UAE, DUBAI - Finance
Director-General, Department of Finance
Abdulrahman Al Saleh is the Director General of the Department of Finance of Dubai. He is also the Chairman of the Board of Directors of the Dubai Financial Support Fund. Prior to joining DOF, he spent four years as the Senior Executive Director for Corporate Affairs in Dubai Customs (DC). In this role, he was responsible for managing the support departments for DC, which includes Finance, HR Management, HR Development, and Administrative Services. He chaired a number of committees in DC such as on the introduction of VAT in Dubai, the Employee Affairs Committee, and the Executive Credit Policy Committee, and was a Member of the Reform and Modernization Program Committee, and IT Steering Committee.
The role of the Department of Finance is to work closely with all government departments, and to support their initiatives and strategic directions, which are all aligned with the Dubai Strategy. During the past four years, we have been able to support all government departments and have followed a fiscal expansionary policy—we did not try to stop any projects in pursuit of savings. This is in line with the direction of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice-President and Prime Minister, and the Ruler of Dubai, which is why most of the major projects that were underway were completed. Now, going forward, we are supporting the main infrastructure projects, which continue to expand.
For 30 years, Dubai has been building itself up to be a regional hub by developing, on the one hand, the infrastructure of the city, but at the same time the soft infrastructure. This includes the city’s regulations, which have made Dubai a point of interest in the region. The decision was taken by the government to finish ongoing projects, including the metro project and the port expansion. Today, we can see that with recovery in the region and the wider world, Dubai is benefiting from investments made during the financial crisis.
We have tried to avoid interfering in the private sector, as this is a free economy. However, where there are regulations, either local or federal, they effectively ensure that processes are legalized and protection is in place for the stakeholders, investors, and contractors. For example, during the restructuring we had to set up a tribunal at the Dubai International Financial Centre (DIFC) in order to protect all parties, while simplifying the process in accordance with international criteria. This avoided the need of going through the Dubai courts, as certain international investors prefer to deal with the DIFC. Providing them that option has really made a difference in the successful structuring of Dubai’s legal system.
Dubai has been developing financial services by setting up the DIFC and has become a regional center for financial services. In addition, there are other non-financial services that are also turning Dubai into a hub. Developing Islamic financial services, or Islamic services in general, is a complement to what Dubai has already been doing. For example, if we look at Dubai’s financial services, sukuks have become one of the main products, and the Dubai government has been issuing them for many years. Most of the listed sukuks on the Dubai Financial Market (DFM) are from the Dubai government, and it is now a matter of leveraging this and building on existing knowledge by developing expertise for new services, such as in finance, insurance, or Islamic insurance, as well as in the certification of halal products. We feel that this initiative for Islamic services will complement what Dubai has been doing as a service-based economy.
Following a crisis, I think it is the natural tendency of investors to stay away from a market, perhaps for liquidity reasons. However, since the start of the economic recovery, investors have started to re-enter the market, and we have been seeing a brisk recovery since the beginning of 2013—trading has reached record numbers in terms of prices and volume.
I don’t see why we would not have two exchanges. Dubai itself, as a trade center, will perhaps serve a different population from among the UAE and overseas investors than Abu Dhabi. And it is not only countries that have different equity exchanges; many cities have more than one exchange and are successful. For example, New York and London also have commodity and other large exchanges; similarly, there is room enough for all of them to survive. In the end, if both of the exchanges are profitable, they are both commercially useful.
The surplus will make a difference; it will enhance the economy and give the government the ability to meet its commitments, or reduce its debts, and this is what is in our plans. The deficit has been declining over the past four or five years. And while it is difficult to predict, we are hoping to issue the 2014 budget without a deficit.
The sectors in demand in the UAE are the aviation sector, which is doing very well, and the tourism sector. We have been seeing very good numbers in terms of tourist arrivals and hotel occupancy lately, and even the real estate sector is booming now. The events observed in the Arab Spring countries are driving people to Dubai because it is safer and more economically sound. We enjoy good growth in these areas.
The UAE has been a stable destination for the past 30 to 40 years, a period that has encompassed the Iranian revolution, the Iran-Iraq war, and the Iraq invasion, aside from the Arab Spring. Dubai’s popularity is mainly to do with the regulations, the rigid infrastructure, and its security. Dubai has attracted many foreigners to stay, for whom it is their preferred place of work within the GCC.
Yes, I think they are already looking at Dubai that way. Dubai’s success in introducing a unique developmental model has gained remarkable international recognition. During crises, people turn their attention to those that have a successful track record. The 2009 crisis has brought Dubai’s developmental model with all its successes into a tough test, and the recovery we have seen over the last two years shows the resilience of our growth model.
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