United Arab Emirates - 2015 Year of Innovation

An official publication of the Embassy of the United Arab Emirates in London

2015 YEAR OF INNOVATION

CONTENTS

RILIND HOXHA/ALAMY STOCK PHOTO

Contents Foreword

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His Excellency Abdulrahman Ghanem Al Mutaiwee, CVO Ambassador of the United Arab Emirates to the Court of St James

An enduring partnership British Ambassador to the United Arab Emirates Philip Parham discusses the close bond between the two countries

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A dynamic trade hub The UAE is building on its pivotal position in international trade by pursuing improved global connectivity

21

Pioneering innovation The National Innovation Strategy and the 2015 Year of Innovation are taking the UAE’s economy to new horizons

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Islamic economy: faith in Dubai The Islamic economy has the potential to spur huge growth, and Dubai is building its credentials as the sector’s capital

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An appetite for foreign direct investment Impressive growth and an advantageous geographical location continue to attract investors to the UAE across sectors

DUBAI DESIGN DISTRICT

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The economy and trade

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34

Progress through education A world-class education system is at the heart of the UAE’s National Innovation Strategy, which is also focusing on the STEM subjects

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A confident energy future The UAE plays an important role in maintaining stable supplies of crude oil to the global market and is the world’s fourth largest oil exporter

44

Powering up with nuclear energy The Barakah nuclear power plant in Abu Dhabi will provide a quarter of the country’s electricity when complete, and reduce polluting emissions

48

Leading the region in renewables The UAE is investing heavily in innovative green energy technologies in order to cut costs in the long term and reduce carbon dioxide emissions

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New banking growth avenues The banking sector is expecting a profitable year, having shown a strong early performance, despite the drop in oil prices

CRANLEIGH SCHOOL ABU DHABI

Investment opportunities

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UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 3

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Innovation in Islamic banking With innovative products being brought to market and an expanding customer base, the Islamic finance sector is entering an exciting phase

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Private equity opportunities Real estate, retail and financial services are among the dynamic sectors attracting attention from private equity investors in the UAE

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A more regulated future for insurance Legislative changes and increasing demand for both conventional and Islamic insurance are setting the scene for the sector’s development

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Raising the bar in patient care The UAE is establishing itself as a global leader in the provision of healthcare, both for Emiratis and medical tourists

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Healthcare regulation in the UAE In order to ensure all facilities adhere to international standards, the UAE has launched a number of regulatory initiatives

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Unsleeping giant: the rise of DP World A stirring example of a local company going global, DP World has an enterprising past and a bold vision for the future

82

Fast-track logistics A programme of infrastructure development, from ports to railways, are set to redefine logistics and transport in the UAE

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Scaling new heights The UAE is expanding its aviation capabilities to tap into rising passenger traffic, building on existing success stories and aiming for new records

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Property: a maturing market Mid-market residential properties are generating interest, while headline real estate projects continue to rise up from the desert

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Media magnate The UAE has a reputation as the Middle East’s leading media production hub, and innovation in this sector is being driven by young, creative talent

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UAE: A centre for financial services The UAE’s financial services sector is set for expansion, with the development of old and new financial centres

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CONTENTS

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Developing the region’s leaders of tomorrow Assurance | Tax & Legal Services | Consulting | Deals

It’s our goal to help improve the knowledge, skills, and expertise of our region’s talent and help organisations across the region grow and retain their people.

With our continued investment in Watani, our programme for Emirati employees, we provide an opportunity for nationals to live, work and study with PwC in both the UAE and the UK. Our growing educational business, PwC’s Academy, provides a variety of training courses, based on the best practices of PwC Global and the individual experiences of our experts, to help our clients achieve their training and strategic talent objectives.

To find out more about PwC’s Academy and PwC Watani Programme, go to www.pwc.com/me

© 2015 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

CONTENTS

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A global meeting point Increasingly recognisable as a destination for meetings, conferences and exhibitions, the UAE is moving up the rankings in the MICE sector

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The master planner The Tourism Development & Investment Company in Abu Dhabi is a pioneer of cultural developments, from museums to island concepts

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2020 vision Dubai plans to attract 20 million visitors by 2020 through a wide-reaching tourism strategy that encompasses hosting World Expo 2020

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Sharjah: true Arabia Named the Capital of Arab Tourism 2015, Sharjah has a buoyant tourist market, which is expected to grow at a rate of 45 per cent to 2020

Doing business in the UAE

UNITED ARAB EMIRATES 2015 YEAR OF INNOVATION GT Media ME in conjunction with Newsdesk Media Publisher Khaled Algaay Managing editor Jane Douglas Sub-editor Emilie Dock Designer Morwenna Smith Production and distribution manager Elizabeth Heuchan Sales manager Laurie Pilate Chief Executive Officer Richard Linn Printed by Stephens and George Print Group Cover image Shomos Uddin/Getty Images

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Key indicators for business Already number one in the region, the UAE has climbed to 22nd place globally for ease of doing business, according to the World Bank index

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Attracting investment with free zones The economic zones in each of the seven emirates have helped boost trade and attract investment

117 119 120

Advancing business interests An overview of the chambers of commerce providing services to investors

An official publication of the Embassy of the United Arab Emirates in London Published by

Communication and information exchange INTERVIEW: Neil Isaacson, Chairman and CEO, British Business Group Fostering entrepreneurship As the UAE moves towards a knowledge-based economy, it has taken steps to support small and medium-sized enterprises

145-156 St John Street, London EC1V 4PY, UK Tel: +44 (0) 20 7608 5137 www.ainalmusafer.com In conjunction with

Art and culture

123

The UAE: regional art capital With a thriving art scene and a reputation as a pioneer, the UAE is fertile ground for further development of its cultural offerings

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Pushing the boundaries of innovation In the lead up to World Expo 2020, some impressive projects are underway, opening the door of opportunity for investors

132

Sharjah in the spotlight This emirate is recognised as a cultural hub with ambition

134

Index of advertisers Alphabetical list of sponsors

62-68 Rosebery Avenue, London EC1R 4RR, UK Tel: +44 (0) 20 7650 1600 www.newsdeskmedia.com © 2015. The entire contents of this publication are protected by copyright. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means: electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher. The views and opinions expressed by independent authors and contributors in this publication are provided in the writers’ personal capacities and are their sole responsibility. Their publication does not imply that they represent the views or opinions of the Government of the United Arab Emirates, Newsdesk Media or GT Media ME and must neither be regarded as constituting advice on any matter whatsoever, nor be interpreted as such.

The reproduction of advertisements in this publication does not in any way imply endorsement by the Government of the United Arab Emirates, Newsdesk Media or GT Media ME of products or services referred to therein.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 7

Strategic Partnership Agreement with EXPO 2020

Al Youlah Championship (Al Meydan)

Held at various locations across Dubai, the Fazza Championships are today considered among the most popular sporting events in the UAE. Lately, these championships – particularly the various falconry tournaments held throughout the year – have also been drawing increasing interest from the sizeable non-Arab expatriate community in the UAE as well as a growing number of European and Asian tourists who are eager to learn more about these traditional pursuits and experience the unique cultural vibe offered by these tournaments. The Fazza Championships therefore play an instrumental role in engaging the UAE’s expatriate population in Emirati cultural activities and integrating them more closely into the national fabric, while continuing to serve as a key component of the UAE’s growing cultural and heritage tourism industry.

The Hamdan Bin Mohammed Heritage Center’s spirit of innovation and commitment to excellence is evident in all aspects of the Fazza Championships; each tournament is staged to the highest professional standards, employs state-of-the-art technology such as a dedicated smartphone app to speed up registration and high-tech devices to assist participants and the judging panel, and provides an exceptional array of amenities and services including special lounges with digital TV screens for participants and spectators.

El Beit Television Program

With the organizing committee for the World Expo 2020 - scheduled to be held in the city of Dubai - appointing Hamdan Bin Mohammed Heritage Center as the Heritage Strategic Partner for the quadrennial mega event’s much-anticipated Middle Eastern debut, the Center is expected to continue playing a decisive role in promoting the UAE’s rich heritage to audiences around the world while breathing new life into the country’s ancient traditions and customs through its various events and initiatives.

Wathiqati Press Conference

@hhcgovae

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Camel Track

FOREWORD

The Year of Innovation INNOVATION IS A CONCEPT THAT CAN BE TRACED back to the creation of the UAE in 1971. It has become embedded deep in our culture ever since because of our constant desire to advance our young nation.

Today the results of innovation are clearly visible in our vibrant economy. The UAE government declared in 2015 the National Innovation Strategy that focuses on fostering innovation in seven main sectors: renewable energy, transport, education, health, technology, water and space.

For example, as part of a strategy to diversify our energy industry away from hydrocarbons Masdar, the Abu Dhabi Future Energy Company, is at the forefront of a global clean energy revolution. Our nuclear programme will also come online in 2017.

In terms of innovation in business, we continue to welcome world leading multinationals to the UAE, and business communities such as TECOM in Dubai foster entrepreneurship for SMEs who will one day develop the output of the future. This year, the World Bank rated the UAE the number one in the Middle East region, in its annual Ease of Doing Business survey.

Tourism is of course vital to the UAE and Dubai’s world famous hotels and resorts continue to attract millions of tourists each year, many of which arrive on our pioneering airlines Etihad and Emirates.

Our first-class public services, healthcare provision, infrastructure and transport systems continues to prosper with innovation in mind, as do the expanding presence of schools and universities.

In 2020, we look forward to welcoming the World Expo with the theme of ‘Connecting Minds, Creating the Future’, which will attract 25 million visitors over a six-month period. This will be the first event of its kind in the Middle East and we hope that the whole region will benefit.

These developments are a source of great pride, but we must not stop here. We remain as ambitious as ever and the UAE will continue to embrace the future in the search for rapid growth and greater prosperity.

HE ABDULRAHMAN GHANEM AL MUTAIWEE, CVO Ambassador of the United Arab Emirates to the Court of St James

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 9

DUBAI HEALTHCARE CITY PERSPECTIVE

Balancing act: building a sustainable healthcare model in Dubai

By Her Excellency Dr Raja Al Gurg, Vice-Chairperson and Executive Director of Dubai Healthcare City Authority In 2002, during the launch of Dubai Healthcare City (DHCC), our founder His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, said, “The growth and development of any successful economy depends heavily on the health of its citizens.”

In harmony with this early and realistic outlook, DHCC has expanded healthcare capacity and improved healthcare quality.

Over the past 12 years, we have increased specialties and addressed capacity gaps in a regulated environment.

As for medical education, we have increased the number of training and accredited programmes to ensure a sustainable workforce. We are also facilitating much-needed research into regional health issues, underpinning

the UAE’s efforts to nurture a culture of research and development.

In tangible terms, DHCC is currently recognised as the world’s largest healthcare free zone, occupying 27 million square feet. In 2014, we recorded 1.2 million patient visits, and today, our healthcare community is represented by 4,500 healthcare professionals, 90 specialties and 320 clinical and non-clinical facilities.

In March 2015, we announced our expansion into wellness, which will bring unique water-facing rehabilitation and wellness offerings covering 3.3 million square feet to cater for all age groups.

It is a balancing act to build a sustainable healthcare model. It is a balancing act between policy and regulation; between a qualified healthcare workforce and investment in medical education.

There are inherent challenges. How to drive quality in line with expansion.

How to promote innovation to improve healthcare delivery. How to cope with

the demand for healthcare as mandatory insurance rolls out. How to foster partnerships with the right healthcare providers. How to put in place the required mechanisms to respond to demographic changes, disease patterns and population growth.

In the seven-year UAE National Agenda leading to the UAE Vision 2021, education and healthcare sectors feature prominently as national indicators. The National Agenda is about transitioning to a knowledge-based economy, promoting innovation and research and development, strengthening the regulatory framework for key sectors and encouraging high value-adding sectors.

Healthcare: a pillar for any country Economic stability and the wellbeing of citizens are linked in ways that are quantifiable. At a country level, the UAE has cemented its position as a hub for trade, tourism, retail and hospitality. The country has capitalised on its geographic location

DUBAI HEALTHCARE CITY PERSPECTIVE

and has developed the infrastructure to meet the demands of a range of industries.

Healthcare is one of the main pillars of the UAE’s economic growth plan, offering a great deal of opportunity for investment.

The nation is witnessing an increasing and ageing population as well as a rise in income levels, insurance penetration and incidence of lifestyle diseases, such as diabetes and obesity, all of which are driving the demand for healthcare and pushing healthcare costs upwards.

To cope, the healthcare model has to build a strong foundation of soft and hard infrastructure that can sustain growth.

The emirate of Dubai is strengthening its reputation as the preferred healthcare investment destination and reversing the outbound medical tourism trend.

For us at DHCC, we enable better and adequate access to healthcare, to a high standard of quality. Through Phase 1, which is a dedicated healthcare community that will include the state-of-the-art tertiary teaching hospital, the Mohammed Bin Rashid University Hospital, and through the upcoming Phase 2, which will drive wellness tourism, we will contribute to Dubai’s diversified economy.

It is our belief that the roll out of mandatory healthcare insurance will boost the healthcare sector overall.

Regulations: the necessary building block Attracting investment, patients and a skilled workforce requires a strong, comprehensive regulatory framework comprising tools such as accreditation and quality standards.

Without this framework, expansion would occur at a cost to quality.

Regulation and licensure of all healthcare professionals and healthcare operators, together with the handling of any complaints arising from the provision of clinical services, is overseen and handled by the Dubai Healthcare City Authority, the governing body and regulator of DHCC.

@HealthcareCity

In January 2015, Dubai Healthcare City added 34 countries to its licensing framework for its healthcare and CAM (complementary and alternative medicine) professionals, totaling 63 countries. Its non-eligibility online examinations for physicians and dentists are available in authorised test centres in 160 countries.

DHCC also introduced a policy for visiting physicians to ensure that only physicians with high qualifications and competencies in their clinical areas can practice. Last year, we introduced an independent Appeals Board that provides healthcare professionals and operators with an independent system to appeal against decisions relating to licensing or complaints.

Another imporant driver of quality in healthcare delivery,is medical education, from certification and training to academic programmes are required.

Medical education: a sustainable workforce Education is supporting our nation’s sustainable growth and knowledge-based economy. Medical education entities are integral to improving clinical performance that will, ultimately, drive excellence within the healthcare system.

The Mohammed Bin Rashid University of Medicine and Health Sciences (MBR-UMHS), DHCC’s first medical university, will help develop a sustainable workforce in the UAE and the region.

The Hamdan Bin Mohammed College of Dental Medicine is the first college established under the MBR-UMHS, with six postgraduate programmes accredited by the Ministry of Higher Education and Scientific Research (MOHESR) in collaboration with UK-based Royal College of Surgeons of Edinburgh (RCSEd). As of January 2015, 60 residents are enrolled. The second is the College of Medicine for undergraduate medical students, which will receive its first intake in September 2016.

Dubai healthcare city

T: 800 Health (432584) | E: info@dhcc.ae

Dubai healthcare City

With regard to medical education and research, our dedicated academic complex – the Mohammed Bin Rashid Academic Medical Center, home to the MBR-UMHS – continues to advance medical education in the region. The DHCC’s Khalaf Ahmad Al Habtoor Medical Simulation Center, which has high-fidelity patient simulators to help health professionals continue to develop their technical and non-technical skills, has trained close to 3,000 multidisciplinary healthcare professionals to date.

DHCC has collaborated with Queen’s University Belfast, Royal College of Surgeons in Ireland and the American Heart Association, among other healthcare and academic institutions.

The building of a sustainable healthcare model DHCC, we believe, is a befitting example of a medical ecosystem. Through integrating quality healthcare, clinical and wellness services and medical education and research, we are ensuring the wellbeing of our citizens as well as our visitors.

Our strategic partnerships with leading names in healthcare and medical academia, along with a pipeline of projects underway and a host of community initiatives, will ultimately boost healthcare for the local and foreign patient.

This is an exciting time for us at DHCC, and we are as proud as we have ever been to contribute to the next chapter of Dubai’s success story.

dubaihealthcarecity

DHCC2011

www.dhcc.ae

THE ECONOMY AND TRADE

An enduring partnership The friendship between the United Kingdom and the United Arab Emirates has been a constant throughout both prosperous and challenging times, as British Ambassador to the UAE Philip Parham tells Aaron Greenwood

12 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

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THE ECONOMY AND TRADE

THE UNITED KINGDOM VIEWS ITS RELATIONSHIP with the United Arab Emirates – one of its closest allies and most important trading partners in the Arab world – with the utmost importance, says the country’s ambassador to the UAE, Philip Parham.

Ambassador Parham, who has served in the role since July 2014, but whose experience in the region dates back to 2000, says that the UK’s enduring bond with the UAE is important because it “touches on the lives of millions”.

“The UK’s relationship with the area and the people who now constitute the UAE spans two centuries,” he says. “It is deep and broad, solid and dynamic, historic and modern, sound and creative. Its range is unrivalled. The security of the UAE is the UK’s security. The prosperity of the UAE is the UK’s prosperity.”

Economic data shows that bilateral trade between the two countries is currently worth around £12.5 billion ($19.8 billion) per annum, while there are more than UAE-UK trade 120,000 UK-born citizens living and surpassed its working in the UAE and more than annual target a million British visitors to the of £12 billion two years early emirates each year.

On the other side of the ledger, more than 260,000 UAE residents travel to the UK annually. The UAE is the UK’s largest civil export market in the Middle East and its 11th biggest globally.

The UAE’s geographic location has helped to consolidate its reputation as one of the world’s fastest-growing hubs for East-West trade. As a result, it has become an important springboard for UK companies looking to expand their interests in the Gulf and across the broader region.

“There are an estimated 4,000 British companies operating in the market,” says the Ambassador. “Bilateral trade reached £12.4 billion in 2013, two years ahead of the target set by the [UAE and UK] governments in 2009. Within that figure, UK exports amounted to £8.6 billion.”

More than 70 per cent of UK exports to the UAE arrive by sea at Jebel Ali Port in Dubai – the world’s largest man-made port – with 40 per cent of this total re-exported to other markets across the region.

Ambassador Parham says that this factor, combined with the superlative air links provided by Emirates, Etihad Airways and UK counterparts British Airways and Virgin Atlantic, is making the UAE “the natural place for many businesses”

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THE ECONOMY AND TRADE

looking to establish regional headquarters “not only covering the MENA region, but [also] engaged in Africa, South and Central Asia, and even the Far East”.

The observation deck at the top of the Burj Khalifa, Dubai. The business outlook for British companies in the UAE is positive

of the Council to identify both obstacles and opportunities in Business incubation their sectors and how to tackle them.”

He points to key government initiatives that aim to cultivate The last meeting of the full Council was held in London in May. opportunities for British companies in the UAE and further afield.

Demonstrating the high regard in which the British establishment “For quick company set-up onshore in Dubai, the UK has developed, views the organisation’s activities, HRH Prince Andrew, the Duke in partnership with the Dubai Economic Department, its own of York, received the members of the Council at Buckingham Palace incubator: the British Centres for Business. Companies receive a following the conclusion of official proceedings. visa and one licence for one year with the option of hot-desking The UAE’s tireless efforts to safeguard security and prosperity facilities. We are working with the Abu Dhabi Government to set at home and across the Gulf also make the country one of the UK’s up a similar incubator in Abu Dhabi,” he says. most important strategic partners in the region. “Our partnership Ambassador Parham cites key growth sectors for and profound friendship with the UAE is grounded in common UK companies operating in the UAE as infrastructure interests and shared history, most important of which (construction and mass transport), energy, aerospace, is our commitment to security and stability across defence and security, education and training, the Gulf and wider Middle East region,” says financial and professional services, healthcare, Ambassador Parham.

British creative industries and media.

“The UAE is a vital partner in the fight against universities “The UK’s strong and early support for Dubai’s terrorism and extremism. Not only has the UAE operate in the successful bid to host Expo 2020, and the UK’s own supported UK and other international efforts emirates successful experience of hosting major international through reliable access, basing and overflights, events like the Olympics, should present big they have themselves also made substantial military opportunities for British business,” he says. “The UAE-UK contributions to international coalitions – for example, British Business Council has agreed a new bilateral trade in Afghanistan and in Libya 2011, and in the first Gulf War, target of £25 billion per annum by 2020.” and now against Da’esh [Islamic State].

Ambassador Parham points to the success of institutions “The UAE is a diplomatic, as well as military, partner in the such as the UAE-UK Business Council in fostering closer ties face of these challenges. The UK and UAE, along with the US, are between the two countries’ business communities. The Business joint co-chairs of the Strategic Communications Working Group, Council, which was established in 2011, is co-chaired by HE Nasser seeking to counter the false and pernicious Da’esh narrative, Ahmed Alsowaidi, who is Chairman of the National Bank of Abu which has been attracting people to violence. The UK and UAE Dhabi (NBAD) and Head of the Abu Dhabi Energy Authority, also co-chair the Countering Violent Extremism Group of the and Samir Brikho, the Chief Executive of AMEC Foster Wheeler.

Global Counterterrorism Forum.”

The Council meets biannually at CEO level and is proving an The UK’s support and enhancement of the UAE’s military important vehicle for “broadening and deepening both trade capacity also sets a practical tone: more military personnel and investment relations,” says Ambassador Parham. “Its from the UAE graduate from the UK’s Royal Military Academy sectoral working groups meet between the main meetings Sandhurst than from any other country outside the UK.

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THE ECONOMY AND TRADE

The UK and UAE are also vital and generous partners in delivering humanitarian and development aid to developing economies. In 2013, the UAE contributed a larger proportion of its gross national income (GNI) to international aid than any other country; and the UK is the only G7 member to meet the United Nations’ target that rich countries’ international development assistance should equal at least 0.7 per cent of their GNI. “The UAE and UK have a track record of successfully collaborating in this field. The UK is the first country to become a partner in International Humanitarian City at Jebel Ali. We have so far contributed $1.2 billion of humanitarian assistance to the sorely pressed people of Syria – second only to the US. And we are also the second-largest bilateral contributor of humanitarian assistance to Palestinians through the UN Works and Relief Agency,” says the Ambassador.

“The UK and UAE are working together to find peaceful solutions to the crises in Libya and Yemen. Overall, the UAE is an important voice for moderation in international fora.”

Building an innovative economy Abu Dhabi’s goal of transforming the UAE into one of the world’s most innovative economies has received strong support in the UK. In the field of education, British-curriculum schools account for 33 per cent of the private education sector in the UAE, while there are 10 British universities operating in the emirates.

Furthermore, since 2011, close to 10,000 UAE residents have relocated to the UK to study.

UK partners are also helping UAE authorities to deliver better public services. Ambassador Parham highlights a Cambridge University scheme that is designed to ensure that all UAE Government departments and agencies have an effective innovation function.

“The UAE is the second-largest Arab economy, the 30th-largest in the world and has the 19th-highest GDP [gross domestic product] per capita ($43,875). Real GDP grew 3.9 per cent in 2011, 4.3 per cent in 2012 and 5.2 per cent in 2013, or, in nominal terms, an almost $50 billion increase. We estimate its infrastructure development is ahead of the region by a minimum of five years,” says Ambassador Parham.

None of this would have been possible “without the foresight and dynamic leadership of the Rulers of the UAE,” he adds. “To quote HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai, in the race for excellence there is no finish line.

“And, in a speech at the Government Summit earlier this year, HH Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces,

BP/UAE-UK BUSINESS COUNCIL

The UAE-UK Business Council gathered in London on 18 May 2015 for its eighth plenary meeting

UK-UAE: partners in trade 2009 Bilateral trade in goods and services totals £7.5 billion.

The governments of the UAE and the UK set the ambitious target of increasing trade between the countries to £12 billion a year (Dh69.6 billion) by 2015.

2010 The UK-UAE task force is established as part of the UK Government’s Gulf Initiative to strengthen its relationship with its Gulf partners.

2011 Bilateral trade in goods and services totals £10 billion.

UAE-UK Business Council is created.

The inauguration of the UK-UAE CEO Forum in Abu Dhabi.

2012 Bilateral trade in goods and services totals £10.6 billion.

2013 Bilateral trade in goods and services totals £12.36 billion. Target of £12 billion a year by 2015 is achieved two years early.

2015 The UAE-UK Business Council sets a new bilateral trade target of £25 billion by 2020.

set out an optimistic vision for the UAE’s future and recognised the importance of continuing to invest wisely. ‘The question is, 50 years from now, after we have loaded this last barrel of oil, are we going to feel sad?’ he asked. “If our investment today is right, we will celebrate that moment.’”

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 15

FAZZA Hamdan Bin Mohammed Heritage Center:

Preserving the UAE’s Heritage Through Collaboration and Innovation When the Hamdan Bin Mohammed Heritage Center (HHC) was established in April 2013, under a decree issued by His Highness Sheikh Hamdan bin Mohammed bin Rashid bin Saeed Al Maktoum, Crown Prince of Dubai, it heralded a new beginning in the United Arab Emirates’ efforts to revive and popularise tangible and intangible elements of its culture and heritage. Although the Center was formally incorporated only two years ago, it had remained – for nearly a decade and a half – a key presence in the heritage and cultural landscape of Dubai and the UAE, having conceived, launched and successfully organized the hugely popular Fazza Championships, an annual cultural and heritage sports event covering a variety of traditional sports disciplines

Photo Courtesy of Hamdan Bin Mohammed Heritage Center

The breadth and scope of HHC’s activities progressively expanded since then, and today the Hamdan Bin Mohammed Heritage Center finds itself at the very forefront of the UAE’s push to promote its rich heritage and cultural traditions – both within the country and to audiences throughout the world.

A pioneering platform that brings together various initiatives to preserve and promote Emirati national identity at a local, regional and international level, the Hamdan Bin Mohammed Heritage Center’s vision focuses on making the UAE’s culture and tradition relevant to a younger generation of Emiratis. The Center acts as a credible and authoritative source and reference for the conservation of the UAE’s national heritage, organizing various events and competitions and conducting heritage studies and specialized research for the preservation and documentation of the country’s heritage. It also collaborates with leading institutions and universities to conduct and support research, workshops and assorted activities aimed at preserving and popularizing traditional skills and pursuits.

One of HHC’s most important recent milestones is the launch of the Al Oula Radio Channel. The channel was launched in September 2014 and it is the first radio station in the GCC to broadcast programs aimed at strengthening national identity among the younger generation and promoting national values by centering its discussions on the country’s rich heritage and day-to-day issues. The radio station taps into a group of highly experienced and creative Emirati talent in the media and heritage activities, with the aim of creating a voice that can address heritage in a modern spirit. Al Oula Radio Channel broadcasts more than 10 programs, covering a variety of topics including history, culture, heritage, poetry, sports and competitions for the young and old alike.

Within less than a year of the launch of this landmark initiative, the Hamdan Bin Mohammed Heritage Center managed to collect more than 2,000 official and non-official documents and manuscripts to build an extensive and rapidly growing database of historical documents. Beyond helping create a broad platform to understand, analyze and document the history of the UAE, “Wathiqati” provides a solid foundation upon which researchers and students interested in historical studies can rely.

In line with the Center’s commitment to promoting and popularising Emirati culture and heritage among a broad international audience, these documents are periodically displayed at various local and international exhibitions, most recently at ITP Berlin 2015, the world’s leading travel trade show where the Hamdan Bin Mohammed Heritage Center was honored with the award for the “Fifth Best Exhibitor” at the CSB (Cologne Business School) Awards held on the sidelines of the exhibition.

In addition, each year the Hamdan Bin Mohammed Heritage Center organizes a diverse range of events, competitions and championships to nurture traditional sports and hobbies – such as falconry, youlah, poetry, freediving, shooting and hunting – along with dedicated competitions for people with disabilities. Launched with the aim of creating wider awareness about the cultural heritage of the UAE and to encourage young Emiratis to embrace and participate in traditional cultural activities and sports, these heritage tournaments – known as the Fazza Championships – have attained huge popularity among Emirati nationals, and also attract a significant number of participants and spectators from other GCC and Arab countries.

Meanwhile, “Wathiqati” is a wide-ranging initiative launched in late 2014 that aims to contribute to the conservation and documentation of the UAE’s national heritage and provide a strong historical reference for future generations by preserving and archiving historical documents, manuscripts and collectibles.

HAMDAN BIN MOHAMMED HERITAGE CENTER, P.O. Box 333500, Tel: (971) 04 373 7000, Fax: (971) 04 373 7100, info@hhc.gov.ae

THE ECONOMY AND TRADE

18 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

THE ECONOMY AND TRADE

A dynamic trade hub Building on its pivotal position in the international trade arena, the United Arab Emirates is pushing for improved connectivity with the rest of the world, and with Africa and Asia in particular

THE UNITED ARAB EMIRATES HAS A LONG cargo. This is due to rise to 15 million TEU and 35 million tonnes history as a trading nation. The region has been a year general cargo when the port reaches completion in 2030. involved in trade for centuries; prior to the opening Furthermore, a 1,200km rail network – the Etihad Railway – is of the Suez Canal, the Gulf constituted a natural currently under construction and is scheduled to open in 2017. trade route between India and the Mediterranean. Moreover, Additionally, the UAE is home not just to two of the busiest before the advent of oil, all the countries of the Gulf had a airports in the Middle East and North Africa (MENA) region, substantial export trade in their former main commodity: pearls. but also to two of the region’s fastest growing airlines. Abu Dhabi Since the formation of the United Arab Emirates in 1971, the International Airport handled 20 million passengers in 2014 and union has gone from strength to strength. The country has is the hub for Etihad Airways. Founded in 2003, Etihad carried succeeded in diversifying its economy to a far greater degree 14.3 million passengers in 2014 and serves 110 destinations in than many of its neighbours, establishing itself as a service 66 countries. In April 2015, Abu Dhabi International Airport saw and trading hub, with many companies choosing to locate traffic increase by 15.5 per cent year on year. Dubai International their regional headquarters in the UAE. Developing trade Airport, meanwhile, handles more than 66 million passengers and industry continues to be a priority, both at the federal a year and is the hub for Emirates. Having commenced and emirate level. operations in 1985, Emirates serves more than One of the UAE’s main advantages is its strategic 140 destinations in more than 80 countries and location. The country lies close to the major sea carried 49.3 million passengers over the 2014-15 routes linking Europe and Asia, and forms part financial year, an increase of 11 per cent.

Jebel Ali is one of the Gulf Cooperation Council (GCC) market, The emergence of the UAE as an aviation hub of the biggest which has a high gross domestic product (GDP) linking Australia, Asia and Europe, along with container ports per capita ($33,000) and a collective population MENA destinations, has helped feed the growth of over 47 million people. of tourism – 14.8 million visitors are projected in 2015, generating 4.1 per cent of GDP, according to the Boosting connectivity World Travel and Tourism Council. But is also a major factor To leverage this, the UAE has invested its oil wealth extensively in attracting so many firms and individuals from overseas to locate in developing first-class connectivity, in terms of both physical in the country. In 2010, according to the Federal National Bureau infrastructure and services. DP World is one of the largest port of Statistics, non-nationals accounted for 7.3 million of the total operators in the world; it has more than 65 marine terminals across population of 8.3 million. In 2012, the latest year for which figures six continents, and, in 2014, it handled 60 million twenty-footare available, the number one foreign investor in the UAE was the equivalent units (TEU). Jebel Ali port in Dubai is the world’s ninth United Kingdom, followed by India, then France and Japan. largest container port, with expansion work currently in progress Indeed, the UAE has long welcomed not just tourists, but skilled due to bring its capacity to 19 million TEU a year by the end of expatriates too. The population of the UAE is remarkably diverse: 2015. Jebel Ali also has its own free zone, home to more than expatriates account for some 90 per cent of today’s population of 7,800 companies engaged in trade, logistics and manufacturing. nine million, with many residents from south and east Asia, other In the emirate of Abu Dhabi, Khalifa Arab countries and the Western world. This diversity of population, Traffic at Jebel Port Container Terminal (KPCT), which together with an immigration policy geared towards eliminating Ali port rose by opened in 2012, is an integrated industrial skills shortages, means that employers find it fairly easy to obtain six per cent to 7.9 port with a capacity of 2.5 million TEU labour at all skills levels in almost all occupations, which is another million TEUs in the first half of 2015 and 12 million tonnes a year of general factor behind the emergence of the UAE as an entrepôt.

DP WORLD

9th

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 19

THE ECONOMY AND TRADE

Currently, the UAE is the premier commercial hub of the Gulf region, but is well placed to assume an importance stretching further afield.

South-South trade has been increasing since the recession bit in Europe and North America, and in line with the rise of China and India as economic powers. According to figures from the United Nations Conference on Trade and Development (UNCTAD), since 2008-09, the countries of the global South (that is, the countries of the developing world) have been exporting more to each other than to the global North, or developed countries. The latest available figures show that in 2011, around 65 per cent of MENA exports went to developing countries, compared with just over 40 per cent in 1990. Developing Asia took the lion’s share of South-South exports, at 77 per cent, but the MENA region accounted for 10 per cent, with sub-Saharan Africa at four per cent.

The UAE has established itself at the centre of a network of sea and air routes linking the emerging economies of Africa and Asia (as well as Europe). This has led to the country becoming a significant centre for re-exports – in 2013, re-exports were worth AED232 million ($62.2 million) out of the total trade value of AED1065 million, according to National Statistics Bureau figures.

In recent years, investment from other developing countries has grown markedly; Indian foreign direct investment in 2012, for instance, stood at AED15.6 million, more than double the AED5.9 million in 2007. In 2012, three of the UAE’s top-10 investors were fellow global South countries: India, Kuwait (sixth) and Saudi Arabia (eighth).

China is also an increasingly important trading partner for the MENA region. According to HSBC figures, investment by Chinese companies into MENA rose to $30 billion in 2013, from $2.4 billion in 2005. In 2014, Chinese President Xi Jinping told the China-Arab States Co-operation Forum that China aimed to increase the value of its trade with the Arab World from $240 billion in 2013 to $600 billion within 10 years. According to the UAE Ministry of Economy, UAE trade with China was worth $46 billion in 2013, up 14 per cent, and over the first three quarters of 2014 was worth $35 billion.

Moreover, the UAE is already a significant investor in other countries of the global South, with DP World announcing in early 2015 that it intended to invest between $1.4 billion and $1.9 billion globally this year in Dubai, Turkey, the Netherlands and India, and a further $500-700 million over 2016-20, for instance.

The UAE’s cosmopolitan nature means that investors and executives from emerging markets who take up residence are likely to feel at home, which is a further factor helping to attract both talent and investment. New factories, free zones and an ever-expanding web of communications should cement the UAE’s position as a leading manufacturing and service centre for the global South.

20 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

DUBAI INTERNATIONAL AIRPORT

Dubai International Airport is now the world’s busiest airport for international passenger traffic

World Trade Organization: United Arab Emirates rank in world trade, 2013 Exports

Imports Rank

16

11

10

11

14

18

20

20

27

30 40

44 Merchandise

Excluding intra-European Union trade

Commercial services

Excluding intra-European Union trade Source: World Trade Organization

Export and import of goods and services (% of GDP) Exports

Imports

100% 90 80 70

2011

2012

2013

2014 Source: World Bank

URBANMYTH/ALAMY STOCK PHOTO

THE ECONOMY AND TRADE

Pioneering innovation The newly launched National Innovation Strategy is a tool with which the United Arab Emirates seeks to become one of the most innovative countries in the world by 2021

OVER THE PAST FEW DECADES, THE UNITED Arab Emirates authorities have worked diligently to build an economy that goes beyond hydrocarbons and is focused on innovation, services and trade.

These efforts have paid off, and the country is easily the most diversified in the region, with only a third of its gross domestic product (GDP) dependent on crude oil receipts.

Building on these achievements, last year the UAE Government announced a bold new National Innovation Strategy that aims to make the country one of the most innovative in the world within seven years. As such, the UAE declared 2015 the ‘Year of Innovation’.

“This innovation strategy is a national priority for our programme of development and progress,” outlined HH Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, at the launch.

Masdar City, to be located in Abu Dhabi, will be a leading urban ecosystem shaped by expert knowledge and innovation

“It is a primary tool to achieve Vision 2021 and an engine for the growth of distinctive skills and capabilities across the nation.

We have always called for creativity in every field: this strategy is a concrete step to implement that vision. These initiatives around innovation will enhance quality of life in the UAE and take our economy to new horizons… We want our public and private sectors to explore new horizons to develop our economy. Innovation is our only way to build a great history of the UAE… the future will be for those who adopt innovation,” said Sheikh Mohammed.

Key pillars of the strategy include the development of institutions and laws that stimulate innovation; a focus on research projects by government institutions; encouraging the private sector to adopt

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 21

THE ECONOMY AND TRADE

The UAE is set to post an economic growth rate of 3.4 per cent this year new technologies and create cutting-edge products and services; and creating an ecosystem that attracts ‘knowledge workers’ focused on science, technology, engineering and mathematics (STEM), including the creation of educational material for schools and universities.

Diversification has helped the economy weather a sustained period of lower oil prices. The UAE is set to post an economic growth rate of 3.4 per cent this year, above the average 2.7 per cent growth forecast in the rest of the Middle East and North Africa (MENA) region.

“While the oil price decline has reduced the authorities’ spending power, its adverse impact will be cushioned by tapping Abu Dhabi’s ample financial buffers and diversified economic base relative to other Gulf states,” notes the Institute of International Finance (IIF) in its latest report on the UAE. While Abu Dhabi, with its formidable crude oil production and sovereign wealth funds, is the undisputed fiscal powerhouse that is the bedrock of the country’s financial stability, Dubai and the other five emirates – Sharjah, Ajman, Ras Al Khaimah, Fujairah and Umm Al Quwain – are playing crucial diversification roles to balance the economy.

The country is also remarkably safe and stable – one of the many reasons it is the number one destination for foreign investment in the Arab World. Foreign direct investment inflows rose to $11.85 billion in 2014 from $4 billion in 2009.

A key indicator of the country’s rising profile on the global stage is its rising ranking in key surveys. The UAE improved its position in the World Bank’s Doing Business report for 2015, in which it was placed 22nd globally, up three places from 2014.

Hamad Buamim, President and Chief Executive Officer of Dubai Chamber of Commerce and Industry, says: “This has been achieved by improvements in getting credit and protecting minority investors. The country topped the world in ease of paying taxes and [came] fourth for registering property, dealing with construction permits and getting electricity.”

The UAE also ranked first in MENA for ease of doing business as a result of actions taken by the government to facilitate doing business and enhance competitiveness.

And the hits keep on coming. While the UAE has positioned itself as a major transportation hub with Emirates and Etihad Airways expanding the country’s air routes, the UAE has also built on its regional prowess in financial services, hospitality, real estate, and information and communications technology (ICT).

Dubai’s ability to sow seeds of creativity that yield rich harvest is well documented. The emirate’s TECOM Investments has attracted technology, media and telecommunications companies to the UAE in the space of less than two decades.

“Our business communities have created genuine ecosystems for the ICT, media, education, science and manufacturing sectors,

22 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

having supported the growth of these industries over the past sixteen years, and our most recent business community, Dubai Design District, or d3, is set to foster the growth of the design sector across Dubai,” says Dr Amina Al Rustamani, Group CEO of TECOM Investments.

Hosting the World Expo 2020 Another key initiative that will spark new waves of growth is Dubai’s successful bid to host the World Expo 2020. The six-month event is expected to generate long-term economic benefits for the UAE economy, with 25 million visitors to the expo, which will drive significant infrastructure upgrades and major new construction projects across a 438-hectare site.

“The Expo 2020 will yield long-term economic benefits, not only for Dubai and the UAE, but also for the entire MENA region,” Dr Al Rustamani said. “We are already seeing growth across the tourism, hospitality and ICT sectors, particularly in line with the government’s Smart City initiatives, and a number of new projects and transportation initiatives have already been launched. Planned infrastructure and project investments over the next five years will offer growth opportunities across a range of industries, and there will be a strong legacy that the event leaves behind, which businesses will be able to take advantage of.”

A key question, however, is project financing. “We expect government-related entities to be responsible for infrastructure improvements, while GREs [government-related entities] and other major developers will handle other projects such as hospitality facilities for visitors,” said Bashar Al-Natoor, Global Head of Islamic Finance at Fitch Ratings. “Real estate developers have made progress in attracting new investment to the sector in 2013 and

THE ECONOMY AND TRADE

DUBAI DESIGN DISTRICT

National Innovation Strategy

Dubai design district will position the emirate as a global creative centre

in repaying or refinancing upcoming maturities. We will examine the plans of Dubai and its leading real estate developers and assess their impact on ratings and relevant sectors as they are announced and implemented.”

Despite the financing challenges, the landmark event will ensure that the UAE economy keeps humming even as the global economic environment wobbles amid weak growth in emerging markets and developed economies.

A culture of innovation “Major projects and preparations to host the World Expo 2020 should help to maintain strong growth of 4.8 per cent in Dubai,” the IIF estimates.

Also, Abu Dhabi plans to invest more than $25 billion in the next five years in offshore oilfields to boost oil production capacity to 3.5 million barrels per day (bpd) by 2018 from its current production of 2.8 million bpd.

“The next stage of growth involves establishing the foundations for driving innovation and creativity across Dubai,” Dr Al Rustamani said. “This will continue to attract talent, support the growth of start-ups and foster dynamic industry ecosystems, and TECOM Investments is investing significantly in creativity, which both supports the development of human capital and provides a platform for innovation and enterprise.”

While the UAE has made huge strides in maximising its potential, there are still a few areas that need to be reformed, according to the IIF. “The rapid development model, which has depended on the boom in construction and real estate

Announced in October 2014 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates, the National Innovation Strategy (NIS) seeks to transform the UAE into a global innovation leader within the next seven years.

“The UAE is already the most innovative Arab nation. We want to be among the most innovative nations in the world. The UAE invests Dh14 billion each year in innovation, Dh7 billion of which is spent on research and development. We will raise this target significantly,” said Sheikh Mohammed. “It is by... following innovative approaches that we bring about progress for our country and people”, added Sheikh Mohammed.

The NIS identifies seven priority sectors: • Renewable energy • Transport • Education • Health • Technology • Water • Space In order to facilitate innovation in these core areas, 30 governmental initiatives are to be implemented over the next three years. These are focused on encouraging investment in specialised skills, protecting intellectual property, removing barriers to innovation, supporting research and development, and easing the patenting process. The NIS is also encouraging cross-sector collaborations.

The UAE has also announced the creation of a new job post within every government department – Chief Executive Officer of Innovation. An agreement has been signed with Cambridge University in the UK to train 60 Innovation CEOs. In a similar vein, the Ministry of Economy and the Dubai Chamber of Commerce and Industry have launched the Mohammed bin Rashid Al Maktoum Business Innovation Award, in an effort to encourage national firms to spend more on research and development and improve operational performance.

and transport-related services, may have reached its limit, and therefore other sources of growth need to be considered,” the Institute said in its report.

The International Monetary Fund (IMF) concurs, noting that structural reforms should aim at further diversifying the economy and accelerating private-sector-led job creation for nationals.

“These could include: further opening up foreign direct investment, improving selected areas of business environment, transitioning toward a knowledge-based economy, easing access to finance for start-ups and SMEs [small and medium-sized enterprises], and creating the right incentives for entrepreneurship and job creation,” Zeine Zeidane, leader of the IMF mission to the UAE, said in a statement.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 23

The International Center for Biosaline Agriculture - ICBA is committed

to working in partnership with organizations across the globe to develop and deliver agriculture and water scarcity solutions for saline and marginal environments.

“We aspire to a bright future for ICBA, and look forward to continued UAE support because of our firm belief in the noble mission of finding solutions to challenges affecting countries of the Organisation of Islamic Cooperation.”

Dr. Rashid Ahmed Bin Fahad Minister of Environment and Water of the United Arab Emirates APPLIED RESEARCH Our applied research focuses on identifying, developing and testing innovative solutions and technologies for food, nutrition and water security in marginal environments. We work within four thematic areas: aquaculture and bioenergy; climate change impacts and management; crop productivity and diversification; natural resources assessment and management.

POLICIES FOR RESILIENCE We help governments and other partners to develop and introduce policies on food and nutrition security, and water and land management in marginal environments.

www.biosaline.org

TECHNICAL ASSISTANCE We offer technical assistance to a wide range of our stakeholders from governments to international organizations to private-sector actors that work on improving land and water productivity in marginal areas.

We help to develop tools for sustainable agricultural development.

“The work being done at ICBA to improve the productivity and resilience of smallholder farmers in marginal environments is vital in the pursuit of food and nutrition security. It is estimated that every dollar spent on agricultural research generates 9 USD in additional food for the children, women and men of developing countries.”

Dr. Kanayo F. Nwanze President of the International Fund for Agricultural Development

PRIVATE-SECTOR-LED PARTNERSHIPS We cooperate with private-sector companies to test how well their innovations and technologies are suited to marginal environments.

Our research facilities serve as a testing ground and this cooperation contributes to further research and development.

Proudly supported by:

UP-SCALING INNOVATION AND TECHNOLOGY We give priority to bringing our research and innovation results to farmers’ fields. We work closely with national partners to test improved technologies and innovations and scale up successful ones so that more and more farmers benefit from using them.

CREATING AND SHARING KNOWLEDGE Knowledge is our main product. We are committed to freely making available to everyone the knowledge we generate, today and tomorrow.

We offer capacity building and training solutions to our stakeholders, including scientists and farmers. Thousands of people have benefitted from our training programs in more than 15 countries.

THE ECONOMY AND TRADE

Islamic economy: faith in Dubai As the Islamic finance industry continues to make huge advances, Dubai is working to consolidate its status as the sector’s global capital

WITH MORE THAN 1.6 BILLION ADHERENTS concentrated mostly in the geographic regions of South Asia and the Middle East, Islam and its followers have the building blocks to develop a Shariah-compliant economy.

While it would be a mistake to lump all the Muslim countries together as one homogenous, contiguous unit – from the gas-rich Qatar, to poverty-ridden Sudan – most Muslim-majority countries do share some common economic and social threads that could be woven together to create a dynamic, diverse mega economy.

While many jurisdictions such as Malaysia and Bahrain have sought to be leaders in Islamic finance, the emirate of Dubai is looking to tap into the greater economic potential of 1.6 billion Muslims and create industries that position it as the global capital of the Islamic economy.

The Islamic economic bloc represents just over $6.7 trillion in gross domestic product (GDP), according to a report jointly conducted by Thomson Reuters and the Dubai Islamic Economy Development Centre (DIEDC). The economic bloc boasts of fast-growing global economies such as Indonesia, Turkey and the Gulf states, and is home to some of the world’s largest oil and natural gas reserves, as well as mineral and metal sources.

Developing global standards Islamic finance assets stand at around $1.66 trillion – a figure that is expected to double by 2019, industry estimates show.

Muslims collectively spent $2 trillion on halal food and Muslim lifestyle products in 2013 alone. In terms of growth prospects, 62 per cent of the population in these countries is below the age of 30, compared with 51 per cent globally.

“The fast-growing and relatively young Muslim population is increasingly asserting its Islamic sensibilities in the marketplace, leading to the development of products as varied as food, banking and finance, and extending all the way to fashion, cosmetics, travel and healthcare,” says Abdulla Mohammed Al Awar, Chief Executive Officer of DIEDC.

26 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

The DIEDC is leading the emirate’s strategy to pursue seven pillars of Islamic economy: Islamic finance, halal industry, family-friendly tourism, Islamic digital economy, Islamic knowledge and research, Islamic arts and design, and Islamic standards.

“We work to support our stakeholders in the implementation of initiatives that aim to develop each and every sector of the Islamic economy,” Al Awar says. “However, our ultimate goal remains to drive and enable practitioners and regulators to develop globally accepted standards and regulations.”

But creating standards across the board will be a challenge.

The decades-old Islamic finance industry has yet to streamline its regulatory standards, with differing rules complicating the process.

Despite the regulatory ambiguity, Islamic finance continues to remain attractive for not just Muslim nations, but also other jurisdictions such as the United Kingdom, Hong Kong and South Africa that have tapped into Islamic bonds, or sukuks, as companies in those countries seek alternative sources of funding.

Dr Adnan Chilwan, Chief Executive Officer at Dubai Islamic Bank, one of the world’s largest Shariah-compliant financial institutions, says that the Dubai Government’s ambition to become a global hub for Islamic economy will mean that Islamic finance will continue to outpace the growth of its conventional counterparts, as was evident from the recent corporate earnings announced by Islamic banks.

This year alone, Dubai Islamic Bank (DIB) successfully tapped capital markets twice with a tier one issuance of $1 billion and a senior unsecured one of $750 million, underscoring strong global investor interest.

“Islamic capital markets will also continue to be an attractive sector given the growing interest from sovereigns and corporates to use sukuk as an alternative method of financing,” Dr Chilwan said. “Simultaneously, other halal industries expected to see a boost through Dubai’s ambitions will further support the growth of Islamic finance and banking.”

Islamic finance may be the most high-profile sector of the Shariah-compliant economy, but it has already been eclipsed by

CHRIS RATCLIFFE/BLOOMBERG VIA GETTY IMAGES

THE ECONOMY AND TRADE

Hub for halal “The Islamic economy has the potential to become the main driver of growth, transcending religions and countries across the world. Aiming to reduce unemployment and inequality in wealth distribution, the world is today much more aware of value creation and engagement. In this context, Dubai has the vision, the will and the means to pave the way for socio-economic development with an emphasis on ethics and social responsibility.”

Dubai’s multipronged approach to building its credentials as the capital of the Islamic economy has led to a number of initiatives: the Dubai Financial Market and Nasdaq Dubai launched the Global Sukuk Centre programme, while the Dubai Technology Entrepreneurship Centre by Dubai Silicon Oasis Authority is focusing on attracting entrepreneurs in the Islamic digital economy space.

Halal industry clusters have been launched at Dubai Industrial City and Jebel Ali Free Zone Authority. Meanwhile, The Dubai Department of Economic Development (DED) is also forging

REUTERS

the halal food industry. And the emirate of Dubai hopes to leverage its status as the regional trading hub coupled with state-of-the-art infrastructure and regulations to emerge as a trusted global centre for halal activities, especially in the manufacturing and trade sector.

The DIEDC is looking to align its strategic goals and objectives with the Dubai Plan 2021, which will transform the emirate into a pivotal hub in the global economy, says Al Awar.

Dubai has overtaken other financial centres in listing Islamic bonds on its two exchanges: Nasdaq Dubai and Dubai Financial Market

global partnerships to position Dubai as a manufacturing and redistribution hub for halal products, and has entered into a memorandum of understanding with stakeholders to develop a “Halal Hub-to-Hub” model.

The new area of focus for the emirate appeals to the many Muslims who wish for a peaceful, prosperous jurisdiction that shares their values. It could also attract the Muslim diaspora across the world and bring additional technology, learnings and funding to Dubai.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 27

THE ECONOMY AND TRADE

An appetite for foreign direct investment

IDUBAI/ALAMY STOCK PHOTO

The United Arab Emirates’ impressive growth continues to attract investors in sectors as diverse as tourism, healthcare, ICT and logistics

FOR ALL OF ITS SKYSCRAPERS, AIR-CONDITIONED shopping malls and mega hotels, the United Arab Emirates continues to press on with wide-ranging advancements. The Gulf country – currently the world’s 11th most sought-after foreign direct investment (FDI) destination – is garnering interest from thousands of businesses each year. Sandwiched between Asia and Europe, it serves as an ideal import-export gateway, and money managers are eager to tap into one of the region’s most lucrative markets.

Dubai FDI, which is overseen by the Department of Economic Development, facilitates the identification of investment opportunities and ensures that newly set-up ventures meet the highest standards.

Some might find it hard to imagine that the desert country that is set to build its own tropical rainforest under a dome – adding to an indoor ski slope and the world’s tallest tower – still has such massive growth potential. Jebel Ali Port ranks among the world’s busiest, Dubai International Airport overtook London Heathrow as the most visited globally in 2014, and tourism and manufacturing continue to contribute significantly to the country’s gross domestic product (GDP).

28 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

Foreign direct investment in the UAE reached $14.4 billion in 2014, making it the third most attractive country in West Asia

Looking forward, the picture appears to be even more lucrative: Dubai has secured the rights to host Expo 2020, an international trade and tourism exhibition. The event is set to boost Dubai’s economy further amid an $8 billion spending plan, according to the International Monetary Fund (IMF).

Expo 2020 raises “global trust in Dubai and the UAE, showing that it can host international events,” Fahad Al Gergawi, Chief Executive Officer of Dubai FDI, said in an interview last year at the MENA Arabian Gateway. “It’s not just about hosting, it’s about giving something to the world, to understand where we are. At the same time, it’s trust in the different phases of development we took and it’s trust also in the future of this region – the future of the UAE.” According to the IMF, the UAE’s economy grew 3.6 per cent in 2014, as “the award of World Expo 2020… further strengthened growth prospects”. Growth continues to quicken as the tourism, retail sales, trade and real estate sectors expand. The country has, as such, made great strides in diversifying its economy away from oil, taking advantage of low operational costs and

THE ECONOMY AND TRADE

higher demand for import and export. This, in turn, has allowed locally based businesses to grow beyond the UAE. Manufacturing momentum The scope for production facilities in the country is huge, from plastics to furniture to auto parts and cables. The manufacturing momentum has been so strong that it has, to a degree, diminished some of the dominance of real estate and construction – traditionally considered the bedrock of the UAE’s growth potential – according to Oxford Business Group.

Annual manufacturing production contributes about $54 billion to the economy, and employs eight per cent of Dubai’s workforce, according to government data. By 2025, it is forecast to contribute 25 per cent of GDP – nearly double the current amount – the UAE Minister of Economy, HE Sultan bin Saeed Al Mansouri, predicts.

At the forefront of the sector is Dubai-based DUCAB, which produces cable used in massive projects, including a Jebel Ali container terminal, the 364-bed Cleveland Clinic and a palace.

Reflecting the importance of the sector, the UAE Ministry of the Economy is working with the United Nations Industrial Development Organization to launch the Global Manufacturing and Industrialisation Summit (GMIS), which will be held in Abu Dhabi in 2016. The GMIS represents a platform for discussion on future manufacturing. The Embassy of the UAE in London recently organised a roundtable event as part of the build up to GMIS. FDI in the UAE currently stands at approximately $14 billion, compared with some $8 billion in 2011. A global investment report by the United Nations Conference on Trade and Development (UNCTAD) in 2014 categorised the nation as the second largest FDI recipient in Western Asia, following Turkey, with its biggest investors hailing from the United Kingdom, Japan and Hong Kong.

The country’s inflows also grew significantly between 2012 and 2013, as investors sought a safe haven from political instability in the region triggered by the Arab Spring. Al Gergawi told Gulf News in November last year he anticipated a 10-15 per cent increase in overall FDI in 2014 versus 2013. “It is the positioning of Dubai more than anything else, that as a city it enables businesses not only to come and set up, but also grow [regionally],” Al Gergawi said in an interview with The Business Year in 2013. “From Dubai, you can reach out to a population of around 2.2 billion within four hours; this is very important for investors. Dubai represents and is accepted as a global services centre to many multinationals.”

Accompanying and aiding the manufacturing industry is logistics. The sector facilitates the movement of raw materials into and out of the country at relatively cheap rates. Illustrating this momentum, first-quarter profit at Aramex PJSC, the Dubaibased logistics and courier provider, grew 10 per cent, supported by e-commerce and technology investments. The stock, which trades in Dubai, has advanced by 17 per cent this year, exceeding the global average of its peers by almost four times.

“Logistics is the tool Dubai uses to be a world trade hub,” Al Gergawi said in the Business Year interview. “Logistics are expanding, with air and sea transport being strongly recognised, and Dubai is gaining global recognition as being a world logistics hub for many companies working in that field.”

The potential lifting of sanctions on Iran has also boosted the trade prospects for the nation, with courier companies, construction, tourism and real estate firms being potential beneficiaries. Once those restrictions are removed, Dubai could become the hub for trade with the Islamic Republic, Bryan Plamondon, a senior economist for the Middle East and North Africa at IHS Global Insight in Massachusetts, told Bloomberg News in April. The country currently serves as the third largest re-export hub, according to the Dubai FDI website.

As part of the drive to further attract foreign investment, the Dubai International Financial Centre (DIFC) said in June this year that it plans to triple its size as a hub for business in developing economies by 2024. According to DIFC Governor Essa Kazim, projects will span infrastructure, trade finance and capital markets. The centre is poised to serve as the base for 1,000 financial firms, three times the 362 businesses present at the end of 2014, Kazim said in a strategy plan presentation.

Tourism and retail Meanwhile, tourism has surged as restrictions on visas have eased, with about 13.2 million visiting Dubai in 2014, up eight per cent year on year. That figure far exceeds the global average, according to the Department of Tourism and Commerce Marketing (DTCM).

Visitors have been lured by the milder weather, the country’s ultra-luxury hotels (which include the Burj Al Arab and the Atlantis), and shopping festivals, as well as growth in the aircraft fleets of Emirates and budget airline flydubai.

Dubai plans to boost the number of hotels by 12.5 per cent from the current 659 between 2015 and 2018, DTCM data shows.

Visa policies to the country were eased on 13 European Union countries last year, according to the department. In January alone this year, passenger traffic through Dubai reached a record.

These figures are hardly surprising when you take a look at the country’s retail sector. Dubai, and indeed the UAE, has become one of the hottest shopping destinations globally, competing with fashion hubs such as Paris, London and New York. The Dubai Gold Souk, which houses more than 300 stores, offers the precious metal tax free. Dubai Mall, the largest in the world, has about 100 million The logistics industry is thriving in the UAE. Dubai-listed delivery firm Aramex posted a 10 per cent increase in first-quarter profit this year JUMANA EL-HELOUEH/REUTERS

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 29

HAMDAN BIN MOHAMMED HERITAGE CENTER PERSPECTIVE

National pride HE Abdullah Hamdan Bin Dalmook, the CEO of the Hamdan Bin Mohammed Heritage Center (HHC), explains how the entity plays a crucial role in preserving and promoting the UAE’s rich culture, enriching the lives of its citizens and enhancing the all-important visitor experience

Since the Hamdan Bin Mohammed Heritage Center (HHC) was established in 2013, it has played an invaluable role in “reviving the UAE’s cultural heritage and preserving national identity”, according to CEO HE Abdullah Hamdan Bin Dalmook.

Founded with a vision to be recognised as a reliable source of reference for conserving, documenting, publishing, highlighting and promoting Emirati heritage, the Center has successfully generated greater understanding of the UAE’s rich cultural landscape among Emirati nationals and visitors alike, he says.

This has been achieved through the introduction of groundbreaking initiatives, from landmark studies like Wathiqati, which documents the UAE’s heritage, to “events, competitions and championships that nurture traditional sports and promote age-old cultural pursuits”.

These include the globally renowned Fazza Heritage Championships, “considered among the most important heritage sports events worldwide”, where participants compete in shooting, falconry, hunting, diving and even the Al Yullah performance, which dates back 200 years.

“The Center’s initiatives have helped connect young Emiratis to their cultural heritage and created opportunities for them to be introduced to, and participate in, a variety of heritage sports,” says Dalmook.

The HHC’s immediate focus is to develop these initiatives by expanding their scope, bringing the Center closer to its goal of “promoting national identity and creating heritage awareness among all sections of the population”.

Strengthening its cooperation with government entities, cultural centres, and educational institutions UAE-wide to support research programmes and organise cultural activities that preserve

and make popular traditional skills and pursuits, is also high on the agenda, stresses Dalmook.

However, as the UAE fast approaches 2020, the year when Dubai will host its largest event to date, the World Expo, the HHC is developing a programme designed to showcase the country’s heritage and history to the 25 million international visitors the six-month exposition is expected to attract.

“A country’s culture and heritage are important components of what it offers to tourists,” says Dalmook.

“Cultural and heritage attractions serve as key travel motivators and are known to play an important role in determining the

In January 2015, HHC was appointed as the Strategic Heritage Partner for Expo 2020 ability of a city or country hosting a major international event such as the World Expo to attract global visitors.”

In January 2015, HHC was appointed the Strategic Heritage Partner for Expo 2020 and under agreement terms, the Center will organise a wide range of heritage-focused activities during the event.

“We are currently working towards finalising an extensive calendar of events to be hosted in the lead-up to Expo 2020,” reveals Dalmook. “This process is continuously evolving, given the event is still some years away, and details will be announced in due course.”

Dalmook hopes the HHC’s ongoing efforts to revive and preserve the UAE’s heritage will enrich the visitor experience and in the long term, attract increasing numbers of tourists who are keen to

improve their knowledge of the country’s history and culture.

Ensuring current and future generations are familiar with ancient traditions and lifestyles and continue to conserve the national heritage for both citizens and visitors, is “imperative”, he says.

“It gives people a connection to certain common values and customs and helps them develop a sense of national identity and belonging,” Dalmook concludes.

THE ECONOMY AND TRADE

shoppers annually and hosts 1,200 stores and a skating rink, and sells the world’s most expensive cupcakes. The UAE is home to at least 15 malls, among them, three in Abu Dhabi and eight in Dubai. The Dubai Shopping Festival – a one-month discount extravaganza – contributes about $1 billion to the city’s economy.

Retail and wholesale trade comprise around 29 per cent of the emirate’s GDP in total.

Above and beyond shopping, the UAE offers multiple entertainment options, from luxury resorts, to top gaming and film facilities, and some of the finest cuisine. In Abu Dhabi, the city’s tourism authority is in the process of building local branches of the world-renowned Louvre and Guggenheim, promising to lure cultural enthusiasts, many of whom already appreciate the city for its multiple concerts, featuring big-ticket names such as Madonna and Beyoncé at Yas Island, as well as its annual film festival, which frequently hosts major premieres.

Damac Properties, a Dubai-based real estate developer, is planning to recreate a jungle under a dome with the help of Amazon rainforest experts. Once it is built, tourists will be able to glide through the forests on a zip wire. Damac intends to capitalise on solar energy to reduce costs as it seeks to build the project. The emirate also has plans to establish the Museum of the Future.

“For 2020, there have been up to 25,000 new [hotel] rooms announced, the majority focusing on three- and four-star hotels,” Al Gergawi told The Business Year. “This is also complementing the idea of where Dubai is shaping itself to be. Within the global market, Dubai has proven its vision strongly, with its aim of being a global player and a global service industry centre.”

Hotel occupancy in Dubai in the first quarter averaged about 86 per cent, while rates fell by about six per cent. Demand continues to grow, according to research from STR Global. Meanwhile, occupancy in Abu Dhabi was 77 per cent in the period. On average, tourism and travel contribute about 31 per cent of Dubai’s GDP. To name just one development that is capitalising on this demand, Atlantis, The Palm, which is already home to more than 1,500 rooms, is expanding with an 800-room, $1.4 billion project.

While staying in the UAE, visitors can also benefit from the top-quality healthcare it has to offer, with some even traveling to the country for the sole purpose of medical tourism. There are more than 100 hospitals in the UAE, including general practice and niche service clinics. Imperial University opened a diabetes centre in 2006 that proved so successful, it followed with another branch in Al Ain. Moorfields Eye Hospital of London, one of the leading institutions of its kind, has only one other branch in the world – in Dubai.

King’s College Hospital also opened clinics in Abu Dhabi last year.

The scope for growth in the industry is huge, as the nation works to withstand rising levels of obesity and diabetes, amid a shortage of healthcare workers and an ageing population.

This year, the Boston Consulting Group ranked the UAE and Qatar regional leaders with the most developed ‘internet economies’ in the Middle East. According to the report, the UAE stands at 24 when compared with all major global economies. This signals that the country has very little by way of cyber restrictions and that its vulnerabilities to infractions on security networks are low.

The government has successfully adopted and implemented

Foreign direct investment FDI stock (million USD)

2012

2013

2014

FDI inward flow (million USD)

95,007 25.5% of GDP

9,602 11.8% of GFCF* 10,488 11.9% of GFCF*

105,495 26.2% of GDP 115,561 28.8% of GDP

10,066 11.2% of GFCF*

*Gross fixed capital formation measured the value of additions to fixed assets purchased by business, government and households, less disposals of fixed assets sold off or scrapped

Number of greenfield investments 344

2012 2013 2014

320 315 Source: UNCTAD

information and communications technology (ICT) throughout its governmental and private sectors. As part of a two-year e-governance initiative, the UAE aimed to put citizens first by “developing an accountable and innovative” system of governance, according to the European Journal of E-Practice.

In 2014, the UAE ranked 24th globally out of 148 countries in the Global Information and Communication Technology report, issued by the World Economic Forum (WEF). The country also ranked 12th globally in online services and 13th in e-participation.

Home to global tech giants including Facebook and LinkedIn, the Dubai Internet City free zone is the biggest ICT hub in the region, and has facilitated the city’s transformation into a knowledge-based economy. Global media organisations are scattered across the country in media zones that include Dubai Media City and Abu Dhabi’s twofour54, making the UAE one of the region’s most lucrative destination for entrepreneurs and small and medium-sized enterprises. Dubai is also setting up the Middle East’s first Google for Entrepreneurs Tech Hub in an attempt to lure tech entrepreneurs seeking to tap into developing economies.

“Dubai and the UAE are on the right path to becoming a high-tech leader in internet and communications, and it has been emulated by many other countries,” Al Gergawi said in an interview with The National in October. He added that the vision to create Dubai Internet City came from His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, and Vice President and Prime Minister of the UAE. “He took me to the desert one day and showed me a place where people had lived 3,500 years ago. He said, they made an innovative economy, and so should we.”

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 31

Empowering the nation for

generations to come

We believe we can make a difference wherever we do business by investing in human resources development, innovation and entrepreneurship, powering economic progress,increasing environmental awareness and working in partnership for energy sustainability

www.adnoc.ae

INVESTMENT OPPORTUNITIES: EDUCATION

Progress through education OVER THE PAST DECADE, THE UNITED Arab Emirates’ education system has been transformed by an influx of foreign investment that has created a vast private education sector.

Overseeing the UAE’s two biggest education markets, the Abu Dhabi Education Council (ADEC) and Dubai Education Council (DEC) – which were both established in 2005 by the UAE Ministry of Education – have spearheaded efforts to attract new foreign investment and secure the involvement of internationally accredited education providers.

According to Colliers International’s Dubai Education Overview Q4 2014, the UAE’s private education sector was projected to reach $13 billion in 2014, with this figure expected to increase to $15.8 billion in 2017 and $18.8 billion in 2020. Dubai’s private education sector accounted for approximately half of the total ($6.1 billion) in 2014.

The same report predicts that the country’s private education sector will require new investment worth $5.8 billion by 2020, with Dubai accounting for $2 billion of this figure. Remarkably, it estimates that Dubai alone will require 52 new private education facilities from 2016-20, equating to an annual demand of 13 new schools.

Key to securing this additional investment is the progress being made in raising standards across all levels of education in the emirates.

In Abu Dhabi, ADEC is rolling out its New School Model (NSM), which has introduced a modern, technology-enhanced learning curriculum to the emirate’s higher education system. The strategy has also sought to recruit the best teaching talent from a variety of native English-speaking countries to help implement the main facets of the programme.

34 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

Importantly, Arabic-language and English-language teaching are based on the same curriculum and standards, and teachers from both sides of the spectrum often collaborate on developing class learning programmes.

In December 2014, members of the Federal National Council (FNC) called for a minimum wage for private school teachers to be implemented, in order to attract the better qualified teachers. The Minister of Education, HE Hussain bin Ibrahim Al Hammadi, promised to address the issue of wages, and discussed the introduction of a new teaching licence system akin to that of the medical profession.

According to ADEC’s Abu Dhabi Education Reform: The Road to 2030 policy paper, the NSM forms part of a broader initiative that aims to lay the foundation for “an innovation-based, knowledge-producing society”. Primarily, the policy aims to “carefully [align] Higher Education with labour market and socio-economic needs” as guided by the Abu Dhabi Economic Vision 2030.

In line with the National Innovation Strategy, which identifies education as a priority sector, a joint taskforce, comprising members of the UAE Space Agency, the Ministry of Education (MoE) and educational bodies, was set up to revise the educational curriculum and conduct a visibility study of the science, technology, engineering and mathematics (STEM) curricula. This is expected to help establish a foundation for innovation, which in turn will attract young Emirati to the sector.

Improving education quality Beyond the initial work of the DEC, Dubai has taken efforts to improve standards a step further through the establishment of the Knowledge and Human

CRANLEIGH SCHOOL ABU DHABI

Creating a world-class education system lies at the heart of the government’s Vision 2021 National Agenda

Students at Cranleigh School follow a UK curriculum. The school, which opened in 2014, is Abu Dhabi’s first boarding school

INVESTMENT OPPORTUNITIES: EDUCATION

Development Authority (KHDA). KHDA oversees of education, up from 30 per cent in 2008. These all aspects of private education in Dubai, rigorously outcomes tally with international assessment scores, enforcing international standards and benchmarking which have also improved since 2007.” education services in the emirate against their KHDA’s remit covers Dubai’s tertiary academic international counterparts. Its remit covers free zones, notably Dubai International Academic 169 schools, providing education to more than City (DIAC) and Dubai Knowledge Village (DKV).

250,000 students from 188 different countries, “The UAE’s education sector is still very young in addition to 26 international universities compared to other more established markets,” that provide education services to 24,000 says Dr Ayoub Kazim, who is Managing students from 145 countries.

Director of DIAC and DKV. “That being “When KHDA was established in said, through the establishment and of investment is 2007, we learned from international growth of our higher education sector needed in best practice, consulted with local in the past 44 years, we as a nation private education educators and policymakers, and helped have successfully developed into a by 2020 to switch the lights on to Dubai’s knowledge-based economy.” education sector,” says HE Dr Abdulla Al The efforts of KHDA and ADEC to raise Karam, Chairman of the Board of Directors and education standards – along with other emirateDirector General of KHDA. “We put in place a number based ministries that fall under the umbrella of the of tools and policies to increase transparency and Ministry of Education – have earned international quality of education. School inspections, for example, recognition. According to the World Economic Forum’s have given us a shared language for talking about the (WEF) Global Competitiveness Index Report 2014-2015, quality of our schools. Currently, more than half of all the UAE ranked ninth out of 144 countries in terms of school students receive a good or outstanding quality the quality of its higher education and training sectors.

$5.8bn

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 35

Above: HeriotWatt University Dubai Campus is located in Dubai International Academic City, which is the world’s only free zone dedicated to higher education Right: Middlesex University Dubai, the first overseas campus of Middlesex University in London

Its primary education system ranked 13th overall.

By comparison, in the previous year’s report (2013-14), the country’s higher education system ranked 15th worldwide, while its primary system ranked 19th.

In the 2014-15 report, the UAE came 18th in the world (up from 21st in 2013-14) in terms of internet penetration in schools, and 17th (up two places) in terms of the availability of research and training services. Dr Kazim, who describes this as “an impressive feat”, says it is testament to the UAE’s “growing human capital”.

“With almost 40 International Branch Campuses (IBCs), the UAE is currently home to the highest number of IBCs in the world, and this number is only expected to grow,” he says. “The knowledge economy agenda implemented by the UAE Government has created significant job opportunities for students in the GCC [Gulf Cooperation Council]. As the economy and opportunities grow, so does competition, and so the fight for the best jobs rests on the level and quality of education the graduate can present.

“An increasing number of international organisations are also choosing the UAE as the location for their Middle Eastern headquarters, which is ideal for graduates looking to start a career in a globally recognised company,” Dr Kazim says.

Twelve national targets As Dr Kazim notes, the main ambition of the UAE Vision 2021 National Agenda is to transform the emirates into an internationally competitive, knowledge-based economy. The Agenda sets out 12 key national targets, ranging from raising the share of UAE nationals in the workforce and gross national income per capita, to improving the UAE’s ranking on key global performance indices, from ease of doing business to overall economic competitiveness.

In 2014-15, the UAE ranked 12th overall on the WEF’s Global Competitiveness Index, up from 27th

IAIN MASTERTON/ALAMY STOCK PHOTO

IAIN MASTERTON/ALAMY STOCK PHOTO

INVESTMENT OPPORTUNITIES: EDUCATION

in 2011-12. By 2021, the country aims to be firmly entrenched in the top 10. The provision of quality education services will be vital to realising this ambition.

“We take inspiration from the Expo 2020 theme of Connecting Minds, Creating the Future,” says KHDA’s Dr Al Karam. “We believe that positive change – and the National Agenda targets – will be realised when the whole education community, from policymakers to leaders, teachers, parents and students, come together to focus on what’s working, both in Dubai and abroad.”

Positive change In addition to providing opportunities for UAE residents, Dr Kazim says the country remains a “hugely attractive destination” for foreign students.

He cites the latest WEF Global Competitiveness Report – which placed the UAE third and sixth for talent attraction and retention respectively – as evidence.

“The cost of living in the UAE is lower than [the cost of living in] a number of major global economies, including the USA, UK, Australia, and Canada; it is seen as one of the safest countries in the world; and it is ideally located closer to the home countries of most [foreign] students,” he says. “In addition, acquiring a student visa to study here, particularly for Indian, Russian, and CIS [Commonwealth of Independent States] students, is significantly more straightforward compared to many Western locations.

“By providing the right environment for higher educational institutions to establish themselves, attracting students, and provide high-quality teaching, we will continue to attract and retain foreign talent, not only to study, but to eventually work [here] too.”

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 37

INVESTMENT OPPORTUNITIES: ENERGY

A confident energy future As the fourth-largest oil exporter in the world, the United Arab Emirates plays an important role in maintaining a stable supply of crude oil to the global market

THE OIL AND GAS INDUSTRY HAS Petroleum Operations (ADCO), Abu Dhabi Marine dominated the United Arab Emirates’ Operating Company (ADMA-OPCO) and Zakum economy since oil was first exported in Development Company (ZADCO). ADMA-OPCO the 1960s and will continue to provide and ZADCO operate the emirate’s major offshore the vast majority of government revenues for many oilfields and have together invested at least $13 billion years, even as the seven emirates push to diversify on field developments in the last three years. into other sectors.

ADMA-OPCO is bringing on production capacity The vast majority of oil and gas production in for the first time at the Nasr, Satah al-Razboot (Sarb) the UAE is found in Abu Dhabi, where a crude and Umm al-Lulu fields, while ZADCO is significantly production capacity of around three million barrels expanding production at Upper Zakum – thought to per day (bpd) is roughly split between offshore and be the world’s second biggest offshore oilfield. onshore fields. The UAE’s oil reserves are estimated The ownership of ADCO, which is estimated to at 97.8 billion barrels, or about 5.8 per cent of the produce more than half of Abu Dhabi’s oil, is still world’s total reserves, according to data compiled undecided as ADNOC assesses bids from IOCs

by British oil major BP. to complete the joint venture. The previous The state-owned Abu Dhabi National Oil incarnation of ADCO expired in January Company (ADNOC) has long maintained a 2014, after ADNOC enjoyed a 35-year target of hitting a capacity of 3.5 million partnership with BP, ExxonMobil, bpd by 2017-18 through significant Shell, Total and Portugal-based Partex major oil and investments in oilfield development. operating its onshore fields. gas projects Since the start of 2013, the UAE has ADNOC had been operating its under execution spent more than any other country in onshore fields as 100 per cent owner for the Middle East on developing oil and gas over a year when French oil major Total projects. According to regional projects announced at the end of January 2015 tracker MEED Projects, the UAE has awarded that it had entered the new 40-year ADCO $23 billion worth of engineering, procurement and concession with a 10 per cent stake. In the following construction (EPC) contracts on oil and gas projects, months, it emerged that Japan’s Inpex had been representing 24 per cent of the $96.3 billion worth of awarded a five per cent stake, and South Korea’s GS deals in the Middle East region, excluding Iran. The Energy picked up a three per cent interest, becoming UAE has 66 major oil and gas projects currently under the first ever Asian companies to gain a share of Abu execution – equalling its larger neighbour Saudi Arabia Dhabi’s onshore production. The deals were symbolic of as the highest number in the Middle East – and has Abu Dhabi’s strengthening ties with East Asia, the $26 billion worth of projects under construction. region that receives the majority of the UAE’s oil shipments each year.

Abu Dhabi’s oil industry ADNOC is looking for IOCs to make up 40 per cent ADNOC oversees all of Abu Dhabi’s major oil and gas of ADCO, leaving 22 per cent of the joint venture activities and operates its oil and gas fields through still unaccounted for. Several companies are still in joint ventures with international oil companies (IOCs). the running, including previous onshore partners The emirate’s major oilfields are largely under three BP and Shell. “Whoever meets our conditions, will be major concessions: Abu Dhabi Company for Onshore considered... there is no timeline,” ADNOC Director

38 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

Refinery storage tanks in the UAE. The country’s oil reserves are estimated at 97.8 billion barrels

ISTOCK IMAGES

66

INVESTMENT OPPORTUNITIES: ENERGY

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 39

DUNCAN CHARD/BLOOMBERG VIA GETTY IMAGES

INVESTMENT OPPORTUNITIES: ENERGY

General Abdullah Nasser al-Suwaidi said on 20 April, as quoted by Reuters.

Companies have been asked to make large payments to enter the joint venture, with Total paying more than $2 billion for its 10 per cent stake. This comes at a time when many IOCs are cutting costs to adjust to a period of lower oil prices. In mid-2014, the Brent crude price began to drop after an almost four-year run, exceeding $100 a barrel. The price hit a low of $45 in January before rising and stabilising largely in a range of $60-65 a barrel.

Although Abu Dhabi must also try and find cuts to offset lower crude revenues, the emirate’s leadership has reaffirmed that it takes a long-term view of investment and would not change its overall development on power prices.

“The rising source of oil supplies, including from unconventional sources in North America, has changed the role of traditional oil suppliers,” Al-Suwaidi was quoted as saying on 20 April by UAE newspaper The National. “But it has not changed our goals: all of our committed projects are in progress and our production targets are the same.”

“ADNOC’s current crude oil production capacity is around three million bpd and is well on its way to achieve 3.5 million bpd by 2018,” he added.

ADNOC is seeking to cut costs in operating expenditure, however, and is aiming to reduce spending by 10-15 per cent to offset lower crude prices.

“When there is a drop in oil prices, of course you need to restructure the expenditure – but our projects,

40 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

nothing has been affected for this year or coming years,” Yasser Saeed al-Mazrouei, ADNOC’s Deputy Director of Exploration and Production, told a reporter at a press conference on 24 May, adding that there would be no job cuts.

Abu Dhabi has announced ambitious plans to invest more than $25 billion in the next five years to boost the production capacity of its offshore fields. This is likely to include further development of the Upper Zakum field to expand its capacity to one million bpd.

Qasem al-Kayoumi, Manager of ADNOC’s Offshore Division of the Exploration and Production Directorate, recently outlined that the company’s investment plan for offshore drilling activities was $2.5 billion per annum to drill 160 wells a year for the coming few years.

“It is a considerable increase – the number of rigs has built up considerably in offshore, it could be more than a 50 per cent increase,” Al-Kayoumi was quoted by Reuters as saying at a conference in the capital on 21 April.

Investment in gas According to MEED Projects estimates, the UAE has approximately $52 billion worth of oil and gas projects at the pre-execution stage; schemes that are either undergoing studies or design, or awaiting a final investment decision. The largest project anticipated is the $10 billion development of the onshore Bab sour gas field, which will see Abu

Oil pipelines and storage silos at Fujairah Port, where a major greenfield refinery is expected to be built

ADNOC

INVESTMENT OPPORTUNITIES: ENERGY

Dredging and land reclamation work is ongoing on the Upper Zakum artificial islands

Dhabi develop a second major sulphur-rich field after the pioneering Shah sour gas development that is currently ramping up capacity.

Elsewhere in the UAE, the emirate of Fujairah on the country’s Gulf of Oman coast continues to grow as a major oil and gas logistics hub. The port will receive a major greenfield refinery and the region’s largest liquefied natural gas (LNG) import and regasification facility.

Increasing LNG imports and developing high-cost and complex sour gas reservoirs are just two strategies the UAE Government is using to plug the increasing gas supply-demand deficit that emerged towards the end of the last decade. The UAE also imports significant volumes of gas through the undersea Dolphin Energy pipeline from Qatar, which could be increased if the two countries can agree on price for future sales.

Meanwhile, Abu Dhabi is looking at a number of ways of reducing gas consumption growth, including construction of the Barakah nuclear power plant and development of a solar power industry.

Abu Dhabi is looking at a number of ways of reducing gas consumption growth

ADNOC and Masdar, a subsidiary of the stateowned Mubadala Development Company, are also working on a project to capture carbon from heavy industry and inject the carbon dioxide into oil wells.

This will replace the natural gas currently pumped into reservoirs to increase oil production, freeing up the fuel for use in the power sector and in expanding non-oil industries.

Abu Dhabi’s leadership and ADNOC are committed to increasing and sustaining supply of oil over the long term, and significant investment is expected to continue both in upstream oilfield developments and downstream refining and petrochemicals projects.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 41

PROFILE

HE Eng Suhail Mohamed Faraj Al Mazrouei Minister of Energy

HE ENG SUHAIL MOHAMED FARAJ Al Mazrouei was appointed UAE Minister of Energy on 12 March 2013.

The Ministry’s main functions are to promote the sustainable development of the energy sector in the UAE, coordinate and represent petroleum affairs, minerals, electricity and water, and assure the proper and efficient use of the country’s resources to support the national economy.

The Ministry works with concerned entities to enact suitable laws and legislations to regulate the energy sector in accordance with international best practices.

This should lead to the proper integration of primary and complementary energy generation sources. The Ministry has set itself a target of achieving around 30 per cent of electricity generation from emission-free sources by 2020, of which 25 per cent is to come from nuclear power and the remainder from solar energy.

Al Mazrouei is also Chairman of the Board of Directors of the Federal Electricity and Water Authority, the Board of Directors of Mubadala Petroleum Co, and the Board of Directors of Emirates Liquified Gas Co. In addition, Al Mazrouei is a member of the Higher Advisory Committee of the Supreme Petroleum Council, the Board of Directors of the Petroleum Development Co and the Board of Directors of Dolphin Energy Co. He is both a member of the Board of Directors and Managing Director of the International Petroleum Investment Co. Having graduated in 1996 from the University of Tulsa in the United States with a Bachelor’s degree in petroleum, Al Mazrouei went on the gain excellent experience in the corporate administration of shipbuilding, defence systems, oil and gas services and real estate development. He has held multiple positions in government as well as in the private sector.

Al Mazrouei developed a career at the Abu Dhabi National Oil Company (ADNOC) over 10 years, after which he joined Mubadala Company in 2007.

At ADNOC, he rose through the ranks until he was appointed Director of Production and Engineering Facilities for all companies operating in the offshore area of Abu Dhabi. This involved the management and coordination of the production of more than one million barrels per day. Between 2004-05, Al Mazrouei went on secondment to Shell EP in the Netherlands, where he gained experience working on many international projects, including in Nigeria, the North Sea and Brunei.

During his career at Mubadala, he played a key role in expanding the company’s portfolio. In particular, he secured assets in Bahrain, Oman and Kazakhstan, which increased the value of Mubadala’s shares. He was responsible for new business development and investment in exploration and production in the Middle East and Africa.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 43

INVESTMENT OPPORTUNITIES: ENERGY

Powering up with nuclear energy

THE WORLD ENERGY COUNCIL estimates that the Gulf Cooperation Council (GCC) will require an additional 100 gigawatts (GW) of energy over the next decade, along with $50 billion worth of investment just to counter growing demand alone.

The issue of surging energy demand is hardly a new phenomenon, though the United Arab Emirates Government forecast back in 2008 that national electricity demand would grow from 15,000 megawatts (MW) in 2008 to exceed 40,000MW by 2020. Indeed, domestic energy demand is growing nine per cent annually, or three times the global average, according to Emirates Nuclear Energy Corporation (ENEC).

While burning fossil fuels has self-evidently been commercially viable historically, its environmental impact has moved up the political agenda in recent years. It also runs counter to the long-running narrative that the economy needs to be weaned off oil and gas by increasing the share of renewables – including ‘clean’ energy such as nuclear power – within the overall energy mix.

A policy white paper entitled Evaluation and Potential Development of Peaceful Nuclear Energy published by the UAE Government in 2008 said that implementation of a successful nuclear programme could reduce carbon dioxide emissions by up to 12 million tonnes annually by 2020. Reflecting this reality and having pored over the numbers the UAE became the first Gulf Arab state (in December 2009) to start building a nuclear power plant. A group led by Korea Electric Power Corporation (KEPCO) was awarded the contract to build four 1,400MW nuclear reactors, now known as Barakah nuclear power plant, at a total cost of $20 billion, to meet the surging demand for electricity.

44 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

The United States’ Westinghouse, now part of Toshiba, is a major subcontractor to the project. The consortium expects to earn another $20 billion by jointly operating the reactors for 60 years. In March 2010, KEPCO awarded a $5.6 billion construction contract to Hyundai and Samsung for the first plants. Factoring in infrastructure and financing, the total cost of the plant is eventually expected to be more than $30 billion.

At the same time as commissioning the Barakah plant, the UAE established the Emirates Nuclear Energy Corporation (ENEC), which is responsible for the deployment, ownership and operation of nuclear energy plants in the UAE. On track for a 2017 start Barakah is due to start delivering electricity to the UAE grid in 2017 and by 2020 is expected to provide almost one quarter of its output. Construction of unit one is now more than 81 per cent complete, while unit two is almost 60 per cent complete. Barakah 1 and 2 are scheduled to begin operating in 2017 and 2018, respectively. Units three and four, for which approvals were granted in October 2014, are due to become operational in 2019 and 2020.

Situated in Al Gharbia (also known as the Western Region), Barakah is ostensibly an Abu Dhabi project, but it will also be exporting power to neighbouring Dubai. Indeed, in November 2013, Dubai Electricity & Water Authority (DEWA) set a target of 12 per cent of Dubai’s electricity supply to be sourced from nuclear power by 2030 – principally from the Barakah plant.

In March 2015, meanwhile, ENEC submitted applications to the Federal Authority for Nuclear Regulation (FANR) for operating licences for units one and two of the Barakah project.

EMIRATES NUCLEAR ENERGY CORPORATION

Once completed, the Barakah nuclear power plant in Abu Dhabi will supply about a quarter of the United Arab Emirates’ electricity and save up to 12 million tonnes of greenhouse gas emissions annually

Work is under way on three of the four Koreandesigned reactors planned for Barakah nuclear power plant

INVESTMENT OPPORTUNITIES: ENERGY

As Mohamed Al Hammadi, Chief Executive Officer of ENEC, put it: “This is a very important stage in the development of the UAE peaceful nuclear energy programme. The successful and on-time submission of this operating licence application is a crucial milestone in our journey to becoming fully operational in 2017, and delivering on our mission to connect safe, clean and reliable nuclear energy to fuel the country’s continued growth.”

Al Hammadi added in subsequent remarks at the opening of Westinghouse’s new branch office in the UAE that the emirate’s decision to pursue peaceful nuclear energy was the opportunity for the development of a new industrial sector in the UAE; and that the presence of major industry players such as Westinghouse offered evidence “of the flourishing nuclear energy sector that is emerging here as a result of our programme”.

In the meantime, ENEC has also applied for two separate licences regarding the import, receipt and possession of radioactive and nuclear materials. These licenses are expected to be signed off well in advance of the first fuel load of the nuclear energy programme, due to take place in 2016.

Barakah is due to start delivering electricity in 2017 This comes after $3 billion in contracts were awarded in 2012 to six foreign firms, including global mining giant Rio Tinto and France’s Areva – the world’s biggest manufacturer of nuclear power plants – to supply fuel for the Barakah project.

The contracted fuel will enable the plant to generate up to 450 million megawatt hours over the first 15 years, said ENEC. The company has also indicated that it “expects to return to the market at various times to take advantage of favourable market conditions and strengthen its security of supply position.”

According to the Al Gharbia Investment Roadmap, which was established by the Western Region Development Council, the emerging nuclear energy sector will ultimately contribute AED62 billion ($17 billion) in capital to that municipality alone.

In the long term, Barakah will most likely prove to be money well spent.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 45

Energy Through Innovation

by Masdar Clean Energy

What is Masdar?

Masdar is a renewable energy company based in Abu Dhabi, United Arab Emirates. Masdar has a mission to invest, incubate and advance the establishment of a clean energy industry in Abu Dhabi and around the world.

www.masdar.ae

Masdar Clean Energy has 1.5 gigawatt of clean energy capacity deployed, or under development globally.

Improving Lives Through Clean Innovation by Masdar Special Projects Masdar Special Projects operates in remote areas addressing pressing and unique energy and technology challenges.

London Array generates up to 630 megawatts of clean energy, powers more than half a million homes and reduces 925,000 tonnes of carbon dioxide emissions per year.

Samoa’s first wind farm has two 55-metre-high turbines that can pivot at the base to be lowered and locked in place in less than an hour. This unique collapsible design helps to avoid damage from the region’s cyclones.

Shams 1, one of the world’s largest Concentrated Solar Power (CSP) plants, incorporates the latest in parabolic trough technology and features more than 258,000 mirrors, mounted on 76 tracking parabolic trough collectors.

The renewable energy desalination project uses new technologies to increase the efficiency and performance of the desalination process through technology innovation.

Pioneering Renewable Energy Innovation

Innovating Sustainable Urban Growth by Masdar City

Masdar City is pioneering a “greenprint” for how future cities are built.

Advancing the Industry Through Research and Innovation by Masdar Institute

Recognising Clean Energy Innovators by the Zayed Future Energy Prize

An independent, graduate-level research university dedicated to advancing renewable energy and sustainable technologies.

The prize recognises pioneers developing innovative solutions for the future of energy and sustainable development.

The Siemens Middle East Headquarters in Masdar City is a LEED Platinum Certified building that achieves 58% water demand reduction and 46% energy demand reduction under LEED rating.

Dr. Faisal Al Marzooqi’s desalination membrane, developed using nanotechnology, is currently pending patent status from the US Patents Office. The membrane will improve capacitive deionization as a desalination technique.

Through these annual awards, the UAE honours the nation’s Founding Father, Sheikh Zayed bin Sultan Al Nahyan and his legacy of environmental stewardship.

The IRENA Headquarters in Masdar City requires 54% less water and 42% less energy than typical buildings in Abu Dhabi.

Alberto Crespo Iniesta, a Masdar Institute graduate, tested desert sand as a CSP energy storage medium, for constant and reliable solar energy supply.

An invention disclosure based on this research has been filed.

Prize winners have touched the lives of more than 150 million people by addressing the challenges of energy access, energy security and the environment.

INVESTMENT OPPORTUNITIES: ENERGY

Leading the region in renewables Beyond the continued development of large renewable energy projects, the United Arab Emirates is heavily investing in innovative clean energy technology to cut costs and reduce carbon dioxide emissions

48 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

of gross domestic product (GDP) from 0.5 per cent, lifting non-oil real GDP growth to five per cent from 3.5 per cent, and ensuring that the UAE is ranked among the top 10 countries as measured by the Global Innovation Index and the Global Entrepreneurship and Development Index.

Global centre for renewable energy R&D Other targets include raising the share of ‘knowledge workers’ in the labour force to 40 per cent from the existing base of 22.76 per cent, and increasing the contribution of small and medium-sized enterprises (SMEs) to non-oil GDP to 70 per cent.

In its recent report UAE: Hub Of the Next Energy Revolution? the non-profit Climate Group, citing International Energy Agency (IEA) future energy scenarios, noted that solar energy alone could satisfy up to one-third of global power demand from 2060 onwards. In 2014, global investment in solar energy was estimated at $150 billion, according to Bloomberg New Energy Finance.

In the UAE’s case, relatively modest targets to increase renewable energy to meet seven per cent of total energy needs in major cities such as Abu Dhabi and Dubai by 2020, and 15 per cent by 2030, belie the fact that the UAE is already leading the way in the Gulf Cooperation Council (GCC) and Middle East and North Africa (MENA) regions when it comes to installed capacity. Latest comparable figures from 2012 across the region showed it having more than three times the installed solar-power-generating capacity of neighbouring Saudi Arabia, for example.

At a two-day workshop last November organised by the Ministry of Environment and Water, the Ministry of Foreign Affairs, the Prime Minister’s Office, and the

Shams 1 was expected to generate about 193,000MWh of power in 2014, but it actually generated 215,000MWh, representing a 12 per cent increase

MASDAR

WHEN HIS HIGHNESS SHEIKH Mohammed bin Rashid Al Maktoum, United Arab Emirates Vice President and Prime Minister and Ruler of Dubai, announced a National Innovation Strategy in October 2014, it reaffirmed the UAE’s aim of being among the world’s most innovative countries by 2021. The UAE Federal Cabinet of Ministers subsequently named 2015 the ‘Year of Innovation’.

The National Innovation Strategy is designed to more easily facilitate the UAE’s Vision 2021 National Agenda, stimulating innovation in seven designated sectors: renewable energy, transport, education, health, technology, water and space.

The first phase comprises 30 national initiatives (with a maximum three-year target set) including legislation, private-sector incentives, international research collaboration, investment in specialised skills and a more general drive for innovation within government itself. To measure overall progress, the strategy will employ 16 indicators, including government-sector measures assessing the percentage of innovative ideas and the proportion of budget allocated to innovation. Private-sector indicators will comprise research and development (R&D) investment and the knowledge profile of the workforce.

Recognising the importance of renewable energy within the overall energy mix as the country continues to branch out from fossil fuels, the strategy will establish a new organisation to facilitate decentralised power-generation projects, such as small-scale solar installations. It will also encourage innovation related to research in clean technology generally.

Principal objectives of Vision 2021, meanwhile, include increasing R&D expenditure to 1.5 per cent

INVESTMENT OPPORTUNITIES: ENERGY

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 49

IAIN MASTERTON/ALAMY STOCK PHOTO

INVESTMENT OPPORTUNITIES: ENERGY

Global Green Growth Institute, participants heard that the UAE would create 160,000 jobs by 2030 as part of its ‘green growth’ strategy. Equally important, it could reap annual cost savings for the economy of $1.9 billion by 2030.

A balanced energy portfolio Central to the UAE’s long-term renewables strategy is Masdar, also known as the Abu Dhabi Future Energy Company. Tasked with investing (including R&D and financing) in renewable energy and clean technology – both inside and outside Abu Dhabi – it has three business units, including Masdar Clean Energy, Masdar City, and Masdar Capital. It is also a subsidiary of the Mubadala Development Company, an investment vehicle of the Government of Abu Dhabi.

Evidence of Masdar’s intent has already been provided by Shams 1, a 100 megawatt (MW) solar thermal plant, and the world’s largest concentrated solar power plant (CSP) in operation, which was launched in March 2013. The $600 million project – a joint venture between Masdar, France’s Total and Spain’s Abengoa Solar – took three years to build,

50 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

will power 20,000 homes in the UAE, and is forecast to displace approximately 175,000 tonnes of carbon dioxide annually.

Meanwhile, the much-lauded Masdar City development, which is being constructed by Abu Dhabi International Airport and scheduled for completion in 2016, will eventually house 40,000 people, with an additional 50,000 commuting in every day. If the city is being built to better understand options available for renewables and other clean technologies, it is also examining the possibility of renewables powering desalination plants. In a region where increasing demands are being placed on freshwater resources, coupled with ongoing climate change, the concept is a win-win, especially if commercially viable desalination facilities throughout the country by 2020 become realisable.

The city also hosts the Masdar Institute of Science and Technology – a graduate-level research university that focuses on alternative energy, environmental sustainability and clean technology and whose aim, through a range of collaborative arrangements, is to find cutting-edge solutions.

The wind tower in Masdar City provides cool air to the courtyard of the Institute of Science and Technology

INVESTMENT OPPORTUNITIES: ENERGY

KAMRAN JEBREILI/AP/PRESS ASSOCIATION IMAGES

The UAE’s first eco-friendly mosque opened in Dubai, in 2014.

It integrates the latest green technologies and its exterior lighting poles are fitted with solar panels

Another major project in the UAE is the Mohammed bin Rashid Al Maktoum Solar Park in Dubai. Owned by Dubai Electricity and Water Authority (DEWA) – the state-run power company – the park is one of the largest renewable energy projects in the region. The 13MW first phase, constructed by US panel-manufacturing company First Solar and covering an area of 238,764 square metres, became operational in 2013. First Solar has since been subcontracted by the park’s operators, Saudi Arabia’s ACWA Power and Spain’s TSK, to deliver panels for the 200MW second phase, which is due to become operational by 2017.

Cutting-edge technology A third project with a capacity of 800MW has also been announced, which will eventually lead to the park having a total power generation capacity of 3,000MW by 2030. The first phase generates approximately 24 million kilowatt hours (kWh) of electricity per year on average, displacing approximately 15,000 metric tonnes of carbon dioxide annually – equivalent to taking approximately 2,000 cars off the streets each year. In addition to generating electricity using solar photovoltaic (PV) panels, the park contains a solar testing facility to study and evaluate the performance, long-term stability and reliability of the panels under actual local weather conditions.

In the corporate sphere, leading local players such as telecommunications company Etisalat are investing heavily in renewables. Meanwhile, Dubai Airports and DEWA have entered into a partnership to build 100 rooftop solar panels that will supply 48.8 megawatt hours (MWh) – about two-thirds of the building’s power – to the airport annually.

Technological advances have seen solar-panel costs fall 60 per cent over the past four years

Yet innovation stretches beyond investing for a renewables future and looking for cutting-edge solutions that can reap cost savings. Indeed, the Kromatix coloured solar panel technology – produced locally by Dubai Investments subsidiary Emirates Insolaire in a joint venture with SwissINSO Holding (which patented the technology) – addresses the issue of basic aesthetics. The technology allows for the improved (and more aesthetically pleasing to many) architectural design of buildings by better integrating solar panels into them.

Innovation at the core However, irrespective of cutting-edge solutions or building-design aesthetics, the key word remains ‘innovation’. 2015: Year of Innovation is a reminder of how far the UAE has come in terms of boosting renewables within the overall energy mix, and of how far its ambitions are likely to take it. Given technological advances that have seen solar-panel costs fall 60 per cent over the past four years, and the UAE’s geographical position in a solar ‘hotspot’, the country is well placed to take advantage of the evolving technologies.

Promoting innovation can only encourage this.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 51

DUBAI INVESTMENTS PERSPECTIVE

Driving the solar energy revolution It is a known fact that solar energy is the cleanest and most abundant renewable energy source available on earth. The solar energy that hits the earth every second is equivalent to four trillion 100-watt light bulbs, yet it only accounts for 1% of global energy consumption.

Understandably, there are no doubts on the potential of solar power, whether it is harnessed for generating electricity or other industrial uses. With such potential on offer, it is natural for companies across the world to jump on the solar energy bandwagon, hoping to add to their bottom lines and secure a more sustainable future.

However, one innovation from the UAE has completely revolutionised the solar industry. Dubai Investments, one of the leading investment companies in the Gulf and Middle East, has carved a niche for itself by launching a number of innovative concepts in the 20 years since its inception,

and took a massive leap with the launch of the world’s first coloured solar glass panels.

Technological breakthrough The coloured solar panels, built with KromatixTM technology and produced by Dubai Investments’ subsidiary Emirates

Insolaire LLC, a joint venture with SwissINSO Holding, allows solar solutions to be completely integrated into the architectural design of all types of buildings across the world for the very first time, opening up a whole new world of opportunities in terms of the aesthetic design of buildings.

DUBAI INVESTMENTS PERSPECTIVE

“Emirates Insolaire made history with the successful installation of the world’s first coloured solar panels”

KromatixTM solar glass panels are now available in various tuneable colours and no longer intrude on the architecture of a structure. Instead, they can be harmoniously integrated into buildings’ envelopes, roofs, facades and balconies, for example. The panels offer the only attractive and highly efficient alternative to the black and dark-blue glass panels currently being used. The technology has been developed in close collaboration with the Swiss Federal Institute of Technology (EPFL).

In May 2015, Emirates Insolaire made history with the successful installation of the world’s first coloured solar panels on a building facade in Lausanne, Switzerland. Two other projects in Basel, Austria and Switzerland, have also been completed, and the company continues to receive enquiries for its coloured and sustainable solar panels, photovoltaic modules and solar thermal collectors

from across the globe, be it from the UAE, Qatar, Saudi Arabia, Kuwait, Egypt, Bahrain, Lebanon, Europe, Asia, the United States and Brazil, among others.

Powering new markets Globally, the photovoltaic market has grown 40% year on year, and the number of installations foreseen for 2015 is 160 gigawatts – approximately 800 million square-metres of glass. The share of building integrated photovoltaics for rooftops and facades, one of Emirates Insolaire’s specialities, is rising rapidly.

Based on current projects, demand and the quantity of enquiries from around the world, Emirates Insolaire expects sales of more than 50,000 square metres for coloured solar panels in 2015 alone. Each panel can generate above 150W of electric power per square meter on roofs, or above 110W per square meter on facades.

With this innovation, Dubai Investments has once again challenged the norms.

What was previously rejected for aesthetic reasons has become a reality; Emirates Insolaire projects in Switzerland and Austria have demonstrated that it is possible to install energy-saving and attractive Emirates Insolaire panels on every house and building, to the relief of our planet as well as the energy user.

It goes without saying that the future for coloured solar panels is bright.

Emirates Insolaire Mr Rafic Hanbali / Samir Elias T: +971 4 8122734 E: info@emirates-insolaire.com www.emirates-insolaire.com

INVESTMENT OPPORTUNITIES: FINANCE

New banking growth avenues Despite the fall in oil prices, the United Arab Emirates’ banking sector expects a profitable 2015, with the country’s top banks showing a strong first-quarter performance

IN SEPTEMBER 2014, HE SULTAN BIN Nasser Al Suwaidi stepped down from his position as Governor of the Central Bank of the United Arab Emirates, a position in which he was held in high esteem by the United Arab Emirates’ financial community.

He was widely credited with strengthening the adherence of UAE banks to new global banking regulations, such as Basel III; limiting the risks lenders can take, enforcing limits on personal lending and on the amount local lenders can offer government-related firms; and improving consumer protection laws, for example, through introducing caps on retail banking fees, a PwC report said.

His replacement, HE Mubarak Rashed Al Mansoori, was appointed as the new governor for a four-year term, and lost no time in meeting with the President of the Federal Reserve Bank of New York to discuss facilitating new relationships with correspondent banks in the United States and continuing the dual coordination of the annual training for bank examiners in the region, the report said.

54 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

He has also denied rumours that he was considering the option of discontinuing the policy of pegging the value of the dirham to the US dollar.

“Though UAE banks are preparing to announce increased earnings and fewer provisions, the new governor will have challenges ahead. Continuous monitoring and supervision will be key factors to manage the risk of the UAE banking industry,” the report added.

Challenges would include increased demand for financing government-related entities involved in large infrastructure projects for the World Expo 2020, and a coming debate in the Federal National Council on the UAE’s banking system. “[The] banking system debate is expected to cover banking legislation and a call for legal reforms, specifically covering protection for bank customers,” PwC posited in the report.

As the Gulf Cooperation Council’s (GCC) secondlargest economy, the UAE has tended to fare very well in financial-sector comparisons with regional heavyweight Saudi Arabia.

National Bank of Abu Dhabi’s growth strategy envisions expanding its wholesale banking network across eight banking centres along the West-East economic corridor

INVESTMENT OPPORTUNITIES: FINANCE

Top five UAE banks’ metrics for 1Q 2015 Operating income $ million Emirates NBD National Bank of Abu Dhabi

Net profit $ million

Net loans $ billion

Total deposits $ billion

1,047

p15%

182

p60%

67.8

p1.2%

34.9

p0.8%

731

p7%

231

p1%

54.5

p3.0%

24.0

p2.7%

First Gulf Bank

426

p3%

340

p6%

38.9

p2.2%

28.3

p1.2%

Abu Dhabi Commercial Bank

628

p15%

455

p13%

38.4

p0.4%

38.9

p2.0%

Dubai Islamic Bank

406

p20%

387

p34%

22.3

p9.4%

68.1

p13.0%

Total

3,835

1,983

241.5

264.9

ISTOCK IMAGES

Official exchange rate: AED3.6725 = $1.

Source: Emirates NBD

“The UAE banking sector is the largest by assets the period. Operating income of the top six UAE banks in the GCC. The sector is dominated by 23 local totalled $3.84 billion, with net income at $1.98 billion banks, which account for more than 75 per cent for the quarter. Abu Dhabi Commercial Bank was the of banking assets; 28 foreign banks account for UAE’s most profitable bank in the period with net the remainder,” said an Emirates NBD Investor income of $455 million.

Presentation published in June.

The bank said gross loans in the UAE banking sector “In terms of the total assets, Emirates NBD, totalled $379.6 billion, deposits totalled $389.4 billion National Bank of Abu Dhabi and Abu Dhabi and assets totalled $635.8 billion, citing UAE Central Commercial Bank are the top three banks operating Bank statistics from February 2015, and its own in UAE. There has been a decline in the rate of growth data as of the first quarter of 2015. The total assets of non-performing loans combined with improved figure here is larger than that given in the Bank of liquidity and a surge in lending, which has helped Sharjah’s data, and includes, in addition, the assets most UAE banks to improve their profitability,” of foreign banks based in the UAE. UAE assets were said a report entitled Doing Business in the UAE the largest in the GCC, higher than those of Saudi by accountants PKF, published earlier this year.

Arabia, which has an economy twice the size of the According to information collated by Bank UAE’s, at $578 billion. of Sharjah, the total assets of UAE domestic banks UAE banks also did well against their Gulf peers. topped the half-trillion-dollar mark, at $518.2 billion, Emirates NBD said the most profitable bank in the for the first quarter ever in the first quarter of GCC in 2014 was Qatar National Bank, with net 2015, a rise of 3.9 per cent on the figure for income of $2.9 billion, a rise of 11 per cent. the full year 2014. In the six years to the This was followed by Saudi Arabia’s end of 2014, UAE bank assets have been National Commercial Bank, with growing at a compound annual growth $2.3 billion (12 per cent), and Al Rajhi local banks rate (CAGR) of 8.3 per cent.

Bank, with $1.8 billion (eight per cent); dominate the Banking sector liquidity remains First Gulf Bank, $1.6 billion (20 per banking sector strong despite the decline in oil prices, cent); National Bank of Abu Dhabi, with the loan-to-deposit ratio standing at $1.5 billion (18 per cent); and Emirates 97.5 per cent as of February 2015, Emirates NBD, $1.4 billion (all UAE, 58 per cent).

NBD explained. “Money supply growth remains As outlined above, the focus of the UAE robust at 8.5 per cent year-on-year to February. Loan Central Bank has been to dampen speculative bubbles growth was steady around the eight per cent mark, at a time when markets could all too easily run away while bank deposit growth stayed around the 10 per with themselves. cent mark over the three months to February 2015.”

The retail banking market was kept from Information provided by Emirates NBD (see table overheating in late 2013, when the Central Bank above) shows that the top six UAE banks had a made first-time expatriate homebuyers eligible successful first quarter. Emirates NBD’s net profit for 75 per cent loan-to-value (LTV) for a property margin was 60 per cent in the first quarter, while purchase below AED5 million ($1.36 million) and Mashreqbank’s total deposits jumped 13 per cent in 65 per cent LTV for a property above AED5 million.

23

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 55

FWU GROUP

HIGHTECH FINANCIAL ENGINEERING ®

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We have two key sales channels for our retail business: In Europe we sell our products through classic brokerage, and for more than 13 years now we have successfully provided private label bancassurance products.

Our bancassurance model focuses on the strategy that the banks can offer our white label products under their own branding. Our insurance product solutions offer a bespoke risk underwriting solution whereby no customer is rejected.

Our USP remains our groundbreaking bancassurance IT system, which allows sales and administration using desktop and mobile (tablet based) solutions. With such systems and

FWU AG Boschetsrieder Straße 67 D-81379 München Telefon: +49.89.74 85 88 0 e-Mail: premium@fwugroup.com

processes, we are able to offer standardized and yet easily adaptable tool sets, to meet banks‘ internal requirements.

We have used the efficiency of our IT systems and our knowledge of the insurance business to develop the transaction business. With it, FWU Group purchases policy portfolios and integrates them intelligently into the product range of our life insurance subsidiary ATLANTICLUX in Luxembourg. FWU Group disposes over the know-how, IT infrastructure and years of experience in the finance business that this demands.

Members of FWU Group: FWU AG (Munich) FWU Global Takaful Solutions (Dubai) ATLANTICLUX Lebensversicherung S.A. (Luxembourg) PREMIUM SELECT LUX S.A. (Luxembourg)

www.fwugroup.com

FWU Global Takaful Solutions Al Fattan Currency Tower 2 DIFC PO Box 482026, Dubai Telephone: +97.144175500 e-Mail: premium@fwugroup.com

IAIN MASTERTON/ALAMY STOCK PHOTO

INVESTMENT OPPORTUNITIES: FINANCE

The apartment sector is faring relatively better than the villa sector in the UAE, with affordability being the main constraint

Bank sources said most of the activity was in the apartment market, as villa prices were beyond the reach of most first-time buyers, according to news reports.

“Mortgage caps and higher transaction fees have helped to deter speculation and cool the market, while the relative strength of the US dollar has made property prices more expensive for foreign buyers,” said Shayne Nelson, Group Chief Executive Officer of Emirates NBD, in April.

First Gulf Bank loan book breakdown by sector Retail loans and cards $8.94bn

Retail mortgages $0.78bn Transportation $0.78bn Personal – others $1.17bn Construction $1.56bn Manufacturing $1.94bn Trading $2.33bn

Public sector $3.11bn

Total: $38.88bn

Services $6.22bn

Financial services $3.11bn Real estate $3.89bn Retail mortgages – NHL* $4.67bn

*National Housing Loan Source: First Gulf Bank

A key focus for the banking sector has been the improvement of customer relationship management (CRM) systems. A study published earlier this year on the impact of CRM on profitability showed that increasing competition in the banking sector underlined the importance of strong CRM procedures.

“The presence of so many banks in the market ensures that the level of competition remains considerably higher than many other service industries. Any bank that wants to retain customers in the long run will have to constantly outperform competitors and also needs to maintain customer satisfaction,” it said.

To obtain an idea about the breakdown of a typical UAE bank in terms of the composition of its loan book, data provided by First Gulf Bank (FGB) of Abu Dhabi (see left) shows that retail, services and construction are among the top priorities of UAE banks, with corporate banking and trade finance more niche products. FGB had loans totalling $38.9 billion out to customers as at the end of March 2015.

FGB’s three core businesses, Wholesale and International Banking Group, Consumer Banking Group, and Treasury & Global Markets Group, contributed 89 per cent of Group total assets as of March 2015, the bank said.

National Bank of Abu Dhabi said its international focus was on “banking the west-east corridor”. It has identified several countries in Africa, the Middle East, India, Asia and China that are likely to acquire ‘megacities’, defined as cities with populations in excess of 10 million inhabitants, by 2025. “We want to bank customers located outside of the corridor who trade and invest inside the corridor,” it said.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 57

INVESTMENT OPPORTUNITIES: FINANCE

UAE: a centre for financial services With the Dubai International Financial Centre set on ambitious expansion and Abu Dhabi launching its own financial centre, the United Arab Emirates’ financial services sector is set for a new era of growth

58 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

members of the International Organization of Securities Commissions (IOSCO), the UAE’s regulators, have been keen to comply with the spirit and letter of the law of various international agencies. Established in 2007, the Abu Dhabi-based Union of Arab Securities Authorities (UASA) is an IOSCO associate member.

New and expanding services Financial services have been regarded by the UAE authorities as equally important. The Dubai International Financial Centre (DIFC), which has ambitions to become the largest financial hub in the region for Islamic bonds, also known as sukuk, was set up in 2004. A new financial services free zone, the Abu Dhabi Global Market (ADGM), officially opened in October 2015.

The DIFC plays host to 22 of the world’s top 30 banks, 11 of the world’s top 20 largest money managers, six of the world’s 10 largest insurance companies and seven of the top 10 global law firms. The 330-room Ritz-Carlton DIFC is the precinct’s biggest hotel.

According to recent official announcements, the DIFC intends to triple its size in the next decade, increasing the number of in-house financial firms to 1,000, and the professional workforce to 50,000, and growing the contribution of the financial services industry to 18 per cent of the emirate’s GDP. “Going forward, we aim to enhance our services and product offerings towards boosting business and establishing new benchmarks,” news reports quoted HE Essa Kazim, Governor of DIFC and Chairman of DIFC Authority, as saying. “In line with the Dubai Plan 2021, DIFC’s strategy identifies the key engines of growth, focusing on new solutions and structural

Dubai International Financial Centre is aiming to triple in size by 2024, which will require around 11-12 per cent growth each year

DIFC AUTHORITY

ANYONE WHO HAS HAD ANY dealings with the Abu Dhabi Investment Authority (ADIA), cited in a 2013 KPMG study as being the world’s second-largest sovereign wealth fund, with assets under management of $627 billion, will know that wealth management is not something that is new in the United Arab Emirates. Founded in 1976, and smaller only than Norway’s Government Pension Fund, ADIA is a company to whose door global fund management advisers constantly flock.

The UAE’s experiment in domestic capital markets – which were soon thrown open to international investors – came later. The Abu Dhabi Securities Exchange (ADX or ADSE), the Dubai Financial Market (DFM) and the Emirates Securities and Commodities Authority (SCA) were all founded in 2000.

The ADX and the DFM enjoyed great success in the boom years to 2008, before succumbing to the global financial crisis in 2009. However, there are signs that the UAE is turning the page, with the FTSE Nasdaq Dubai UAE 20 Index reaching a seven-year peak of 4,761.08 on 18 September 2014. In mid June 2015, it stood at 3,959.93. The index was at 4,328.54 in the week of 28 April 2008.

The Nasdaq Dubai, successor to the Dubai International Financial Exchange, came into being in 2005, and its trading platform has been merged with the DFM’s. With a combined market capitalisation of $236 billion on 17 June, according to data provider Zawya, the UAE’s exchanges have been valuable crucibles of wealth creation.

With no fewer than four exchanges today – the ADX, the DFM, Dubai Gold and Commodities Exchange (DGCX) and the Nasdaq Dubai – affiliate

INVESTMENT OPPORTUNITIES: FINANCE

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 59

INVESTMENT OPPORTUNITIES: FINANCE

reforms. The Centre is critically important to the emirate’s ability to finance growth and create jobs by attracting global investors.”

ADGM aims to be a broad-based international financial centre for local, regional and international institutions. Sowwah Square has been renamed Abu Dhabi Global Market Square and observers say that the precinct’s size will be more than double that of the DIFC. “Abu Dhabi Global Market is a key pillar of Abu Dhabi’s Economic Vision [2030], acting as a catalyst for the growth of its dynamic financial services sector in the UAE,” says Ahmed Ali Al Sayegh, Chairman of ADGM. “At the heart of ADGM is a premise of long-term partnership and collaboration – locally, regionally and internationally.

“ADGM will employ the inherent strengths of the Abu Dhabi economy to become an international financial centre that, in time, will rank alongside the world’s leading centres, such as Shanghai, Singapore, London and New York, operating in partnership with them.”

Mergers, deals and speculation Over the past 15 years, a series of mergers, alliances and deals have allowed the financial services industry in the UAE to raise its international profile, spurring the notion that Dubai’s ultimate goal is to be the biggest global exchange between Frankfurt and Singapore. In turn, the potential merger of all of the UAE’s major exchanges into a single platform has constantly elicited flurries of speculation in the press, although there are signs that Abu Dhabi, the UAE’s capital, feels no need to be seen as subordinating its interests or status to Dubai.

“ADSE is in alliance with New York Stock Exchange Euronext, itself party owned by Qatar Stock Exchange, which also has a stake in London Stock Exchange, in turn linked to Dubai’s stock exchange. Borse Dubai owns both the DFM and Nasdaq Dubai, linked to NYSE Euronext. Both the federal SCA and ADSE regulate stock markets in Abu Dhabi,” writes Linda Low in her 2012 work, Abu Dhabi’s Vision 2030: An Ongoing Journey of Economic Development.

“The full-scale integration of DFM and Nasdaq Dubai creates an equity trading platform. Since the global financial crisis, size and competitiveness mean more than the sum of individual parts. The ADSE’s apparent support of a possible merger with Dubai’s

ABU DHABI GLOBAL MARKET

The DIFC plays host to 22 of the world’s top 30 banks

exchange for the same multiplier effects has not gone further. The Gulf stock exchanges have generally bypassed consolidation as a trend started in the West as beneficial for investors, issuers and regulators.”

The latest bout of speculation regarding a merger of Abu Dhabi and Dubai exchanges took place in January, when Abu Dhabi daily The National said that HE Sultan bin Saeed Al Mansouri, the Minister of Economy and SCA Chairman, had invited speculation that talks over a potential tie-up of the bourses [were] still possible when he spoke to the Federal National Council (FNC) of “if there would be one market or two”.

Abdullah Al Turifi, the Chief Executive Officer of the SCA, added that it was up to the stock exchanges to decide, the paper said. “They each have their own board, with their own interest and strategies, and it’s up to them to decide,” Al Turifi was quoted as saying on the sidelines of the same FNC session.

Certainly, top of the agenda is the need to move several narrowly based but very successful family concerns onto a broader footing with public listings.

In March, Moody’s Investor Services published a report entitled Challenges in Rating Family-Owned Corporates in the GCC, calling on family-owned conglomerates in the Gulf Cooperation Council (GCC) to reform so that it would easier to rate them. It is often the case that structural problems in GCC firms mean that they are given lower credit ratings than their performances would suggest they deserved, causing difficulties in raising debt and often leading to overreliance on banking funding at more expensive rates.

“The SCA has positively managed to upgrade market trading volume and capitalisation by urging and encouraging family-owned business to turn into public joint-stock companies,” said Al Turifi.

“Moreover, laying out the requirements to be followed for going into initial public offering paved the way for an increase in the number of the public companies listed in the capital markets.”

Abu Dhabi Global Market, the city’s financial free zone, is now ready to accept applications from potential member firms

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Innovation in Islamic banking The United Arab Emirates is set to become the global hub for Islamic finance and assets, driven by innovative banking products and service developments, increased sukuk issuance and a growing customer base

THE UNITED ARAB EMIRATES’ Islamic finance industry is in an exciting phase, experiencing strong growth as Islamic financial institutions build their franchises through organic growth and introduce innovative products to the market. In 2014, and to date in 2015, key Islamic finance segments including Islamic banking and capital markets have continued to support economic growth in the UAE, the wider Gulf Cooperation Council (GCC) and globally by providing Shariah-compliant financing. The UAE has benefited significantly from the increasing availability and diversity of Islamic financial solutions to support sovereign, corporate and household activity.

The UAE banking sector is the largest by assets in the GCC, accounting for around 38 per cent of the GCC total. The share of Islamic banking assets to the total financial sector is approximately 20 per cent in the UAE. Although growing above the rate of conventional banking assets, it still has significant scope to penetrate further. For example, the share of Islamic banking assets relative to total banking assets is above 50 per cent in Saudi Arabia, 45 per cent in Kuwait and 25 per cent in Qatar.

The UAE has emerged as a key player in the growth of Islamic banking assets, with solid growth expected over the next few years. Al Hilal Bank, a 100 per cent Abu Dhabi Government-owned Islamic bank, is optimistic that robust growth will continue in the UAE and the bank will see strong growth as it aligns its strategy with the Abu Dhabi Economic Vision 2030.

Customised products and services Over the past seven years, Al Hilal Bank has continued on the path of steady growth. In 2014, its customer base rose by 17 per cent to surpass the 100,000 mark.

Last year also saw Al Hilal become the first bank in the UAE to support the use of Emirates identity cards for ATM transactions in the country. Moreover, the

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bank was selected as a World Economic Forum (WEF) Global Growth Company (GGC).

The latest product offerings of Al Hilal Bank include Tharwa, a specialised banking segment for its affluent clients, and Laha, the UAE’s first scented credit card. Al Hilal Bank is about to launch a card builder website – an online platform that allows customers to customise the credit card benefits they wish to avail as well as the design of the card itself.

It is also in the final stages of launching a loyalty programme for its banking customers.

Al Hilal Bank has recently added voice recognition to its telephone banking, adding an extra layer of security and allowing customers to use their voice for identification, which speeds up their phone banking transactions. Internet banking, mobile banking, SMS banking and bill payments through ATMs are also available to customers.

Dubai Islamic Bank’s (DIB) principal plan for 2015 and 2016 is to grow its core businesses of consumer, corporate, treasury and commercial real estate across the UAE. DIB is also aiming to expand its existing geographic footprint through a variety of options, including acquisitions, establishing new subsidiaries and branches, and pursuing strategic partnerships and cooperation agreements with local partners in Asia, Africa and the Gulf.

According to Dr Adnan Chilwan, Chief Executive Officer, DIB’s focus is on innovation and commitment to its roots as a Shariah-compliant organisation. It has a vast and growing retail customer base and it has seen advancement not just in its product offerings, but also in its service quality via its SMART BANK platform. DIB is continually investing in technology and infrastructure backed up by a renewed sales focus. The bank has seen a strong start to 2015, with strong organic growth supported by its SMART banking campaign.

Abu Dhabi Islamic Bank (ADIB) is positive about 2015, following a good year in 2014. Gross customer

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Al Hilal was the first bank to allow its customers to use their Emirates ID cards to complete banking transactions

financing assets grew by 18.2 per cent driven by strong performance from wholesale banking (up 21 per cent) and retail banking (up 16 per cent). With the growing acceptance of Islamic banking worldwide, ADIB is increasingly turning its attention to replicating its business model through geographic expansion. ADIB’s international expansion began in Egypt with the acquisition via a joint venture structure of National Bank of Development, followed by the establishment of operations in Iraq, the United Kingdom, Saudi Arabia, Qatar and Sudan.

Islamic banking penetration ADIB is the first bank in the UAE to offer VISA’s ‘shipnow2.me’ service, which allows its customers to make online purchases in the United States and arrange delivery to the UAE. Philip King, Head of Retail, said that e-commerce was “growing across the UAE and GCC. People in the UAE are doing more of their shopping online and recent studies predict that e-commerce in [the] MENA region will grow to $200 billion by 2020.”

According to a study by Frost & Sullivan, the UAE is expected to be a key market for e-commerce with the

The UAE has the highest level of computer ownership in the Middle East at 76 per cent

highest total market share of 53 per cent across GCC countries. The growth will come from the fact that the UAE has the highest level of computer ownership in the Middle East at 76 per cent, the highest level of internet penetration at 78 per cent, and the highest per capita online retail spending on a par with the US and the European Union.

Emirates Islamic Bank’s Nasdaq Dubai Murabaha platform is a visionary initiative by Nasdaq Dubai and Emirates Islamic’s subsidiary Emirates Islamic Financial Brokerage (EIFB). The platform provides a unique solution for Emirates Islamic and other financial institutions and their customers to conduct Islamic financing transactions in a streamlined, flexible and transparent manner. In less than a year since its launch, the platform has achieved rapid growth, with

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UAE Islamic capital markets at the forefront The UAE and GCC region remain at the centre of sukuk issuance. Sovereign and corporate funding needs to continue to be serviced by Islamic finance, through both the banking industry and capital markets.

The GCC financial sector, in efforts to comply with Basel III standards, has issued several Basel III-compliant sukuks over the last year or so, including a perpetual sukuk by the UAE’s Al Hilal Bank. Al Hilal Bank successfully priced $500 million perpetual additional tier one sukuk certificates in 2014. The transaction drew demand worth $4.5 billion.

UAE capital markets are benefiting from the increasing availability and diversity of Islamic financial solutions and products pertaining to sovereign, corporate and household activity. In order to support expansion, Islamic banks are raising capital.

In January 2015, DIB successfully priced a $1 billion tier one capital-eligible issuance with a perpetual maturity. Given the significant growth in core business and the fact that this momentum is expected to continue for 2015, DIB wanted to tap the market for additional tier one capital.

ADIB has been active in many landmark sukuk deals. In December 2014, ADIB finalised a AED1 billion finance facility for Baniyas Investment & Development Company (BIDC). The transaction will refinance BIDC’s existing conventional financing, which was previously secured against the construction of Bawabat Al Sharq Mall, as well as part of the residential apartments and villas built in phase one of BIDC’s Bawabat Al Sharq

Development in Abu Dhabi. “This facility demonstrates ADIB’s growing ability to finance large-scale projects, which play a major role in the economic development of the UAE,” said Arif Usmani, Global Head of Wholesale Banking. “The deal is one of many we have closed this year that are directly related to the expansion and development of Abu Dhabi. We expect this part of our business to continue to grow significantly.”

In April 2015, Noor Bank completed its inaugural sukuk. The five-year $500 million sukuk, with cost of 2.788 per cent, became the lowest-ever pricing paid by any sukuk issuer in the UAE to date.

Hussain Al Qemzi, CEO of Noor Bank, said: “The issuance is a milestone for Noor Bank and is the result of our diligent efforts that have seen the bank register stellar financial performance in the past few years.

The issuance has been well received globally on the back of demand from a diverse investor base. This issue will enable us to diversify our funding profile as part of our ongoing financial strategy and will help to create a sustainable funding and capital structure which will further support the growth of the bank.”

In April 2015, Sharjah Islamic Bank’s (SIB) AED1.84 billion ($500 million) sukuk was listed on Nasdaq Dubai. In addition to supporting SIB’s expansion plans, the listing supports Dubai’s reputation as global capital of the Islamic economy. Sukuk listings on the emirate’s exchanges currently total $29 billion. Hamed Ali, CEO of Nasdaq Dubai, said: “Nasdaq Dubai is committed to further

transactions turnover exceeding AED31 billion ($8.4 billion). Jamal Bin Ghalaita, CEO of Emirates Islamic, said: “The Nasdaq Dubai Murabaha platform is a great example of the innovation driving Dubai’s vision of becoming the global hub of the Islamic economy.’’

In a separate news item, Bin Ghalaita said: “In 2011, we formulated a roadmap for Emirates Islamic to propel us to market leadership status in the Islamic banking sector in the UAE. The results for the first quarter of 2015 are another milestone on this road to success. At Emirates Islamic, we recognise that Islamic banking will be a key pillar in the growth of the nation’s economy and we aim

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enhancing its sukuk listing procedures and framework, to ensure streamlined access to the exchange for issuers and ongoing support post listing.”

Ahmed Saad, Deputy Chief Executive Officer of SIB, said: “In 2013, the bank established a $1.5 billion sukuk programme.

Given the overwhelming demand for SIB’s credit globally, the bank was able to tap the market for $500 million issuance at very attractive pricing. The 2013 sukuk was a major milestone for the bank, since it helped position SIB as a key player in the global sukuk space, which enabled us to upsize the programme to $3 billion in 2015.”

In March 2015, DIB acted as a joint lead manager in the Emirates successful pricing of $913 million certificates due in 2025.

The proceeds will be used to acquire four Airbus A380-800s.

The issuance marked the world’s first sukuk financing supported by UK Export Finance and the largest capital markets offering in the aviation sector carrying an Export Credit Agency guarantee. The issue represented the first time a sukuk has been used to pre-fund the acquisition of aircraft.

In June 2015, DIB successfully priced a $750 million sukuk maturing in 2020.

The issuance from DIB’s $2.5 billion sukuk programme carries a profit rate of 2.921 per cent. There was strong demand with the issuance ultimately receiving orders amounting to nearly $2 billion. As Dr Adnan Chilwan, CEO of DIB, said: “Islamic Capital markets are among the fastest growing in the global financial sector.”

to play a leadership role in its development across the financial sector.”

In 2014, Noor Bank recorded a record net profit of AED678.1 million, marking a 166 per cent increase from the year ended 2013. “The bank has established a strong momentum and it is well positioned to maintain balanced and sustainable growth during 2015,” observed Hussain Al Qemzi, CEO of Noor Bank.

Islamic finance assets in the UAE have crossed the $100 billion mark. The segment is expected to grow by two and a half to three times in the coming five years as the UAE aims to become the global hub for Islamic finance and assets.

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Private equity opportunities Private equity funds are capitalising on the United Arab Emirates’ diversification strategy, which is creating opportunities in non-oil sectors that include real estate, retail and financial services

THE UNITED ARAB EMIRATES’ private equity market is maintaining its forward momentum and the outlook for the sector remains promising.

The UAE private equity market, as well as the wider Gulf Cooperation Council (GCC) region, is an attractive market due to a number of factors, including the rule of law, demographics, stability, sound economic growth, transparency, World Trade Organization membership and the limiting of foreign exchange risk thanks to the local currency’s being pegged to the US dollar.

There are a number of reasons why Gulf Capital, based in the UAE and one of the leading private equity players in the region, finds the area offering good opportunities. These include growing business activity, the presence of many entrepreneurs who have been attracted to the region by its good infrastructure and tax-free status, and the fact that you are on the cusp of three continents and, within an eight-hour flight, can cover two-thirds of the world’s population and economy. There are other positive attributes, including the wealth generated by the oil sector, demographics with around 57 per cent of the population below the

The UAE dirham has been officially pegged at 3.6725 to the US dollar since 1997

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Big-ticket events such as the Dubai Expo 2020 will help support investment

sector, reflecting the weaker oil price in 2014 and pressure in that sector, particularly among the smaller players. It is not surprising, therefore, that the majority of M&A activity in the GCC over the next two years is very likely to come from the oil and gas sector, as well as associated sectors and companies with business or activities linked to exploration and production.

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The UAE is heavily investing in building worldclass transport infrastructure

age of 30, services related to the oil industry that are not as cyclical as exploration and production, and the fact that governments have committed to spending $2.5 trillion on hard and social infrastructure over the next 10 years.

There are many family businesses and around 70 per cent of private businesses are non-oil related.

These businesses often have the need to be institutionalised and cash out.

Consumer spending will continue to grow in the UAE and GCC region, supported by a sizeable population with high levels of disposable income.

Private equity firms expect disposable income to continue its strong growth trajectory until 2018, driving private consumption. Favourable demographics and immense consumer spending potential entices private equity investors to deploy growth capital in directly influenced sectors, such as household goods and food retail. The combination of growth in both oil and non-oil sectors, fast-rising populations and government spending in the UAE and most other GCC countries makes it an attractive investment destination. In private equity terms, there are significant opportunities in the infrastructure gap, including across the under-penetrated healthcare and education sectors.

Big-ticket events such as the Dubai Expo 2020 will help support investment and economic expansion over the medium to long term in the UAE. Globally recognised events such as the Expo will have positive secondary impact on other sectors in the UAE economy, including real estate and tourism. Both these sectors remain important to the UAE and have recorded good growth over the past 12 months.

The main mergers and acquisition (M&A) activity in global markets in 2015 has been in the oil and gas

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A diverse private equity landscape Feedback from GCC executives to Mergermarket Group identifies real estate, financial services, infrastructure and retail as dynamic sectors in the M&A market in the UAE and surrounding region. Other economic areas such as the industrial and chemicals sectors are becoming increasingly important in the UAE and in other Gulf states, and Mergermarket analysis indicates these sectors as growth areas alongside sub-sectors of building materials and fixtures. Growth in these sub-sectors is inextricably linked to infrastructure projects and real estate development.

The Abu Dhabi National Chemicals Company (ChemaWEyaat) was established in 2008 to enhance the involvement of Abu Dhabi’s chemicals industry production’s holdings while complementing Abu Dhabi National Oil Company’s (ADNOC’s) subsidiaries Abu Dhabi Polymers Company in Ruwais, which develops polyethylene and polypropylene based on ethane; Borouge Marketing in Singapore; Ruwais Fertilizers Industries, which develops methane-based fertilizer plants; and International Petroleum Investment Company’s (IPIC) international chemicals subsidiaries.

The UAE authorities have long recognised the need to diversify away from the energy sector and have actively put in place schemes and infrastructure to support diversification and the expansion of other corporate activity. Initiatives include special economic zones and important transportation developments such as the Khalifa Port. Located midway between Dubai and Abu Dhabi, the deepwater Khalifa Port is the first semi-automated container port in the region and one of the most technologically advanced ports in the world. Currently, the port serves more than 20 shipping lines, offers direct services and direct connections to more than 52 international destinations as well as trans-shipment at the world’s main hubs.

GULF RELATED

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Business incentive zones, good infrastructure, a growing and wealthy domestic market, and a strong and large financial services sector with available capital has enabled the UAE to emerge as the leading investment market in the region, attracting major private equity investors.

The Abraaj Group, Auvest and Gulf Capital are among the leading and most active private equity firms in the UAE. All have been busy in raising new funds and placing investments in growing sectors and companies in the region. Abraaj and Auvest in particular have targeted the small to medium-sized corporate sector as offering good growth opportunities in the UAE and the GCC. With regard to investment potential, these two private equity firms have highlighted business sectors including retail, logistics, packaging, education and healthcare as offering attractive opportunities. The GCC has many good companies with solid cashflow and franchises in these sectors and their competitive strengths can be exploited to expand business through both organic growth and acquisitions. The availability of capital in the UAE and the GCC in general provides the scope for financing such moves.

Gulf Capital’s private equity funds and portfolio companies are experiencing good growth. Its recent GC Equity Partners III fund was the largest private equity fund raised in the Middle East over the past three years, attracting $750 million worth of

investment. Gulf Capital targets control-oriented growth buyout investments in the GCC and Egypt.

Gulf Capital’s successful exits have included Gulf Marine Services and Metito, the leading emerging markets water company. Destination of the World, a leading hospitality distributor, and Middle East Glass are two of Gulf Capital’s recent investments.

Gulf Capital’s real estate operations have also been active. Projects include the $1 billion Al Maryah Central high-end retail mall in Abu Dhabi. As evidence of both its own credit standing and the liquidity and funding strength of leading banks in the UAE, Gulf Capital recently received an AED850 million six-year revolving financing facility from Abu Dhabi Commercial Bank and First Gulf Bank. The facility provides Gulf Capital with the necessary war chest to target investment opportunities throughout the region. Dr Karim El Solh, Co-Founder and Chief Executive Officer of Gulf Capital, believes that there is currently a unique window to secure attractive investments at reasonable valuations in high-growth sectors across the GCC. In 2015, Dr El Solh says that Gulf Capital will continue to focus on consumer-driven industries including food, FMCG, healthcare and education, together with rapidly growing industries such as logistics and hospitality.

These areas, along with the traditional sectors real estate and energy, have all been highlighted by private equity firms as offering good opportunities.

Due to open in 2018, Al Maryah Central will add more shops, restaurants and entertainment to the city of Abu Dhabi

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A more regulated future for insurance

CONSIDERED AMONG THE MOST advanced in the Middle East, the United Arab Emirates’ insurance sector has taken giant strides in the past few years, but there is still plenty of scope for development.

Compared with an average of $3,318 per capita spend on insurance in developed countries, the UAE’s insurance density stands at around $1,388, according to Alpen Capital.

While the figures highlight the nascent state of the industry, they also underscore the massive potential for growth in the sector, in tandem with the country’s dynamic economic growth.

With 29 insurance companies operating in the country, including seven focused on Islamic insurance, or takaful, the market boasted gross premium income of around AED16 billion ($4.35 billion) at the end of last year, 8.6 per cent higher than in 2013.

Total shareholder funds stood at AED16.7 billion or 105 per cent of gross premiums, and up seven per cent from AED15.7 billion in 2013.

However, there should be no expectation that the pace of insurance sector growth, typically measured in growth in gross premiums written, should closely align with the pace of economic growth, explains Kevin Willis, Primary Credit Analyst at ratings agency Standard & Poor’s (S&P).

“The emirates that comprise the country have introduced a paced – but, to some extent, perhaps uncoordinated – expansion of new compulsory insurance requirements,” says Dubai-based Willis.

“That represents a step change in insurance growth, uncoordinated with economic growth.”

A fragmented market has resulted in a price-cutting war in the UAE, particularly on the key medical and

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motor business lines, notes Salman Siddiqui, London-based Senior Financial Analyst at credit rating agency AM Best. “Additionally, rates for commercial property lines remain low compared to other emerging markets, in part driven by excess capacity from re-insurers.”

To bolster the sector, the UAE Insurance Authority announced new rules earlier this year to improve the risk profile and policyholder security of UAE insurers by placing limits on higher-risk investments, introducing risk-based solvency calculations and standardising reporting and actuarial practices.

“AM Best views the new regulations positively and expects them to have a good impact on the industry in terms of building underwriting and investment discipline,” Siddiqui says. “However, the level of impact is dependent on the regulator’s ability to implement the rules and take appropriate action when breaches are identified.”

The new regulations related to capitalisation and investments will strengthen several credit characteristics of insurers, including capital, asset quality and reserve adequacy. “Eventually, this would alleviate competitive pressures, support market stability and make way for consolidation opportunities, considering the providers have three years from the start of February 2015 to adjust their positions and comply with the new regulations,” says David Harris, Director of Distribution, UAE and Bahrain, at RSA Insurance.

However, it may be a challenge for small to medium-sized insurance companies, especially as they would be likely to see costs rise as they comply with additional requirements from the regulator.

Analysts say the consolidation would actually help

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The United Arab Emirates’ insurance industry is heading towards a period of vibrant development on the back of legislative changes and increasing demand for both conventional and Islamic insurance

Widespread social, infrastructural and regulatory developments in the UAE are creating opportunities in the insurance sector

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to shore up balance sheets and lead to fewer but larger players in a sector where bigger is better.

While there has been much talk of consolidation in the fragmented market, there have been few mergers and acquisitions (M&A) in the space. AM Best’s Siddiqui suggests that a number of factors limit the appetite for M&A activity in the UAE insurance market. “Key among them is the shareholding structure of various insurance companies, with significant ownership concentrated in a number of wealthy individuals and families who are reluctant to sell,” he says.

The Islamic insurance sector is also gaining ground, albeit slowly. Analysts believe takaful companies need to develop marketing strategies and product offerings that allow them to differentiate themselves from

A fragmented market has resulted in a price-cutting war in the UAE

conventional companies. Indeed, price competition with conventional companies has had a corrosive effect on the underwriting profits of takaful participants.

Nurturing the takaful market “Moreover, the UAE is pushing itself to become a major financial hub for Islamic finance, which may assist the takaful sector, or at least provide greater opportunities

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for takaful operators to diversity their investment holdings and reduce concentration risk within their investment profile,” says Siddiqui.

However, Islamic insurance remains a relatively new concept and needs careful nurturing to help it grow.

In the UAE and wider Gulf Cooperation Council (GCC) region, takaful was introduced less than a decade ago.

Furthermore, insurance companies are expensive to establish, so there is a pressure on the management of takaful companies to generate an income stream, Willis states. “In relatively marginally priced, high-volume lines like medical and motor, the level of loss incidence and cost may exceed new income stream, and, as public entities, the level of relative under-performance by the takaful sector, among others, generates negative media commentary, which can act as a further drag on acceptability,” says the S&P analyst.

Growth pockets The insurance sector should benefit from the UAE’s economic expansion, set to rise a relatively robust 3.2 per cent this year, according to the International Monetary Fund (IMF), which is higher than regional gross domestic product (GDP) growth estimates of 2.4 per cent. Analysts see strong growth potential in motor, property and casualty insurance, but the largest growth opportunity is in health insurance, which is now compulsory in Dubai and Abu Dhabi.

“The other promising areas of growth are home and home contents insurance and SME insurance,” RSA’s Harris notes. “Recently, there has been an increased focus by the authorities in the region to enforce the need for different types of insurance for all businesses in the UAE.” With the UAE seen as a regional trading hub, credit risk insurance is another promising area of growth. Trade credit insurance protects companies against the risk of a buyer defaulting on payments for goods and facilitates suppliers to provide longer payment terms to buyers.

While the UAE is a promising area in trade credit insurance, according to Euler Hermes, a provider of trade-related credit insurance, the country needs to catch up with other nations. “The United Arab Emirates [is]… still lagging behind when it comes to simplifying the life of companies trying to recover their dues,” the company said in its annual report.

Despite a weak 2014, which saw the industry’s consolidated net profit fall 5.4 per cent due to the under-performance of a few key companies, the overall outlook for the sector in the UAE points to an upward direction. The takaful sector, for example, showed improvement in net earnings, with profits of AED74 million in 2014 against losses of AED97 million in 2013, S&P data shows.

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“We believe 2015 might be seen as an inflection point, with underwriting starting to recover by year end and investment yields slowly benefitting from the anticipated rise in interest rates. At the same time, equity prices and investment yields may slip,” S&P said in a report.

The UAE continues to be seen as an attractive place to live and work, and the population growth will drive expansion, especially in medical and motor.

In addition, the domestic insurance market now recognises that there are prospects for the development of life assurance, which had been largely left to the international companies to drive.

“Moves by the UAE to diversify its economic drivers away from oil dependence, and develop infrastructure to support this, will see continuing development of CAR/EAR [Construction/Erection] risks, but probably not material creators of new business,” says Willis.

While the influx of expatriates into the UAE means the country exhibits lower levels of insurance penetration rates than other developed markets, there is plenty of room for growth.

“Coupled with the country’s ambitious growth aspirations supported by a buoyant economy, young population, high levels of disposable income as well as social, infrastructural and regulatory developments, it is a positive outlook for the UAE market with respect to insurance,” Harris says.

The UAE is seen as an attractive place to work.

Population growth is expected to increase demand for insurance

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INVESTMENT OPPORTUNITIES: HEALTHCARE

Raising the bar in patient care The United Arab Emirates is rapidly establishing itself as a world leader in healthcare for Emiratis, expatriates, luxury-healthcare clients and medical tourists alike

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Clinic in Abu Dhabi and Al Ain, to the Moorfields Eye Hospital in Dubai, Emiratis and expatriates from all over the globe are now being offered world-class private healthcare, whether general or niche, inpatient or outpatient. This boom in clinical services has, as such, paved the way for the introduction of ‘luxury healthcare’ offerings.

Opportunities for investors Despite such improvements in the healthcare sector over the past ten years, the industry is still ripe with investment opportunities. A fast-growing population, significant revenue streams from private hospitals, compulsory health insurance in cities including Abu Dhabi, reliance on the import of equipment and talent, as well as growth in medical tourism – which is being led by Dubai, Lebanon and Jordan – offer ample room for further investment, according to Colliers International.

Cognisant of this rapid population growth (the UAE is home to 9.3 million people, compared with four million a decade ago) and the urgent need to cater to it, the government has encouraged the private sector to meet demand, aided by an economic recovery coupled with rising average income levels.

Non-clinical areas in Burjeel Hospital, Abu Dhabi’s largest private tertiary hospital, are of Arabesque design and provide 7-star accommodation, fine dining and a concierge service

BURJEEL HOSPITAL

AT ABU DHABI’S BURJEEL HOSPITAL, patients receive much more than healthcare. Prior to and post surgery, patients receive what the institution proudly refers to as seven-star healthcare: three-course meals prepared by a gourmet chef with the guidance of a dietician, a bellboy to help you with your luggage and a hospital room that’s indistinguishable from that of a five-star (or seven-star) hotel. There’s even a pianist and a man whose sole purpose is to serve guests Arabic coffee.

Non-clinical spaces in the hospital are arabesque by design, echoing “the traditional hospitality of the Gulf region”, according to Burjeel Hospital’s website.

Royal and presidential suites are available, along with premier and deluxe rooms. It’s nothing short of a VIP experience – with the caveat of surgery. At Burjeel, it’s seemingly possible to sideline the burden usually associated with hospitalisation, in large part thanks to what the hospital refers to as the healing touch.

To capitalise on the demand for the sort of services offered by the hospital, Burjeel has opened representative offices in Oman, Kenya, Yemen, Nigeria and Sudan. Chief Executive Officer Clancey Po – a 25-year veteran of the industry – says that the institution’s main philosophy is the forgotten “art of healing”: “There is no doubt that our clinical excellence and patient care defines our success. What makes us different is our constant commitment to these two pillars. I personally do not believe in the seven-star approach, but in meeting or exceeding our guests’ expectations. What makes me happy is a smiling guest and we know that good medical outcome is what our guests seek,” says Po. “The UAE has a better infrastructure to cater for developing medical tourism and, therefore, has tremendous potential.”

The success of the hospital, Po says, also signals the strides that have been made in healthcare across the United Arab Emirates – not just in the capital. With facilities ranging from King’s College Hospital London

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There are more than 100 hospitals across the country

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The newly opened Cleveland Clinic in Abu Dhabi is one of several healthcare facilities in the UAE that will provide treatment for diabetes

Areas of potential development include the number of qualified physicians, a relatively low number of beds available to the total population and a surge in obesity and lifestyle-related diseases, according to Colliers.

The success of health tourism in the nation can be attributed to “favourable government rules and regulations, hospitals [being] more focused on quality, international accreditation” and the UAE’s ability to attract top talent, according to Po. “The UAE has become a hub for world-class healthcare. Having said that, I must admit we have a long way to go,” particularly with respect to organ transplant and cancer treatment, he said.

The UAE Government has made health one of the seven priority sectors of the National Innovation Strategy announced last year. Aiming to be among the most innovative countries in the world, the government will promote advanced technologies in healthcare services, stimulating the growth of the biotechnology and pharmaceuticals sectors while working with strategic partners to support medical research.

There are more than 100 hospitals across the country, most of which offer general practice, while a number offer niche services.

Take Imperial College London Diabetes Centre in Abu Dhabi, which opened in the capital in 2006 before launching in Al Ain in 2012. The UAE’s level of obesity is double the global average. That significantly boosts the likelihood of diabetes afflicting an individual at a relatively young age. About 19 per cent of the country’s population are victims of the disease, while only half of those are aware they even have it or are susceptible to it, according to the centre’s website.

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It is in this context of a lack of awareness that the institution also boasts research on the illness, with the aim of understanding and preventing its proliferation in the UAE: “We anticipate that the research that will take place at the [centre] will have an even greater legacy, both in the UAE and in the wider world, by helping us to develop new ways of preventing people from developing the condition,” Edward Astle, the Pro Rector for Enterprise at Imperial College London, said of the Al Ain centre’s launch.

Also looking to cater to the growing need for diabetes treatment is the newly opened Cleveland Clinic in Abu Dhabi. “One of the most common side effects of long-standing diabetes is disturbance of vision, especially through retinal diseases,” said Dr Tomislav Mihaljevic, the clinic’s Chief of Staff and Chief of its Heart and Vascular Institute, in an interview with Gulf News. “Nearly two-thirds of the patients we expect to see at our Eye Institute will be treated for conditions linked to diabetes.”

“Healthcare in the region is pegged to witness exponential growth in the coming years, fuelled by population growth, a rise in chronic diseases, high disposable income, sophisticated spending patterns and political stability,’’ said His Excellency Dr Raja Easa Al Gurg, Vice Chairperson of Dubai Healthcare City (DHCC).

Describing itself as a centre of excellence for clinical and wellness services, DHCC has two hospitals and more than 120 outpatient medical centres. The development is the largest integrated-healthcare free zone in the Middle East, made up of a medical division consisting of clinics, hospitals and retail services, with a “wellness community” in the works. DHCC “offers a ‘one-stop shop’ for investors, giving business partners the freedom to focus on their core operations, including company incorporation, trade license and visa services,” according to its website.

“We are confident that DHCC is well positioned to lead sector growth in tandem with the anticipated demand,” said Dr Al Gurg, who this year was included in the Forbes list of the 100 most powerful women in the world.

Also found in the city is the only international branch of Moorfields Eye Hospital, the 200-year old London institution. Despite its location, the hospital

MATILDE GATTONI/ARABIANEYE/CORBIS

INVESTMENT OPPORTUNITIES: HEALTHCARE

is still fully owned and managed by the United Kingdom’s NHS Foundation Trust, and maintains close links to London.

Medical tourism The decision to expand into the Middle East was, according to Managing Director Mariano Gonzalez, a “relatively straightforward one” given “Dubai’s position at the crossroads of the region and world-class infrastructure.” Total patient visits to the city reached about 1.2 million last year, up from one million in 2013, according to its 2014 annual report. Of those patients, 15 per cent were classified as medical tourists, and among those tourists, more than half were from outside the GCC. Fertility, cosmetics and dental treatments were the most used services.

Similarly, Abu Dhabi plans to open a local branch of London’s Maudsley Hospital with a focus on mental health among young children and teens. The move came after the health authority pinpointed the need to address mental disorders and illnesses – which can often be stigmatised in the region – particularly among the youth.

“Cities such as Abu Dhabi and Dubai have world-class infrastructure when it comes to facilities, accommodation, shopping options as well as tourism,” says Po. “The UAE – Abu Dhabi and Dubai in particular – is indeed establishing itself as a medical tourism destination in the Far East.”

Burjeel Hospital forecasts that over the next three years, at least five per cent of its patients will come from overseas. The Dubai Government announced last year that it intended to attract up to half a million medical tourists a year by 2020, a trend that could boost the nation’s economy by up to $700 million.

As part of the master plan drawn up with this aim, 22 hospitals will be built, with the strategy being implemented in two phases, Essa Al Maidoor, Director General of the Dubai Health Authority, told The National newspaper. The initiative, which will include the promotion of plastic surgery, preventative and sports medicine,skincare, dental care and eyecare, will seek to lure patients from the Commonwealth of Independent States as well as from South Asia and the rest of the Gulf. The country is on course to become the medical tourism hub it seeks to be.

The National Innovation Strategy aims to promote the use of advanced technology in the healthcare sector as a tool to provide better services

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JANSSEN PERSPECTIVE

Healthcare innovation specialists Jan Van der Goten Managing Director for Janssen, GCC Janssen is the pharmaceutical pillar of Johnson & Johnson. A healthcare company consisting of three sectors, our goal is to advance transformational products in pharmaceuticals, consumer health and medical devices.

Our innovative medicines and healthcare solutions transform individuals’ lives; we are committed to improving health and well-being for people all over the world.

Our responsibility to society is to provide these innovative treatments to all that need them, including healthcare systems and patients. Since 2009, we have introduced 14 novel therapeutics and 35 new indications in major markets for existing medicines, all of which provide important new treatment options across several serious life-changing illnesses.

Janssen is committed to providing innovative and integrated products and medicines of high unmet medical need to patients in the Gulf Cooperation Council (GCC) region. It is a priority market for us and we are working hard to achieve our vision of becoming the trusted and respected pharmaceutical company in the GCC region. Mid- and long-term partnerships are at the core of our overall business strategy in the GCC to help create lasting stability and the strongest possible health outcomes for patients.

Bringing innovation to the GCC “We are a highly innovative pharmaceutical company and one of the fastest growing top 10 pharmaceutical companies worldwide. However, we want to bring more than just products to the region and are currently working to develop partnerships with all relevant local

organisations, from the government and patient groups to physicians, distributors and other professionals from the global academic and business communities,” said Jan Van der Goten, Managing Director for Janssen, GCC.

From the ground up Our collaborations in the region are designed to bring meaningful benefits to patients and add value to society; we always seek to understand the needs of patients and try to improve the broader healthcare community and region as a whole.

“We want to ensure we partner with the local healthcare systems and governments to help improve education and the training and upskilling of specialists in the region.

For example, within the GCC, the diabetes prevalence ranges from 15 to 24% of the population, but currently there are not enough healthcare professionals educated

JANSSEN PERSPECTIVE

Our ultimate goal is to offer people in the Gulf region a new sense of hope, with access to innovative treatments and quality healthcare to treat the condition. These are things we can help to change,” said Jan Van der Goten.

Our mission is to transform patients’ lives and strengthen healthcare provision in the Gulf region. In the next few years we are planning to launch nine new therapies, in five important therapeutic areas: • immunology (psoriasis); • neuroscience (schizophrenia, depression, dementia, pain, attention deficit hyperactivity disorder (ADHD)); • infectious diseases and vaccines (HIV/AIDS, hepatitis C (HCV), tuberculosis); • cardiovascular and metabolic diseases (diabetes); and • oncology (multiple myeloma, prostate cancer).

All of these medicines have been designed to address the current healthcare needs of the global and Gulf region.

Diabetes and HCV in particular, are conditions with significantly high unmet need within the GCC, affecting millions of people across the region.

Diabetes: a regional priority An example of our commitment in the region includes our efforts with regard to diabetes. It is estimated that one in 10 people in the Gulf States is living with diabetes. It is associated with rising obesity levels, a decline in physical activity and an increase in consumption of processed foods. The management of the condition is therefore one of the region’s biggest health priorities. According to the International Diabetes Federation (IDF), the number of cases is expected to increase by more than 80%, from 36.8 million people to 67.9 million in 2035, making the Middle East and North Africa region one of the world’s fastest growing regions for diabetes.

“We are collaborating with numerous different authorities in the GCC to help improve levels of education about diabetes and its prevention and management.

Diabetes is a serious and growing concern in the GCC region and something that we all need to work together to try to prevent and control,” said Jan Van der Goten.

Hepatitis C: a viral timebomb HCV represents a huge present and future burden to healthcare systems in the Gulf States, the Middle East and Africa. Due to the heterogeneous nature of the disease, multiple treatment options are required to tackle HCV if a cure is to become a reality. Indeed, genotype 4, the variant of the disease most prevalent in the region, affects 90% of those living with HCV and there remains an unmet need in treating these patients.

While the number of patients being newly diagnosed with HCV is declining, it takes approximately 20 to 30 years for symptoms to appear, with HCV cases expected to peak between 2030 and 2035.

Without treatment, HCV can progress to much more serious conditions, including hepatocellular carcinoma and eventual liver transplantation, which will place healthcare systems under unsustainable pressures in the near future.

Our future focus We have a heritage in introducing genuine product innovation (recognised by the Prix Galien for our work in Tuberculosis (TB) and HCV), and we continue to maintain

these high standards globally, as evidenced through our commitment in the Gulf region.

We are progressing a number of ongoing Phase III and phase IV clinical trials in the region. Currently, there are clinical trials in inflammatory bowel disease, diabetes, arthritis and HCV. As well as in diabetes, HCV and schizophrenia, new products in the pipeline include treatments for arthritis, inflammatory bowel disease and chronic lymphocytic leukaemia.

We are dedicated to providing innovative new products to the GCC region, coupled with broad access for patients. We focus on bringing our global entrepreneurial mindset to our local partnerships, which revolve around ensuring the best health outcomes for patients in the Gulf. Our ultimate goal is to offer people in the Gulf region a new sense of hope, with access to innovative treatments and quality healthcare.

Johnson & Johnson Level 7 Building 14 PO BOX 505080 Mohamed Bin Rashid Academic Medical Center Dubai Health Care City Dubai UAE T: +97144297200

INVESTMENT OPPORTUNITIES: HEALTHCARE

Healthcare regulation in the UAE

WHILE VAST BY OPERATION, THE United Arab Emirates’ healthcare sector focuses primarily on the delivery of sustainable and comprehensive wellness.

The Ministry of Health implements international and local healthcare policies via 24 departments that span each emirate excluding Abu Dhabi, which has its own authority. The departments fall under secretaries dealing with support services, public health and licensing, and clinics and hospitals. Reporting to the Undersecretary of the Ministry of Health are individual offices that deal with medical research and liability, crisis and disaster, and strategy and development.

Over the past decade, the healthcare ministry has spent millions of dollars on developing the sector, improving upon already-built institutions while luring investors to pour money into private ones. It now has more than 100 hospitals and medical centres, compared with fewer than 10 half a century ago. Total expenditure on health per capita in the UAE stands at $2.2 billion or 3.2 per cent of gross domestic product (GDP), according to the World Health Organization (WHO).

Much like the Ministry of Health, the Health Authority of Abu Dhabi (HAAD) regulates the efficiency and delivery of local healthcare while also developing the industry’s policies in the emirate. Separately, SEHA (which translates as ‘health’ in Arabic), or the Abu Dhabi Health Services Company, was launched as part of a governmental healthcare reform initiative in 2007 to manage and develop the hospitals and clinics of the capital. The company, which operates 12 hospital facilities, is partnered with Cleveland Clinic Foundation and Johns Hopkins Medicine International.

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These efforts – with a special focus on quality – appear to be paying off. In Abu Dhabi, life expectancy increased by two years to 80 over the 2002-12 period, according to WHO. “Clearly, quality has a very scientific meaning when it comes to healthcare, but the parameters of how you can assess it are varied,” said Professor Maha Barakat, Director General of HAAD, in an interview at the Abu Dhabi Quality Forum last year. “Quality healthcare is related to how well a patient is treated when they enter a healthcare provider. Do they have appropriate care, do they have patient satisfaction, do they have a pleasing experience? If one can maintain a good measurement analysis and assessment of quality in any healthcare facility, then hopefully the patients will be able to have the best outcomes.”

Transforming healthcare Demand for high-quality healthcare of this sort is also increasing as the nation seeks to boost its status as a medical tourism hub. As such, the government is undertaking a strategy to develop this particular sector and raise it to world-class standards by 2021.

As part of this effort, Abu Dhabi-based investment company Waha Capital commissioned a report by the Economist Intelligence Unit, which found that healthcare in the nation had transformed with the help of mandatory insurance, regulatory reforms and outsourcing. The report made several recommendations to help sustain growth, including harmonisation between policymakers, less red tape and greater cooperation between the various agencies across the seven emirates. In order to meet its 2021 health targets, the country will need to boost the number of doctors by 50 per cent, the report showed.

ISTOCK IMAGES

With a comprehensive healthcare authority structure in place, the United Arab Emirates has launched a number of initiatives to ensure that all facilities meet the highest international standards

The UAE is working to provide healthcare services that conform to world-class standards by 2021

INVESTMENT OPPORTUNITIES: HEALTHCARE

HAAD – whose seven priorities include attaining, retaining and training a substantial workforce – oversees, monitors and analyses the health status of the population and performance of the sector. The regulatory body also aims to raise awareness among the general population with respect to the adoption of a healthy lifestyle and living standards. This is a crucial step for the authority given the rising levels of obesity (and hence diabetes) in the nation.

In addition, it keeps hospitals at their highest standards by performing routine regulation checks.

Top four health concerns in the UAE according to Abu Dhabi Live, the annual health and well-being show

28%

of deaths

15%

of deaths

62% of population

25% of population

Heart disease

Cancer

Obesity

Diabetes

Accounting for 28 per cent of total deaths, cardiovascular disease is a prime concern

Cancer is responsible for 15 per cent of deaths, making it the second-leading cause of death in the Emirates

Today, more than 62 per cent of the UAE population is considered overweight, including children

More than 25 per cent of UAE residents have diabetes, which is the second-highest prevalence of diabetes in the world Source: Abu Dhabi Live

In April alone, the healthcare body suspended four private facilities from operation, following the discovery of violations in the clinics by inspectors who routinely screen the hospitals. According to a report in The National, inspectors identified problems with hygiene, medical device quality-control standards and the improper storage of supplies. “[The] decision aims to safeguard patients and also to allow healthcare facilities to take necessary corrective actions,” Professor Barakat said. “Complying with standards is key to improving the quality of healthcare services in the emirate of Abu Dhabi.”

As part of the goal to raise standards, the emirate unlocked a hospital-rating initiative called Jadwa (or ‘quality’) last year.

Dubai Healthcare City (DHCC), meanwhile, is overseen by an independent regulator, the Centre for Healthcare Planning and Quality. The city has set up the Mohammed Bin Rashid University of Medicine and Health Sciences, and the Mohammed Bin Rashid University Hospital, and created an independent appeals board to field complaints from healthcare professionals and operators.

“We introduced advanced standards of governance for licensing and complaints, and signed agreements with strategic partners to advance healthcare and medical education,” Marwan Abedin, ex-Chief Executive Officer of DHCC, explained in its annual report.

“We are optimistic about 2015 bearing witness to new milestones.”

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INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

Unsleeping giant: the rise of DP World

DP WORLD

Operating ports from China to Venezuela and with further infrastructure developments under way in London, the Maldives and Canada, DP World is cementing its reputation as world-class port and logistics provider

IN 2015, A YEAR OF INNOVATION IN the United Arab Emirates, it is worth pausing to appreciate that few Emirati enterprises have been as bold and enterprising as its container terminal operator, DP World. Tracing its history back to modest beginnings in 1972 as operator of Dubai’s Port Rashid, the company is now one of the global top five terminal operators, with more than 65 facilities in six continents, from Qingdao to Chennai, and from Antwerp to Algiers.

In 2014, DP World handled 60 million twenty-foot

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equivalent container units (TEU), and, with its committed pipeline of developments and expansions, capacity is expected to rise to more than 100 million TEU by 2020. New developments are currently under way in India, Africa, Europe and the Middle East.

The DP World story is a stirring example of the evolution from local to global. Its predecessor began serving local trade in Dubai with the development of Port Rashid in 1972. That was during the heady days of Dubai’s first foray into commercial oil production, and was followed by the opening of the ambitious Jebel Ali

DP World London Gateway is a highly automated deep-sea container port, hosting the UK’s largest logistics park

DPWORLD

INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

By adding a fourth terminal, DP World will add 3.1 million TEUs in Jebel Ali Port

Port in March 1979, then the world’s largest man-made Having received UK Government approval for the harbour and DP World’s flagship port to this day. In London Gateway scheme in 2006, DP World forged 1991, the operations of Port Rashid and Jebel Ali port ahead even though it was hit hard by the global were combined to create the Dubai Ports Authority. financial crisis in 2008-10. Now, thanks to the In 1999, Dubai Ports International FZE (DPI) was Gateway, which has 16 million consumers within formed to manage container terminals and other a 50-mile radius, London is seeing a return of its facilities outside the UAE, winning concessions in historical status as a global shipping hub. And DP Jeddah (Saudi Arabia) and Doraleh (Djibouti) in 2000, World has even bigger plans for it. In February 2015, and then in Visakhapatnam (India) in 2002, Constanta the company announced that it would move ahead (Romania) in 2003 and Cochin (India) in 2004. with constructing a third berth there. DP World’s plan DPI’s status as a global player was established is for London Gateway to provide 2,700 metres of in early 2005 with the acquisition of CSX World quay, six deep-water berths with drafts of 17 metres, Terminals for just over $1 billion, giving it a strong and 24 giant quay cranes, and to achieve an annual presence in Asia for the first time, with ports in handling capacity of 3.5 million TEU. Hong Kong, Tianjin and Yantai in China, as While DP World has grown beyond well as operations in Australia, Germany, recognition since 1972, the global ports Dominican Republic and Venezuela. market is highly competitive and deeply Later that year, DPI merged with the fragmented. For all its strengths, the Dubai Ports Authority, and DP World company has been estimated to control TEUs handled

by DP World was born. True to its new name, the less than 10 per cent of global market in 2014 company cemented its world-leading share. It means that there is considerable position in early 2006 with the purchase, scope to expand and, true to form, DP for $7 billion, of the world’s fourth largest World has proven itself to be an unsleeping ports operator in the world, UK-headquartered giant. Spaces to watch include the Maldives P&O. DP World was then everywhere – Asia, India, where, in March 2015, DP World signed a Memorandum Australia, the Americas, Europe and Africa – and of Understanding with the Maldivian Government was listed on Nasdaq Dubai in 2007. for the development of the archipelago’s ports and logistics industry. And in April, DP World announced Not afraid of mature markets an agreement to acquire Maher Terminal’s Fairview While enterprises in any sector will register fast Container Terminal in Prince Rupert, British growth in emerging markets, DP World stands out Columbia, Canada, for $457 million. Fairview is with its bold plays that have breathed fresh life into a purpose-built terminal with an efficient sea-rail markets considered settled and mature. A notable link that has a current capacity of 850,000 TEU. example is London where, after more than a decade of A newly announced phase two expansion will planning and construction, DP World’s new deep-sea increase capacity to 1.35 million TEU. port, called London Gateway, opened in November Port operators are notoriously vulnerable to 2013. Built on a former Shell oil refinery on the River the vagaries of the global economy, but DP World’s Thames 32km east of central London, the £1.5 billion bold vision and decisive actions mean that, wherever terminal can handle the largest deep-sea container and whenever demand increases, it will be in a ships and features one of Europe’s largest logistics parks. position to meet it.

60m

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INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

Fast-track logistics

AFTER OIL WAS DISCOVERED IN Dubai in 1966, the emirate’s ruler, His Highness Sheikh Rashid bin Saeed Al Maktoum, famously said that while his grandfather rode a camel and he himself now drove a Mercedes, the camel would make a comeback by the time of his grandson’s generation. It was a wryly prescient comment on the fleeting nature of oil wealth, and the Sheikh set about creating a different future with a more diversified economy.

His plan was to capitalise on Dubai’s geostrategic position and turn it into a global trade and logistics hub. The result was that, just 10 years after Dubai’s first commercial shipment of crude, the Sheikh was, in 1979, able to preside over the opening of Jebel Ali Port, the world’s largest man-made harbour. So while Dubai’s oil production peaked in 1991 at 410,000 barrels per day, and has been steadily declining ever since, Jebel Ali is now the world’s ninth busiest container port, and the trade associated with it has underpinned much of Dubai’s astonishing prosperity.

Nationally, the United Arab Emirates has followed Dubai’s lead in investing in infrastructure that promotes regional and global connectivity. In 2012, neighbouring Abu Dhabi opened its deepwater facility, Khalifa Port. Completing this bold vision are plans for the United Arab Emirates’ first national rail network.

Jebel Ali Port Though some held the view in the 1970s that the new port at Jebel Ali was unnecessary, Sheikh Rashid pressed ahead with construction and the port was inaugurated in 1979. In 1985, it received a boost from the establishment of the Jebel Ali Free Zone (Jafza), with big-name Japanese manufacturers Sony and Aiwa setting up regional distribution hubs, and the port expanded steadily throughout the 1990s and 2000s.

In June 2013, it officially welcomed one of the largest container ships afloat, the MSC La Spezia, to its

82 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

recently expanded Terminal 2, with its quay wall extended nearly eight times, from 400m in length to 3,000m. Allowing the simultaneous handling of six mega ships, the new Terminal 2 brought Jebel Ali’s handling capacity to 15 million twenty-foot-equivalent container units (TEU).

At that point, Jebel Ali had already been voted the Best Seaport in the Middle East for the previous 19 years, but the port’s owners, DP World, had bigger plans. DP World had already embarked on building the new $850 million Terminal 3, which, just over a year later in October 2014, welcomed its first vessel. With its 18m draft, Terminal 3 gives Jebel Ali the ability to handle the new generation of mega vessels – as many as 10 ultra-large container ships at once. Scheduled to be fully operational in 2015, Terminal 3 will give Jebel Ali the ability to handle 19 million TEU. Terminal 3 also breaks ground in the latest logistics technology, featuring 19 of the world’s largest automated rail-mounted gantry cranes, which are remotely operated from a state-of-the-art control room by an operations team comprised largely of Emiratis.

Jebel Ali is now a gateway for more than 90 weekly services connecting more than 140 ports worldwide.

What does the future hold? A master plan proposed in 2007 envisaged the port expanding annual capacity to around 56 million TEU by 2030, but that is out of date and DP World has not made specific plans public.

However, preliminary work is in progress to prepare more space by linking a reclaimed island to Terminal 2: “Basic infrastructure will enable a quick reaction should market demand require further capacity,” a DP World spokesperson said.

Khalifa Port Holding 94 per cent of the 97.8 billion proven oil reserves in the UAE, Abu Dhabi did not face quite the same pressure to diversify as Dubai. But Abu Dhabi has not been far behind. For decades it has been investing

DP WORLD

Port infrastructure developments and the new modern rail network will redefine logistics and transport in the United Arab Emirates and across the Gulf Cooperation Council region

Jebel Ali Terminal 3 is one of the largest semi-automated facilities in the world

INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

ABU DHABI TERMINALS

Jebel Ali is now a gateway for more than 90 weekly services

Managed and operated by Abu Dhabi Terminals, Khalifa Port Container Terminal is set to handle 2.5 million TEU in 2015

in infrastructure to broaden its economic base, and a key plank in the strategy has been Khalifa Port Container Terminal (KPCT), which opened in 2012.

Built on a man-made island some 5km offshore, it is connected to the mainland by a causeway and bridge. In February 2015, the world’s largest ro-ro container vessel (‘ro-ro’ is short for ‘roll-on roll-off’, for wheeled cargo such as cars and trucks), the Jolly

Titiano, made its maiden call, signalling that KPCT was already making a name for itself.

Port operator Abu Dhabi Terminals (ADT) has been steadily ramping up KPCT’s capacity and the port is expected to handle 2.5 million TEU during 2015, assisted by 12 super-post panama gantry cranes.

Since 2012, the volume of cargo handled has risen by approximately 20 per cent a year. In January 2015, ADT announced that it has secured $81.7 million (AED300 million) in a nine-year agreement with Abu Dhabi Commercial Bank to fund ongoing capacity expansion at a rate of 2.5 million TEU a year. Now, around 20 weekly container line services embark to more than 50 international destinations, connecting Abu Dhabi and the wider UAE with the world markets.

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INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

Etihad Rail: network map Etihad Rail’s 1,200km network will extend across the UAE, running from the border of Saudi Arabia right through to the border of Oman. It will eventually connect with the GCC network

Ras al Khaimah Ras al Quwain Ajman

Stage 1 Freight alignments – 264km

Sharjah Fujairah

Stage 2 Freight alignments – 628km Dubai

Stage 3 Freight alignments – 279km Freight facility Ghweifat

Ruwais

Al Ain Tarif

Abu Dhabi

Saudi Arabia

UAE Shah

By 2030, says ADT, the port will be able to handle 15 million TEU a year and, together with the adjacent Khalifa Industrial Zone Abu Dhabi (Kizad), will contribute 80 per cent of Abu Dhabi’s non-oil GDP. Crucially, says ADT, Khalifa Port will also be the first port in the UAE with on-dock rail access to the country’s first national rail network, which is under development now.

ETIHAD RAIL

Etihad Rail national rail network will connect the UAE to the wider GCC network

A modern rail network Jebel Ali and Khalifa ports are remarkable achievements by any standard, but one piece of the puzzle is missing that would cement their links to the UAE’s own growing cities and outward to the wider Gulf region:

Oman

Source: Etihad Rail

a modern rail network. Etihad Rail was established in June 2009 under Federal Law no. 2, with a mandate to manage the development, construction and operation of the UAE’s first national freight and passenger railway.

Built in phases, the 1,200km network will link the principal centres of population and industry of the UAE, and connect to the planned Gulf Cooperation Council (GCC) railway network linking Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.

The first stage, a 264km line from Shah and Habshan to Ruwais, has been laid and is now in the testing and commissioning phase. It connects the Shah gas fields in the south to the gas distribution and processing facilities at the port of Ruwais in the north. The second stage will run for 628km, connecting Mussafah to Khalifa and Jebel Ali ports, and on to the Saudi and Omani borders. Preliminary engineering is complete for this stage, bids have been submitted, and contract awards are expected in 2015. The final, third stage is 279km in length and will extend the network from Dubai to the northern regions of Fujairah, Ras Al Khaimah and Sharjah.

In many ways, this is the most striking of the UAE’s ambitious infrastructure plans because it is introducing a whole new mode of transport to the country and region, promising faster, cleaner, more efficient movement of goods and people. With its busy ports linked to a modern regional rail system and rapidly expanding airports, the UAE is set to become a truly a multimodal, hyperconnected hub.

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We We continue continue to deliver to deliver creative creative electromechanical electromechanical engineering engineering solutions. solutions. www.anel.com.tr www.anel.com.tr

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Scaling new heights The United Arab Emirates continues to capitalise on its advantageous geographical location, expanding its aviation capabilities to serve rapidly increasing passenger traffic

DUBAI INTERNATIONAL AIRPORT

IN 2014, DUBAI MARKED A KEY milestone in aviation history. Dubai International Airport superseded London Heathrow as the world’s busiest airport for international passenger traffic, demonstrating the true power of the emirate’s geocentric nature, located at the intersection of all major traffic flows between east and west.

The airport saw 71 million international passengers pass through its doors over the 12-month period, surpassing the 68.1 million reported at Heathrow.

“And our inherent rate of growth will make it difficult to lose this new status,” explains Paul Griffiths, Chief Executive Officer of Dubai Airports. “We are anticipating 79 million passengers by end of 2015, so we are already creeping up on the next volumedriven milestone – to be the biggest airport in the world regardless of passenger numbers.”

Heathrow’s total 2014 throughput was 73.4 million domestic and international travellers, a number Griffiths believes Dubai International will leapfrog by the end of 2015. The airport’s first-quarter growth of 6.8 per cent to 19.6 million passengers (compared with 18.4 million in the first quarter of 2014) puts the facility on track to reach, if not actually surpass, the 79 million mark by the end of the year.

Over the next four years, Dubai International is also likely to outperform Hartsfield–Jackson Atlanta International Airport in the United States,

88 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

which caters to almost 100 million domestic and international passengers annually.

Current predictions put Dubai’s 2020 passenger traffic total at a staggering 126 million, exceeding by 36 million the original forecast of 90 million set out in Dubai Airports’ 2008 $7.8 billion Strategic Plan 2020 (SP2020).

“So there will have to be some serious participation at Dubai World Central – probably of around 20 million passengers – to enable us to accommodate the growth over the next few years,” Griffiths reveals. He is, of course, referring to Dubai’s new aviation mega hub, currently under construction to the tune of more than $32 billion at Jebel Ali. Moreover, in accordance with the National Innovation Strategy, the UAE General Civil Aviation Authority has said that it will set up innovation clusters to foster further growth in the sector.

Dominating global aviation Upon completion in the late 2020s, Al Maktoum International – Dubai World Central (DWC) will become the world’s largest airport with an ultimate capacity exceeding 220 million passengers and 16 million tonnes of cargo per annum. It is part of the DWC aerotropolis – a multiphase development of six clustered zones that will include Dubai Logistics City (DLC), Commercial City, Residential City, Aviation City and Golf City.

In January 2015, Dubai International Airport became the world’s busiest airport for international passenger traffic

INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

DUBAI INTERNATIONAL AIRPORT

DWC will become the world’s largest airport

Dubai Airports is expected to receive 126 million passengers by 2020

DWC first opened its doors in June 2010 with commencement of cargo facilities, and today, more than 24 cargo airlines including all the Emirates freighters use the facility.

Passenger services were introduced three years later in October 2013, with European carrier Wizz Air as the launch operator. Kuwait’s Jazeera Airways, Bahrain’s Gulf Air and Doha-based Qatar Airways now operate flights to the new airport, and more than 500,000 passengers passed through the facility’s doors in 2014.

“If passenger business follows the same growth trajectory as cargo, as airlines and customers see the advantages of going through a very uncongested and rapid terminal process, we are confident DWC will be a successful operation,” says Griffiths. “The growth

at DWC will accelerate when capacity at Dubai International becomes much more scarce, which it does every day.”

In May this year, Dubai Airports announced plans to fast-track construction of phase one at DWC in order to boost capacity from the six million passengers a year to 26 million by 2018.

The initiative is part of the $32 billion expansion package announced for the airport in 2014 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

Griffiths and his team are currently “putting a structure in place” to raise this finance, which will see DWC built in two phases over the next eight years, with the first phase including two satellite buildings with capacity for 120 million passengers annually and the ability to accommodate 100 A380 aircraft at any one time.

Less than 100km south-west of DWC, expansion work has advanced on another UAE aviation hub of distinction – Abu Dhabi International Airport – where the terminal component of the Midfield

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 89

HONEYWELL PERSPECTIVE

Partners in innovation For us at Honeywell, innovation is part of our legacy, and it is at the core of everything we do. It is about creating solutions to improve people’s lives, address global challenges and deliver more value for our customers. Our vision, much like that of the Government of the United Arab Emirates (UAE), is for a secure, comfortable and more efficient future, and we have a steadfast belief in the power of innovation to achieve this.

When the UAE Government designated 2015 the ‘Year of Innovation’ and launched its National Innovation Strategy to make the country one of the world’s most innovative within the next seven years, we found that the nation’s spirit and ambition resonated deeply with Honeywell’s drive to increase productivity and support sustainable growth.

Resource efficiency Through our extensive international experience, honed over 125 years, we are proud to have been the pioneers of revolutionary technologies in a diverse array of global industries, ranging from oil and gas, aerospace and building solutions, to fire and industrial safety, residential and commercial security, climate control and energy management. We are also leaders in the field of energy efficiency, as 50% of our products are proven to save energy.

Honeywell has been a partner in the UAE’s development for more than 50 years, and has played a significant role in building the nation’s infrastructure, including airports, refineries, hospitals, ports and metros, in addition to a number of the

main oil and gas facilities, which have helped to foster the UAE’s inspiring growth and development.

As the UAE looks to the future, we are excited that the vision and chosen growth path of this nation’s leadership has many synergies with Honeywell’s evolving technology offer – a number of which are already being used to benefit the UAE today. Looking at the seven key sectors that are being targeted to promote innovation, Honeywell is already helping

50%

of our products are proven to save energy

the UAE make notable progress. In the renewable energy field, Honeywell’s green fuels process technology will be used to produce renewable jet fuel and renewable diesel at a new refinery to be built in Fujairah. Honeywell Green Jet Fuel can reduce greenhouse gas emissions by 65 to 85% compared with petroleum-based fuels.

Within the health sector, Honeywell has developed a broad spectrum of technologies and solutions focused on improving patient comfort, safety and security. This will help deliver the ‘Hospital of the Future’ and will revolutionise the way that citizens and residents in the Gulf Cooperation Council (GCC) are cared for.

In the field of transportation, Honeywell recently supported the upgrade of both

runways at Dubai International (DXB) with one of the world’s first complete LED airfield lighting systems. Moreover, our technology was chosen to be part of the iconic Dubai Metro project.

Honeywell has also made great strides in developing more efficient technologies that can help desert nations, such as the UAE, manage the energyintensive process of water desalination and meet growing water requirements.

We are confident that our space systems, which have contributed to many mission successes for the United States, will go a long way in aiding the nascent UAE Space Agency to fulfil its objectives.

This brings us to education, one of the most important pillars. Honeywell’s technologies can play a key role in turning all public schools into smart learning centres, and creating a brighter future for the UAE from a grassroots level.

The next seven years will be exciting for the UAE in the run-up to 2021. In terms of innovation, there is little doubt that the UAE will succeed in delivering on the objectives of its National Strategy and will secure its place as a world innovation leader.

Honeywell Middle East, Emaar Business Park, Building 2, Sheikh Zayed Road PO Box 232362, Dubai, UAE T: +971 4 4505 800 F: +971 4 4505 900 www.honeywell.com

INVESTMENT OPPORTUNITIES: INFRASTRUCTURE

UAE carriers set growth pace Emirates President and CEO Tim Clark says the airline will move to DWC within the next 10 years. “We expect to be down there between 2023 and 2025,” he confirms.

Emirates carried 44.5 million passengers in the 2013/2014 financial year, but Clark anticipates that more than 70 million people will fly with the airline by 2020.

The Dubai flag carrier currently operates 219 passenger aircraft and has 281 more worth $135 billion on order, including 81 A380s. More than 59 of the airline’s super jumbos are already in service, with Dubai International ranked the world’s leading A380 hub in 2014. The airport saw 15,098 A380 flights take off to 39 destinations around the world, a sharp increase in the 10,608 flights to 26 destinations in 2013. Dubai also tripled London Heathrow’s 2014 count of just 5,434 A380 flights to 11 cities.

“Emirates’ expanding fleet of A380 aircraft is a key driver of Dubai International’s passenger growth and has shaped the expansion of the airport,” says Griffiths.

“This includes Concourse 3, the world’s first purpose-built A380 facility.”

ABU DHABI AIRPORTS

The UAE’s expansionist carriers are one of the major driving forces behind the fast-paced development of Dubai and Abu Dhabi’s aviation infrastructure.

Emirates and Etihad Airways have established themselves as two of the world’s most influential airlines, adopting an effective hub strategy whereby they connect six continents through their respective airports.

Emirates and Dubai’s low-cost carrier, flydubai, account for around 38 per cent of capacity at Dubai International, according to Griffiths, and as both pursue ambitious growth plans with more network expansion and service frequencies planned, and an impressive order book of new next-generation aircraft set in stone, their contribution to Dubai’s flourishing aviation sector will continue to gain momentum.

Emirates’ growth trajectory has been a top consideration for Dubai Airports as it looks to speed up the construction of DWC. “As soon as we get phase two ready, we will construct to a capacity that allows Emirates to move its entire hub,” says Griffiths. “We have to build enough capacity for them to move quickly.”

Sustainable design and environmental impact have been key concerns while building the new Midfield Terminal at Abu Dhabi Airports

Terminal Complex (MTC) project is on track to meet its target opening date in the fourth quarter of 2017. It’s all part of operator Abu Dhabi Airports’s Capital Development Programme (CEP), which has already seen the completion of the airport’s Terminal 3 and the opening of a new runway, both back in 2009, as well as the total refurbishment and expansion of facilities at Terminal 1 (2011 and 2015 respectively).

In addition, a VIP Terminal opened last year, operated in partnership with National Aviation

As you’d expect, Etihad Airways is also the top contributor to growth at its home base, Abu Dhabi International, which registered a 20 per cent hike in passenger traffic to more than 20 million passengers in 2014. The carrier accounted for the lion’s share, with 14.8 million passengers flying with Etihad last year, up 22.3 per cent on 2013. This was achieved through its unique business model, which President and CEO James Hogan says focuses on “organic growth, codeshare partnerships and minority equity investments in other airlines”.

In fact, the airline’s seven new codeshare agreements and the expansion of three existing ones delivered 3.5 million passengers in 2014, up 40 per cent on 2.5 million in 2013, he reveals. Etihad also acquired a 49 per cent shareholding in Italian flag carrier Alitalia last year.

In 2015, 24 million passengers are expected to pass through Abu Dhabi International and traffic from Etihad’s eight new destinations will play a key role in driving a 20 per cent growth of passenger volume.

Services (NAS). When completed, MTC will cover 700,000 square metres or the equivalent of 98 football pitches, initially catering to 30 million passengers annually.

In January 2015, Abu Dhabi Airports reported that the steel works on all four piers of the Midfield Terminal Building (MTB) were 99 per cent complete, with the structure now a “visible landmark from the air and the ground”, according to Chairman His Excellency Ali Majed Al Mansoori. “This achievement has allowed us to start the building enclosure around the piers, which will enable the building structure to take its final shape during the course of 2015,” he says.

Work is under way on supporting road networks for the MTC, which is destined to be one of the world’s largest passenger terminals. Abu Dhabi Airports is also carrying out expansion and refurbishment work on Abu Dhabi’s secondary airports, including Al Ain International, Al Bateen Executive Airport and Sir Bani Yas Island and Delma Island airports.

Other UAE aviation projects that have been given the green light include the construction of Ajman International Airport. A 2018 opening has been mooted for this AED2.1 billion ($571 million) facility.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 91

ABU DHABI PORTS PERSPECTIVE

Steering Abu Dhabi’s trade and logistics strategy Abu Dhabi Ports is playing a vital role in the United Arab Emirates capital’s emergence as one of the world’s most important trade and logistics hubs.

The jewel in the operator’s crown is Khalifa Port, which is home to the region’s first semi-automated container terminal and features nine of the world’s largest ship-to-shore cranes.

The container terminal was recently ranked the fastest-growing port in the region and the third fastest-growing container port in the world.

The port is on track to report record business volumes in 2015, after seeing a significant surge in business during the first 10 months of the year.

accounted for 2.9 per cent of Abu Dhabi’s non-oil GDP. Chief Executive Officer of Abu Dhabi Ports Mohamed Juma Al Shamisi says the close integration of Khalifa Port and Kizad is crucial to the operator’s future development strategy. “The integrated services of Khalifa Port and Kizad offer long-term competitive commercial advantages, including exceptional supply chain efficiencies,” he says.

Technological innovation “We make constant efforts to improve our efficiency. Khalifa Port’s Container Terminal boasts a 12-minute turnaround time for trucks – a regional best – and

Maqta Gateway is a revolutionary trade and logistics management system Khalifa Port’s design has the potential for expansion to handle more than 15 million TEUs (twenty-foot equivalent units) containers and 35 million tonnes of cargo, when all phases are operational.

Crucial to Khalifa Port’s growth strategy is the ongoing development of the Khalifa Industrial Zone Abu Dhabi (Kizad), a vast trade, logistics and manufacturing hub.

Combined, the two facilities are core to Abu Dhabi’s economic diversification plans.

A recent study conducted by Oxford Economics found that Abu Dhabi Ports’ operations contributed more than AED14 billion ($3.8 billion) to Abu Dhabi’s gross domestic product (GDP) and generated in excess of 39,500 new direct and indirect job opportunities in 2014.

In fact, one in every 50 jobs in Abu Dhabi’s non-oil sector could be attributed to Abu Dhabi Ports in the same year.

The study also revealed the organisation’s total operational output

35 gmph (gross moves per hour), raising Khalifa Port’s profile as an international maritime hub,” adds Al Shamisi.

“By adopting new technological solutions and by providing supply chain efficiencies, we enhance our service operations, allowing us to meet the demands of rising import and export activities in Abu Dhabi.”

Al Shamisi says competitive operating costs, dedicated customer and investor support and integrated clustering are just some of the benefits offered by Khalifa Port and Kizad.

“We have invested in intelligent information technology, from our e-pass systems for access controls and terminal software operating systems to streamline cargo operations, to introducing the ports community system, Maqta Gateway,” he adds.

Maqta Gateway is a revolutionary trade and logistics management system that will bring together all stakeholders in Abu

Mohamed Juma Al Shamisi, Chief Executive Officer, Abu Dhabi Ports Dhabi’s import and export trade business and manage the flow of cargo into and out of the emirate. The first stage of the project is set to go live in early 2016.

“Maqta Gateway will streamline Abu Dhabi’s import and export trade activities through a single window, delivering secure, real-time information and transparent efficiencies that will enhance the processing times of goods and improve communications between all parties involved,” says Al Shamisi.

NAKHEEL

INVESTMENT OPPORTUNITIES: REAL ESTATE

Property: a maturing market Headline projects continue to rise up from the desert, but, as the United Arab Emirates’ real estate market settles, the mid market presents lucrative returns for would-be property investors

THE UNITED ARAB EMIRATES’ property market continues to mature, led by local developers such as Nakheel, DAMAC Properties, Emaar and Aldar.

Prices have stabilised and demand for new projects remains. There is increasing demand for mid-market developments, again pointing to the growing maturity of the sector, and new projects have launched in response to this.

An MPM Properties market report on the Abu Dhabi Real Estate Market in the first quarter of 2015 highlights a demand for studio and one- or two-bedroom apartments, with smaller residential units providing investors with the highest yields.

With Expo 2020 now only five years away, tourism, travel and trade will continue to be the core drivers of the UAE economy, with its real estate sector most likely to track this growth.

Ambitious projects Dubai-based Nakheel’s most recent launches include a range of master developments and residential, retail and tourism projects to be developed in line with the vision of Dubai for 2021. Among them are Deira Islands, Dragon City, Warsan Village, The Palm Tower, Jumeirah Park Legacy Villas, Jumeirah Village Circle, Deira Islands Mall, Nakheel Mall and The Boardwalk at Palm Jumeirah.

Deira Islands, a waterfront tourist and residential development, offers a range of investment opportunities

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INVESTMENT OPPORTUNITIES: REAL ESTATE

In recent months, DAMAC Properties has brought to market a lush green community called AKOYA Oxygen. The 55-million-square-foot master development is set around the Tiger Woods-designed Trump World Golf Club Dubai and includes a wide array of entertainment and high-end retail and dining options, including the region’s first-ever rainforest.

“We have also launched a four-tower project named DAMAC Towers by Paramount Hotels & Resorts, which overlooks the Burj area of Dubai and includes the world’s first Paramount Pictures-branded hotel, with over 800 keys [guest rooms],” explains Niall McLoughlin, Senior Vice President. “The other three towers are made up of luxury hotel apartments, which will be managed by our DAMAC Hotels & Resorts team, under the DAMAC Maison brand.”

Emaar is currently focused on the development of several key projects in Dubai. These include the Dubai Creek Harbour, a joint venture with Dubai Holding; Dubai Hills Estate, a joint venture with Meraas Holding; and the Opera District, a cultural and lifestyle destination located in the heart of Downtown Dubai.

“We are also expanding on the residential offerings in Downtown Dubai and Arabian Ranches,” said a spokesperson for Emaar Properties.

Abu Dhabi and Dubai property comparison Residential

Abu Dhabi

Dubai

Total supply

227,000 units

471,000 units

Q1 2015 new supply added

750 units

2,000 units

Q2-Q4 2015 future supply

5,800 units

19,400 units

Year-on-year average sale value change

+6.1 per cent

+7.0 per cent

Year-on-year average rental change

+7.0 per cent

+5.0 per cent

Q1 2015 off-plan (launched projects)

126 units (one project)

3,207 units (eight projects)

Abu Dhabi

Dubai

Total rooms (hotel and hotel apartments (H&HA))

21,900

92,000

Q1 2015 new rooms added (H&HA)

300

600

Q2-Q4 2015 future supply (H&HA)

2,900

4,400

Year-to-date (YTD) occupancy

80 per cent

85 per cent

Revenue per available room (AED)

397

867

Average room rate (AED)

497

1,020

Total guests (2015 YTD)

647,00

1,800,000

Hospitality

Source: Abu Dhabi Real Estate Market Overview Q1 2015, MPM Properties

94 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

The UAE remains a hotbed of property investment, offering some of the highest rental yields in the world

Meanwhile, Aldar Properties commenced sales for its Meera residential development in Shams Abu Dhabi on Reem Island in early June.

Mohamed Al Mubarak, Chief Executive Officer at Aldar, said: “Meera offers buyers the chance to own an attractive home in one of Abu Dhabi’s most desired destinations, Shams Abu Dhabi. Due to the strong demand for mid-market residential properties in prime locations in the capital, we are expecting high interest in the development from owner-occupiers and investors that are seeking homes and strong return on investment.”

Meera features two 26-storey towers overlooking a landscaped park, with 408 one-, two- or threebedroom apartments.

DAMAC Properties is on target to complete between 2,500 and 2,700 units in 2015, including welcoming the first residents to its first luxury golf course master development, AKOYA by DAMAC. “This luxury development includes an array of apartments and villas overlooking the first golf course in the Middle East to be managed by The Trump Organization. The desirable development is presented across 42 million square feet, and is one of the most anticipated developments in Dubai,” says McLoughlin.

Investor outlook Nakheel has already delivered a number of projects in 2015, including Palm Views East and West on Palm Jumeirah, an additional 90 villa units at Jumeirah Village Circle, homes at Jumeirah Park and residential units at Badrah and Veneto.

“We are also opening two food and beverage outlets – Barrel 12 and Sun& – on Palm Jumeirah this year, as part of our growing Hospitality and Leisure business,” explains Sanjay Manchanda, CEO, Nakheel.

“On the retail side, expansions to our Dragon Mart and Ibn Battuta malls are due to open in 2015, along with Palm Jumeirah’s Golden Mile complex. In addition, our joint venture with Engel & Völkers was launched this year, with E&V’s new Dubai Market Centre now open and fully operational.”

In 2014, Emaar completed 572 units, including Panorama in the Greens, Alma 2, La Avenida 2 in

INVESTMENT OPPORTUNITIES: REAL ESTATE

Arabian Ranches I, and Casa, ahead of schedule, in Arabian Ranches II. The developer has planned a similar project delivery schedule for this year in Downtown Dubai and Arabian Ranches.

The UAE remains a hotbed of property investment, offering some of the highest capital growth and rental yields in the world.

“The majority of our buyers are from overseas markets, with many from around the GCC [Gulf Cooperation Council], India, Pakistan, the UK and, increasingly, China. Location will always remain the key deciding factor, alongside the quality of build, luxury interiors and history of the developer,” says DAMAC’s McLoughlin.

“Many buyers from the UK and the GCC are often looking for private or serviced hotel apartments in the prime locations of the city such as Dubai Marina and the Burj area, while those from India and Pakistan are often looking to invest in villa communities for their families,” he adds.

According to Manchanda, Nakheel has seen a healthy response to all of its newly launched projects, with some selling out in a matter of days.

“Interest has been particularly strong for projects on Palm Jumeirah, which continues to be one of the world’s most sought-after destinations for living, leisure and tourism. Jumeirah Park, our growing luxury villa community, also continues to attract investors, and our newly launched Warsan Village community has also been a big draw,” he says.

Meanwhile, Nakheel’s 15.3 square kilometre Deira Islands waterfront master-planned development offers a diverse mix of investment opportunities, particularly for people looking to tap into Dubai’s growing tourism sector. Strategically located, this project will transform Dubai’s Deira district into a world-class hub for living and leisure. With new retail developments including the 5,000-outlet Night Souk, Deira Islands will also extend the traditional commercial activities by boosting trading opportunities in the area known as ‘Old Dubai’.

A number of key infrastructure projects have been announced ahead of Expo 2020 as part of the preparation for this global event, providing a platform for the UAE to demonstrate its ability to meet visitors’ expectations.

Impact of Expo 2020 “The property market will further strengthen and continue to grow as a result of major events such as Expo 2020, and in reflection of the government’s vision for 2021, which aims to bring 20 million visitors to Dubai annually,” explains Manchanda. “Nakheel itself is developing a number of projects in the tourism, retail and leisure sectors, in line with these goals.”

DAMAC

Falcon Island development Al Hamra Real Estate Development (AHRED) is a leading consortium and real estate developer in the UAE. Located in Ras Al Khaimah, AHRED has established itself as a significant master planner with world-class iconic destinations such as Al Hamra Village, Bayti townhouses, shoreline apartments Bab Al Bahr and Royal Breeze, as well as the ultraexclusive Falcon Island.

Comprising a collection of just 150 luxurious fiveto eight-bedroom canal, beach and park residences, Falcon Island is complemented by private beach access, landscaped green spaces, stunning waterfront views and a signature central canal, giving the development a ‘Venice in the Middle East’ feel.

Al Hamra has witnessed strong levels of demand from both buyers and investors looking for a luxury waterfront living, combined with value-for-money.

Dubai developer Damac Properties launched AKOYA Oxygen in 2015, its first hotel villa concept

“Dubai’s successful bid to host the World Expo in 2020 is attracting investors to the real estate sector, with the Expo expected to enhance returns substantially – and tourism to jump to 20-25 million visitors in the next five years,” adds DAMAC’s McLoughlin. “The Expo win has certainly put the cherry on the cake and is a strong reason to buy in Dubai. It should be said, however, that even without the Expo, Dubai’s fundamentals in terms of location [and a] tax-free and secure environment remain the key drivers for foreign investment.”

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 95

INVESTMENT OPPORTUNITIES: MEDIA

Media magnate THE REMARKABLE GROWTH OF THE United Arab Emirates’ media sector can be traced to the pioneering vision of its rulers, in particular, His Highness Sheikh Rashid bin Saeed Al Maktoum, the late ruler of Dubai, whose policy of establishing free trade zones in the emirate led to a huge influx of foreign investment in Dubai’s economy.

Dubai Media City (DMC), which was established in 2001 under the auspices of Dubai’s current ruler, HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, was the region’s first dedicated free zone for the broadcast and print media industries. Operated by TECOM Investments, a Dubai government real estate master developer, the precinct has attracted some of the world’s biggest media companies as tenants, including BBC World, CNN International and Reuters.

“Dubai Media City was created to provide a home for companies across the media value chain, giving them access to talent and allowing them to operate alongside each other, network, share knowledge and expertise,” says Mohammad Abdullah, Managing Director of the TECOM Investments Media Cluster.

“When DMC was established, Dubai’s media sector was very much in its infancy. However, industry leaders have since selected DMC as the home from which to base their business […] and DMC has successfully promoted sector growth by providing the right environment for companies to operate alongside each other.”

Meeting international standards In 2005, in response to demand for specialised facilities in the emirate, TECOM Investments established Dubai Studio City to cater to companies from across the broadcasting and production value chain. International Media Production Zone (IMPZ) followed in 2007, providing infrastructure for printing, publishing and packaging companies.

96 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

Each precinct has gone on to be hugely successful, helping to put Dubai on the international media production map. “Together, these media communities have pioneered the development of a genuine media ecosystem here in Dubai, and are now home to more than 2,000 business partners,” says Abdullah.

Indeed, recent data released by the Dubai Film and Television Commission shows that of these 2000 media companies, 120 are television broadcasters and 180 are production houses. Furthermore, more than 20,000 media workers from 120 countries live and work in the emirate.

“DMC is now a frontrunner in Dubai’s transition into an innovation-led economy, and is championing creativity within the media sector and more generally in the UAE,” maintains Abdullah. “One of our core focus areas has been supporting and spearheading initiatives to drive innovation. So far this year we have been very involved with IBC Content Everywhere, Dubai Lynx, the Middle East’s inaugural Festival of Media, and Creative Mornings, which have provided excellent platforms for nurturing talent and encouraging creativity.”

In Abu Dhabi, the government’s media strategy acknowledges the importance of building a sustainable local media production sector and its potential benefits in regards to forging a strong national identity promoting innovation and creativity.

The UAE capital’s media production free zone, twofour54, was established in 2008, and has since gone on to play a major role in nurturing Arab talent through a variety of education, training, and funding programmes.

The precinct is home to more than 300 media and entertainment production companies, including high-profile partners Sky News Arabia, National Geographic, CNN, Bloomberg, and Abu Dhabi’s main film funding vehicle, Image Nation. twofour54’s unique approach to cultivating homegrown talent also places an onus on some

JUMANA EL-HELOUEH/REUTERS

The United Arab Emirates has forged a significant global reputation as the Middle East’s most important – and innovative – media production hub

Sky News Media is one of many media production companies operating in twofour54, Abu Dhabi’s media production free zone

TWOFOUR54

INVESTMENT OPPORTUNITIES: MEDIA

twofour54 aims to be recognised as a global hub for the media industry

of its high-profile partners – most notably the BBC, Cartoon Network and the AFP Foundation – who contribute or help coordinate twofour54 tadreeb’s 200 or more professional media training courses.

“Our vision for twofour54 is to be a globally recognised hub for the media industry and a sustainable catalyst and platform for the authenticity,

diversity and creativity of media from Abu Dhabi,” says Noura Al Kaabi, Chief Executive Officer of twofour54.

“Our mission is to nurture media businesses and professionals, through a fully integrated and supportive tax-free media zone that delivers world-class production services and talent development initiatives, ensuring the growth and sustainability of the region’s media industry.”

According to Al Kaabi, the Abu Dhabi government continues to commit significant resources to expanding twofour54’s capabilities and building a vast creative ecosystem. “Most recently, we unveiled our revamped post-production facility that now offers an experience unmatched in the region,” she says. “The facility offers the most comprehensive range of editing suites and latest colour correction capabilities as well as a private 18-seat 4k screening room.

“Through our Creative Lab, we commission projects to give our community members hands-on experience in various disciplines. We also provide funding for Arab filmmakers through the SANAD fund. Ali

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INVESTMENT OPPORTUNITIES: MEDIA

More than 20,000 media workers from 120 countries live and work in the emirate

MONA AL MARZOOQI/THE NATIONAL/GC IMAGES/GETTY IMAGES

twofour54 helped secure two of the biggest Hollywood productions in recent years, such as the newest Star Wars film

Mostafa’s film, From A to B, was co-produced by Image Nation and twofour54, and the film has now been picked by Studio Canal for UK distribution.

“Our talent development activities also reach beyond simply Abu Dhabi and the UAE. In partnership with organisations like Saudi Broadcasting Corporation in Saudi Arabia and Tamkeen in Bahrain, we run training courses to support the development of media talent across the region.

“All of these talent development activities help to upskill young Arabs interested in a media career.

This ensures there is a steady stream of talented media professionals coming up through the ranks to sustain the future of the industry.” twofour54’s role in helping to secure two of the biggest Hollywood productions in recent years – Fast and Furious 7 and the rebooted Star Wars: The Force Awakens – which were both filmed in Abu Dhabi, is testament to its rising status as a

Production type in Dubai (by filming days) Film: 1% Short format: 3% Commercial: 4% Corporate video: 5%

Photography: 12% Total filming days in 2013: 13,191 TV: 75%

Source: Annual Activities Report 2013/2014, Dubai Film and TV Commission

98 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

global film production hub. Al Kaabi says twofour54’s collaboration with the Abu Dhabi Film Commission (ADFC) – which spurred the creation of a 30 per cent rebate scheme offered to filmmakers choosing to shoot on-location in the capital – is paying huge economic dividends.

Citing a recent PwC report on the impact of the rebate scheme, she says that for every $1 contributed by the Abu Dhabi government, $4.50 is generated for the emirate’s economy.

“The positive impact comes through increased hotel occupancy rates and sales in the F&B [food and beverage] and services sector,” says Al Kaabi. “To date, more than 15,000 hotel room nights have been booked through ADFC as a result of productions visiting Abu Dhabi. The current economic impact of the film industry is valued at AED198 million ($54 million).

“The study also estimates that Abu Dhabi could expect to generate up to AED1 billion ($272 million) annually by 2020 if we continue to secure international productions,” added Al Kaabi.

A thriving local film industry Both Al Kaabi and Abdullah believe Emirati talent will propel the country’s media production sector to new heights in the future.

“Innovation is being driven by young, creative talent, who are pioneering new channels for developing and consuming content, particularly online,” says Abdullah. “Digitisation has presented major growth opportunities for the media industry, and talented and innovative individuals and businesses are taking advantage of this, creating new products and championing new ideas.”

Highlighting the fact that 30 per cent of all media companies based at twofour54 are Emirati-owned and operated, Al Kaabi says the media zone “has helped to initiate the creative careers of hundreds of young Arabs”.

Importantly, she adds, at grass-roots level, “twofour54 also enables young Arabs to share their stories, helping to counter some of the misconceptions about the region.”

“We are driven by our belief in the creative talent of the region’s young people and a desire to help young Arabs realise their potential and achieve their dreams as well as making the sector an attractive industry for local talent,” she adds.

INVESTMENT OPPORTUNITIES: MICE

ALI HAIDER/EPA/ALAMY STOCK PHOTO

A global meeting point World-class venues, supporting infrastructure worth billions, strong air links to six continents, and a flourishing knowledge economy have put the United Arab Emirates on the global MICE map

THE GULF COOPERATION COUNCIL (GCC) meetings, incentives, conferences and exhibitions (MICE) industry was valued at $1.3 billion in 2014, according to Alpen Capital.

The sector is “one of the key growth drivers for the region’s burgeoning economy, making significant contributions through income and employment along with attracting substantial foreign investment”, the firm noted in its September 2014 GCC Hospitality Industry report.

The number of international association meetings taking place in the region has more than tripled over the past 10 years, earning the Gulf global prestige as a popular meetings and incentive hub, the report said.

The region’s MICE focal point is the United Arab Emirates, home to many of the world’s biggest sporting tournaments and the host of an increasing number of major international rotational congresses. Dubai stages around 27 per cent of all events held in the region and Abu Dhabi generates $700 million from its MICE sector, a figure forecast to grow at an annual rate of seven per cent to reach $1.4 billion by 2020, according to the Abu Dhabi Convention Bureau (ADCB).

The UAE’s world-class infrastructure is a major draw card for world congresses, according to Martin Sirk, Chief Executive Officer of the International Congress and Convention Association (ICCA). “The range of venues, trained professionals, accommodation, air access and other support services is now at a really high level,” he says.

Dubai ranked 44th on the ICCA’s list of top congress cities globally in 2014, having staged 56 international association meetings. This marks a 34 per cent improvement on 2013 when 37 meetings were held in the city, which ranked 63rd globally.

The 2015-20 forecast “looks strong”, says the Dubai Convention and Events Bureau’s (DCEB) Director of Convention and Business Tourism, Steen Jakobsen, noting upcoming events including the IATA World Passenger Symposium in 2016, the World Tunnel Congress in 2018, and the World Pulses Convention in 2020.

He adds that Dubai earned renown among the global convention fraternity after successfully staging major meetings such as the World Diabetes Congress in 2011, the World Congress of Cardiology in 2012 and the banking industry’s Sibos convention in 2013.

The MICE industry is poised to make an even stronger contribution to the UAE’s economy over the next five years

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 99

INVESTMENT OPPORTUNITIES: MICE

ADNEC’s impact on Abu Dhabi’s economy reached AED2.56 billion in 2014

“They proved to the world that Dubai is capable of hosting some of the world’s biggest events,” he says.

Dubai’s successful bid to host World Expo 2020 is concrete proof of this. The event, which will run over a period of six months and is expected to attract 25 million people, has injected new energy into the emirate’s construction, real estate, hospitality and transport industries.

Dubai’s advantageous geographical position, close to several key emerging source markets where associations are looking to grow their membership, is one of the destination’s strongest selling points, Jakobsen stresses.

Add to the mix the connectivity provided by Emirates and its fleet of 59 A380s, and the city is a business event magnet. This was demonstrated in April 2014, when the carrier flew 14,500 delegates from China’s Nu Skin Enterprises to Dubai for the UAE’s largest ever incentive group hosting. “The group used more than 70 Emirates flights and Nu Skin even chartered two of the carrier’s A380s to bring delegates here,” Jakobsen reveals. This 10-day sightseeing trip generated economic benefits worth $80 million, according to Dubai’s Department of Tourism and Commerce Marketing (DTCM), with Dubai beating off fierce competition from Singapore, Seoul and Macau to host the event.

on calendar diversification,” he says. “Moreover, DWTC’s venue utilisation was at its peak in 2014, reporting a substantial increase in the mid-sized exhibition segment.”

Sectors represented at these events included healthcare, information and communications technology (ICT), energy, finance, food, logistics, retail – all of which are “well aligned” to Dubai’s 2021 strategy outlining key economic pillars for gross domestic product (GDP) growth.

To facilitate ongoing demand for “new shows and strategic events”, DWTC recently unveiled plans to build a customisable 15,500 square metre extension to its current indoor space, with three new halls taking total indoor event and exhibition capacity to more then 122,000 million square metres when operational in the first quarter of 2016. “The planned flexible event space is expected to cater to the next five years of portfolio growth that will, in turn, support increases in Dubai’s business tourism traffic,” says Alkhaja.

He underlines DWTC’s role as an “important facilitator of Dubai’s continuing growth as a leading business and events destination”, noting the financial performance of its MICE portfolio has “outperformed the global industry average over the past seven years”.

“It is not just about the bottom-line growth, but the number of events we stage and the volume of quality visitors we attract,” explains Alkhaja. “We bring top-tier decision-makers to Dubai, propagating partnerships, transactions and sustained economic activity. Our delegates and exhibitors bring knowledge, expertise and a desire to do business in Dubai, and to access, and be part of the growth of, the entire MENASA [Middle East, North Africa and South Asia] region.”

A record-breaking year But Dubai’s prowess as a global MICE destination would not have been achieved without the clout of the Dubai World Trade Centre (DWTC). Boasting one million square feet of multipurpose indoor space, including 17 halls and a ballroom, it stakes its claim as the Middle East region’s largest venue, attracting a record 2.45 million business and event visitors in 2014, Dubai World Trade Centre Authority (DWTCA) figures reveal. This represents an “astounding 10 per cent year-on-year growth,” says Ahmad Alkhaja, DWTC Senior Vice President – Venues.

“Showcasing more than 435 trade events, 49 of which were new, DWTC witnessed 16 per cent growth in the number of exhibitions and a 40 per cent year-on-year increase in the number of association meetings and congresses, in addition to double-digit growth in the live entertainment and consumer events portfolio, resulting from the strong focus

Epicentre of business tourism Abu Dhabi is also attracting an increasing number of sizeable business events, thanks to the pulling power of the Abu Dhabi National Exhibition Centre (ADNEC), which comprises integrated venues covering 133,000 square metres of interconnected floor space including a 73,000 square metre indoor exhibition area. ADNEC’s International Convention Centre (ICC) seats up to 6,000 for conferences, plus there are two conference halls and 20 meeting rooms. Expansive outdoor facilities include a central plaza, grandstand demonstration area, and a pedestrian bridge connecting ADNEC to a marina.

The expertly master-planned facility also offers three-, four-, and five-star hotel accommodation.

ADNEC hosted 327 events in 2015, including 40 exhibitions, compared with 37 in 2013.

“In the first quarter of 2015, we hosted 14 exhibitions and five conferences, and our goal is

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INVESTMENT OPPORTUNITIES: MICE

to host 46 exhibitions including 11 new additions by the end of the year,” says ADNEC’s acting group CEO, Humaid Matar Al Dhaheri.

ADNEC started 2015 on a high note, hosting Abu Dhabi Sustainability Week 2015 (ADSW 2015) in January, which attracted more than 30,000 visitors from 170 countries; the International Defence Exhibition and Conference (IDEX) in February (101,000 visitors); and, in March, the second edition of the Global Forum for Innovations in Agriculture (GFIA 2015) and the 16th World Conference on Tobacco OR Health (WCTOH 2015) – two of eight events staged that month.

“ADNEC has played the central role in solidifying Abu Dhabi’s reputation as a leading MICE destination,” says Al Dhaheri. “To keep up with the sector’s exponential growth, we are working with event organisers, industry associations, meeting planners and buyers to bring more specialised events to our venues.”

ADNEC’s impact on Abu Dhabi’s economy reached AED2.56 billion ($700 million) in 2014, surpassing the original AED2.55 billion projection. In the first quarter of 2015 alone, ADNEC’s economic impact was AED842 million, with its year-end contribution predicted to hit the AED2.6 billion mark. Between 2007 and 2014, ADNEC’s total economic impact to the emirate was AED17.9 billion, notes Al Dhaheri.

Yas business and leisure Down the road on Yas Island, a number of world-class business facilities and attractions are also putting Abu Dhabi on the meetings industry map. They include Yas Marina Circuit (YMC), home to the Formula 1 Etihad Airways Abu Dhabi Grand Prix; Ferrari World Abu Dhabi, the world’s first Ferrari-branded theme park and biggest indoor theme park in the world; Emirati-themed waterpark Yas Waterworld; Yas Links Abu Dhabi golf course; two live entertainment venues, the outdoor ‘du Arena’ and indoor ‘du Forum’; and seven hotels.

They are all purpose-built for business and leisure, acknowledging market demand for this type of venue.

In addition to their attractive entertainment offerings, most offer meeting room facilities, while Yas Marina Circuit is home to the Yas Events Centre – a full-service MICE venue equipped to host a range of events, from trackside team-building days to large-scale conferences.

“Yas Island’s outstanding infrastructure offers unlimited opportunities for one-of-a-kind events or networking experiences, from a golf day for partners to a gala dinner at a world-class Formula 1 race circuit,” says Clive Dwyer, Director of Destination Management at Miral Asset Management, the entity responsible for promoting Yas Island. “It’s also compact, with all

ROBERT HARDING/ALAMY STOCK PHOTO

UAE among most popular global MICE destinations According to the Pacific World Destination Index 2014, the UAE ranked in the top three destinations in Europe, the Middle East and Africa (EMEA) for MICE

Most popular UAE destinations:

Most popular source markets:

Top industry sectors:

Most popular services:

Dubai Abu Dhabi

Eastern Europe Scandinavia Benelux India USA

Pharmaceuticals Automobile

Incentives Meetings

assets [located] within minutes of one another, plus 10 minutes from Abu Dhabi airport.”

Yas Island plays host to large-scale music and sporting events, with last year’s Formula 1 race weekend attracting upwards of 60,000 spectators.

In 2014, the island’s hotels reported a 30 per cent year-on-year hike in room nights driven by business events, reveals Dwyer.

“MICE delegates are high-yielding visitors, spending up to six times more than rational holiday visitors,” he says. “Our research indicates that 38 per cent of MICE delegates intend to return for a holiday within three years, so MICE helps grow our leisure market.”

Source: Pacific World Destination Index

In 2014, Abu Dhabi National Exhibition Centre received 1.6 million visitors

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INVESTMENT OPPORTUNITIES: TRAVEL AND TOURISM

The master planner A portfolio of high-profile projects ranging from world-class museums to unique island concepts are being pioneered by Abu Dhabi’s Tourism Development Investment Company (TDIC), solidifying the emirate’s status as a destination of distinction

ABU DHABI, AS PART OF ITS wide-reaching 2030 economic diversification strategy, has set its sights on boosting tourism arrivals to the emirate by appealing to a range of niche markets.

The pitch is varied, from targeting the high-end leisure and business events sectors to luring those seeking cultural and halal-friendly tourism experiences. Yet, the end goal is to attract discerning visitors from around the globe to Abu Dhabi’s collection of one-off tourism offerings.

One of the major entities helping the United Arab Emirates capital realise its meticulously planned tourism strategy is the Tourism Development & Investment Company (TDIC), a wholly owned subsidiary of the Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi), which, since its inception in 2006, has rapidly gained a reputation for excellence as a master developer of major tourism, cultural and residential destinations across Abu Dhabi. These include Saadiyat island, which will soon be home to

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three world-class museums, as well as the Desert Islands project – a tourism destination spanning eight separate islands with the wildlife-rich Sir Bani Yas Island as its current focal point.

“TDIC’s mandate is to develop Abu Dhabi’s tourism and cultural assets to support the government drive to turn the emirate into a globally renowned destination,” confirms His Excellency Ali Majed Al Mansoori, TDIC’s Chairman of the Board. “TDIC’s expansive portfolio therefore features unique tourism destinations such as the award-winning Sir Bani Yas Island with its natureinspired experience, and Saadiyat Island, home to its own dedicated cultural district. Both cater to different market niches and are already growing in popularity, garnering local, regional and international interest.”

Abu Dhabi’s tourism industry headline grabber in 2015 will be the completion of the long-anticipated Louvre Abu Dhabi, the first of three cultural institutions planned for the Saadiyat Cultural District.

Due to open in December, Louvre Abu Dhabi will make its mark as the first universal museum in the

The Anantara Sir Bani Yas Island Al Sahel Villa Resort has been designed to offer guests an authentic Arabian wildlife experience

INVESTMENT OPPORTUNITIES: TRAVEL AND TOURISM

TDIC

The end goal is to attract discerning visitors from around the globe

TDIC

Saadiyat cultural district will be a centre for global art and culture

Arab world, displaying art, manuscripts and objects of historical, cultural and sociological significance. It will be housed in a futuristic building designed by Pritzker Prize-winning architect Jean Nouvel.

Louvre Abu Dhabi’s debut will pave the way for Zayed National Museum, which will tell the story of the region’s history and the unification of the UAE through the life of His Highness Sheikh Zayed bin Sultan Al Nahyan, the UAE’s founding father, and Guggenheim Abu Dhabi – billed as a pre-eminent platform for global contemporary art and culture.

“The opening of Louvre Abu Dhabi will draw in art and culture lovers from near and far, who will come to view unique exhibitions, permanent collections, productions and performances that put the emirate of Abu Dhabi on the world stage as a destination for art and culture,” says Al Mansoori.

The museum’s exceptional structure will be an attraction in its own right, he says, characterised by its “iconic 7,000-tonne dome, supported by only four piers. Inspired by the interlaced palm leaves traditionally used as roofing material in the UAE, visitors will be enchanted by its playful ‘rain of light’ effect while exploring the museum’s rich art collection,” Al Mansoori adds.

More than $28 billion worth of projects will be completed on Saadiyat over the next few years, and the cultural district is just one of three districts under construction on the island. The others are Saadiyat Beach District, home to five-star beach resorts, and Saadiyat Marina District, the island’s commercial heart.

Al Mansoori says that TDIC’s developments are designed to offer visitors “unique, immersive and unforgettable experiences”, whether cultural (Saadiyat), natural (Sir Bani Yas) or truly Arabian (Liwa).

The organisation’s desire to create experiential offerings has been encapsulated in two of its high-end resorts, operated by Bangkok-based luxury hospitality firm Anantara Hotels, Resorts & Spas. On Sir Bani Yas, there is a three-property complex designed to offer visitors an indigenous Arabian experience: the family-friendly beach resort Desert Islands Resort & Spa by Anantara; Anantara Sir Bani Yas Island Al Yamm Villa Resort, with 30 beachfront villas; and Anantara Sir Bani Yas Island Al Sahel Villa Resort, with 30 villas located in the heart of the Arabian savannah, home to free-roaming wildlife within the Arabian Wildlife Park.

Back to nature Al Mansoori says that TDIC’s development of Sir Bani Yas has rocket-launched its status to “one of the most popular nature-based destinations in the region”. In addition to wildlife-based rides and treks, visitors can take an archaeological site tour of a pre-Islamic monastery, go mountain biking, kayaking, horse riding, deep-sea catch-and-release fishing, scuba diving and snorkelling. TDIC also plans to develop a midmarket hotel on Sir Bani Yas. Meanwhile, the island’s airport is being expanded to support the anticipated influx of regional and international visitors.

Inland, TDIC’s Qasr Al Sarab Desert Resort by Anantara is a secluded desert retreat located in the dunes of the ‘Empty Quarter’, Liwa, offering guests the chance to take part in camel riding, an Emirati-inspired desert falcon and saluki show, desert walks, desert land sailing and fat biking.

Back in the city, TDIC’s portfolio includes the Eastern Mangroves complex, home to the Eastern Mangroves Hotel & Spa, also operated by Anantara, plus eco-friendly activities such as a guided kayaking tour or rides on the new silent-motor and speed-restricted donut boats.

The distinctive and exclusive nature of TDIC’s portfolio, combined with notable accomplishments such as Louvre Abu Dhabi’s imminent debut, have spawned global interest from visitors and investors alike, says Al Mansoori.

“Investor confidence is growing within the emirate, especially for development opportunities available on Saadiyat,” he says. “As more projects come online, the island will experience increased footfall from visitors as well as a growing demand for its other offerings, whether residential, leisure [or] educational, and we also anticipate more developers coming forward to spearhead their own projects.”

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INVESTMENT OPPORTUNITIES: TRAVEL AND TOURISM

2020 vision Dubai’s plans to attract 20 million annual visitors by the end of the decade are well on track, driven by a multifaceted tourism strategy that includes hosting the prestigious World Expo in 2020

WHEN DUBAI WON THE HIGHLY contested bid to host the World Expo 2020, it marked a major milestone in the emirate's tourism development strategy.

It was hailed a “once-in-a-lifetime opportunity to accelerate the growth of Dubai’s tourism industry”, by His Excellency Helal Saeed Almarri, Director General of Dubai’s Department of Tourism and Commerce Marketing (DTCM) and Chief Executive Officer of Dubai World Trade Centre Authority (DWTCA).

“Expo 2020’s impact on the tourism industry will be substantial, with 25 million visitors expected over

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the event’s duration from October 2020 to April 2021, 70 per cent of which are predicted to come from outside the UAE, making the event the most globally inclusive in Expo history,” says Almarri.

Those 25 million visitors are expected to make upwards of 33 million visits during the six-monthlong Expo, which will be staged at Dubai Trade Centre, Jebel Ali – a site selected due to its strategic location, equidistant between Dubai and Abu Dhabi and adjacent to Dubai World Central (DWC), home to Al Maktoum International Airport. The estimated economic impact of hosting Expo 2020 is

INVESTMENT OPPORTUNITIES: TRAVEL AND TOURISM

EXPO 2020 DUBAI

Dubai's successful bid to host Expo 2020 is expected to draw 25 million visitors to the city between October 2020 and April 2021

approximately €17.7 billion ($24 billion), creating more than 277,000 jobs in Dubai by 2021.

Almarri says that the mega event will play a “valuable role” in helping Dubai achieve its tourism targets, focusing global attention on the emirate and its many attributes, but notes that the Expo bid is just one aspect of a “long-term vision to ensure sustainable national development and prosperous future for the UAE”.

Ahead of targets Dubai’s target is to attract 20 million visitors annually by 2020, doubling the 10 million that arrived in 2012.

In order to achieve this goal, set out in the Dubai Tourism Vision 2020 announced in 2013, the destination must achieve an annual growth rate of seven to nine per cent, reveals Almarri.

“While fluctuations are, of course, expected, our growth over the last five years has averaged eight per cent, indicating that we are very much on track,” he says.

“Statistics published in May 2015 demonstrate that Dubai welcomed 13.2 million international overnight visitors in 2014, which represents a year-on-year increase of 8.2 per cent and far

outpacing global average tourism-sector growth of 4.7 per cent, according to the World Tourism Organization (UNWTO).

“Dubai’s growth is also all the more remarkable given that 2014 presented numerous challenges including currency devaluation across several regions affecting visitor numbers, as well as an upgrade project at Dubai International Airport that resulted in an 80-day partial runway closure over the summer.”

Integral to Dubai’s tourism strategy success is its fragmented source-market approach, designed to mitigate the risks associated with overreliance on any specific region or geography. In essence, its visitor demographic reveals a diversity that mirrors its multicultural society.

“As 2014 figures demonstrate, Dubai has managed to maintain and grow its traditionally strong source markets such as Saudi Arabia, the UK and India, while at the same time attracting high-growth emerging markets such as China, Nigeria and Eastern European countries,” notes Almarri.

Dubai’s two home-grown airlines, Emirates and flydubai, have played a major role in driving business from these and other source markets through network and fleet expansion, he adds.

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WESTEND61 GMBH/ALAMY STOCK PHOTO

INVESTMENT OPPORTUNITIES: TRAVEL AND TOURISM

The view from Jumeirah Corniche, which opened in 2014 as part of an initiative to beautify Dubai's beaches

Emirates launched eight destinations and added circa 420,000 seats in 2014, while flydubai introduced 18 new destinations and approximately 180,000 seats.

Dubai also boasts a burgeoning cruise industry and opened a third cruise terminal in 2014. It is expected to handle 425,000 passengers in 2015, representing a 30 per cent increase on 2014 cruise season figures.

Dubai’s accessibility has also improved with the relaxation of UAE visa regulations, making it easier and cheaper to visit the emirate. Citizens from 46 countries can now obtain a visa on arrival, boosted by the March 2014 addition of 13 European Union countries to the existing 15 member states already eligible.

“Positive results can already be seen in the increase in visitors from Bulgaria, Hungary and Romania, for example, up 104 per cent, 86 per cent and 64 per cent respectively in 2014,” says Almarri.

Dubai is adding between 140,000 and 160,000 new hotel rooms by 2020 in order to accommodate the expected 20 million annual visitors. The emirate made significant progress with new property roll-outs in 2014, with the total hotel and hotel-apartment count hitting the 657 mark at the end of year, amounting to 92,333 rooms – up 9.2 per cent year on year.

“The emirate’s hotel sector is not just growing, it is also continuing to diversify, increasing the number of midmarket hotels while at the same time ensuring Dubai maintains its reputation as one of the world’s

Citizens from 46 countries can now obtain a visa on arrival leading destinations for luxury,” adds Almarri. Indeed, in 2014, the city’s five-star hotel capacity increased by 11.4 per cent, four-star capacity by 13.4 per cent and one- to three-star capacity by 3.4 per cent.

Hotel-apartment inventory also increased, with the number of ‘standard’-classified establishments growing 7.7 per cent and ‘deluxe’-classified establishments by 10.2 per cent, year on year.

“Taking all of this into account, as well as continual enhancements to Dubai’s leisure and business tourism offer, we can confidently say Dubai is on track to realise its Tourism Vision for 2020,” says Almarri.

The other emirates – Ajman, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain – are also looking to claim their share of the tourism market.

Ajman, for example, has been keen to promote the emirate’s heritage and natural landscapes on the global stage, participating in conferences and exhibitions such as the World Travel Market. According to ATTD, the number of guests across hotels and hotel apartments in Ajman reached 415,000 in 2014, up from 285,000 in 2013.

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Travel and tourism in the UAE: key facts 2014

2015 forecast

2025 forecast p4.9%

AED61.6bn 4.1% of total GDP

GDP: direct contribution

AED96.9bn 4.5% of total GDP p5.1%

AED126.7bn 8.4% of total GDP

GDP: total contribution

AED194bn 9.1% of total GDP

p1.4%

AED86.3bn 5.7% of total exports

Visitor exports

AED129.5bn 4.5% of total exports

p13.5%

Investment

AED23.0bn 6.5% of total investment

AED43.5bn 7.9% of total investment Source: World Travel and Tourism Council

As a destination, there is much more to Dubai than the iconic landmarks, malls and beaches for which it has become globally renowned.

“Arts, culture and heritage are vital to the success of our expanding economy, and they enhance the Dubai brand as well as the city’s standing as the cosmopolitan hub of the Middle East,” says Almarri.

Dubai’s gastronomic attractions have been a focal point, with a year-round campaign highlighting the emirate’s varied cuisine, punctuated by February’s Dubai Food Festival, where dining experiences range from street food to celebrity-chef-backed restaurants.

Beautifying Dubai’s beaches, parks and green spaces is also high on the agenda and, last year, the 14km-long Jumeirah Corniche opened to the public. Meanwhile, the regeneration of the city’s oldest neighbourhoods is under way as part of the upcoming Dubai Historical District. Dubai’s family offering will receive a boost when Dubai Parks & Resorts’ three theme parks open as early as October 2016, including LEGOLAND Dubai.

“We are continuing to highlight the depth and substance of the emirate’s vast array of experiences beyond its headline landmarks, as well as the numerous ‘value’ attractions, activities and accommodation options that cater to more budget-conscious tourists,” explains Almarri.

More than meets the eye There is also an “enormous opportunity” to enhance Dubai’s reputation as a world-leading events and entertainment destination, he says, with the DTCM looking to leverage the expertise of Dubai Festivals

and Retail Establishment (DFRE), which already runs successful crowd-pleasers such as the Dubai Shopping Festival (DSF) and Dubai Summer Surprises (DSS).

The development of cultural initiatives and developments that promote Dubai’s rich Arabian identity and national heritage are deemed an important pillar of tourism industry diversification.

Examples range from Art Dubai, an event that draws galleries, artists and visitors from across the globe, to the soon-to-be opened Qur’an Park, spanning 65 hectares and featuring many of the 54 plants mentioned in Islam’s holy book. Attractions will include an Islamic garden, children’s play areas, an Umrah corner, outdoor theatre, fountains, a desert garden, palm oasis, a lake, and running, cycling and walking tracks.

Almarri notes that, in the years following the Expo, the Dubai Trade Centre at Jebel Ali will become a cultural tourism site in its own right, featuring a university and a national museum. “In addition, the innovative solutions and partnerships created as a result of Expo 2020 will have a lasting effect on communities around the world.”

Dubai South Happiness and welfare are also core strands of Dubai's Strategy 2021. These aims are being manifested in Dubai South, a 145 square km city that is planned around happiness and creativity, investment, inclusivity and sustainability. Already home to Al Maktoum International Airport, when complete, Dubai South is expected to sustain one million people.

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Sharjah: true Arabia Named the Capital of Arab Tourism for 2015, Sharjah is forging a formidable reputation as a destination that blends tradition with modernity, spearheading projects that showcase the emirate’s unique cultural and natural assets

SHARJAH, THE UNITED ARAB Emirates’ third largest emirate, is responsible for almost half of the country’s manufacturing output, and has earned a reputation as a regional education hub of note. But, above all, Sharjah has carved a niche as the capital of Arab and Islamic culture, thanks to its plethora of museums, art galleries, cultural centres, grand mosques and monuments.

“Sharjah has a very active arts and culture scene, with more than 20 museums,” says Khalid Jasim Al Midfa, director general of the Sharjah Commerce and Tourism Development Authority (SCTDA). “It’s also known as the city of 1,000 minarets.”

This rich cultural offering has led to the city being named the Capital of Arab Tourism 2015, having previously been designated the Capital of Islamic Culture 2014. “Visitors can experience true Arabia in Sharjah,” adds Al Midfa.

Given Sharjah’s unique point of difference and its strong global air links, tourism has been identified by the government as a key pillar of growth and development for the future. Its strategy to date has paid dividends, with the SCTDA reporting a 15 per cent increase in the number of hotel guests in 2014.

Statistics for the first quarter of 2015 reflect an ongoing upward trend, with hotel guest numbers touching 600,000 for the period, compared with 515,947 during the same period in 2014. Sharjah’s hotel inventory currently spans nearly 10,000 rooms,

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but the SCTDA predicts that this will rise 20 per cent to 12,000 rooms within the next few years.

Sharjah International Airport – home to the region’s largest low-cost carrier, Air Arabia – is playing a significant role in driving more international tourism to the emirate, reporting a 12 per cent jump in passenger traffic to 9.5 million in 2014, compared with 8.5 million in 2013. In March, passenger numbers increased seven per cent year on year to 814,648, pushing up total first-quarter 2015 passenger statistics to 3.2 million, up six per cent the same period in 2013, according to Sharjah Airport Authority.

Growing passenger numbers The SCTDA aims to draw more than 10 million tourists to Sharjah by 2021, when the UAE celebrates its 50th anniversary. This target forms part of the recently unveiled Sharjah Tourism Vision 2021, which calls for collaboration between the public and private sectors, and tourism and aviation industry stakeholders, to work towards four pillars of development. These include promoting Sharjah as a family destination and a cultural hub, and providing innovative and world-class tourism experiences and facilities.

One of the entities integral to the strategy’s execution is the Sharjah Investment and Development Authority, known as Shurooq, which, since its inception on 2009, has ploughed local and global investment into several travel-, tourism- and leisure-related projects.

Sharjah was crowned the 2014 capital of Arab and Islamic culture

CULTURA CREATIVE (RF)/ALAMY STOCK PHOTO

INVESTMENT OPPORTUNITIES: TRAVEL AND TOURISM

IAIN MASTERTON/ALAMY STOCK PHOTO

The Eye of the Emirates ferris wheel, located in Al Qasba entertainment district in Sharjah

“Shurooq’s developments have been meticulously planned and are designed to showcase Sharjah’s cultural heritage, blending tradition with modernity,” explains Chief Executive Officer HE Marwan bin Jassim Al Sarkal. “They have gained international acclaim, attracting visitors from all over the world.”

These developments include Shurooq’s first-ever venture, the overhaul of the Al Qasba development, which now features the 60m-tall Etisalat Eye of the Emirates wheel; the Maraya Art Centre; the 300-seat Masrah Al Qasba theatre; plus waterside restaurants and cafés occupied by reputable local and global food and beverage brands brought on board by the authority. Today, Al Qasba attracts around two million visitors annually.

The vast Al Majaz Waterfront project is another feather in Shurooq’s cap, involving the expansion and beautification of a 20-year-old park into a landmark recreation area housing international restaurants and cafés and the musical cybernetic Sharjah Fountain.

“A variety of new projects are due for completion over the next few years,” notes Al Sarkal. “One notable example is the Chedi Khorfakkan [a luxury 100-suite hotel], part of the five-star Al Jabal Resort on Sharjah’s east coast, which won the GCC Hospitality and Leisure Project of the Year at the fifth annual Middle East Architect Awards.

“It has been designed to integrate seamlessly into the natural landscape, enabling guests to enjoy traditional architecture and illuminating the fascinating history of the city of Khor Fakkan.”

Diverse projects Two additional environment-led initiatives are also in the pipeline, including the Kalba Eco-Tourism Project, which will be constructed in three phases over six years. The master plan involves the redevelopment of natural reserves in Kalba and the transformation of Kalba Creek into a tourism hotspot. “The project will take advantage of the diverse habitats that are home to a rich array of wildlife, delicately balancing environmental conservation with low-impact

commercial, hospitality and cultural developments to create a unique experience-centric tourism destination,” explains Al Sarkal.

Shurooq is also developing Sir Bu Nuair Island at a cost of AED500 million ($136 million), with an estimated completion date of 2017. The island, located 65km off the UAE coast in one of the Gulf’s most protected marine areas, will feature a five-star hotel and resort; hotel apartments and villas; a camping village; cultural and recreational areas; plus large-scale infrastructure including a harbour and an airport. It ranks as one of Shurooq’s largest projects, says Al Sarkal.

“We also recently unveiled a tourism and leisure project on Al Noor Island in Khalid Lagoon, which is the Arab world’s first island to combine nature, art and entertainment,” he adds. “It covers an area of 45,470 square metres and reflects the art styles of a world-renowned designer with a streamlined structure inspired by the natural environment of butterflies; a pedestrian bridge that serves as an entrance to the island; a literature pavilion; a children’s playground; and an egg-shaped OVO art sculpture.”

According to Shurooq chairperson HE Sheikha Bodour bint Sultan Al Qasimi, projects like this set Sharjah apart, reflecting a “commitment to maintaining the emirate’s cultural integrity”.

“We are developing Sharjah within the framework of its Arabic and Islamic identity,” she says. This mandate is nowhere more evident than in Shurooq’s orchestration of the Heart of Sharjah development, which Al Sarkal has hailed as the region’s biggest heritage project to date.

Scheduled for completion in 2025, the initiative will restore and revamp the city’s traditional areas to “reflect what Sharjah was like in the 1950s, weaving together Sharjah’s modern life with its history”, he says. The development is already attracting “thousands of visitors annually”, and will eventually include restaurants, retail outlets, art galleries, markets, archaeological sites, museums, play areas and offices, many of which will be housed in renovated buildings.

Shurooq’s portfolio of developments meets the authority’s long-term vision to establish Sharjah as “one of the region’s premier travel and tourism destinations”, says Al Sarkal, taking advantage of the emirate’s “central geographic location, vivid natural beauty, historical richness, beautiful architecture, and extraordinarily diverse mountain and marine wildlife”.

“We want to showcase these unique attractions to visitors from all over the world,” he says.

Al Sarkal reveals that Sharjah’s tourism market value is set to rise from $377 million in 2014 to $546 million by 2020, representing a growth rate of 45 per cent that Shurooq, through its aforementioned initiatives, will play a major role in delivering.

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DOING BUSINESS IN THE UAE

Key indicators for business The United Arab Emirates has climbed up to reach 22nd position in the World Bank’s ease of doing business index and ranks top in the region

THE UNITED ARAB Emirates was one of the top 10 improvers in the World Bank’s Doing Business report.

And in 2015, the country ranked 22nd out of 189 economies, compared to 25th place in 2014. This places the UAE ahead of countries including Japan and France.

The ease of doing business index is a World Bank initiative to assess how local regulations affect the business climate in jurisdictions across the globe. Since 2003, it has assessed various aspects of the regulations applying to small and medium-sized enterprises (SMEs) over the course of their lifecycle. The ranking is comparative rather than absolute; thus, if a country slips down the rankings, it does not necessarily mean that it has become harder to do business there, but rather that other countries have introduced measures that facilitate matters there.

The Doing Business report offers an accessible and quick snapshot of the relative burden of regulations in a number of practice areas. The index focuses on a hypothetical small business in the main business centre of a country (in the case of the UAE, Dubai) and how the various

interactions with officialdom it will have to do over the course of its operations will affect it in terms of time and money.

Switzerland of the Middle East Since independence in 1971, the UAE has steadily built up a business-friendly legal and economic climate, and continues to make further reforms to attract investment. The UAE has managed to establish itself as the premier location for business in the Middle East and North Africa (MENA) region; these efforts are reflected in the fact that the country took first place out of the MENA countries represented on the ease of doing business index, followed by Saudi Arabia (49th globally) and Qatar (50th).

In total, the index evaluates 10 regulatory topics facing businesses. These are: starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; and resolving insolvency.

For starting a business, the UAE came 58th, down slightly on 49th in 2014, it took an average of eight days to set up

112 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

a new business, involving procedures.

This compares favourably to the regional average of 18.9 days and eight procedures, as measured by the World Bank.

In terms of obtaining construction permits, the UAE ranked fourth in the world, unchanged from the previous year.

Securing a building permit took an average of 44 days, involving 10 procedures, compared to the average of 149.5 days and 11 procedures in the economies of the Organisation for Economic Co-operation and Development (OECD), widely regarded as the ‘club’ of developed economies.

For getting electricity, the country came fourth, down one place on 2014.

Receiving an electricity connection took an average of just 35 days, involving just three procedures. This compares to an average of 84.9 days and 4.8 in the MENA region and 76.8 days with 4.7 procedures in the OECD economies. Connections costs were also much cheaper, coming in at 24.2 per cent of the per capita income, against 972.5 per cent for MENA and 73.2 per cent in the OECD. Since 2014, the UAE has eliminated the requirement for site inspections and has reduced the time it takes to get connected to the power grid.

DOING BUSINESS IN THE UAE

Ease of doing business in the UAE, 2015

#58

Starting a business

#4

Dealing with construction permits

#4

Getting electricity

#4

Registering property

#89

Getting credit

#43

Protecting minority investors

#1

Paying taxes

#8

Trading across borders

#121

Enforcing contracts

#92

Resolving insolvency Source: the World Bank Group

Registering property is also fairly (measured as a percentage of profits) simple and the UAE’s score on this variable compares favourably to many other stands at fourth place, unchanged from jurisdictions, averaging 14.8 per cent 2014. Just two procedures are necessary in 2015, against 32.6 per cent in MENA and the process can be completed in and 41.3 per cent in the OECD. two days at a cost of 0.2 per cent of the In terms of ease of trading across property’s value. In MENA, this takes an borders, the UAE ranked eighth in 2015, average of 31.3 days, with 6.1 procedures down one place from 2014. Exporting and costs 5.7 per cent of the value of the required just three pieces of documentation property. The respective averages for and importing required just five. Costs the OECD countries are 24 days, 4.7 were significantly lower than the world procedures and 4.2 per cent of the value. average, standing at $665 per container, Reforms recently completed include compared to $1,166.3 per container in introducing a standard contract for MENA and $1,080.3 per container in property transactions and opening new the OECD. The respective average import service centres for registering property. costs per container were $625 in the The score for getting credit was up in UAE, $1,307 in MENA and $1,100.4 2015 to 89, from 99 in 2014. In terms of in OECD countries. the strength of legal rights in the country, On enforcing contracts, the UAE’s the UAE scored top in MENA. Credit rank was 121, unchanged from 2014. bureau coverage of the population was This involved 49 procedures, compared fairly low, at 28.3 per cent, but still more to a regional average of 43.6 procedures than double the regional average of and 31.5 in the OECD. However, 11.6 per cent. Moreover, the the UAE was faster at processing country’s ranking on this such claims than many other variable rose as credit countries, with an average of bureaus started to exchange 524 days involved, compared UAE overall information with utilities, to an average of 657.8 days ease of doing enabling greater depth on in MENA and 539.5 days in business rank information on individuals’ OECD jurisdictions. creditworthiness.

For resolving insolvency On protecting minority cases, the UAE scored 92 in investors, the UAE rose 2015, down from 88 in 2014. The considerably, from 102 in 2014 to strength of the country’s insolvency 43 in 2015. This comes on the back of legal index (as ranked from 0 to 16 according reforms requiring greater disclosure for to World Bank methodology) was nine related-party transactions, both in a public out of 16, above the regional average of company’s annual report and to the stock 6.6 out of 16 but below the OECD average exchange. Moreover, since 2014, directors of 12.2 out of 16. Insolvency costs took up can be sued for transactions that harm a 20 per cent of the value of the estate on company, and held liable for transactions average in the UAE, against 13.9 per cent that constitute a conflict of interest. in MENA and 8.8 per cent in the OECD. Shareholders also now benefit from greater The UAE’s high rankings on other transparency relating to documents business indices bears out these results; pertaining to related-party transactions, for instance, in the World Economic Forum’s and can request the rescission of a Global Competitiveness Report, the country transaction found to be unfair. scores 5.3 out of a possible seven points, The UAE ranks first in the world in and is rated as the world’s 12th most terms of the ease of paying taxes. The competitive economy. average number of payments required The authorities in the UAE are is just four and takes up just 12 hours committed to continuing to identify and a year, against 17.4 payments taking up smooth out potential obstacles to doing 220.4 hours annually in MENA and 11.8 business, giving substance to the country’s payments taking 175.4 hours a year in recent moniker, “the Switzerland of the the OECD. Moreover, the overall tax rate Middle East”.

#22

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Attracting investment with free zones Since the first one was opened 30 years ago, economic zones across all seven emirates have helped to secure the United Arab Emirates’ place on the international trade and commerce map

FREE ZONES HAVE transformed the United Arab Emirates into the Middle East’s commercial hub and export powerhouse. Since the country opened its first specialised economic zone (SEZ) – the Jebel Ali Free Zone (Jafza) – in 1985, the total number of free zones across all seven emirates has ballooned to 36. These SEZs specialise in a multitude of sectors, including aviation, logistics, finance, information and communications technology (ICT), media, gold and jewellery, healthcare, clean energy, automotive, and even floriculture.

Offering financial incentives such as 100 per cent foreign ownership, zero taxation, fast-track business set-up and licensing, 100 per cent repatriation of capital, immigration services and low-cost operations, the UAE’s free zones have become an attractive proposition for foreign investors looking to enter the Middle East market.

As the country continues to diversify its economy, free zones have also grown in

significance – accounting for 33 per cent of non-oil trade, His Excellency Sultan bin Saeed Al Mansoori, the Minister of Economy, said in comments published in May 2015.

Dubai More than half of the UAE’s free zones are located in Dubai. Among these is Jafza, which hosts more than 7,800 global companies that include more than 100 Global Fortune 500 enterprises, says Salma Hareb, Chief Executive Officer of Economic Zones World (EZW), the free zone’s parent company. These companies represent industries from electronics, construction, transport and food, to pharmaceuticals, retail and services.

Quoting a report by EY in 2014, Hareb says that Jafza’s total gross value added (GVA) to Dubai’s economy in 2013 was estimated at AED72.6 billion ($19.8 billion) or 20.6 per cent of the emirate’s gross domestic product (GDP). It also generated more than 200,000 jobs or 8.7 per cent of Dubai’s total employment.

114 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

“The total contribution of Jafza companies to FDI [foreign direct investment] is estimated at AED8.9 billion [$2.2 billion]. This equates to 23 per cent of total inward FDI in the UAE,” she adds.

The Dubai Multi Commodities Centre has emerged as one of the fastest-growing and largest SEZs in the country, listing more than 10,000 firms. It regulates, promotes and facilitates trade in gold, diamonds, pearls, precious metals and tea.

TECOM Business Parks operates nine free zones, namely: Dubai Internet City (an ICT hub); Dubai Media City (which attracts media organisations worldwide); Dubai Studio City (designed for the broadcast, film, television and music industry); Dubai Knowledge Village (a human resource development, professional training and educational free zone); Dubai Outsource Zone (dedicated to the business process outsourcing industry); Dubai International Academic City (the world’s only free zone dedicated to higher education); International Media Production Zone (which serves graphic

IAIN MASTERTON/ALAMY STOCK PHOTO

DOING BUSINESS IN THE UAE

art, printing, publishing, packaging and media production companies); Enpark (for companies in the energy and environment sector); and Dubai Biotechnology and Research Park (for companies in the life sciences industry).

The Dubai Airport Free Zone attracts investments from the aviation industry, Dubai Logistics City caters to the cargo and logistics sector, and Dubai Maritime City supports the shipping sector and other maritime enterprises.

In addition, jewellery companies are welcomed in Gold and Diamond Park, while pharmaceutical companies and medical centres are hosted in Dubai Healthcare City. Dubai Silicon Oasis promotes modern-technology-based industries, and the Dubai Auto Zone and Dubai Flower Centre provide platforms for automotive companies and the floriculture industry respectively.

Highlighting Dubai’s status as a global investment hub, Dubai International Financial Centre (DIFC) is crucial in catering to the needs of banks, capital

markets, Islamic finance, asset management and insurance companies.

Last but not least, the International Humanitarian City enables humanitarian organisations to facilitate aid and development efforts across the globe.

Abu Dhabi In the UAE capital, Abu Dhabi Ports is the master developer, operator and manager of nine commercial logistics, community and leisure ports, including Khalifa Port and the industrial, trade and logistics hub, Khalifa Industrial Zone (Kizad).

“Kizad has free zone plots that have been leased and [we] are exploring the allowance for the allocation of additional free zone land,” says Captain Mohamed Juma Al Shamisi, Abu Dhabi Ports CEO. “A total of 11 million square metres of land has been leased in Kizad, representing a total investment of over AED47.75 billion ($13 billion).”

Al Shamisi added that a study commissioned by Abu Dhabi Ports and conducted by Oxford Economics

Dubai Internet City – an ICT free zone

concluded that the company’s contribution to Abu Dhabi’s GDP in 2014 amounted to approximately AED14.1 billion ($3.84 billion) or 2.9 per cent of the emirate’s non-oil GDP in 2014.

Other free zones in the emirate are Masdar City, which supports companies involved in renewable energy, energy industries, clean technology and ICT; twofour54, a media and entertainment free zone; and Abu Dhabi Airport Free Zone, which serves companies operating in aviation cargo, warehousing, supply, logistics, and maintenance, repair and overhaul (MRO) sectors. ZonesCorp is responsible for the SEZs in Abu Dhabi and currently targets the manufacturing, engineering, processing, oil and gas, construction and chemical industries.

Sharjah Hamriyah Free Zone (HFZ) houses more than 6,200 companies from 157 countries, welcoming foreign investments from

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ABU DHABI TERMINALS

DOING BUSINESS IN THE UAE

more than 500 industries in the key technology, healthcare, marketing, food sectors of oil and gas, petrochemicals, and construction, and many others.” maritime, steel, construction and food It is focusing on expanding its production. It is also the largest steel zone back-office services such as human and the second largest oil storage zone in resources, accounting and call centres, the UAE. Latest figures indicate that HFZ while also attracting a wide variety of has attracted $3 billion of FDI. educational institutions and academic Another SEZ in the emirate is the service providers.

Sharjah Airport International The emirate has two other Free Zone (SAIF), which offers free zones: the Ras Al trade, industrial and service Khaimah Investment licences to various types of Authority (RAKIA) and the businesses. It has signed up RAK Maritime City. RAKIA free zones more than 6,500 companies was voted Best Free Zone in the UAE since launching in 1995.

Middle East 2014 by the United Kingdom-based Global Ras Al Khaimah Banking and Finance Review.

Helping the emirate attract The zone is home to 7,000 investors from around the world, the Ras companies and manages two industrial Al Khaimah Free Trade Zone (RAK FTZ) is parks in Al Hamra and Al Ghail. one of the fastest-growing free zones in RAK Maritime City, meanwhile, is the the UAE. latest, and most advanced, maritime free “Within the last four years, we have zone to open in the UAE, providing doubled our portfolio of international a cost-efficient and secure environment clients from more than 4,000 to over for its tenants.

8,000 currently,” outlined Ramy Jallad, Acting CEO. “These companies represent Fujairah over 50 industry sectors, including light Capitalising on its strategic location, and heavy industrial, distribution and Fujairah Free Zone (FFZ) offers investors trading, services, logistics, information easy access to ports in the Gulf, Red Sea,

36

116 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

Khalifa port – located in Abu Dhabi

Iran, India and Pakistan. In addition, it is close to the Fujairah International Airport. It currently serves more than 2,000 companies.

Also contributing to the emirate’s economy is Fujairah Creative City, which provides services to a broad spectrum of industries, including media, events, consulting, education, communication and marketing, music and entertainment, design and technology.

Ajman and Umm Al Quwain Ajman Free Zone (AFZ) and Umm Al Quwain Free Trade Zone (UAQ FTZ) offer investors access to the business potential of the rest of the northern emirates.

Around 15 per cent of the UAE’s manufacturing firms are located in Ajman, and AFZ has provided a fertile environment for companies in various sectors such as textile, food and beverage, chemicals, publishing and metal, to name a few.

Meanwhile, located within an hour’s drive of Dubai and Sharjah, UAQ FTZ provides an ideal location for micro businesses, small and medium-sized enterprises (SMEs), and conglomerates.

DOING BUSINESS IN THE UAE

Advancing business interests The chambers of commerce in the United Arab Emirates are primary sources of business services for investors, providing a range of services and access to extensive business networks

THE UNITED Arab Emirates is climbing the ranks of soughtafter foreign direct investment destinations. With individuals and companies keen to do business here, chambers of commerce across the emirates are a crucial calling point for investors wanting access to its fast-growing markets.

Each chamber offers primary business services and provides technical advice and assistance on the local regulatory system. Once companies have received their licence from the relevant authority, they are required to register with their local chamber, which serve to further the interests of businesses.

The following listings provide details for each emirate’s main chamber of commerce. For information on regional branches and city chambers, visit the relevant chamber’s website.

Abu Dhabi Chamber of Commerce and Industry Abu Dhabi Chamber of Commerce and Industry (ADCCI) has a number of branches located across the emirate. Working to connect businesses and advocate policies that contribute to sustainable economic development, ADCCI also aims to increase the competitive capabilities of the private sector at the local, regional and international level. Services on offer include company and trade registration, as well as information on investment opportunities in Abu Dhabi and how to pursue them.

E: contact.us@adcci.gov.ae W: www.abudhabichamber.ae Opening hours: 8am-3pm Sunday-Thursday

MAIN OFFICE Main Building of Abu Dhabi Chamber Corniche Road PO Box 662 Abu Dhabi, UAE T: +00 971 2621 4000 F: + 00 971 2621 5867

MAIN OFFICE Dubai Chamber of Commerce and Industry Baniyas Road, Deira PO Box 1457 Dubai, UAE T: +00 971 4228 0000 F: +00 971 4202 8888

Dubai Chamber of Commerce and Industry The strategic objectives of Dubai Chamber of Commerce and Industry are to create a favourable environment for business in the emirate, support the development of business and promote Dubai as an international business hub. The chamber’s network comprises more than 150,000 members, who benefit from services targeted towards helping members to network and grow.

E: info.member@ dubaichamber.com | info. dataresearch@dubaichamber. com | customercare@ dubaichamber.com W: www.dubaichamber.com Sharjah Chamber of Commerce and Industry Aiming to be the pioneering voice of Sharjah’s business community, Sharjah Chamber of Commerce and Industry (SCCI) works to enhance economic activity and grow and develop members’ trade relations. Offering technical advice and assistance, the chamber also recommends different business options and procedures. In addition, SCCI’s online e-services provide information on Sharjah, from trade operations to visiting the local bazaars.

MAIN OFFICE T: + 00 971 6530 2222 F: + 00 971 6530 2226

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DOING BUSINESS IN THE UAE

E: scci@sharjah.gov.ae W: www.sharjah.gov.ae Opening hours: 7.30am-2.30pm Sunday-Thursday Ajman Chamber of Commerce Strategically located between Dubai and Sharjah, Ajman is marking its place on the map as a destination for foreign direct investment, and Ajman Chamber of Commerce (ACC) serves to promote the emirate as a centre of business and commercial, industrial and agricultural activity. The chamber’s vision is one of economic sustainability, and ACC assists its members by providing information, vendor and legal services that The UAE’s chambers of commerce provide vital information for investors

underpin Ajman’s growth. As well as offering membership services, ACC is on hand to organise economic seminars, forums and events, receive trade delegations and supply key economic information to professionals.

MAIN OFFICE Ajman Chamber of Commerce PO Box 662 Ajman, UAE T: + 00 971 6005 95959 F: + 00 971 6747 1222 E: info@ajmanchamber.ae W: www.ajmanchamber.ae Opening hours: 7.30am-2.15pm Sunday-Thursday Ras Al Khaimah Chamber of Commerce and Industry The chamber of commerce and industry in Ras Al Khaimah supports the emirate’s business environment by

providing economic, legal and commercial services and consultation in line with international best practice. Furthermore, to standard advisory, registration and membership services, the chamber offers a comprehensive investment guide, which outlines procedures and services connected to completing foreign direct investment to the emirate.

MAIN OFFICE Ras Al Khaimah Chamber of Commerce and Industry Al Jazah Road Ras al Khaimah, UAE T: + 00 971 7207 0222 F: + 00 971 7207 0292 W: www.rakchamber.ae Opening hours: 7.30am-2.30pm Sunday-Thursday | 10am-2pm Saturday

Fujairah Chamber of Commerce and Industry As well as looking after the interests of commercial, industrial, services and professional entities, Fujairah Chamber of Commerce and Industry (FCCI) enhances cooperation among members and fosters strong relations between members and government entities. Its functions include promoting Fujairah’s economy and supporting the establishment of small projects in the emirate, namely through the financial and consultation services rendered by the Fujairah Small Projects Supporting Center.

MAIN OFFICE Fujairah Chamber of Commerce and Industry PO Box 738 Fujairah, UAE T: + 00 971 9222 2400 F: + 00 971 9222 1464 E: chamber@fujcci.ae W: www.fujcci.ae Umm al-Qaiwain Established in 1977, Umm al-Qaiwain’s Chamber of Commerce and Industry serves business in the emirate and is focused on underpinning economic development. The chamber provides a number of services, including online management of investment applications and information-sharing services for prospective foreign investors.

HEMIS/ALAMY STOCK PHOTO

MAIN OFFICE Umm al-Qaiwain Chamber of Commerce and Industry PO Box 436 Umm al-Qaiwain, UAE T: + 00 971 0676 51111 F: + 00 971 0676 57055

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DOING BUSINESS IN THE UAE

Communication and information exchange The British Business Group plays a key role in the development of British business in the United Arab Emirates, sharing best practice and arranging networking for its growing membership

Neil Isaacson Chairman and Chief Executive Officer, British Business Group (BGG) Dubai and Northern Emirates Neil Isaacson is patriotic and passionate about helping British companies and citizens succeed in the United Arab Emirates. Neil has more than 20 years of experience helping companies to grow and develop their products and services, and manages stakeholders in various sectors both in the United Kingdom and the UAE. Neil’s current role involves advising companies on growing their business in the Gulf Cooperation Council.

Neil’s first involvement with the BBG was as a platinum sponsor. He then joined the committee, holding the roles of legal and secretariat, followed by business development. Neil played a key role in helping to drive the new strategy, enhance sponsor relationships and improve how BBG operates.

How would you describe the structure and function of the British Business Group?

The British Business Group A Dubai and Northern Emirates, more commonly known as the BBG, is a non-profit membership organisation administered by a committee of 12, of which 11 are elected by the membership each year, and one is Head of the UK Trade and Investment office at the British Embassy in Dubai.

The BBG encourages the development of business between the United Kingdom and the United Arab Emirates by engaging its professional community of individuals and companies.

In what way does the BBG support foreign professionals working in the UAE? The BBG provides opportunities for A members and other representatives of British companies with a presence in the UAE to meet on a regular basis and provides a forum for the exchange of

information related to current and expected business opportunities that pertain to the UK and the UAE. The BBG also assists British trade missions and British enterprises considering business opportunities in the UAE. Since its inception, the BBG has experienced impressive growth.

For 2015 and beyond, how do you anticipate expansion in terms of member numbers and opportunities?

Since its inception, the BBG has A grown to be one of the most active and influential business groups in the UAE and Middle East region. The newly implemented BBG strategy for 2015-17 is based on engagement and development for members. This involves strategic aims by the operations team, committee, focus groups and platinum sponsors. This will not only encourage greater opportunities for our members, but will also achieve further growth in memberships.

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Fostering entrepreneurship The United Arab Emirates has taken steps to create an environment that supports small and medium-sized businesses as it moves towards a knowledge-based economy

FOR THE GOVERNMENT of the United Arab Emirates, providing a business environment that promotes entrepreneurship and supports small and medium-sized enterprises (SMEs) is a vital component of the country’s sustainable economic growth plans.

The contribution of SMEs to the UAE economy cannot be overstated. Around 94 per cent of the 300,000 enterprises in the UAE are SMEs, while 60 per cent of the country’s non-oil economy and 90 per cent of employment are also generated by the SME sector.

By 2021, when the UAE celebrates its 50th founding anniversary, SMEs will have a more significant economic impact, representing 70 per cent of the country’s gross domestic product (GDP), according to the Ministry of Economy.

In recent years, reforms have been adopted by the UAE Government to encourage growth in the SME community.

According to the World Bank’s Doing Business 2015 report, the UAE ranked 22nd out of 189 countries globally in terms of the ease of doing business, highlighting the country’s profile as having the most enabling environment

in the Middle East and North Africa (MENA) for entrepreneurs.

The extension of credit facilities to SMEs has also been strongly encouraged, with 40 out of the 52 banks in the country offering banking services to SMEs. An initiative by the newly launched Al Etihad Credit Bureau to offer commercial credit reports will further promote transparency and mitigate risks associated with SME lending, The National said in March 2015.

Government initiatives Since launching in 2002, Dubai SME has initiated a series of value-added services that cover start-up subsidies, incubation, training, financing, and the Government Procurement Programme, according to Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME. “To date, Dubai SME has assisted over 18,000 entrepreneurs, and helped more than 3,000 Emirati start-ups [to get their businesses off the ground],” he says. “It has also facilitated more than AED2.1 billion [$570.6 million] worth of contracts for member SMEs, while providing over AED215 million [$58.4 million] of government subsidies to qualified entrepreneurs.”

120 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

The agency similarly continues to recognise top-performing entrepreneurs through its Dubai SME 100 rankings. In its third cycle, Dubai SME 100 received registrations from 4,532 companies.

In April 2015, Dubai SME launched the Mohammed bin Rashid Establishment for SME Development, which aims to support Emirati entrepreneurs through seed capital loans and credit scheme loans, according to UAE news agency WAM. Meanwhile, the Khalifa Fund for Enterprise Development (KFED) provides interest-free loans to Emirati start-up companies and has so far distributed financial assistance worth AED1 billion ($271 million) to around 800 projects.

Recognising that access to capital is one of the most important challenges facing the SME sector, the KFED has created a diverse funding portfolio

Around 94 per cent of the 300,000 enterprises in the UAE are SMEs

that seeks to support SMEs in various stages of growth.

Both local and expatriate entrepreneurs are thriving in the UAE’s SME market.

Rasha Al Dhanhani, Chairperson of PappaRoti cafe, says that starting her business in 2009 during the economic slowdown was not easy. But the company, which sells coffee-caramel-coated buns, bucked the trend and now has several outlets across the UAE, including other parts of the Gulf Cooperation Council (GCC) and Yemen.

Supporting the entrepreneurial journey “UAE is extremely welcoming and supportive of new entrepreneurs,”

she says. “There are several funding options available to UAE citizens [and the UAE Government] encourages young entrepreneurs, who have the capability and passion to do something on their own.”

Fellow Emirati entrepreneur Ayman Al Awadhi, Managing Director and Partner of Corporate Business Services, a business set-up company, agrees, saying that the UAE has introduced several policies and regulations conducive to entrepreneurship, as well as facilitated entry, growth, transfer of ownership and smooth exit of enterprises. “Today, access to funds and investments are much easier and fairly available,” he explains. “Many entrepreneurs [are] able to export their

COFFEE PLANET

COFFEE PLANET

DOING BUSINESS IN THE UAE

Coffee Planet, whose machines are located across 200 petrol station in the UAE, attributes some of its success to support given by Abu Dhabi National Oil Company

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DOING BUSINESS IN THE UAE

Start-up accelerators Business incubators that provide support and access to funding have also contributed to the UAE’s evolving start-up culture. Impact Hub Dubai, for example, offers initiatives like the Emirati Launchpad, which is supported by the Hamdan Innovation Incubator, Dubai SME and the Commercial Bank of Dubai, says Aman Merchant, CEO and Co-Founder.

“Here, UAE entrepreneurs are offered training and mentorship to help them take their business off the starting blocks and across the GCC – and potentially the globe,” he says. “We are also working with UAE [telecommunications operator] Etisalat and Dubai SME to provide international exposure to UAE entrepreneurs through our SME Hub

services and products globally beyond the UAE borders. [Also], the culture of social entrepreneurship is widely becoming common [in the country].”

Hazel Jackson, CEO of biz-group, says that her company has grown from a one-person team with a typewriter, $700 worth of capital and enormous energy, to a 51-strong workforce with revenue of more than AED20 million. The company, which provides corporate training, team-building and business strategy solutions, has also been cited as the number one SME Great Place to Work for 2015 in the UAE. The UAE Government’s clear vision and determination, as well as the presence of free zones, have given companies like biz-group a chance to start, scale up and thrive. “[There’s also healthy competition].

The UAE is a place for many to start their businesses, and competition is critical to keep you current, open new categories and continuously push boundaries,” Jackson comments.

Robert Jones, Managing Director of Coffee Planet, says that his gourmet coffee-on-the-go business has thrived over the past 10 years, thanks largely to the support of Abu Dhabi National Oil Company (ADNOC). Coffee Planet machines can now be found across 200 petrol stations in the UAE. It also supplies locally roasted beans to hotels and restaurants in the region.

Passport. This provides access to our sister hubs in 25 countries including North, South and Central America, Europe, Russia, South Africa and Asia.”

Impact Hub Dubai is also promoting the 90-Day Accelerator Challenge, a unique programme that looks to accelerate ideas and business goals within just 90 days, instead of the usual one year.

Merchant said the Emirati Launchpad and its sister programme for expatriates, Entrepreneur Rising, bring aspiring entrepreneurs together with potential angel investors.

Another accelerator, Flat6Labs Abu Dhabi, supports start-ups at early and growth

phases, with a broad focus on media and digital content, including media and film production, e-commerce, social media, online education, gaming, mobile apps, and big data and analytics.

“We support them by incubating them for 14 weeks, providing each start-up with seed funding, strategic mentorship, office space, a multitude of perks and services from partners, support with company registration and visa acquisition, and a focused business-training curriculum, all engineered to prepare companies to be investment-ready within four months,” explains Nina Curley, Managing Director of Flats6Labs Abu Dhabi.

Ease of Doing Business: 2015 ranking Country Distance-to-frontier score* (and Doing Business 2015 ranking)

United Arab Emirates (22)

76.81

Saudi Arabia (49)

69.99

Qatar (50)

69.96

Bahrain (53)

69.00 66.39

Oman (66) Kuwait (86)

63.11

Regional Average (MENA 106)

59.23

Jordan (117)

58.40

Source: Doing Business 2015: Going Beyond Efficiency, the World Bank Group *Note: The distance-to-frontier score shows how far an economy is from the best performance achieved by any economy on each Doing Business indicator since 2005 or the third year in which data for the indicator was collected. The measure ranges between 0 and 100, with 100 representing the frontier.

“I have always been very impressed with the UAE Government’s efforts in fostering and supporting entrepreneurs.

Dubai especially is very much a regional hub of commerce,” he explains.

“Venture capital funding is also increasingly being made available to entrepreneurs. Although nurturing

122 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

ideas from concept to execution is not an easy task, the support given to entrepreneurs from crowd-investing platforms also helps develop start-ups into SMEs – we have been fortunate to work closely with finance providers Gulf Finance and crowd-funding platform Beehive.”

ART AND CULTURE

KARIM SAHIB/AFP/GETTY IMAGES

The UAE: regional art capital Home to a historic and thriving arts scene, the emirates have firmly established themselves as cultural pioneers. Now, with the support of prominent figures enriching growth, the UAE is set to remain a leader in the creative field

LESS THAN FOUR DECADES AFTER its unification, the United Arab Emirates has solidified its positioning as the region’s cultural hub – a standing largely attributed to two significant factors: the vision of the country’s rulers and the tireless efforts of the nation’s diasporic communities.

The roots of the emirates’ patronage of the arts began in the late 1970s, when the Ministry of Education sponsored art scholarships abroad and among its recipients are recognised names in the local art circuit such as Dr Najat Makki, Abdul Qader Al-Rais, Abdul Rahim Salim and Hassan Sharif, the latter known as the ‘father of conceptual art in the

UAE’. These pioneering artists returned to their homeland and went on to found the Emirates Fine Arts Society (EFAS) in 1980, where they taught and exhibited their art. It would be fair to say that the Emirate of Sharjah, led by His Highness Sheikh Dr Sultan Al Qasimi, initiated an arts-appreciating culture through the establishment of the Sharjah Biennial, founded in 1993 and several museums – among them the Sharjah Art Museum, Sharjah Museum of Islamic Civilisation and Sharjah Calligraphy Museum.

In March 2015, Christie’s Dubai welcomed more than 500 art collectors and enthusiasts for its 18th consecutive art sale season

The UAE’s emerging arts scene Branches of the EFAS are open in Abu Dhabi and Ras Al Khaimah, where artists also staged exhibitions in

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the city’s hotels and also where galleries began to set up shop, among them Green Art Gallery, founded by the late Mayla Atassi, a Syrian national; Majlis Gallery in the city’s Al-Fahidi Historical Neighbourhood, founded by British-born Alison Collins; and The Courtyard, designed by Iranian-born architect Dariush Zandi. In the UAE capital, the Cultural Foundation presented annual exhibitions and also became the city’s nucleus for artists and thinkers to gather.

By the early to mid-2000s, the world looked to the Middle East as the next emerging art market, with the UAE at the forefront of this movement. This was largely due to the growing number of galleries, as well as the launch of Canvas, the premier magazine for art and culture from the Middle East and Arab world in Dubai; the establishment of the Christie’s Dubai office in 2006; the introduction of the Art Dubai and Abu Dhabi Art fairs in 2007; the founding of the Dubai Culture and Arts Authority in 2008; and the announcement of the Saadiyat Island Cultural District in Abu Dhabi. The latter, a $27 billion unprecedented project led by the Tourism and Culture Authority (TCA), will boast the designs of five Pritzker Prize-winning architects: Zaha Hadid for the Performing Arts Centre, Frank Gehry for the Guggenheim Abu Dhabi, Jean Nouvel for the Louvre Abu Dhabi, Tadao Ando for the Maritime Museum, and Sir Norman Foster for both the Zayed National Museum and the UAE Pavilion, which was designed for the 2010 Shanghai World Expo. The

124 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

IAIN MASTERTON/ALAMY STOCK PHOTO

TDIC, DESIGN: ATELIERS JEAN NOUVEL

ART AND CULTURE

TCA has, along with the Louvre Abu Dhabi, the Guggenheim Abu Dhabi and the British Museum, staged several exhibitions in the UAE capital in the lead-up to the launch of the museums. The agency has also succeeded in collaborating with renowned cultural organisations such as the Musée National Picasso to stage exhibitions in the UAE capital. These initiatives and more have firmly cemented the emirates as both the region’s cultural capital and a global player in the international art scene.

A fusion of art Geography plays an important role in the emirates’ art and culture scene. As a gateway between East and West, as well as being a melting pot of nationalities, the UAE’s location and population diversity have

Top: A rendering of the Louvre Abu Dhabi interior Above: Seeing Through Lights – selections from the Guggenheim Abu Dhabi Collection

ART AND CULTURE

LINDSAY KIRKCALDY

Regional art has been supported by patrons all over the world

The Alserkal Avenue Expansion during Dubai Art Week in March 2015

allowed the exhibition of a predominance of regional and Asian art – both genres have, and continue to gain, attention and importance all over the world. This has been exemplified through several aspects, such as retrospectives and exhibitions for regional artists in museums including the Guggenheim, Pompidou and the Tate. In addition, auctions have witnessed world records for Middle Eastern art both in Dubai and Doha, as well as in Europe. The Christie’s Dubai Modern and Contemporary Arab, Iranian and Turkish art sale, held in March 2015, achieved $11.4 million for 158 artworks, a seven per cent increase on last year’s sale.

More importantly, regional art has been supported by patrons all over the world, and among some notable Emiratis are Her Highness Sheikha Salama Bint Hamdan Al-Nahyan, wife of His Highness Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces; His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai; His Excellency Abdul Rahman Al Owais, UAE Minister of Health; His Excellency Sheikh Nahyan Bin Mubarak Al Nahyan, UAE Minister of Culture, Youth and Community Development; and the Alserkal family, which was awarded the Patron of the Arts Award in 2013.

“We’ve learned that in building strategies in the areas where we are funding, it is essential that we build on platforms of knowledge,” says Sheikha Salama, who created her namesake foundation in 2010 in support of the arts, education and health. Sheikh Mohammed, a poet and art collector, launched his namesake Patrons of the Arts Awards in 2009, and in 2012, announced plans for the Dubai Modern Art Museum and the Opera House District. He is quoted as saying: “The cultural accomplishments of a nation define its character and individuality.”

Sheikh Nahyan, former Minister of Education and an avid collector of calligraphy, believes in the power of

culture as a tool for understanding. “The world has come to our country and our culture gains strength when our youth and communities engage, understand and appreciate that world,” he says.

In 2006, the UAE established the Ministry of Culture, Youth and Community Development and in the same year appointed Al Owais as Minister. A collector of Islamic as well modern and contemporary Arab art, under his tenure the UAE participated for the first time at the Venice Biennale in 2009. Today, the UAE also participates at the Venice Architecture Biennale and has secured a permanent pavilion at the Venice Biennale – both of these achievements are due to the backing of the government as well as the Sheikha Salama Bint Hamdan Foundation, which acts as the commissioning body. “We are lucky that our leaders are patrons and have a vision,” says Al Owais.

In 2010, Al Qassemi created the Barjeel Art Foundation in Sharjah to house his 500-plus-strong collection of regional art. “The objective of the foundation is to create a dialogue on Arab art,” says Al Qassemi. “Ultimately, the whole purpose is to make sure that art from the region has as many patrons and supporters as possible.”

The Alserkal Family, on the other hand, are behind Alserkal Avenue – one of Dubai’s foremost art districts, home to a majority of the city’s art galleries, which has recently unveiled its expansion plans: an additional 76,200 square metres, doubling its size to include more galleries, an events centre, an outdoor courtyard area and food and beverage outlets.

There are of course numerous ‘soft power’ activities being implemented across the emirates to nurture this thriving arts ecosystem. Among these are the efforts of diasporic residents to set up non-profit organisations to showcase their collections; these include Farhad Farjam of the Farjam Foundation and Ramin Salsali of the Salsali Private Museum. Elsewhere, organisations such as Art Dubai and Alserkal Avenue, as well as the galleries themselves, stage talks and seminars focused on art and culture.

Though the UAE has, in an incredibly short span of time, managed to architect and build a solid art scene, there is much yet to do – artist residencies, a regulatory body, education and public art are all central targets.

The good news is that a cultural army is ready and willing to participate.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 125

ART AND CULTURE

Pushing the boundaries of innovation

THE DUBAI SKYLINE IS ALREADY among the most identifiable in the world.

But hone in closer, to ground level, and an astronomical transformation is taking place as the emirate adds a plethora of new infrastructure and entertainment options in the lead up to the World Expo 2020.

By the end of the decade, the world’s largest Ferris wheel will sit on a man-made island off Dubai Marina, three mega theme parks will boast landmark rides and monuments and the present desert-residential checkerboard will be filled in as the government aims for a more compact, and sustainable, city.

The distinctive Dubai Metro will stretch further across the emirate, with seven new stations expected by 2020, while Jebel Ali port will swell and the rapid expansion of the second airport, the Expo site and related residential projects means Dubai World Central – presently a sparsely developed spot – will boast much stronger connections to the city.

“Dubai has been one of the fastest growing cities in the world over the past few years. This pace of change is unlikely to slow over the next five years,” says Craig Plumb, Head of Research at Jones Lang LaSalle MENA (Middle East and North Africa), which acted as the real estate advisor to Dubai’s Expo 2020 bid committee.

The significant growth will obviously benefit the construction industry, but tourism and hospitality will also be top winners. Unlike international sporting events such as the Olympics and the FIFA World Cup, Dubai’s Expo is expected to maintain a consistent throng of tourists, many of whom will be visiting the country for the first time, over six months.

In total, 25 million people are expected to the extravaganza, with the World Expo site designed

126 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

to host up to 300,000 people and an average of 153,000 each weekday.

Plans have been put in place to almost double the number of hotel rooms by 2020, but it will not only be occupancies that soar, hotels also will reap additional revenues from food and beverage offerings. The United Arab Emirates already has a far higher revenue percentage from its dining outlets than most tourist destinations and there will be strong competition from international restauranteurs to ensure they have the opportunity to profile their brand to a global audience during the World Expo.

London Business School Professor of Economics and Deputy Dean (Programmes), Andrew Scott, said the Expo would have particular advantages in helping to boost Dubai’s status as a hub for various sectors.

Some are more obvious than others and are already reaping the benefits, but by 2020 there would be something to gain for almost every industry.

“Expo enables further investment and further growth. In some sense, the sectors that benefit are obvious and established – construction, travel and hotels – and these will clearly benefit from Expo 2020,” Scott said.

“Longer term, the benefits will be broader spread.

Dubai will continue to cement its reputation as a regional global hub and attract more corporate headquarters from a multitude of sectors.”

Her Excellency Reem Al Hashimy, Managing Director of Expo 2020 Higher Committee and UAE Minister of State, has said the Dubai Expo is an opportunity for the entire world, with a lasting legacy that will spread beyond the UAE’s borders.

Dubai’s bid was supported by countries of the north, south, east and west:

MERAAS

A host of infrastructure projects are underway, especially in the retail and tourism sectors, to maximise on the growth opportunities presented by Expo 2020

Several new developments are under way in Dubai ahead of World Expo 2020

ART AND CULTURE

Plans have been put in place to almost double the number of hotel rooms by 2020

“This recognition furthers our commitment to develop an inclusive platform that allows our partners on this global stage to truly showcase the best they have to offer, and — in that journey — create linkages and partnerships with others,” HE Al Hashimy said in a speech to the General Assembly of the Bureau of International Expositions (BIE) in Paris shortly after winning the bid.

At least 300,000 new jobs are expected to be created. With the majority to be filled by expatriates, residential real estate will thrive, while the companies running various projects will increase the demand for office space. Dubai Multi Commodities Centre (DMCC) has already announced Burj 2020, which it says will be the tallest commercial tower in the world, in anticipation of demand.

The flow on effects will also lead to a significant increase in imports and retail opportunities – of food, homeware, clothing, construction materials and everything in between. Both Dubai and Abu

Dhabi are expanding their ports and related infrastructure to accommodate this.

Residents also will be seeking out more and new entertainment options, while Dubai Design District (d3) will nurture a blooming arts culture, supported by Emaar’s new opera house. All of the new developments will also, of course, be a boon for the construction sector and its related industries from architects to window cleaners.

Forging innovative partnerships But Dubai is keen to ensure the Expo is a showcase of sustainability, opening up great opportunities for the sector to not only fulfil the Expo requirements, but also take advantage of the invitation to promote new innovations. In fact, many in innovation could benefit from the Dubai Expo, with research institutes, corporations, citizens and entrepreneurs being asked to join together and find solutions to global challenges, which will ultimately be presented in 2020.

The Expo Live Partnership Fund has been established by the UAE Government to support new research and development projects that promise breakthroughs in the areas of sustainability, mobility and opportunity (the three Dubai Expo sub-themes).

All in all, there is so much happening in Dubai in the lead up to the Expo that few could argue there is no opportunity for them.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 127

A catalyst for growth Innovation, driven by megatrends including disruptive technological change, is reshaping how organisations and governments are delivering their services around the world.

During the past few years, some countries in the Middle East have started to undergo a transition from “importing” innovation to “producing” innovation. The UAE has taken the lead in this transition, with innovation being at the top of the national agenda to create a comprehensive ecosystem that will foster innovation. As part of the UAE’s long-term vision to become a global innovation leader, Dubai is set to host an unprecedented Expo event, which will generate new knowledge and ideas from all stakeholders (public, private, citizens, academia and non-governmental organisations) to enhance national, regional and global knowledge-based economies. Hosting Expo 2020 will serve as a catalyst for fostering innovation and smart solutions across the three main themes: Mobility, Sustainability and Opportunity.

What is innovation?

Innovation is the act of introducing something new, and is not only about technology, it is about solving problems with new ideas – big or small – that create significant benefits. Innovation is an important global theme. It enables growth, and can cause creative destruction. We can identify three main types of innovation: • Incremental innovations are changes to an existing product or service. The changes to the technology or business model are primarily aimed at doing the same, but enhancing the process to produce the existing products or services in a more efficient manner.

• Breakthrough innovations make many more changes to technology or business models. They are often game changers that have a higher competitive advantage as they can’t be replicated. As is the case with incremental innovation.

• Radical innovations create new paradigms, disruptive changes to the competitive environment for a product or a service, often resulting in completely new services and products. They are less frequent than incremental and breakthrough innovations but provide the highest competitive advantage and often create new categories of products and services or new sectors.

Innovation, no longer a luxury Evidence shows that innovative organisations outperform their less innovative peers.

According to PwC’s 2013 Global Innovation Survey1, the most innovative companies have grown at least 16% higher than their less innovative peers during a three‑year historical period. Over the next five years, innovative companies are expected to grow by double the global average and outgrow their less innovative peers by three times.

PwC’s research also shows that the most innovative organisations have several characteristics in common. They: • Innovate with a purpose and have a well‑defined innovation strategy.

• Take a more formal and structured approach to innovation.

• Concentrate on a greater proportion of breakthrough and radical innovations.

• Plan a broader range of business model innovation and explore a wider range of innovation operating models.

• Collaborate more with their stakeholders and business partners.

• Generate more revenues from new products and services.

1 In 2013, PwC surveyed over 1700 C‑suite executives from more than 25 countries and across 30 sectors to capture their experiences with innovation. For more information see “Breakthrough Innovation and Growth, PwC, September 2013”

But innovation is not limited to the private sector. Government also has an important role to play, both as a service provider and as a regulator. As a service provider, innovative governments can play multiple roles to maximise value for money through a continuous improvement cycle that leverages innovation, as shown opposite (Figure 1).2 As a regulator, the government has to provide an environment that incentivises innovation. In some cases, it can even champion some evolving innovative sectors/industries until the private sector develops to the point where government involvement is no longer needed and it can step back, having created the conditions to unleash the creativity of entrepreneurs and start‑up companies.

Opposite is an illustrative example of such an innovation ecosystem (Figure 2) showing the main drivers, several of which can be government enabled, as well as example focus industries and the main stakeholders that need to collaborate to enable the ecosystem to deliver.

Figure 1: Government’s service delivery cycle Cost drivers

Service delivery cycle Continuous improvement

Leadership

Strategic

Needs Assessment

• Why do we deliver

service this way?

Community & democratic engagement enabling citizen & business participation

• Do we need to

deliver the service?

Structural

Securing funding investing in infrastructure & talent

Brand building

Collaboration & needs assessment Market development Supplier management

Home-grown innovation In the Middle East, innovation has been growing in importance. Many companies are incorporating innovation in their product and service development and offerings, and more are planning to invest in innovation in the future. When PwC started tracking innovation in the region in 2010, the main focus was starting to shift from importing innovation (Figure 3). Fast forward to five years later; the focus has clearly shifted to producing innovation and in some cases, setting the strategic ambition to become an innovation leader.

Performance monitoring

Service Policy Sourcing

• What has been

the biggest impact on the fixed costs of delivery?

Focus: Value for Money Effectiveness & Efficiency

Make or buy or stop decisions

Smart funding & financial management

Innovation & rapid prototyping

Service delivery

Operational

Outcome assessment

Service design

Service evaluation

Service delivery

• How do we execute

key processes well?

Security

• Can we demonstrate value for money?

Private sector

Regeneration

Front office

Public space

Middle office

Welfare payments

Social care

Back office

Environment

Virtual office

Other public sector bodies

Pan Public sector

Figure 2: Example of an innovation ecosystem

Drivers

Stakeholders Entrepreneurship

Regulatory reforms

Government

Logistics

Governance & management

SOEs Cities

Finance

Infrastructure Tourism

Prototyping also plays an important role in a well‑functioning innovation environment. It allows for the rapid testing of ideas in real life conditions.

Most recently, several cities have embraced the concept of a “living lab”, where innovative service and products are tested by citizens, who are willing to experiment and provide feedback to enhance the design. The result is user‑centric services that improve outcomes and impacts.

Compliance Regulation Central Reporting

Human capital & Education

Market

Funding

Manufacturing ICT

Universities

Energy

Private sector Real Estate

Not for profit Prototyping Projects

Citizens

Figure 3: A shift in the Middle East Innovation landscape

“Importing” Innovation

“Producing” Innovation

Import products for consumption

Adapt products for regional needs

Import knowledge – for oil and gas, banking, education, etc.

Develop knowledge locally, including for export

Mimic government structures & services

Strenghthen government agencies to meet indigenous needs

2 For more information, see PwC’s research “The Future of Government”, June 2013

Regional ambitions, investments

Capital, vision, and government support Regional Innovations

Potential Export Innovations

Ubiquitous technologies

This century, Dubai continues to drive its ambition forward through the knowledge‑based economy and innovation. The Dubai Strategic Plan 2021 describes the future for Dubai through six key criteria3:

Cities and regions are better served by assessing their long‑term priorities for development and then bidding on the events that best correlate with those priorities4. Well‑chosen and delivered mega events serve as catalysts to help in achieving long‑term objectives. However, success can’t be taken for granted and the design for legacy has to take place from early on for all components, as shown in Figure 5.

Figure 5: Delivering a mega event legacy

lo

g pin

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th e s of t infr a

h the nu ve

a r d infr a

e s a nd a

cy

str

uc

str

t

cc

e

di

ng

ing the le ga

uc

om

mo Hosting the event

d atio n

4 For more information, see PwC’s research: “It’s how you play the game – matching a region priorities with a mega, or not‑so‑mega event”, April 2014

ve

h i ev

re

3 Source: Dubai Executive Council

Ac

tu

• The People: “City of Happy, Creative & Empowered People” • The Society: “An Inclusive & Cohesive Society” • The Experience: “The Preferred Place to Live, Work & Visit” • The Place: “A Smart & Sustainable City” • The Economy: “A Pivotal Hub in the Global Economy” • The Government: “A Pioneering and Excellent Government”

• Their deadlines mandate discipline and commitment.

• They offer rare opportunities for positioning in the spotlight of intense media attention.

• They necessitate collaboration between the various levels of government.

• They require the public and private sectors to cooperate.

• They mobilise national pride toward a common goal.

• They celebrate human achievement.

ur

Innovation in the UAE, the new norm?

The government leadership in the UAE realises the importance of creating an innovation ecosystem, and has started to take serious steps in this direction.

Encouraging innovation is also seen as a part of the effort to move away from an oil‑dependent economy towards an economy that is knowledge and innovation‑based. The UAE government has placed innovation at the centre of its priorities, declaring 2015 the Year of Innovation and also formulating an ambitious innovation strategy to thrust the UAE into the forefront of innovative nations by 2021.

At the emirate level, Dubai has long been known for its creativity, thinking big and turning ideas into action. Since its early days, Dubai has demonstrated its ability to think out‑of‑the box by launching innovative ideas in the past century, such as Port Rashid, Port Jebel Ali and Free Zone and Emirates Airlines. All of these have proven to be critical contributors to its economy and positioning as a regional and global logistics hub.

De

Global Innovations, Regional Capabilities

Hosting mega events such as the Olympics, World Cup or Expo has long been heavily contested by cities and nations. What motivates the fierce competition to host these events? And are the investments and risks worth the rewards? Mega events do possess inherently singular features that are not easily replicated:

il

Global access & reach

To translate the strategic ambition into action, the UAE Government has created a new post of “CEO of Innovation” in governmental agencies. These innovation champions will be trained at leading academic institutions, such as Cambridge University, which is also known for being at the centre of an innovative ecosystem and knowledge cluster.

Bu

Figure 4: A new innovation cycle

Dubai Expo 2020, a catalyst for innovation and a lasting legacy On November 27, 2013 Dubai, UAE was awarded the honour of hosting the World Expo in 2020 under the theme ‘Connecting Minds, Creating the Future’.

Dubai won decisively after competing with cities from Brazil, Turkey, Russia and Thailand. The Expo, sometimes named the “The Knowledge Olympics”, is among the top three most coveted mega events: the Olympic Games, the World Cup and the Expo.

th

This is a clear case where the UAE’s investment in aircraft purchases by Emirates Airline and Etihad Airways was coupled with a strategic vision and ambition to develop an innovative set of local state‑of‑the‑art assets and capabilities that are exported to the rest of the world. The UAE’s aerospace ambition goes beyond providing highly sophisticated aircraft components, and extends to reaching unchartered frontiers for Arab and Muslim nations to send a probe to Mars, named “Al Amal”, or hope in Arabic.

The National Innovation Strategy focuses on fostering innovation in seven main sectors: renewable energy, transport, education, health, technology, water and space. The government aims to undertake thirty initiatives within a three‑year period of fostering innovations in these sectors, including new legislation, innovation incubators, investment in specialised skills, private‑sector incentives, international research partnerships and an innovation drive within government.

Preparing

Now a new cycle of innovation is starting in hubs in the region, such as the UAE, taking advantage of ubiquitous technology, regional investments and global access and reach (Figure 4). One such example is the aerospace Strata factory in Al Ain. This pioneering effort provides sophisticated aircraft components to both Airbus and soon to Boeing too.

In Dubai’s case, hosting the World Expo in 2020 will allow it to further develop its advantageous position: • Trade: The availability of reliable transportation infrastructure has catapulted the UAE into a position among the 30 largest trading economies in the world. The UAE enjoyed a total trade surplus of $55 billion in 2013.

• Tourism: Dubai had 13.3 million visitors in 2014 and plans to grow this number by 7‑9% p.a to reach 20 million tourists by 2020.

Dubai’s airport is one of the busiest airports in terms of international passengers with a 15.2% rise in traffic in 2013.

• Business Climate: Non‑oil trade in the UAE amounted to $359 billion in 2013 illustrating the country’s commitment towards economic diversification. Half of the Fortune 500 companies have a presence in Dubai.

• Global Positioning: Dubai, and the wider UAE, is strategically positioned between East and West allowing global companies and individuals seamless access to all corners of the world.

All of these advantages, together with the promising theme and sub‑themes for the World Expo 2020, provide the ingredients to design and deliver a lasting legacy for generations to come. The physical site that will host the World Expo in 2020 has a master plan which spatially manifests the theme ‘Connecting Minds, Creating the Future’ – a theme that seeks to fuel collaboration, spark ideation, and mobilise multilateral action towards a more accessible, equitable and sustainable tomorrow5.

It will be located on a 438‑hectare site that brings to life the theme and integrates the three sub‑themes of Opportunity, Mobility and Sustainability, which will converge at the central Al Wasl Plaza, the figurative and literal heart of Expo 2020.

Of the 25 million visitors projected to enter Dubai specifically for the World Expo 2020, it is expected that 70% will come from overseas. Previous host cities (from 2005 onward) only saw an average of 5% visitors from overseas. This high share of outside visitors will allow Dubai to showcase its innovation, not only within the confines of the magnificent Expo Park site, but also through the visitor’s experience during their customer journey and interactions from the minute they decide to come to Dubai for the Expo.

Dubai is already aspiring to become one of the world’s smartest cities. The Expo sub‑themes allow the city to consolidate its smart initiatives so as to provide a seamless experience that combines all the building blocks of a holistic, true smart city. At the World Expo in Milan, which started on 1 May 2015, the UAE pavilion featured a first taste of what visitors can expect when they come to Dubai, five years later.

Realising the legacy of an event like the World Expo, or for that matter any strategic ambition for a city, requires a combination of capabilities and collaboration among the stakeholders to be in place6 (see Figure 6). There is no doubt that Dubai has the majority of these capabilities firmly in place and will be working continuously on strengthening them to deliver an unforgettable, highly innovative World Expo in 2020, that serves as an important milestone in its socio‑ economic development as envisioned by the Dubai 2021 plan.

Figure 6: A road map to achieving outcomes

External stakeholders

Clear, ambitious and widely shared vision

Capabilities to make it happen • • • • • • • • •

Internal stakeholders

5 Source: Dubai Expo 2020 web site and bid file 6 For more information, see PwC’s “Making it Happen”, 2012

•

Inspirational Leadership Resilient City Brand Social intellegence Innovation Financing and Financial Management capability Collaborative Partnering Priotitisation and Implementation Planning Programme & Project Management Comprehensive Performance Measurement & Risk Management Simplified and streamlined organisation

Successful execution of strategy

Delivery of outcomes

Hazem Galal PwC Partner, Cities & Local Government Sector Global Leader T: +971 4 304 3100 M: +971 50 3878518 E: hazem.galal@ae.pwc.com

ART AND CULTURE

Sharjah in the spotlight

NOVARC IMAGES/ALAMY STOCK PHOTO

Crowned the Islamic Culture Capital of 2014, Sharjah was given a unique opportunity last year to showcase its rich diversity and cultural heritage during a year of festivities

THE EMIRATE OF SHARJAH HAS long been one of the United Arab Emirates’ most popular cultural centres, both in common opinion and official title.

The emirate boasts a rich cultural mix of the historical and modern, with attractions such as the impressive Cultural Palace, which hosts activities and events, to the vibrant Souk Al Arsah, where traders and shoppers barter for wares amid impressive architecture in the UAE’s oldest marketplace.

Sharjah’s cultural attractions have not gone unnoticed by the Islamic Educational, Scientific and Cultural Organization (ISESCO), which last year crowned the emirate the Islamic Culture Capital. This followed UNESCO’s recognition of Sharjah’s unique cultural offerings in 1998, when the special agency of the United Nations named the emirate the Cultural Capital of the Arab World.

Established in May 1979 and headquartered in Rabat, Morocco, ISESCO works to strengthen, promote

132 UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION

and consolidate cooperation among its member states within the framework of Islamic values. The annual title gives cultural hubs the opportunity to develop their educational, architectural and historical assets.

In recent history, Sharjah as a centre of culture and industry pays thanks to its Ruler, His Highness Sheikh Dr Sultan Bin Mohammed Al Qasimi, who has been at the forefront of the emirate’s cultural, economic and social development, and has played a significant part in encouraging cultural interaction and dialogue among nations, both in the UAE and internationally.

This drive to foster education and establish Sharjah as a thriving cultural hub has enabled the emirate to distinguish itself from its neighbours and has undoubtedly contributed to it gaining the prestigious ISESCO title. Part of the Sheikh’s ongoing legacy involves establishing institutions to realise his vision of Sharjah as a culture centre – an ambition that resulted in numerous projects targeted towards preserving the emirate’s heritage.

More than 100 events and activities were held during Sharjah’s year as the Islamic Culture Capital

KAI-UWE WAERNER/DPA/PRESS ASSOCIATION IMAGES

KAI-UWE WAERNER/DPA/PRESS ASSOCIATION IMAGES

ART AND CULTURE

Right: Sharjah Calligraphy museum is dedicated to showcasing Arabic calligraphy on a variety of materials

Every household in the emirate received 50 books DALLET-ALBA/ALAMY STOCK PHOTO

Above: Sharjah Museum of Islamic Civilization displays more than 5,000 pieces from the Islamic World

According to the Islamic Culture Capital selection committee, Sharjah was chosen “thanks to its long history and scientific reputation”, with the emirate holding a prominent cultural position in the UAE and the wider Arab region. References were made to Sharjah’s distinctive contribution to Islamic and human culture, as well as its facilities and points of interest. The emirate’s university city was given a special mention, along with its numerous scientific research facilities, manuscript libraries and archaeological centres, all of which have served as major attractions for researchers and those interested in art, culture, literature and science.

Culture without borders During Sharjah’s year as the Islamic Culture Capital, more than 100 events and activities were held and more than 20 projects launched in celebration of the title, and the emirate committed to continuing its historic work in preserving, promoting and disseminating Arab culture at local, regional and international levels.

One of the most prominent cultural projects implemented last year was ‘Culture without Borders’; the core aim of which was to establish a library in every home. Every household in the emirate received 50 books to encourage reading, especially among younger family members.

This scheme was complemented by the children’s reading festival, ‘Discover Friends for Life’. As well as inspiring Sharjah’s younger generations to engage with literature, the 11-day event sought to create a networking platform for the creative community.

Publishing houses from across the UAE were in attendance, as well as writers, artists and academics from home and abroad.

Other festivities held throughout the year included the Clusters of Light festival, which bought together artists, performers and scholars and launched the annual celebrations. The festival was centred on an oratorio, which told the story of the Prophet Muhammad. This was the culmination of His Highness Sheikh Dr Sultan bin Muhammed Al Qasimi’s vision, who sought to commission a performance artwork celebrating Islam, underlining the tolerance and human values that the religion is founded upon.

Part of 2014’s legacy is the new Al Qasimia University, which opened in April this year and will serve as a scientific and cultural beacon of Islamic culture. Sharjah’s ruler attended to tour the facilities and encourage newly enrolled students to gain skills and knowledge and to unleash their creativity.

Speaking at the inauguration of the university, the Sheikh said: “Today, we witness the birth of a new institution that will add richly and uniquely to Sharjah’s cultural landscape and send a message of tolerant Islam to the entire world.”

As the emirate’s arts, culture and history scene continues to expand and the UAE’s position as a growing tourism destination endures, cultural enrichment is set to remain at the forefront of Sharjah’s development agenda.

UNITED ARAB EMIRATES – 2015 YEAR OF INNOVATION 133

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by Anantara

Anantara Sir Bani Yas Island Al Sahel Villa Resort

Explore breathtaking beauty, unsurpassed opulence and the warmth of Arabian hospitality at each of the unique Anantara Hotels, Resorts & Spas in Abu Dhabi.

Be mesmerised by the alluring charm of the Liwa Desert at Qasr Al Sarab Desert Resort or escape to the calming serenity of the mangroves at Eastern Mangroves Hotel & Spa. Relax body and mind in the natural beauty of one of our three Sir Bani Yas Island resorts.

No matter what your heart desires, these magnificent Anantara destinations will set the stage for unforgettable memories.

Embark on a journey rich with discovery at

anantara.com

Call +971 (0)2 656 1399 or email crome@anantara.com for enquiries and reservations Liwa Desert • Sir Bani Yas Island • Abu Dhabi

THE PULSE OF TRADE

EMBARKING ON THE NEXT 10 YEARS OF INNOVATION For the past 10 years, Abu Dhabi Ports has been driving maritime trade business innovation through the development of ports and industrial infrastructure and services.

To date: Developed and managed Khalifa Port, the MENA region’s most advanced deepwater sea port, Caters to the world’s biggest ships, Boasts a semi-automated container handling system, Developed and managed one of the region’s largest industrial zones, Created world-class infrastructure, Designed and built the region’s first hot-metal road, Created a port community system that facilitates fast and efficient trade.

To learn more +971 800 10 2030 | adports.ae