Increased global focus, economic diversification to provide partnership opportunities for foreign firms
The Middle East region is seeing a wave of global businesses descending to capture the robust opportunities offered by the UAE and Saudi Arabia as both nations complement regional growth, said Sir Anthony Ritossa, chairman of Ritossa Family Office.
Dubai-based Ritossa Family Office — popular among family offices in the region and globally — facilitates family offices and entrepreneurs to explore opportunities in the region and recently concluded their 18th Global Family Office Investment Summit in Riyadh with participation from government-level delegates of both nations.
“Elite global family offices are committed to investing for the greater good of mankind and we believe that those who wield economic power must do everything within their power to serve as a pioneering global forum for action,” said Ritossa.
The event hosted 400 plus world leaders who share similar values regarding the importance of tailoring solutions to the world’s greatest challenges and making an impact through investment, positive action, and personal commitment. Royal families, global business leaders, Sheikhs, leading entrepreneurs, and private investors joined the event, which was held in the presence of Prince Abdulaziz bin Faisal bin Abdulmajeed Al Saud. From the UAE, Nhayan Al Dhaheri, Head of Economic Section at UAE Embassy in Riyadh participated along with officials from Sharjah FDI.
Previous summits have raised $2.8 billion in investments for leading global startups, entrepreneurs, funds, and philanthropic endeavours and indications are that the Riyadh event will achieve a new record in terms of investments and deals.
“It’s exciting to have a record number of Middle East family office investors joining. In a small way, the gathering did make history by hosting a global audience from the Gulf Cooperation Council (GCC) including Saudi Arabia, Bahrain, Kuwait, Oman, and the UAE, with international families and selected presenting companies from the US, Europe, Australia, and Latin America. We are now looking forward to our next event in Europe, scheduled on June 27-29th in Monaco,” added Ritossa.
According to research from Century Financial Consultancy, the UAE and Saudi Arabia’s increasingly global focus and continued economic diversification will provide significant partnership and investment opportunities for foreign companies in the coming years to drive regional growth in the Middle East.
Saudi Arabia became the second-largest recipient of UAE exports, with a contribution of 10.7 per cent, receiving Dh38 billion of the country’s exports, achieving a growth of 48 per cent compared to 2020 and by 22.4 per cent compared to 2019. World Bank estimates that UAE’s economic growth will accelerate this year compared to 2021, growing at 4.6 per cent in 2022 against 2.6 per cent in 2021.
Additionally, the UAE attracted $46.4 billion in foreign capital inflows in 2021 with foreign direct investment (FDI) accounting for nearly half of that at $21.8 billion, ahead of Saudi Arabia’s at $19.5 billion. Saudi Arabia’s economy is expected to expand 7.7 percent in 2022, after 3.3 percent growth in 2021.
The UAE aims to invest more heavily in advanced industry sectors and technology, education, renewable energy, agribusiness, petrochemicals, defense, and healthcare. To boost long-term FDI, the government has also allowed full foreign ownership of onshore companies.
Driving long-term FDI and highly skilled immigration will help the UAE to foster a robust private sector and develop potential avenues for homegrown service and goods exports. UAE will shift its focus from acting as a regional entrepot to a more global trade role. As part of these efforts, the authorities have progressed on free trade negotiations in recent months, including with India, South Korea, Israel, and Indonesia.
The Saudi economy has witnessed a growth in a large number of sectors, taking advantage of the natural resources in the Kingdom and its geographical and cultural position between three continents. In order to develop and diversify the economy and reduce dependence on oil, Saudi Arabia launched Saudi Vision 2030; built on several economic and financial reforms, which aim to transform the structure of the Saudi economy into a diversified and sustainable economy focused on enhancing productivity, increasing the contribution of the private sector, and empowering the third sector.
Said El Saadi, director-general at Australia Saudi Business Council, who participated in Ritossa’s event, said: “Strong Family Offices play a major role in consolidating and coordinating investment environments across multiple markets and driving national economic growth. Family Offices in Saudi Arabia and UAE account for 70 per cent of known offices in the GCC. A significant surge in Family Offices within Saudi Arabia and UAE is a natural outcome facilitated by enhanced regulations and aligned with ambitious grand national visions in both countries; hence encouraging restructuring and launching more Offices. This is driving additional economic growth.”
“Participants in the Riyadh Summit have manifested the essence and vision of Sir Anthony Ritossa to bring influential families from across the world to collaborate and build better economies and investment opportunities in the region. Family Offices should build sufficient flexibility in their strategies to navigate the eminent positive or negative changes or disruptions in each sector, whether it is regulatory or otherwise. Exit strategies for threats should be more realistic and given proper attention,” added El Saadi.
Both the countries are dominant economic players in the Middle East and North Africa. Dubai is among the world’s top five global hubs for maritime shipping and logistics. The Jebel Ali Port and Free Zone (JAFZA) accounts for one-third of the emirate’s GDP. Indeed, Jebel Ali is the linchpin of the UAE’s strategy to position itself as a “nexus state.” Saudi Arabia, in line with “Vision 2030,” is also making a bid to become a leading regional and global logistics hub. Riyadh has launched an ambitious National Logistics and Transport Strategy. Intensifying Saudi-Emirati competition in the maritime transport and logistics sector is part of the larger intra-Gulf jockeying for position to capture the increasing interregional cargo trade volumes, informed Mohammed Shaheen, CEO, Seven Capitals.“
“The Emirates enjoys robust economic stability and a promising investment environment due to its strategic location, strong financial reserves, large sovereign wealth funds, and robust and uninterrupted government spending. Moreover, Saudi Arabia is at the forefront of economic transformation through sustainability. Saudi Arabia has long played a central role in the international energy market, helping drive global economic growth and development,” concluded Shaheen.
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