STRATEGIZING MANUFACTURING

Dubai 2020 | INDUSTRY | FOCUS

The Middle East has been known generally as import-dependent in the construction and manufacturing industries.

Dubai has already shown its talent at diversifying its economy, as one of the few Gulf actors able to claim almost complete economic independence from oil and gas sectors. Its success is thanks to a continuous, intensive diversification strategy, which saw Dubai's economy expand into the real estate, banking, trade, and financial sectors. However, 2009 showed us what can happen when an economy can become too dependent on liquidity-fueled sectors such as construction and tourism. With this in mind, Dubai is looking to strengthen its economy via the recently announced Industrial Strategy 2030 that looks to focus on developing local industrial production and expand its reach into strategic subsectors, including aluminum and fabricated metals, pharmaceuticals and medical equipment, food and beverages, and machinery and equipment. More generally, the initiative's aim are to mold Dubai into a manufacturing platform with an emphasis on environmentally friendly and energy-efficient manufacturing and Islamic products.

Manufacturing Growth
The Middle East has been known generally as import-dependent in the construction and manufacturing industries. With the creation of Dubai Industrial City (DI) and similar industrial hubs offering world-class manufacturing facilities, this dependence is looking to change. While Dubai had already seen previous growth in this sector (with its construction sector contributing about 6.3% and its manufacturing sector contributing 9.4% respectively to the GDP according to its 2018 economic report), the new initiatives will aim for policies that encourage both foreign companies looking to manufacture locally and provide support to local manufacturing businesses.
This focus on industry will “help the Emirate import less products and instead export them to international markets," according to Saud Abu Al-Shawareb, DI's Managing Director. Some manufacturers are looking to halal products to provide a platform through which to create the Made in Dubai brand.

Keeping it halal
The growing market of halal products has an estimated global market valuation of USD1.9 trillion, according to an IMARC Group 2019 report. Expanding into this market fits seamlessly within Dubai's strategic initiative to grow its Made in Dubai brand into an internationally recognized label. With the creation of its own brand, Dubai is hoping to build credibility for its nationally-made products on the global market. By combining these two goals, the Emirate is posed to create a strong locally-based production line of halal products that will also be the subject of innovation.
As the “bridge between companies and opportunities in the halal market," Halal Trade Marketing Center (HTMC) has made Dubai its global hub due to its central location, says Tomás Guerrero Blanco in his TBY interview. Similarly, the government's recently created Dubai Islamic Economy Development Centre (DIEDC) aims to turn Dubai into the world's Islamic economy capital specializing not only in food products, but also economic services, pharmaceuticals, and cosmetics.
In launching the strategy, Sheikh Mohammed Bin Rashid Al Maktoum said, “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," according to an Emirates24/7 2016 article. This emphasis on R&D is important for Dubai's continued growth into new markets, and it has planned an additional investment of USD190 million by 2030. While the strategy has set the globe as its goal, the initiative aims to create local lines of production through investment incentives and to empower local Emiratis in growing sectors through engagement in national industrial projects. Dubai's government is engaging with local businesses to understand what policies need to be done in order to facilitate a more sustainable economy. “As long as stakeholders work in a cohesive manner, all outstanding issues can be solved," Electric Way CEO Atheeqe Ansari stated in his TBY interview.