TBY talks to Fahad Al Gergawi, CEO of the Foreign Investment Office of Dubai FDI, on Dubai’s foreign investment environment.
TBY What is Dubai’s continuing appeal to foreign investors?
FAHAD AL GERGAWI I think it is the positioning of Dubai more than anything else, that as a city it enables businesses not only to come and set up but also grow in the entire region. From Dubai you can reach out to a population of around 2.2 billion within four hours; this is very important for investors. Dubai represents and is accepted as a global services center to many multinationals looking at expanding their businesses in the region and globally.
What measures have you taken to increase Dubai’s appeal as a hub?
We are focusing more on the central role of Dubai in the region. Our location has been key to our status as a hub, and we will continue to be important regionally and globally in the future.
On the economic development front we are looking at best practices that we can learn from, while at the same time trying out new things boldly and being innovative in the way we develop our infrastructure to make it more appealing to businesses. We are also launching campaigns across the global media, and new success stories are being told to the world. In addition, the key economic messages of Dubai are delivered across bilateral and multinational platforms, such as delegation visits, missions, and conferences.
Has the recent regional unrest had a direct impact on FDI flowing into Dubai?
Regional unrest always creates a positive flow into surrounding markets that are stable and have sound fundamentals. It is important to note that Dubai has been a safe haven for investment for many years, and will continue to be a preferred investment destination, not so much due to regional unrest, but because of the underlying fundamentals driving the economy. Dubai has proven that it can compete on an international scale in times of global growth and in times of global decline, which is proof of a resilient economy.
What initiatives are being taken to continually increase Dubai’s attraction as an FDI destination in light of the increasing competition from regional markets such as Saudi Arabia and Qatar?
We have been observing competition for a long time, and we are convinced more than ever that such competition should be welcomed by all means. One of the philosophies of Dubai is that rather than being looked at as one city—as one center of excellence—we want there to be a holistic approach to the market. Being part of a region where there are a number of cities that are vibrant only serves to add value to what Dubai has to offer in terms of investment propositions.
How does the government balance the interests of local businesses in the market against the entrance of international companies?
In terms of the free market, Dubai, since its inception, has set no real limit as to where foreign companies can invest. We now have global companies here in the market, and we would like our own companies to be more competitive in order to enter and be established in the global market. When we look at those family-owned businesses now, they appear well positioned to become more international and offer more opportunities for joint ventures. There are still a few protected areas, such as oil and gas and telecommunications, but these are highly advanced areas. Generally, the government wants to support multinationals that can add to diversity and competence to the business sector and engage in fair competition with local firms. It will help both sides by creating new jobs and opportunities for the training and development of the local population and knowledge transfer.
In which sectors are you seeing increasing activity and from which markets?
The main areas witnessing activity are trade, logistics, hospitality, and tourism, and we are also starting to see an improved flow into real estate. However, trade, logistics, and services continue to dominate the scene. We have more than 16,000 hotel rooms under development, which for a location like Dubai is very important. ICT is also a strong sector. We are seeing encouraging development in the healthcare and education sectors, and we support this because we want to see global best practices in these two sectors. As for our major trading partners, we see India, China, the UK, the US, and Switzerland in the top rung, and we are starting to see an increased flow coming in from South American countries as they look to diversify their trade balances with different regions in the world.
© The Business Year