Foreign investments in UAE’s 36 free zones reach AED 268bn

The total value of foreign direct investment through UAE free zones has touched Dh268 billion ($73 billion). Free zones or export processing zones and specialised economic zones have gained prominence in trade and investment over the last 30 years that help investors bypass a lot of local laws that restrict foreign investment and exports. “The total value of foreign direct investments (FDI) that have flowed into the UAE [through free zones] has reached approximately Dh268 billion, making us the second most FDI attractive country in the Arab world, according to the UN Conference on Trade and Development (Unctad),” Shaikha Lubna Al Qasimi, Minister of Foreign Trade, said.In the UAE, foreigners can obtain 100 per cent ownership in businesses. There are 36 free zones serving investors, the majority located in Dubai which hosts the Middle East’s largest free zone in Jebel Ali. There are 2,300 zones in 119 developing and transition countries clustered mainly in Asia, the Pacific and the Americas. Altogether these zones account for $200 billion (Dh734 billion) in gross exports a year and directly employ some 40 million workers and another 60 million indirectly. Oussama Al Omari, CEO and Director General of Ras Al Khaimah Free Trade Zone Authority (RAK FTZ), told Gulf News that more than 200,000 companies registered with free zones generate more than $1 billion of wealth annually. (Source: Gulf News)

Abu Dhabi’s new Industrial Free Zone

The Khalifa Industrial Zone Abu Dhabi (Kizad) will help attract foreign direct investment to Abu Dhabi and facilitate the building of new industries that will help diversify the economy of the emirate and the UAE as a whole.The industrial zone, located between Abu Dhabi and Dubai, will have an advanced seaport that is scheduled to be operational by the fourth quarter of 2012, to help ensure easy access to global markets. Kizad will also have road and rail links to the rest of the world. By 2030, Kizad is expected to contribute around 15 per cent of Abu Dhabi’s non-oil gross domestic product and between 60 per cent and 80 per cent of its manufactured goods will be exported, according to official projections. These are ambitious targets, but they can be achieved if the free zone succeeds in its aim of achieving low operational costs for companies and becoming an easy place to do business. The opening of the free zone to investors and potential tenants is also an important milestone in Abu Dhabi Economic Vision 2030, which aims to ensure the growth and development of its economy. The industries identified as important to Kizad range from heavy machinery to trade and logistics, technology and small businesses. This variety is essential to ensuring the growing diversity of the Abu Dhabi economy.

The offer of 100 per cent foreign ownership of companies in the free zone that contribute to Abu Dhabi’s strategic economic objectives will help attract the necessary investment. Foreigners tend to be reluctant to put their money into projects in which they cannot reap the full benefit of their investment. The more open the economy, and the clearer its commitment to good governance and the protection of property rights, the more it will attract foreign direct investment.

Abu Dhabi plans trading house for food security

Abu Dhabi, home to 95 percent of the hydrocarbon reserves of the United Arab Emirates, is transforming itself into a global city and has kicked off ambitious infrastructure plans worth more than $300bn that require a huge flow of raw materials. As part of its food security strategy, Abu Dhabi is building silos in the smaller emirate of Fujairah, but it was not clear if the new firm would trade in oil.Commodities prices have rocketed in the past six years, fuelled by demand from China and other emerging markets, driving up metals such as iron ore 38 percent this year, with foodgrains such as corn and wheat up 28 percent and 17 percent respectively.

Abu Dhabi stands for sustained Growth and Investment

Abu Dhabi is becoming the breakout emirate for investment and growth as Dubai’s image still reels from its financial woes during the global credit crisis, said speakers at the Reuters Middle East Investment Summit.Abu Dhabi came into the spotlight after its high profile bailout of state owned Dubai World turned the emirate into a white knight and its conservative financial approach appealed to investors burned by Dubai’s exuberance.Abu Dhabi’s appeal with regional and international investors crosses sectors, from oil and gas to the battered corporate banking and real estate markets, executives said.At the same time, Abu Dhabi is emulating Dubai in ways, building leisure and entertainment facilities, as well as more active financial districts, to draw more residents.Traditionally Abu Dhabi was more conservative in its development projects compared to neighbouring Dubai. During the heydays of the real estate boom, Dubai’s glitz easily eclipsed Abu Dhabi conservative policies. But with the collapse of the six year boom, Abu Dhabi has fared better, making it more appealing to investors.

There has been an influx of oil and gas companies, as well as infrastructure related entities, that now have long term contracts in Abu Dhabi of 15 to 25 years and are looking for reasons to reside in the emirate, rather than Dubai. Abu Dhabi is also expected to be an active hub for corporate banking. Financial institutions, are expanding their presence to meet the growing need in the market. (Source: Reuters)

UAE’s Ras Al Khaimah eyes further expansion

The UAE emirate of Ras Al Khaimah with no oil and gas like its neighbouring emirates is planning projects worth $5 billion to 2020 with the help of foreign investors.

RAK Free Trade Zone (RAK FTZ) is currently home to around 4,000 companies aims to turn itself into a business hub for small and medium enterprises and lure more multinational investors for its infrastructure and airport expansion plans. Oussama el Omari, CEO, RAK FTZ, said: “We forecast 2,250 additional companies in 2010. In 2009, registrations and company revenue in the zone grew 10 and 11 percent respectively despite the global crisis, he added. Most new companies would come from Germany, France, Turkey, and India.
While speaking to Reuters, Omari said: “Some of the largest investments are from Knauf group from Germany, Dole Group from the ‘States, and Hyundai Group,” without giving details.
Solar power, the nuclear energy sector and education would form the bulk of projects in coming years, he said.

The authorities in the emirate, just 100 km (62 miles) away from debt-struck Dubai, are launching large scale projects such as a new international airport as a catalyst for growth.
RAK being the fourth largest emirate in the UAE is focused on industries like cement, pharmaceuticals, and glass, and building a regional manufacturing and shipping hub.

Dubai Airports has reported a 16.3 percent increase in passenger traffic for H1 2010 compared to the year earlier period.

The six months to end-June saw 22,554,445 passengers use Dubai International airport, compared to 19,397,089 in the corresponding period in 2009.

According to an emailed statement released Monday by Dubai Airports, Dubai International processed 3,684,192 passengers in June 2010 compared to 3,361,413 in June 2009, a year-on-year increase of 9.6 percent. Cargo continued its upward trend throughout the first half, with Dubai Airports reporting year-to-date movement of 1,101,856 tonnes of freight compared to 874,828 tonnes during the same period in 2009, an increase of 26 percent. Cargo handled by the airport jumped 21.2 percent in June to 184,576 tonnes, the state-run facility said

According to the statement average monthly passenger traffic in the first half this year stands at 3.7 million as compared to 3.1 million during the corresponding period in 2009. In the first six months of the year, daily average passenger throughput at Dubai International reached 123,000. “Many major airports around the world are starting to display positive growth following an almost year-long spell of double-digit decrease in traffic,” said Paul Griffiths, CEO of Dubai Airports. Griffiths added that in the first half of 2010 more than 145 weekly flights were launched to 21 destinations across Asia, Europe and Africa by different passenger carriers. Dubai International currently serves 130 airlines flying to more than 220 destinations across six continents.

The UAE is planning to export camel milk to Europe after the European Commission (EU) gave the green light, it was reported on 4th July 2010.

“The UAE is intending to export camel milk to European markets next year, to be among the first suppliers of this product to the EU,” Abdullah Al Janan, executive director for Agricultural and Animal Affairs Department, Ministry of Environment and Water, told the Arabic daily Al Ittihad. “We have received a letter of approval from the EU on the UAE plan on safety and quality of camel milk,” he added in comments translated and published by news agency WAM.Ten analyses and tests will be carried out on camel milk every month and their findings will be sent to the EU to match them with its export regimes.

EU officials will visit a number of camel farms, especially those producing milk, as part of the approval process. Camel milk is more nutritious than cow milk because it is lower in fat and cholesterol and richer in potassium, iron and minerals such as sodium and magnesium, according to a paper presented at the 5th Dubai International Food Safety Conference, which was held in Dubai last February.

The UAE will maintain the dirham’s peg to the dollar and has no plans to rejoin the planned Gulf monetary union “for the time being,” Sheikh Mohammed Bin Rashid Al Maktoum told Cable News Network June 25, 2010.

The emirates “still believe” in the peg, Sheikh Mohammed said in an e-mailed transcript of the CNN interview on Friday sent by the Dubai ruler’s media office. “The euro is in trouble and we thought of the Gulf currency and we said, well the UAE said ‘not yet’ and I think they are right, until we are sure.”
Last year the UAE pulled out of a planned monetary union with four other Gulf states that aims to allow the region more control over monetary policy, now tied to the US. The UAE central bank faces no currency risk from fluctuations in the euro as almost all its portfolio is in dollars, Saif al-Shamsi, senior executive director for the central bank’s treasury department, said June 8. The euro has been the worst performer this year among 10 developed-nation currencies, falling 9.3 percent, according to the Bloomberg Correlation-Weighted Currency Indices.

Dubai’s economy will shrink about 0.5 percent this year, the International Monetary Fund said last month, after real estate prices plummeted from their peak in 2008. The second- largest of the seven emirates making up the UAE, Dubai had to seek a $20 billion bailout from Abu Dhabi last year, after borrowing $109bn according to IMF estimates.


Dubai is currently developing a strategy to diversify power generation sources and improve efficiency to ensure an adequate energy supply through 2030.

Dubai produces less than four percent of the nation’s oil. The emirate is seeking to guarantee power supply and reduce emissions that contribute to global warming. The UAE holds about seven percent of the world’s crude reserves, with most of the country’s deposits of oil and natural gas located in the capital Abu Dhabi. Oil and natural gas production made up about 5.5 percent of Dubai’s $62bn economy in 2007, (Source: UAE Ministry of Economy). The UAE is beginning an atomic-energy programme to diversify supply and compensate for limited amounts of the natural gas needed to fire power plants.

Dubai’s ruler and Vice President of the UAE, Sheikh Mohammed bin Rashid Al Maktoum, last year established an energy planning council and an oil affairs department to manage production, sale and export of crude and regulate licensing of related products. The emirate announced earlier this year that it discovered an offshore crude deposit that it plans to evaluate and begin developing as early as next year. The size of the deposit and prospective production levels weren’t disclosed.

Government-run utility Dubai Electricity & Water Authority (DEWA) is seeking international investors to build a 1,500-megawatt power plant and water desalination facility. DEWA plans to build in six phases a new generation facility located at Hassyan on the border with Abu Dhabi that would generate a total of 9,000 megawatts when completed. The utility, which slowed projects because of lower growth rates, still plans to raise generation capacity by about a third over the next two years to 9,800 megawatts
(Source: Bloomberg)

Dubai and Abu Dhabi continue to occupy the highest rankings in the GCC a new global Quality of Living survey. The Mercer report ranked Dubai at 75, with Abu Dhabi taking the 83rd spot in the list. Elsewhere in the GCC, Muscat in Oman was the region’s only other city in the top 100 out of a total of 221 cities included in the survey. Following the revision of the index a selection of cities globally has been added, including Doha in Qatar (110), Manama, Bahrain (111), Kuwait City (122), Saudi capital Riyadh (158) and Jeddah (159). This year’s ranking also identifies the cities with the best eco-ranking based on water availability and drinkability, waste removal, quality of sewage systems, air pollution and traffic congestion.  The highest-ranking eco city in the GCC was Muscat (48), followed by Dubai and Abu Dhabi jointly occupying the 65th place, Manama (80), Doha (85), Kuwait City (88), Riyadh (114) and Jeddah (130). Globally, Vienna retained the top spot as the city with the world’s best quality of living, according to the Mercer 2010 Quality of Living worldwide city rankings. Zurich and Geneva followed in second and third position, while Vancouver and Auckland remain joint fourth in the rankings. Baghdad (221) remained at the bottom of the table, although its index score has increased slightly (from 14.4 to 14.7 in 2010). A lack of security and stability continue to have a negative impact on Baghdad’s quality of living.