Emirate a global magnet for international firms, helping transform plans and ideas to reality
The only way for the Middle East to address economic challenges is to open up an economy like Dubai, which has set an example and showed the world how to achieve sustainable growth despite geopolitical and financial headwinds that the region faced over the past decades, minsters and private sector executives said at the World Economic Forum (WEF) in Davos.
At Davos, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, met Apple CEO Tim Cook and Cisco CEO Chuck Robbins, where the Crown Prince affirmed that the UAE and Dubai's experiments present a model for development and offer an incubator for innovation and technology.
He said Dubai became a global magnet for international companies and entrepreneurs as the emirate offers good opportunities to help business leaders to transform their plans and ideas to reality.
Sheikh Hamdan also attended the signing of an agreement to establish the Emirates Centre for the Fourth Industrial Revolution in the UAE. The agreement was signed by Mohammad bin Abdullah Al Gergawi, Minister of Cabinet Affairs and the Future, vice-chairman of the board of trustees and managing director of Dubai Future; and Professor Klaus Schwab, founder and executive chairman of the WEF.
Mohammad Al Tuwaijri, Saudi Arabia's Minister of Economy and Planning, said Dubai has set an example for the Arab world on how to achieve growth despite political, economic and financial headwinds.
"Talking about practical solutions for the region, if I take Dubai as an example, they started their [growth] journey in late-80s and I can't count negative events that took place in the region during this period from the Gulf war to Asia crisis and oil volatility," he said. "Yet, Dubai is here, growing and showing the world an example what it could achieve. Dubai has established a role model and has done a great job."
Alain Bejjani, CEO of Majid Al Futtaim, said solutions of economic problems for the Arab world will come only from the private sector and regional governments should open up their economies just like Dubai.
"The only solution for the region is to open up the economy - just like Dubai. The private sector in Middle East countries will come and invest. We know what are the investment opportunities; the government doesn't need to tell us. Put aside Saudi Arabia and the UAE, there is no government in the Arab world that has ability to deal its issues on its own," Bejjani said during a panel discussion.
According to Dubai FDI figures, Dubai remains a magnet for global foreign investors, especially in new-age sectors such as e-commerce, AI, blockchain and fintech, as the emirate recorded a 26 per cent increase in foreign direct investment (FDI) in the first half of 2018, reaching Dh17.7 billion. The number of FDI projects surged 40 per cent year-on-year to 248 during H1 2018, reflecting growing confidence in the emirate's economy and its policies. Backed by accelerated government spending prior to Expo 2020 Dubai, the International Monetary Fund had predicted Dubai's economy to expand 3.3 per cent in 2018 and 4.1 per cent in 2019.
The Saudi minister also pointed out that the UAE and Saudi Arabia are working hard to ease and digitise cross-border trade and remove barriers.
"Recent joint efforts with the UAE are significant that two countries can sit down and agree on very specific targets, measures where they can show the world how and issues can be resolved. For example, between the UAE and Saudi Arabia, we decided that borders will be easier, digitised and quicker accessibility of trucks, etc. Instead of taking more than 72 hours, they will hopefully take three to four hours," Al Tuwaijri said.
He hoped that other regional countries will join the UAE and Saudi Arabia when they see this model working.
"We want to establish a reference for others to follow. If two big nations with big GDPs succeed, I think we will have a better chance and opportunity."
Bejjani said after Dubai and Abu Dhabi, vision 2030 by Saudi Arabia has been a whiff of fresh air.
"What is happening between the UAE and Saudi Arabia is exemplary. If this [removal of trade barriers] becomes reality and it is moving fairly at quite a rapid pace, the private sector we will invest in the Arab world," he added.
He said scale and global relevance and competitiveness are the two biggest problems when it comes to entrepreneurship, startups or corporates in the Arab world.
"During the past century, some of our countries gained independence and some were formed. And we have been working ingeniously on making sure that we put barriers across the Arab world. And the reality is that we have a market that is as big as most of largest markets in the world such as Western Europe and the US; but we are not smart enough to work together... We didn't do enough and if we want to promote innovation and promote growth we need to give market to the people who want to invest in it," Bejjani said during the panel discussion.
Citing examples of San Francisco and Palo Alto, he said Silicon Valley exists not because that people born there were smarter but simply because they have good education system and have market.
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