Moody's has recently confirmed Sharjah's “A3" long-term credit rating with a stable outlook. What makes Sharjah an attractive investment destination?
The rating is a testament to Sharjah's highly diversified economy that is not dependent on any single sector. The government of Sharjah has been working to ensure steady growth. Since the 1970s, the prime area of focus of HH Sheikh Dr. Sultan Bin Muhammad Al Qasimi, Member of the Supreme Council and Ruler of Sharjah, was to create an industrial zone in Sharjah itself and provide opportunities for foreign investors to establish long-term factories and businesses in Sharjah at an international level. Today, Sharjah is the industrial hub of the UAE, with almost 33% of the UAE's manufacturers located here. Nevertheless, the economy is diversified between manufacturing, publishing, logistics, healthcare, and tourism, in addition to a range of other sectors, which shows how resilient Sharjah's economy is. The government never aspired to develop beyond what is required. As a result, Sharjah's diversified economy was not primarily affected by the global financial crisis, and it has become a safe haven for a lot of investors. Today, Sharjah has close to 20 different industrial areas and two free zones—the Hamriyah Free Zone and the Sharjah Airport International Free Zone—that have played a major role in attracting foreign companies. More than 12,000 companies operate in those free zones today. This is where Shurooq comes into play, as we look to promote Sharjah and facilitate investors that are looking for long-term investment opportunities. There is a lot to be developed in Sharjah and different facilities in need of improvement, which means considerable opportunities and potential. Sharjah's strategic geographical location also plays a significant role in its ability to attract investments. It is the only Emirate with shared borders with all other Emirates, making it an ideal central location within the UAE. And even more importantly, Sharjah is the only Emirate that has direct access to both the Arabian Gulf and the Indian Ocean and boasts three ports—two on the Gulf and one on the Indian Ocean—all with excellent logistic capabilities. When you add the Emirate's excellent infrastructure to this strategic placement, it is easy to see why it is a perfect choice for a GCC and Middle Eastern hub, which elevates Sharjah's international profile. Not many investors are aware of Sharjah, yet we are slowly but steadily changing this.
Shurooq has targeted four sectors requiring investment: tourism, environment, transport and logistics, and healthcare. Can you tell us more about the opportunities that exist in these sectors?
The first area of growth is the transportation and logistics sector, which comprises almost 6% of GDP, and we need to increase that. Looking at the expected growth rate and what the expected market size increase is, there is a huge gap in what is available and what can be done. For tourism, our aim is to increase the current contribution of 10% to GDP. Sharjah requires almost 3,000 additional beds to cope with increasing tourist numbers, so we need more hotels and resorts. We also want to attract more passenger carriers/ cruise ships to Sharjah, and to expand the culinary offering available to tourists. Shurooq supports investors by providing them land with support for their facilities, and even connecting them to the right operators to fill those hotels in the future. We are actively trying to diversify the tourism sector to cater to all kinds of tourists, be it cultural tourists, beach tourists, or eco-tourists. We are developing eco-tourism in Kalba, beach tourism in Khorfakkan, and cultural tourism in the city of Sharjah. Healthcare is also a major area in terms of investment and development throughout the Arab world. The services are not as advanced as in Europe or Asia, so governments are trying to attract investors keen to establish their own hospitals and institutions. Most governments in the GCC have created zones, and Sharjah, too, has created the Sharjah Healthcare City, a free zone offering ample opportunities to investors. One area that we are targeting in particular is healthcare services for the elderly, where there is a huge gap between supply and demand for services. The fourth sector we focus on is the environment. We are trying to promote companies that can provide us with energy efficient products that would reduce our carbon footprint and emissions. It is a huge market that accounts for nearly $41million, and experiencing annual growth of 15%. Sharjah was the first city in the region to undertake recycling. Environmental and waste management company Bee'ah has played a major role in this sector, and we are trying to attract investors to work closely with it.
How specifically does Shurooq facilitate investment in Sharjah?
We create market intelligence, conduct studies, and provide investors with market data rather than simply inviting them to Sharjah. We promote Sharjah through international roadshows, and deal directly with Chambers of Commerce in many countries around the world. Furthermore, we have seminars with foreign business councils in the Emirate. However, Shurooq's role is more than just providing market intelligence. We actually work hand in hand with investors in providing land for projects and easing the process within the government departments. We don't give financial support to our investors because we believe those investors are coming ready to invest. However, we do enter into joint ventures with investors and work with local entities to facilitate the process for investors.
This interview will be published in 'The Business Year: Sharjah 2015'. To change your subscription information, log on at www.thebusinessyear.com and navigate to My Page.
© The Business Year - April 2015