi (EAD), says: “Our environment is a legacy, handed down from generation to generation. Our family values incorporate the fundamental belief that we must be wise custodians of the land and sea that we have inherited – it is our responsibility towards the future generations. “The development of our emirate is, of course, critical to our continued growth and prosperity. But our primary focus must be to ensure that development does not come at an unacceptable cost to the environment, to ensure that it goes hand in hand with conservation and sustainability.”
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DUBAI INDUSTRIAL STRATEGY 2030 Launched in 2016 by HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, the Dubai Industrial Strategy 2030 aims to establish Dubai as a global hub for knowledge-based, sustainable and innovation-focused businesses. According to government forecasts, Dubai’s industrial sector will generate an additional AED18 billion ($4.9 billion) in revenues by 2030, creating 27,000 jobs, with exports forecast to increase by AED16 billion. Meanwhile, investment in research and development will increase by an additional AED700 million by 2030. The sector’s contribution to GDP was around 14% in 2014. “The Dubai Industrial Strategy aims to leverage our advanced infrastructure, enabling an environment to transform the UAE into a global platform for innovative industries and a destination of choice for international companies seeking an integrated and favourable environment for growth and sustainability,” Sheikh Mohammed said at the launch of the initiative. “With the Dubai Industrial Strategy,
ROAD TO 2030 | 4.1
“We are one step closer to achieving the goal of making Dubai a homeland for innovators, a favourite place to live and work in, a global economic hub, and a preferred destination for visitors” — HH Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai
we are taking one more step towards the future. We have laid down a strong foundation that blends our strategic location and infrastructure with our ambition, confidence and experience. Today, we have put in place the basic framework needed to compete globally in the industrial sector and develop national talents. We are one step closer to achieving the goal of making Dubai a homeland for innovators, a favourite place to live and work in, a global economic hub, and a preferred destination for visitors,” he added. The strategy is based on 75 initiatives and is projected to generate an additional AED160 billion in revenues for Dubai’s economy by 2030. It targets five key objectives that will serve as the foundation for Dubai’s industrial future: ① Increase the total output and value-addition of the emirate’s manufacturing sector ② Enhance the depth of knowledge and innovation ③ Make Dubai a preferred manufacturing platform for global businesses
④ Promote environmentally friendly and energy-efficient manufacturing ⑤ Establish Dubai as a global hub of the Islamic economy. “Nations are recognised for what they produce and offer in products and services and the value they add to the global economy,” says Sheikh Mohammed. “Sustainable development involves activating all pillars of the economy. A conducive environment is required to achieve our targets that focus on knowledge, science, and research, which form the foundation for the development of industries.” The strategy has further identified six priority sub-sectors: aerospace, maritime, aluminium and fabricated metals, pharmaceuticals and medical equipment, food and beverages, and machinery and equipment. These sub-sectors were chosen based on their importance to the Dubai Industrial
Strategy and Dubai Plan 2021, as well as their future growth prospects, export potential and mid-term to long-term economic impact, the government said in a statement. Sultan Ahmed bin Sulayem, group chairman and CEO of DP World and chairman of Ports, Customs and Free Zone Corporation, says the Dubai Industrial Strategy reflects the UAE’s goals for sustainable progress in the post-oil era. He cites the development of Dubai Wholesale City – the world’s largest facility of its type – as evidence of Dubai’s ambitious economic diversification strategy. “The launch of Dubai Wholesale City, the world’s largest city for wholesale trade extending over 550 million square feet at a cost of AED30 billion, reinforces Dubai’s clear economic vision for the future through the creation of dynamic new sectors and the reformatting of existing sectors on a global scale,” he adds.
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INNOVATION
DUBAI’S AUTONOMOUS TRANSPORTATION STRATEGY WILL: ≠≠
Cut transportation costs by 44%
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Create economic savings of more than AED22 billion annually
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Reduce environmental pollution by 12%
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Reduce traffic accidents and losses by 12%
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Increase productivity by 13%
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Save 396 million hours on transportation trips annually
DUBAI AUTONOMOUS TRANSPORTATION STRATEGY Dubai’s highly ambitious Autonomous Transportation Strategy aims for 25% of the city’s transport requirements to be met by self-driving or automated vehicles by 2030. The strategy is anticipated to create economic savings of more than AED22 billion ($6 billion) annually. Discussing the goals of the strategy, HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, says: “Dubai is leading the cities of the world by taking a big leap in the adoption of artificial intelligence to serve humanity and establish a global model of the city of the future as we aim to become the world’s largest laboratory for technology and research and development. We [have] put forward clear and precise goals for Dubai Autonomous Transportation Strategy, making it one of the main pillars to achieve a sustainable economy for the emirate. “Our goal is to make the UAE a global source of the future for various sectors, including smart cities, clean energy, autonomous transportation, sustainable infrastructure and legislation for the future.” According to government estimates, the Autonomous Transportation Strategy will help cut trans-
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portation costs by 44%, resulting in savings of up to AED900 million a year. It will also help save AED1.5 billion a year by reducing environmental pollution by 12%, while generating AED18 billion in annual economic returns by increasing the efficiency of Dubai’s transportation sector. It also aims to reduce traffic accidents and losses by 12%, generating savings of AED2 billion annually, and increase the productivity of individuals by 13%. It will also reduce the amount of space required for parking. “We want to make Dubai a sustainable place to live in, to enable future generations to enjoy the finest smart services within a sustainable environment. We are placing a new component of the city of the future, represented in a transportation system based on autonomous technology,” says Sheikh Mohammed. “We have moved from foreseeing the future to the stage of making the future. The eyes of the whole world are set on our country as we forge ahead of others in the world in the use of technology to improve key sectors related to human life and adapt innovation and new technologies in various areas of work and life.”
Creating unique experiences @_Shurooq ShurooqSharjah
shurooq.gov.ae
5.1 | FDI
INVESTMENT CENTRAL The UAE is the top recipient of foreign direct investment (FDI) in the Arab world and one of the hottest destinations worldwide
UAE FDI IN 2018 FDI OUTFLOWS
FDI INFLOWS
$15B $10.4B
092 92
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FDI OUTWARD STOCKS
$139.4B
FDI INWARD STOCKS
$140.3B
FDI | 5.1
W
ith the region’s most diversified economy and liberalised trading environment, it is little surprise that the UAE continues to prove a magnet for foreign investment. In 2018, the UAE ranked first in the Middle East and 27th globally for FDI inflows, according to the United Nations Conference on Trade and Development’s (UNCTAD) 2019 World Investment Report, three positions ahead of its 2017 ranking by the organisation. This followed a stellar performance in 2017 when the country accounted for around 40% of all FDI recorded in the Arab world. HE Eng Sultan bin Saeed Al Mansoori, UAE Minister of Economy, says the UAE’s global standing as a top destination for FDI “corroborates investor con-
fidence in the country’s business-friendly environment and reinforces the prestigious position boasted by the UAE as a key regional investment hub”.
DUBAI A TARGET FOR INVESTORS Dubai dominates FDI inflows in the Middle East and Africa. Total FDI in the emirate rose 41% year-on-year in 2018 to AED38.5 billion (US$10.5 billion), with the United States, India, Spain, China and the United Kingdom combined accounting for 70% of the total figure. In the first half of the year alone, the number of FDI projects initiated in Dubai rose 40% year on year to 248. According to data from the Dubai FDI Monitor of the Dubai Investment and Development Agency (Dubai FDI), the US accounted for 23% of total FDI in the emirate in 2018, followed by the UK
““[The Foreign Direct Investment law] accelerates the development of a knowledge economy, boosts confidence among foreign investors and encourages major international firms to invest in the UAE” — HE Eng Sultan bin Saeed Al Mansoori, UAE Minister of Economy
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5.1 | FDI
ABU DHABI ESTABLISHES DEDICATED FDI DEPARTMENT In a bid to accelerate FDI in Abu Dhabi, authorities in the UAE capital recently established the Abu Dhabi Investment Office (ADIO). The department has been charged with executing a comprehensive strategy to drive FDI, with Public-Private Partnerships (PPP) a core priority as well as developing targeted incentives for priority economic sectors such as technology and advanced manufacturing. Saif Mohamed Al Hajeri, chairman of Abu Dhabi Department of Economic Development, describes the establishment of ADIO “as an important milestone for Abu Dhabi’s economic development”. “With a growing, diversified economy, it is essential we continue to attract inward investment from international players,” he explains. “Abu Dhabi is one of the world’s most attractive investment destinations and I am confident that ADIO will drive further progress in line with our economic strategy,” he adds. Discussing ADIO’s plans, Elham Abdulghafoor Mohamed Al Qasim, acting CEO of the organisation, says increasing the involvement of the private sector in Abu Dhabi’s economy is a core priority. “Our goal is to channel FDI towards priority sectors and enhance private sector participation in strategic projects where there are growing opportunities,” he says. According to a government statement, Abu Dhabi’s PPP framework will “bolster FDI inflows and enhance the private sector’s participation in key strategic sectors such as the creation of urban infrastructure. ADIO will also support investors in making commitments in line with Abu Dhabi’s economic strategy and work with government and private sector partners to use financial, technical, and regulatory criteria to screen proposed projects and assess their feasibility for PPP”.
with 13%, France (9%), India (7%) and China (5%). Retail and wholesale trade investments accounted for 25% of the total figure. In terms of overall standings, Dubai was the number one destination for FDI in the Middle East in 2018, and sixth overall worldwide. This growth trend has only accelerated
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in 2019. According to data from Dubai FDI, foreign investment in the city’s economy reached $5.5 billion in the first quarter of this year, marking a 176% increase compared to the same period in 2018. Speaking to Bloomberg Television earlier this year, Fahad Al Gergawi, CEO of Dubai FDI, said he was confident the city would set a new record for FDI in 2019.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
“We’re looking at probably a better year, where numbers could be even higher than the performance we had in 2018,” he said. “We’re in a city of optimism always, and His Highness [Dubai leader Sheikh Mohammed bin Rashid Al Maktoum] has shown us this is the way. “Investment generally in the last years has grown in Dubai tremendously. Looking at last year’s performance, coming from where we were before, it was a tremendous one.” Importantly for Dubai’s ongoing economic diversification strategy, start-up ventures and high-growth tech sectors continue to attract significant investment. In fact, the UAE attracted 70% of all start-up funding invested across the Middle East and North Africa in 2018, with Dubai leading the way, according to a 2018 report published by investment analyst Magnitt. Thirty percent of all investment transactions across the region also involved UAE headquartered start-ups, the firm’s research revealed. Last year saw 366 investments in startups across the MENA region, equating to $893m in total funding. This marked a 31% increase in the level of investment compared to 2017.
FDI | 5.1
NEW LEGISLATION DRIVING UAE INVESTMENTS In a bid to capitalise on this growth trend, Emirati authorities approved a landmark Foreign Direct Investment (FDI) Law in 2018. The new law provides for 100% foreign ownership of companies operating in 122 high-growth areas of the economy, including agriculture, industry and services, innovation, technology, and scientific research, among others. According to Al Mansoori, the legislation “represents a pioneering legislative and regulatory framework that significantly enhances incentives and advantages offered to foreign investors in the UAE and strengthens its position as a safe and attractive investment environment”. “It accelerates the development of a knowledge economy, boosts confidence among foreign investors and encourages major international firms to invest in the UAE,” he says. UAE authorities have also established a Foreign Direct Investment Committee under the auspices of the country’s Ministry of Economy. According to a government statement,
FDI FLOWS INTO DUBAI, January 2015 – March 2018 Region
Number of Projects
Capex (USD m)
Africa
355 213 172 69 29 22
$5,738 $3,990 $5,552 $2,607 $3,244 $530
Total
860
$21,660.63M
European Union United States Asia Pacific Other GCC
Number of Jobs
17,754 10,487 12,595 7,342 4,288 1,700 54,166
Source: Financial Times, fDI Markets Data
the FDI unit will propose FDI policies, identify priorities, formulate relevant programmes, and lead the implementation of the Cabinet-approved proposals. It will also oversee the establishment of a comprehensive database for UAE investments as well as assist in the registration and licensing of new FDI projects, among other responsibilities. “The new FDI Law encourages liberalisation of innovation and knowledge-related activities for investors with a broad
package of incentives and guarantees,” comments Al Mansoori. UAE authorities are confident the new initiatives will help accelerate FDI flows by up to 20% this year, up from an average 8% previously. The landmark legislation is predicted to further strengthen the UAE’s business-friendly environment and aid longterm growth by stimulating private sector investment in key non-oil sectors of the country’s economy.
DUBAI TO HOST 2021 GLOBAL FDI FORUM Dubai was recently confirmed as host of the 18th World Forum for Foreign Direct Investment (FDI) in a significant coup for the city. Dubai will host the event concurrently with Expo 2020 in February 2021. The World Forum for FDI is recognised as one of the world’s biggest annual events for investors and regularly attracts delegates from across the globe. It is designed to showcase opportunities for FDI in the host city. In announcing Dubai’s selection as host city for the World Forum for FDI, Adam Jones-Kelly, the president of event organiser, Conway, described Dubai as “a stunningly beautiful city, a magnet for investment, and a world-class destination”. “If there’s a city more associated with explosive growth and FDI attraction, I’ve never seen it,” he said. “We’re thrilled to announce that the World Forum for FDI is going to Dubai in 2021, and even more excited to say that the Forum will run alongside the World Expo.” Conway has confirmed it will stage a one-day FDI Training Seminar prior to the World Forum, which will “detail global best practices, new ideas on marketing, and the latest strategies for attracting and increasing foreign direct investment”.
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START ME UP The UAE has established itself as the Middle East’s leading destination for start-ups and entrepreneurs looking to take their ideas to the global marketplace
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he UAE has become a magnet for venture capitalists in recent years, thanks to the success of local start-ups such as Souq.com and ride-hailing app Careem, which have become leading global brands in their own right. Indeed, the remarkable rise of Careem, which was snapped up by Uber in a $3.1 billion deal earlier this year – the region’s bigger-ever merger and acquisition deal – has taught aspiring Arab entrepreneurs that they don’t have to leave the region to pursue their dreams.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
As a result, the UAE has become a hotbed of entrepreneurial talent and the region’s biggest destination for venture capital (VC) funding. According to the latest MENA Venture Investment report published by investment analyst Magnitt, the UAE attracted 70% of all start-up funding invested across the Middle East and North Africa (MENA) region in 2018. Thirty percent of all investment transactions across the MENA region also involved UAE-headquartered start-ups, the report revealed.
SMES & ENTREPRENEURS | 5.2
“The UAE will remain a global incubator for exceptional talents and a permanent destination for international investors” — HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai
to emulate. Commenting on the report’s findings via his Twitter account, HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said the UAE would always welcome young Arabs seeking success. “My message to them is the UAE was [and] will always be your country, a part of a beautiful Arab world that will continue prospering with your energy [and] aspirations,” Sheikh Mohammed tweeted. The UAE’s economic transparency and growing reputation as a global hub for innovation and entrepreneurship were also cited as key to the country’s appeal by young Arab entrepreneurs.
In 2018, 366 investments were made in start-ups across the region, equating to $893 million in total funding. This marked a 31% increase in the level of investment compared to 2017. Careem attracted the largest single tranche of funding, raising $200 million. “In 2018, more international investors entered the fray, new accelerator programmes [were] created, multiple government initiatives spurred innovation and established regional VC firms closed out new funds to deploy further capital,” comments Philip Bahoshy, Magnitt founder and CEO.
UAE THE TOP DESTINATION FOR ARAB ENTREPRENEURS Inspired by Careem’s success, young Arab entrepreneurs are flocking to the UAE. In fact, the latest Arab Youth Survey declared the Emirates the most desirable place to live for young people in the Middle East. The report found that 44% of respondents said they would like to live and work in the UAE, citing the country’s employment opportunities, safety and generous salary packages. A similar percentage also chose the UAE as the country they’d most like their own
GENEROUS FUNDING PACKAGES ATTRACTING TOP TALENT Much of the UAE’s popularity among entrepreneurs can also be attributed to generous funding packages offered by Emirati authorities to help establish the country as a global hub of innovation. In 2016, HH Sheikh Mohammed launched the $270 million Future Endowment Fund, which was designed to encourage tech entrepreneurs to establish their businesses in Dubai. Intrinsic to the fund is the Future Accelerators Programme, which identifies top talent from among thousands of candidates
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5.2 | SMES & ENTREPRENEURS
Ride-hailing app Careem is one of the UAE’s biggest start-up success stories, having been acquired by Uber in a $3.1 billion deal this year
EXPO 2020 DUBAI BOOSTS SMALL BUSINESS SECTOR Small- to-medium enterprises (SMEs) are benefitting from the event’s show of support for fledgling operators More than half of all contracts relating to Expo 2020 Dubai have been awarded to SMEs to date, the event’s official organiser has revealed. “We have [more than] 26,000 registered suppliers from 150 countries wanting to do business with Expo. Seventy-five percent
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of these companies are SMEs,” commented Tina Ghanem, the director of Expo 2020’s Online Marketplace (OMP), during a presentation at the Arabian Business Startup Academy in Dubai. Expo organisers had previously committed to awarding 20% of the mega-event’s total budget to SMEs. However, Ghanem revealed that 56% of all Expo 2020 contracts had been awarded to SMEs to date, or more than half of the 5,600 deals signed in total for the event. Expo 2020 will be the largest-ever international event staged in Dubai. The city’s authorities have pumped billions of dollars of investment into the staging of the event, which will run from October 2020 to April 2021.
UAE 2020: BUILDING A PROSPEROUS TOMORROW
OPENING THE MARKET TO NEW INVESTMENT The UAE government’s decision to allow 100% foreign ownership in key sectors of the economy while introducing the option of long-term residency visas for investors, highly skilled professionals, entrepreneurs and students will only serve to enhance the UAE’s regional and global appeal. “The UAE will remain a global incubator for exceptional talents and a permanent destination for international investors,” commented Sheikh Mohammed on the development in 2018. The 10-year residency visas are available to investors who have committed at least AED10 million to the country’s economy, as well as entrepreneurs and highly skilled workers. The visas are also available for their families. Investors who have committed at least AED5 million to a property purchase can also apply for a five-year visa without requiring
The Expo 2020 site under construction in Dubai South
PHOTOS: SHUTTERSTOCK.COM
$3.1B
and provides mentoring, training and support, with a view to these individuals establishing their businesses in Dubai. To date, more than 50 graduates of the programme have signed Memorandums of Understanding (MoUs) with the Dubai government to trial their technologies with key ministerial departments. “The programme offers an ideal platform to forecast and plan for the future as it gathers the world’s brightest minds and most innovative companies to join hands with government and semi-government entities in the UAE and address challenges in key sectors using cutting-edge technologies,” explains Khalfan Belhoul, CEO of Dubai Future Accelerator. Dubai authorities recently established a dedicated government department charged with fostering growth in the city’s small- to
medium-business sector. Dubai SME also provides funding and support to start-up businesses and entrepreneurs. In 2018, the organisation provided $27 million in funding to more than 4,200 Emirati entrepreneurs, marking a rise of 32% year on year. Dubai SME’s training and development programmes are also attracting entrepreneurs in their thousands. Last year, more than 5,000 people enrolled in courses run by the organisation, marking a 163% rise compared to 2017. Discussing Dubai SME’s role in supporting the growth of Dubai’s small businesses, Abdul Baset Al Janahi, the organisation’s CEO, says: “Since its inception in 2002, Dubai SME has pursued a clear strategy towards translating the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to enable the citizen to be part of the economic development process and a true patron of the State. True to this spirit we strive to support entrepreneurship and develop the SME sector in Dubai, which is the backbone of the emirate’s economy.”
SMES & ENTREPRENEURS | 5.2
a sponsor, as can retirees, executives and exceptional students who meet key criteria. In July 2019, the UAE’s Ministerial Cabinet revealed that 122 economic activities across 13 key growth sectors, including renewable energy, space, agriculture and manufacturing, would be made eligible for 100% foreign ownership. Areas of foreign ownership will also include transport and storage, which will enable investors to own projects in the field of e-commerce transport, supply chain, logistics, and cold storage for pharmaceutical products. Previously, 100% foreign ownership was restricted to the dozens of free trade zones located across the country. Dubai alone is home to more than 30 free zones catering to various industries, from transport, trade and logistics to education, finance, media and technology. UAE authorities have moved to safeguard these economic areas by making it easier and more cost-efficient for entrepreneurs and start-ups to operate across multiple free zones. Launched by the Dubai Free Zones Council (DFZ Council), the One Free Zone Passport Initiative will enable firms
“Since its inception in 2002, Dubai SME has ... strived to support entrepreneurship and develop the SME sector in Dubai” – Abdul Baset Al Janahi, CEO of Dubai SME to operate in more than one of free zone without requiring an additional licence.
BUSINESS LICENCE APPLICATIONS BOOMING The net effect of these initiatives has been a massive rise in the number of new business registrations in the UAE in the first half of 2019. Dubai has been a major beneficiary, with 14,737 new licences issued in the first half of the year, or about 81 a day, according to data published by Dubai’s Department of Economic Development (DED). Of the new licenses, 52% were commercial, 45% were professional, 2% were tourism related and 1% were industrial. In March alone, the DED issued 2,459 new business licences, marking a massive 35.4% increase compared to the same period in 2018 (1,816). According to the DED, the impressive growth in new business resulted in the creation of 9,661 new jobs during the month. Major industries to benefit from the influx of new business included the city’s real estate, building, hospitality and construction sectors, the DED revealed.
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5.3 | FREEZONES
Free trade zones have played a crucial role in underpinning the UAE’s economic diversification strategy
ZONED IN T
Lhe UAE has long been recognised as the driving force of economic free zone developments in the Middle East. In fact, the UAE is home to more than a quarter of the 160 free zones currently operating across the region, with 30 of this number based in Dubai alone. According to data provided by the UAE Federal Customs Authority, the country’s free trade zones accounted for more than AED592 billion ($161 billion) of the AED1.63 trillion-worth of total foreign trade reported by the UAE in 2018.
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FREEZONES | 5.3
Today, there are more than 5,400 free trade zones operating in 147 countries worldwide, employing a workforce of more than 100 million people. Combined, these economic zones account for approximately 30% of global trade. Asia is home to the greatest proportion of free zones, followed by North America, South America, and the Middle East. According to the 2019 World Investment Report, published by the United Nations Council on Trade and Development, more than 1,400 free trade zones have opened in the past five years, with a further 500 in the global development pipeline. “The SEZ [special economic zone] boom is part of a new wave of industrial policies and a response to increasing competition for internationally mobile investment,” the report states, adding that free zones often act as a vital conduit for the broader economy. “In today’s fast-paced world, free zones are more than facilitators of seamless operations,” says Dawood Al Shezawi, CEO of Annual Investment Organising Committee, which stages the Annual Investment Meeting (AIM) conference in Dubai each year. “Offering legislative and investment benefits, free zones around the world have evolved as competitive business models, that accelerate the growth of the economy by creating job opportunities and facilitating easy and smooth trade,” he adds. In addition to allowing 100% foreign ownership of businesses and levying zero tax rates on profits, UAE free zones provide foreign companies a convenient and secure base to access to regional markets. Home to 30 of the UAE’s 45 free zones, the success of Dubai’s economic expansion strategy has hinged on the development of these economic areas. According to government data, Dubai’s free zones accounted for 41% of the city’s total trade in the first nine months of 2018. Furthermore, total trade volumes in these economic free zones grew by 22% year-on-year during the same period to hit AED394 billion ($107 billion). “Free zones are important economic hubs and centres of foreign direct investment that are poised for growth and expansion in the years ahead,” says HH Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai Free Zones Council (DFZC). “Over the past decades, free zones have been instrumental in increasing Dubai’s GDP and FDI inflows that are experiencing high annual growth despite the prevailing global economic climate. Today, we see the emirate’s free zones as more than just economic facilitators. Due to their legislative and investment incentives and through adopting strategic initiatives that shape the future of trade and economy to consolidate Dubai’s status as an ideal business destination, they have evolved into globally competitive models.”
“Over the past decades, free zones have been instrumental in increasing Dubai’s GDP and FDI inflows…Today, we see the emirate’s free zones as more than just economic facilitators” — HH Sheikh Ahmed bin Saeed Al Maktoum, chairman of Dubai Free Zones Council
Free trade zones accounted for 31.9% of Dubai’s gross domestic product (GDP) in 2018, demonstrating their overall importance to the emirate’s economic wellbeing, says Sheikh Ahmed, who is also chairman of Dubai Civil Aviation Authority and chief executive of Emirates Group. “Dubai’s economy relies on the free zones’ efforts to diversify the national economy and expand non-oil business in line with the Dubai Plan 2021, which aims to elevate the emirate’s global status and establish it as a major contributor to the global economy,” he adds. One of the UAE’s newest – and fastest-growing free zones is located in the northern emirate of Ras Al Khaimah. RAK Economic Zone (RAKEZ) was created in 2017 following the merger of RAK Free Trade Zone and RAK Investment Authority. “RAKEZ brought together two of the UAE’s fastest-growing and most successful investment hubs,” explains RAKEZ Group CEO Ramy Jallad. “This move was a step towards revolutionising the investment landscape in Ras Al Khaimah.” RAKEZ is currently home to around 14,500 businesses from 100 countries worldwide catering to more than 50 unique industries. “Under RAKEZ, the facilities, services, parks, and clients of the two free zones have been consolidated. This has opened up broader benefits and opportunities to global investors looking to establish operations in the emirate,” says Jallad. “RAKEZ is among the key drivers of the emirate’s economic diversification plans as well as being a magnet for foreign direct investment.”
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4.2 | AROUND THE EMIRATES
TAKING CARE OF BUSINESS
The UAE is home to dozens of free trade zones catering to markets as diverse as finance and IT to textiles
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ABU DHABI
Abu Dhabi Airport Business City Abu Dhabi Global Market Abu Dhabi Ports Company Higher corporation for specialised economic zones/ ZonesCorp Industrial City of Abu Dhabi
Khalifa Industrial Zone Abu Dhabi (Kizad)
4
FUJAIRAH
Fujairah Free Zone
Creative City Fujairah Launched in 2007, Creative City provides a professional environment for individuals and businesses working in a range of creative industries including media, events, communication and marketing, music and entertainment, graphic design and technology. It is designed to complement existing media clusters in the region and further facilitate creativity in all fields.
7
AJMAN
Ajman Media City Free Zone
Ajman Free Zone Established in 1988, Ajman Free Zone is one of the UAE’s oldest free trade zones and is currently home to more than 12,300 companies. It offers tenants access to warehousing facilities, executive offices and other meetings facilities.
Incorporating the state-of-the-art Khalifa Port, this vast trade and logistics hub will cover an area two-thirds the size of Singapore when fully operational. By 2030 it will rank as one of the world’s largest industrial zones.
1
Masdar City One of the world’s most sustainable urban developments, Masdar City is enabling innovation in sustainability and clean technologies by integrating education, research & development, investment and business opportunities. The free zone is home to more than 600 local and international firms and organisations including the International Renewable Energy Agency (IRENA), Siemens, and Emirates Nuclear Energy Corporation (ENEC).
twofour54 twofour54 is Abu Dhabi’s media and entertainment industry hub. Named after the geographical coordinates of Abu Dhabi, twofour54 is home to more than 470 media companies, including Sky News Arabia, Image Nation, Ubisoft, CNN, Fox, Flash Entertainment and M&C Saatchi. It also boasts world-class production facilities, talent development initiatives and training, and business support services for media companies.
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RAK Maritime City Ras Al Khaimah Media Free Zone
2
RAS AL KHAIMAH
RAK Economic Zone Established in 2017, RAKEZ was formed from the merger of two of the emirate’s most successful economic zones, RAK Free Trade Zone and RAK Investment Authority. RAKEZ is home to more than 14,500 businesses originating from 100 countries and operating across 50+ industries. RAKEZ is one of the region’s few economic zones that offers both free zone and non-free zone entity formations – enabling businesses to trade locally and internationally.
AROUND THE EMIRATES | 4.2
5
DUBAI
Dubai Airport Free Zone Dubai Auto Zone Dubai Cars and Automotive Zone Dubai Flower Centre Dubai Gold and Diamond Park Dubai Healthcare City Dubai Industrial City Dubai International Academic City Dubai Knowledge Park Dubai Logistics City Dubai Maritime City Authority
7 5
Dubai Media City Dubai Outsource Zone Dubai Science Park Dubai Silicon Oasis Dubai Studio City National Industries Complex Dubai Textile City Energy and Environment Park International Humanitarian City Jumeirah Lakes Towers Free Zone Dubai Production City
2
3 6
Dubai Design District Known as d3 and located near Downtown Dubai, this dynamic precinct is recognised as the city’s hub for design and creativity and features regular fashion shows and launches, as well as art exhibitions. It is also a creative hub, attracting and hosting talent from across the region.
Dubai Internet City Dubai Internet City is the Middle East and North Africa’s largest ICT business hub, featuring more than 1.5 million square feet of office space. It is home to more than 1,400 companies employing in excess of 10,000 workers. It is also the site of the regional headquarters of some of the industry’s biggest players, including Microsoft, Google, Amazon, Huawei and Samsung, among others.
Jebel Ali Free Zone Authority (Jafza)
4
Jafza is one of the world’s largest free zones, with 8,600 companies based in the precinct, including almost 100 Global Fortune 500 enterprises. The economic zone sustains more than 135,000 full-time employees and attracts 23.9% of Dubai’s foreign direct investment. Jafza’s Jebel Ali Port, which is the world’s largest man-made port, contributed more than 33% of Dubai’s GDP in 2017.
Dubai International Financial Centre Dubai International Financial Centre (DIFC) is the leading financial hub for the Middle East, Africa and South Asia (MEASA) region, which comprises 72 countries with an approximate population of 3 billion and a nominal GDP of US$ 7.7 trillion. It is home to more than 2,200 companies and a total workforce of 24,000 finance professionals. The precinct reported a 14% YoY increase in registered firms in the first half of 2019.
Dubai Multi Commodities Centre (DMCC)
6
SHARJAH
Sharjah Airport Free Zone USA Regional Trade Centre Free Zone Sharjah Media City
DMCC is the world’s most interconnected free zone and a leading trade and enterprise hub for commodities. The zone covers an area of 200 hectares and boasts 15,000 registered companies from 170 countries and 60,000 employees. The DMCC Tea Centre handles 53 million kilograms of tea a year.
Hamriyah Free Zone Established in November 1995, Hamriyah Free Zone is the UAE’s second largest industrial free zone. It is home to more than 6,500 businesses from 163 countries. In addition to world-class facilities including offices, warehouses, factories and executive office suites, Hamriyah Free Zone also boasts more than 15 on-site key business services, including banking and auditing firms, currency exchanges, conference facilities and more.
3
UMM AL QUWAIN Umm Al Quwain Free Zone Authority
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6.1 | CULTURE
UAE: CAPITAL OF CULTURE The UAE is recognised as the region’s premier cultural hub and a leading international destination in its own right. Here’s our list of some of the country’s top current and upcoming attractions
Louvre Abu Dhabi
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CULTURE | 6.1
ABU DHABI
culture, presenting some of the most important artistic achievements of our time. According to a statement from the Guggenheim Foundation, the museum’s collection “will encompass art in all mediums produced around the world from the 1960s to the present day”. “It will be a catalyst for scholarship in a variety of fields, chief among them the history of art in the Middle East in the 20th and 21st centuries,” it adds.
SHEIKH ZAYED GRAND MOSQUE
SAADIYAT ISLAND Abu Dhabi has invested a remarkable $28 billion in creating this dedicated cultural district that will be home to three worldclass museums – Louvre Abu Dhabi, Zayed National Museum and Guggenheim Abu Dhabi – plus a new Performing Arts Centre and a leisure, dining and entertainment hub, known as The District. The Louvre Abu Dhabi, which opened in 2017, is touted as “the first universal museum in the Arab world that translates the spirit of openness of cultures”. Designed by Pritzker-prize winning architect Jean Nouvel, the Louvre Abu Dhabi encompasses 9,200 square metres of galleries including the Permanent Gallery and a Temporary Gallery that includes loaned artworks from notable French museums including Musee du Louvre, Musee d’Orsay, and Centre Pompidou. Zayed National Museum, which is currently under construction and is scheduled for completion in 2020, will tell the story of the UAE’s late founding father, Sheikh Zayed bin Sultan Al Nahyan, his unification of the country in 1971, the history of the region and its cultural connections across the world. Meanwhile, the Guggenheim Abu Dhabi, which is scheduled to open in 2022, has been designed by renowned architect Frank Gehry. It will be a preeminent platform for global contemporary art and
An artist’s impression of the Guggenheim Abu Dhabi
Sheikh Zayed Grand Mosque
One of the world’s largest mosques, Sheikh Zayed Grand Mosque is famed for its ability to capture the unique interactions between Islam and world cultures. Sheikh Zayed’s vision for the Grand Mosque was to incorporate architectural styles from different Muslim civilisations and celebrate cultural diversity by creating a haven that is diverse and inspirational in its foundation. The mosque’s architects hailed from the UK, Italy and the UAE, and its design was inspired by grand mosques in Turkey, Morocco, Pakistan, and Egypt. Sheikh Zayed Grand Mosque can accommodate up to 40,000 worshippers and visitors at any one time. The mosque’s open-door policy has made it a magnet for tourists keen to learn more about Islam and discover the building’s remarkable interior design, which houses the world’s largest chandelier and carpet, both of which are handmade.
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6.1 | CULTURE Top: Qasr Al Watan Middle: Al Ain Palace Museum Bottom: Al Jahili Fort
QASR AL WATAN Qasr Al Watan is Abu Dhabi’s latest cultural landmark and tourism attraction located in the UAE Presidential Palace in Abu Dhabi. Qasr Al Watan has been created under the auspices of UAE President Sheikh Khalifa bin Zayed Al Nayhan in a bid to boost cultural understanding of the UAE. The Presidential Palace is the official meeting place of the UAE Cabinet and the Federal Supreme Council, the highest constitutional authority in the country. Qasr Al Watan provides visitors with insight into the UAE’s values and traditions. Highlights include the Palace library, with its vast collection of books, documents and other resources highlighting the UAE’s political, social and cultural history. The West Wing also houses exhibits highlighting the UAE’s formation, while the East Wing (‘The House of Knowledge’) features a vast collection of rare manuscripts and artefacts detailing the Arab world’s achievements in the fields of science, literature and the arts.
Above, Dubai Opera and below, CEO, Jasper Hope.
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AL AIN PALACE MUSEUM Al Ain Palace, better known as Qasr al-Ain, is dedicated to cataloguing the life and times of the late Sheikh Zayed, whose family occupied the palace prior to 1966. The Bedouin style architecture dates back to 1937 and the building was converted into a museum in 1998 as a cultural and tourist attraction. The museum opened its doors to visitors in 2001 and continues to celebrate the rich history of the UAE, preserving its links to the present and the future.
AL JAHILI FORT Located in Al Ain, Abu Dhabi’s Garden City, Al Jahili Fort has been the city’s cultural focal point since its opening in 2008. Al Jahili is one of the largest forts in the UAE and was built in the 1890s on orders from Zayed The First as the home to members of the Al Nahyan ruling family. Between 2007 and 2008, the fort was restored by the Abu Dhabi Authority for Culture and Heritage, who transformed it into a cultural centre and tourist attraction that now houses a permanent exhibition devoted to Wilfred Thesiger, the intrepid explorer, travel writer and photographer, who crossed the Empty Quarter twice in the 1940s, and a temporary exhibition gallery. Surrounded by pristine grounds and lush gardens, the fort won the prestigious Terra Award for the best Earthen Architecture in the world in 2016.
CULTURE | 6.1
DUBAI
MUSEUM OF THE FUTURE The $200 million Museum of the Future project, set to open in 2020, will be “an icon of the future of science, technology and innovation in Dubai, and will be a pioneer global destination for the launch of new technologies, innovations and many creative ideas”, according to a government statement. “The museum will provide visitors the opportunity to experience the future now. It will be the destination for scientists, experts, innovators, and creative minds, from all over the world, to design and shape the future,” says Mohammad bin Abdullah Al Gergawi, Minister of Cabinet Affairs and the Future, and vice chairman of the Board of Trustees and managing director of Dubai Future Foundation. Housed in a highly distinctive, oval-shaped building, the museum will feature innovation labs and act as a permanent exhibit for future inventions and an incubator for ideas.
SHEIKH MOHAMMED BIN RASHID LIBRARY This $272 million facility, located in the Al Jaddaf area of Dubai, is designed to resemble a large open book. The 66,000 sq metre library holds more than 1.5 million volumes, one million audio books and two million e-books, making it the world’s largest electronic collection and the biggest library in the Arab world.
Hussein Nasser Lootah, director general of Dubai Municipality, says the remarkable library is a “world-accredited reference in [the] Arabic language and a destination for specialists, scientists, writers, poets, intellectuals, talented minds, and students. It will also serve as an incubation for publishers.”
Above left: Museum of the Future Above: Sheikh Mohammed Bin Rashid Library
NICHE DUBAI
Dubai is home to a growing underground arts scene that reflects the city’s vibrant personality
Dubai’s Al Quoz Industrial area is home to one of the city’s most unlikely creative hubs, Alserkal Avenue. Featuring more than 35 galleries and creative spaces spread across an area exceeding 500,000 square feet, it’s the place to observe local artists at work, watch an independent film at Cinema Akil, listen to Cuban jazz at The Fridge or grab an organic coffee at Appetite Café. Alserkal’s latest attraction is Concrete, a multipurpose venue designed by Rem Koolhaas’ Office for Metropolitan Architecture (OMA). The venue is designed to host international exhibitions as well as art, design and fashion events. Concrete was recently shortlisted for the 2019 Aga Khan Award for Architecture, marking the first time a project in Dubai has been considered for this prestigious award. In Bur Dubai’s historic district of Al Fahidi, coffee lovers gather at the Dubai Coffee Museum to get their caffeine fix. Experts are on hand to explain coffee roasting and brewing methods, while visitors can visit a gift shop selling coffee and coffee accessories, from milk jugs to latte art pens. Art lovers can also take advantage of Art Bus, which provides guided tours of the city’s best galleries, studios, alternative art spaces and art fairs. The bus itself is a blank canvas on which emerging local artists have been commissioned to showcase their work in conjunction with Dubai Culture & Arts Authority.
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6.1 | CULTURE
DUBAI OPERA This stunning 2,000-seat venue, which opened in 2016 and was developed at a cost of US$300 million, is the centrepiece of Emaar’s new arts and culture precinct in Downtown Dubai, which also features hotels, a retail plaza and a waterfront promenade. The facility has hosted worldclass cultural events and live productions since its opening, including live performances of Les Miserables and Cats.
Above: Dubai Opera Right: Coca-Cola Arena Below: Art Dubai 2018
COCA-COLA ARENA Expo 2020 will showcase Emirati and Arab culture to the world
DESTINATION: EXPO 2020 DUBAI
The first expo to be staged in the Middle East will showcase Emirati and Arab culture to the world The US$4 billion Expo 2020 Dubai site in Dubai South will be a self-contained city of sorts spanning some 438 hectares and with an exhibition area covering 4.38 square kilometres – the largest site in the history of the event. The six-month-long expo is expected to attract 25 million visitors, create at least 250,000 jobs and contribute more than US$19 billion to the UAE’s economy. As the region’s first-ever World Expo, the event will showcase Emirati and Arab culture to the world. Expo 2020 has even inspired the creation of the first Emirati opera. Al Wasl, which means ‘the connection’ in Arabic, will bring a thousand years of culture to life, showcasing the UAE’s unique heritage from its Bedouin roots to forward-thinking, modern multicultural hub. With music by award-winning composer Mohammed Fairouz and dialogue penned by best-selling author Maha Gargash, the two-hour opera will be performed in both Arabic and English at Dubai Opera. Al Wasl, produced in collaboration with Welsh National Opera, will be the result of collaboration between more than 100 Emirati and global artists and musicians as well as a production team of 70 professionals. A cultural milestone for the UAE and Expo 2020, Al Wasl will support the country’s flourishing arts industry and celebrate the first ever World Expo to be held in the Arab world.
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One of Dubai’s newest mega-venues, Coca-Cola Arena is the region’s largest live entertainment destination, capable of accommodating up to 17,000 spectators. Located at City Walk, the stadium is designed to host events year round, from sporting tournaments to concerts, theatre productions and gala dinners. Since opening in June, Coca-Cola Arena has hosted performances by the likes of Maroon 5, Westlife and comedian Russell Peters.
ART DUBAI Art Dubai has become one of the region’s premier annual cultural events since its launch in 2007. In its inaugural year, 40 galleries took part in the art fair, which attracted 8,000 visitors. By 2017, the event had grown to include installations and presentations in more than 90 galleries across the city, with 27,000 visitors in attendance. Today, Art Dubai features contemporary and modern art from the Middle East, North Africa and South Asia, making it one of the world’s most eclectic annual art fairs.
CULTURE | 6.1
SHARJAH The 1998 UNESCO Cultural Capital of the Arab world and 2014 Capital of Islamic Culture, Sharjah is home to 20 world-class museums, restored heritage sites, mosques and traditional souqs. One of the city’s biggest cultural highlights is the Sharjah Museum of Islamic Civilisation, which houses more than 5,000 remarkable Islamic artefacts from across the Arab world. The museum opened in 2008 on the site of the former Souq al-Majarrah and has since become
one of Sharjah’s biggest tourist attractions, drawing thousands of visitors every year. Situated in the downtown district, The Heart of Sharjah precinct comprises two neighbourhoods, Al Sheyoukh and Al Maraija, that have been fully restored and pedestrianised. The precinct houses several interesting museums. The nearby traditional Souk al Arsah and Souk al Shanasiya feature a range traditional wares. Souk al Arsah is believed to be the oldest souk in the region.
Mleiha Protected Area has significant cultural and historical importance. Priceless artefacts such as potteries were discovered here, and it serves as an openair geological museum for modern and medium-scale excavation. Sharjah is also home to renowned cultural events including Sharjah Light Festival, Sharjah Heritage Days, and the Sharjah International Book Fair – the oldest and largest event of its kind in the Middle East.
Sharjah Light Festival is one of the emirate’s most popular annual events
OTHER NOTABLE ATTRACTIONS Located in the 18th century Ajman Fort, the Ajman Museum brings the emirate’s past to life through displays including ancient manuscripts, weaponry and models of wooden dhows. One of the most notable displays is an excavated cemetery discovered in the Al Muwaihat area, which features pottery and funeral jewellery dating to 3000 BC. Another popular exhibit is devoted to the pearl trade that once dominated the region, while the fort itself – which was the home of Ajman’s ruler until 1970 – is a well-preserved example of traditional Emirati architecture. The National Museum of Ras Al Khaimah is another popular cultural attraction. Located in the city’s ‘Late Fort’, the museum features a large number of archaeological,
historical and ethnographical exhibits. Many of the artefacts and collections were partly donated by members of the emirate’s ruling Qawasim family and residents of Ras Al Khaimah. Right: Ajman Museum Below: National Museum of Ras Al Khaimah
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6.2 | UAE-UK BUSINESS COUNCIL
The UAE-UK Business Council is a strategic, CEO level forum that was established in 2011 to identify barriers to and opportunities for bilateral trade and investment, writes the council’s co-chairman, HE Nasser Ahmed Alsowaidi
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UAE-UK BUSINESS COUNCIL | 6.2
T
he UAE-UK Business Council counts among its members some of the world’s most-respected firms, including BP, Barclays, Mubadala, Emirates Airline, Rolls Royce, HSBC and ADNOC. In 2015, the Business Council accepted the challenge set by then-UK Prime Minister, David Cameron, in correspondence with HH Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, to achieve £25 billion-worth of bilateral trade by 2020. In order to meet the target, we aim to: - Identify and recommend actions to remove impediments to greater trade, investment and commercial links between the UAE and UK; - Act as a catalyst for greater interest and linkages between the two countries’ commercial sectors from small and medium sized enterprises to multinationals; - Propose areas of collaboration that would benefit both countries economically and deepen bilateral relations; - Provide strategic advice to the two Governments as appropriate. We have organised ourselves into a series of working groups that take forward the ideas and suggestions of the Business Council, as well as providing a voice to companies that are not members of the council itself. Our current working groups are as follows: Security & Aerospace; 4th Industrial Revolution; Manufacturing & SMEs; Education & Training; Energy; Infrastructure; Healthcare & Life Sciences; and Financial & Professional Services. One thing that draws consensus from all our members is that the UAE is an excellent market for British companies. This is evident by the fact there are more than 5000 British companies already operating in the UAE, across all sectors. Several large British firms have a substantial local presence, while a significant number of British nationals are employed in senior management positions in UAE companies. There are more than 100,000 British residents in the UAE and in the region of 1.5m British tourists every year. The strong historical relationship between the UK and the UAE has meant that UK companies have done well here.
“These are exciting times to be doing business in the UAE... [there are] great opportunities for British companies who want to get involved” — UAE-UK Business Council co-chairman HE Nasser Ahmed Alsowaidi
The UAE government is constantly looking at ways to make it easier for companies to operate here and this is reflected by the raft of economic measures that were announced in the summer of 2018. These announcements were welcomed by foreign companies and investors doing business in the UAE. They included confirmation of a new Foreign Investment law that allows majority overseas ownership in UAE-based companies, with the prospect of 100% in certain industries. The UK ranks among the largest foreign investors in the UAE economy. At the same time the UAE government also revised the UAE’s immigration laws, with the aim of attracting and retaining talented individuals and investors. These amendments have been welcomed by the expat business community in the UAE.
FAST FACTS
UK-UAE BILATERAL RELATIONSHIP ≠≠
The UAE is the UK’s fourth-largest export market outside Europe and accounted for £10.5bn (US$12.91bn) of UK exports in 2018.
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Total trade in goods and services (i.e. exports plus imports) between the UK and UAE was £16.3bn in the four quarters to the end of Q3, 2018.
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The stock of FDI from the UAE in the UK was £5.4bn in 2017, 26.3% higher than in 2016.
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UAE investors currently hold more than £5bn-worth of UK assets.
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More than 100,000 UK nationals live in the UAE and 586,000 UK tourists visited Dubai in the first half of 2019.
These amendments and others are what has helped the UAE reach 11th position in the World Bank’s Ease of Doing Business report 2019; a rise of 10 places from 2018. These are exciting times to be doing business in the UAE. Following a brief economic slowdown, the economy now seems to be doing well, new companies are setting up here, and the UAE government is looking to the future and setting high standards for the nation. This is creating great opportunities for British companies who want to get involved in this forward-thinking country, both to do business here and use it as a hub for accessing markets in the Middle East. If you are considering making the move to the UAE, there is significant support available in terms of dealing with the logistics of establishing a business in the Emirates. The Department for International Trade both in the UK and at the British Embassies in Abu Dhabi and Dubai and British Centres for Business, will be able to help you with sector advice and trade opportunities. There are a number of accelerator and incubator schemes to help you get started here and dozens of free trade zones to choose from. If you want to find out more about doing business in the UAE, whilst also networking with others British businesspeople both in your sector and others then why not contact the British Business Groups in Abu Dhabi or Dubai. They run sector-specific and business networking events throughout the year and are an invaluable resource for British businesspeople and those working with British companies.
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6.3 | DOING BUSINESS
YOUR GUIDE TO DOING BUSINESS IN THE UAE Here, Paul Bryson, director of Domestic Structuring at UAE business set-up specialist, Virtuzone, provides insight into the options available to UK firms looking to establish a commercial presence in the UAE
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WHAT ARE THE DIFFERENT STRUCTURES AVAILABLE TO UK BUSINESSES LOOKING TO RELOCATE OR LAUNCH IN THE UAE? The historical ties between the UAE and UK are already strong, reflected in an expatriate population of more than 120,000 UK citizens and more than 5,000 British companies operating in the UAE. With Expo 2020 on the horizon, UK companies are well placed to take advantage of the many opportunities this major event will present. Setting up in the UAE can prove a challenging process to the uninitiated. But
UAE 2020: BUILDING A PROSPEROUS TOMORROW
once you understand the different business structures and benefits available, it can open up a whole new world of opportunity.
WHAT IS THE PROCESS OF SETTING UP A NEW COMPANY IN A FREE ZONE? Free zones are the perfect place to get started. They provide a smooth set-up process and a fast-track approach to launching your business. A huge benefit is that many of these zones are sector specific, which gives new companies instant access to a local hub of knowledge and the expertise of others already operating within their field. You also have plenty of options regarding location, given that there are more than 45 free zones operating across the UAE – each with their own benefits. The biggest advantages for setting up in a free zone is that you will pay 0% corporate or income tax, while foreign investors can retain 100% of their business (and profit) without the need for a local partner or agent. You will also avoid customs duties levied on imports and exports. Of course, such benefits come with restrictions, such as with staff numbers, office sizes, and (in some locations) the type of business you can conduct. You will also be prevented from trading within the local markets outside of your geographical free zone area. If your intention is to get your company set up and generating turnover as quickly as possible, the free zone option could be for you.
DOING BUSINESS | 6.3
FAST FACTS≠
DOING BUSINESS IN THE UAE ≠≠
There are more than 45 free zones in the UAE. Companies based in free zones pay 0% corporate and income tax, while foreign investors retain 100% of their business (and profit) without the need for a local partner or agent. They also avoid customs duties levied on imports and exports.
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The UAE government now allows 100% foreign ownership for businesses based outside free zones that cater to 13 fast-growing sectors of the economy.
ESTABLISHING YOUR BUSINESS OUTSIDE A FREE ZONE If the free zone is where new businesses get their foot in the door and start to change the game, the mainland is where you level up. It is the perfect next stage for those with growing businesses or who need the freedom to trade through the UAE and beyond. A mainland company can also work in any business activity, which frees you up from some of those free zone limitations. One restriction with mainland companies is that in most cases you will require the involvement of a local partner or service agent – however, this should not be seen as a barrier to entry [the UAE government this year introduced 100% ownership rights for foreign firms operating in 13 emerging sectors of the economy]. In the case of working with a partner, often this can mean that at least 51% of your shares in your business should be held be a UAE national or a 100% UAEowned company. However, all risks can be mitigated and you are able to maintain full ownership control of your business if it is properly structured. Foreign expats can maintain 100% ownership of their business on the mainland if they are in the professional services industry (including doctors, lawyers, engineers and consultants) and have the appropriate licence. However, with this type of company comes unlimited personal liability of the shareholder. Therefore, a limited liability company with a 51% local nominee shareholder might be a more attractive option.
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Foreign expats can maintain 100% ownership of their business on the mainland if they are in the professional services industry.
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Typically, when remunerating a local partner this should be done on a fixed fee basis which doesn’t increase based on the success of the business. This means the profits do not have to be distributed in the same percentages as the shares and can be entirely repatriated.
SETTING UP A REPRESENTATIVE OFFICE Opening a representative office in the UAE is arguably the easiest way for foreign companies and entrepreneurs to bring their brand into our exciting market. It essentially involves creating an extension of your overseas business in the UAE. It cannot conduct business and turn a profit (unlike a ‘branch’ office), but rather creates a small foothold in the market and then outsources all of its work back to the parent company. There are several legal and administrative steps, as you would expect, including hiring a Local Services Agent to act as your representative/sponsor and applying to both the Department of Economic Development and Ministry of Economy for approval. But for those who want to dip their toes in the local market, setting up a representative office is a very cost-effective way of establishing a presence in the UAE. Not only will you enjoy lower overheads (thanks to operations being smaller than those involved in setting up a branch or an entirely new business), but there are also no restrictions on the share capital involved – so you retain full control.
Most firms based on the mainland (ie outside a freezone) require the involvement of a local partner or service agent to operate.
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International firms also have the option of opening a representative office in the UAE. These businesses cannot turn a profit (unlike a ‘branch’ office), but they provide a foothold to explore opportunities in the market.
“With Expo 2020 on the horizon, UK companies are well placed to take advantage of the many opportunities this major event will present” — Paul Bryson, director of Domestic Structuring at UAE business set-up specialist, Virtuzone
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INDEX OF ADVERTISERS 114
UAE 2020: BUILDING A PROSPEROUS TOMORROW
IFCI-01 IBC OBC
First Abu Dhabi Bank (FAB) Ajman Tourism Development Department Department of Culture and Tourism Abu Dhabi
4-5
Abu Dhabi Ports
9
Etihad Museum
17
Ras Al Khaimah Economic Zone
23
Dubai Chamber of Commerce and Industry
25
Ajman Free Zone
44
Visa
49
TIME Hotels
55
BP
85
Emirates Global Aluminium
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