APPEALING SCENERY
Diversification is the name of the game in an Emirate as rich in culture as it is in commerce.
Ras Al Khaimah today is marshaling those factors that best extend its economic ascendancy. The Emirate's welcoming investment environment enables a diversified economy in the absence of hydrocarbons. Yet, while it holds just 0.6% of proven reserves, it is reportedly keen to increase capacity.
The Tools for the Job
The Emirate enjoys a strategic location in the Arabian Gulf, opening up a rich commercial vista on the economies of the Middle East. The government has been notably proactive in laying the groundwork for both local and foreign investment by making sure that the requisite infrastructure and investment environment essential to business are in place. In addition to RAK International Airport, the Emirate has four seaports, a maritime free zone, and a clutch of marinas at its disposal, as well as an efficient highway network. Meanwhile, relatively cheap yet effective utilities and human resources curb operational costs.
And the Domino Effect
Ras Al Khaimah's growth is characterized by major infrastructural plans that serve several vital economic sectors. Thus, as construction flourishes, the infrastructure of a burgeoning tourism sector is being put in place. Simultaneously, encouraging macro prints have led to a thriving real estate sector. Ras Al Khaimah's primary manufacturing involves non-metal minerals, chiefly cement, ceramics, glass, and construction materials. It is fortunate to have rich reserves of limestone, essential to the cement and building materials industry. Additionally, the Emirate exploits iron, copper, and chromium deposits. Four Portland cement companies operate in Ras Al Khaimah with a recent combined clinker capacity of 4.5mtpy, half of the UAE total, and a cement capacity of 6.0mtpy, which is just over 40% of the total.
Conducive Business Environment
Dr. Abdulrahman Alshayeb Alnaqbi, the Director General of the Ras Al Khaimah Department of Economic Development (RAK DED), notes that in 2017, RAK ranked 45th in World Bank Doing Business report and 87th in the Starting a Business index. Added to expedited official procedures in setting up a business is the ready availability of land. And once established, in terms of commercial operations, apart from proximity to regional markets, RAK provides a 5% cap on customs duty for the bulk of imported goods used by resident businesses. RAK Chamber data reveals business license issuances are dominated by firms active in commerce, services, construction, and manufacturing. The vibrant climate of free enterprise is facilitated by a well lubricated financial services sector.
Financial Services Sector
Ras Al Khaimah has a national bank, RAKBANK, and all banks in the UAE are supervised by the Central Bank of the United Arab Emirates (CBUAE). Moody's foresees the Gulf Cooperation Council (GCC) overall experiencing stability in 2018, underpinned by welcome financial fundamentals. Robust capitalization will be facilitated by sufficient loan-loss reserves that yield a resilient loss-absorption capacity. Moody's expects non-oil economic growth to remain modest but recovering to 2.6% this year assuming that Brent oil prices stabilize at the upper end of Moody's USD40-60 /bbl band. Readers will recall that as of January 1, 2018, VAT became a reality in the UAE which, along with OPEC production cuts throughout 2018 , may dent non-oil growth according to the rating agency.
Promising Sectors
In Ras Al Khaimah, manufacturing, including that taking place in free trade zones, accounts for 36% of the Emirate's GDP, ahead of wholesale and retail trade (8%) and the quarrying industry (9%). Ras Al Khaimah's primary manufacturing involves non-metal minerals, chiefly cement, ceramic, glass, and construction materials.
Just Check the Scenery
Notwithstanding, it is tourism that holds an economic beacon for tomorrow. Boasting mountains, desert, and pristine beaches, tourists are discovering the charms of a thus far less-visited destination. Around two dozen new hotels are set to materialize shortly, and the industry is also open to foreign participation. In fact, growth in tourist arrivals to Ras Al Khaimah approached 11% in 2016 and 20% in 2017, in stark contrast to the global average of 3-4%. The Ras Al Khaimah Tourism Development Authority (RAKTDA), established in 2011 to champion the tourism sector, is working to a three-year strategy that envisages employing 15,000 people, and thus being a major catalyst of socio-economic advancement. It foresees hosting 1 million visitors in 2018 and generating revenues of USD653.4 million.
The Outlook
It is telling that a recent poll shows that virtually 100% of residents and citizens consider life in Ras Al Khaimah both safe and sustainable. This is a view shared by international ratings agencies. Ras Al Khaimah enjoys a rating of 'A' from both S&P and Fitch. The former agency foresees the Emirate continuing to record fiscal surpluses and maintain a low manageable debt level. Its 'A/A-1' rating indicates that economic performance (GDP growth of 1.5% in 2017) is set for gradual improvement to 2021 with GDP growth averaging at 2.5% for the period. This will be fueled by a regional upswing in domestic demand and flush capital spending among other Emirates and by firmer oil prices. S&P projects an average fiscal surplus of 2% of GDP in the 2018-21 period with a state budget surplus of 1.5% of GDP in 2018, up from about 1% in 2017. Gross consolidated debt is forecast sliding to approximately 17% of GDP by 2021. Meanwhile, Moody's has a stable outlook for Ras Al Khaimah's economy to 2021, underpinned by a robust fiscal position and the dynamics of the broader nation.
In short then, the Emirate of Ras Al Khaimah is well placed to sustain a stable economic growth trajectory, while tapping into growth sectors proving highly successful elsewhere in the nation.
APPEALING SCENERY
TABLE OF CONTENTS
Interview
ndrea Di Gregorio, , Director of Energy Efficiency and Renewables , RAK Municipality Department
TBY talks to Andrea Di Gregorio, Director of Energy Efficiency and Renewables of the RAK Municipality Department, on the Emirate's overall strategy, specific programs, and early supporters of energy efficiency and renewables.
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Abdulrhman Al Shayeb Al Naqbi, Director General, Ras Al Khaimah Department of Economic Development (RAK DED)
TBY talks to Abdulrhman Al Shayeb Al Naqbi, Director General of the Ras Al Khaimah Department of Economic Development (RAK DED), on improving the ease of doing business, key diversification pillars, and the impact of new VAT.
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Sheikh Ahmed bin Saqr Al Qasimi, Chairman, Ras Al Khaimah Economic Zone (RAKEZ)
TBY talks to Sheikh Ahmed bin Saqr Al Qasimi, Chairman of the Ras Al Khaimah Economic Zone (RAKEZ), on offering investors a global platform, creating a one-stop shop, and the strategic comparative advantages of access to the Indian Ocean.
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Manu Mehra, CFO, RAK Investment & Development Office (RAK IDO)
TBY talks to Manu Mehra, CFO of the RAK Investment & Development Office (RAK IDO), on the role of free zones in diversification, the benefits of smart state intervention, and the keys most needed for a strong manufacturing sector.
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Yousef Esmaeel, Chairman, Supreme Committee of Saud Bin Saqr Establishment for Youth Enterprises Development (RAK SME)
TBY talks to Yousef Esmaeel, Chairman of the Supreme Committee of Saud Bin Saqr Establishment for Youth Enterprises Development (RAK SME), on incentivizing young people, working with local government to encourage entrepreneurialism, and the role of SMEs in the UAE marketplace.
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Abdullah Al Abdooli, Managing Director, Al Marjan Island
TBY talks to Abdullah Al Abdooli, Managing Director of Al Marjan Island, on the continuous growth of the real estate market in RAK, its robust investment landscape, and the Emirate's ambitious plans to develop its tourism sector.
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Hassan Hamdan Al Alkim, President , American University of Ras Al Khaimah (AURAK)
TBY talks to Hassan Hamdan Al Alkim, President of the American University of Ras Al Khaimah (AURAK), on the consequences of growing global demand for education and AURAK's efforts to attract students from beyond the Emirate.
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Gurumadhva Rao, Vice Chancellor, RAK Medical & Health Sciences University (RAKMHSU)
TBY talks to S. Gurumadhva Rao, Vice Chancellor of the RAK Medical & Health Sciences University (RAKMHSU), on the further development of higher education, its key differentiators, and the need for qualified doctors.
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Taner Topcu, Director, Ras Al Khaimah Economic Zone’s (RAKEZ) Academic Zone
Taner Topcu holds a bachelor's degree in Public Administration from Anadolu University in Turkey. He is an industry expert with more than 20 years of successful experience in education, hospitality, business development, and customer relations. Prior to joining RAKEZ in 2015, Taner worked at TECOM Investment's Education Cluster in Dubai Knowledge Village and Dubai International Academic City, where he worked in operations, business development, and account management. He also worked at Aabar Investments in Abu Dhabi as a Business Development Manager and at Dubai's Knowledge and Human Development Authority as a Director of Engagement Operations.
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