NICHE FACTOR

Sharjah 2015 | DIPLOMACY | YEAR IN REVIEW

Having carved out a niche of its own in the wider UAE, Sharjah was sitting pretty when oil prices began to slip, and today styles itself as the industrial and cultural heart of the country.

While many governments in the region fumble anxiously to diversify their economies, especially in the wake of falling oil prices, Sharjah has already got a pretty solid egg-to-basket ratio, with no single sector representing more than 20% of GDP. Indeed, the region's favorite carbon–hydrogen bond accounts for just 13% of GDP and 14% of revenues, meaning the Emirate has been able to keep a loose grip on its purse strings as its neighbors consider hunkering down, fingers crossed, to await the enevitable return of high oil prices. Elsewhere in the economy, many sectors are projected to grow above the 3.2% predicted for the national economy in 2015 and 4.4% in 2016, with extra special performances expected of the tourism and real estate industries. The latter is expecting a particular boom thanks to the passing of a new law that allows expatriates with UAE residence visas to own property in Sharjah. But with many foreigners likely waiting to pounce on their dream properties, the government has had the foresight to limit purchases, which are not actually purchases at all, but 100-year leases—to several large real estate projects only in order to keep the pressure off of Sharjah's overcrowded city center. On top of that, caps have been introduced on off-plan apartments and the ratio of a project that foreigners can buy into set at 20% in order to prevent pesky property flippers, who were partly to blame for neighboring Dubai's real estate bubble only a few years ago.

As for the tourism sector, Sharjah also steps up to the plate with something a little different, and remains popular with Muslim tourists, thanks in part to its strict prohibitions on illicit substances and Islamic way of life, and European and Russian guests who want to experience a slice of the Gulf away from the bright lights of neighboring Dubai and Abu Dhabi. In total, over 2 million tourists put head to pillow in the Emirate in 2014, helping along the sector's contribution of 8.5% to GDP. Marketing itself as an authentic getaway with everything from desert excursions and shopping malls, to museums, Sharjah was selected as the Capital of Arab Tourism for 2015 by the Arab Council of Tourism, capping off an all-round successful year.

And while neighboring Emirates have focused their economy on oil and gas, real estate, and logistics, Sharjah has transformed itself into the UAE's manufacturing workhorse. Accounting for 48% of the Emirate's gross industrial output, the manufacturing sector has come to prominence in part due to Sharjah's location bordering all the other six Emirates and presence on both the Arabian Gulf and Gulf of Oman. And the sector hasn't escaped international attention, with both Moody's and Standard & Poor's citing the role of the manufacturing sector when slapping sovereign credit ratings of A3 and A, respectively, onto the proud Emirate's lapel. The sector is also popular with foreign investors, especially at its two free zones, the Hamriyah Free Zone (HFZ) and the Sharjah International Airport Free Zone (SAIF), which focus on heavy and light industry, respectively. Not wanting to churn out the goods with no afterthought, however, the government has placed the environment at the heart of policymaking.

The UAE Ministry of Environment and Water is spearheading initiatives, inaugurating the sixth edition of the annual exhibition “My Environment, My Responsibility,” in conjunction with World Fisheries Day celebrations. In collaboration with the Sharjah Aquarium, the Minsitry aimed to boost awareness of environmental protection. And in May, the Ministry also announced five UAE sites identified as areas of ecological importance, including two in Sharjah; Sir Bu Nair Island and Khor Kalba, the latter of which is the focus of an ecotourism project run in collaboration with the Sharjah Environment and Protected Areas Authority (EPAA). The Sharjah Electricity and Water Authority (SEWA) is also prominent in the formulation of green policies, and is employing smart technologies to conserve resources, while promoting renewable energies.
Sharjah has become an important part of the UAE, carving out a niche for itself in a number of areas. From its competitive free zones and industrial matrix to buzzing tourism scene and green idealism, the Emirate is increasingly finding itself on the lips of executives across the world as a valid investment destination in the region.