Dubai: Business registration in Dubai has increased since the beginning of the year, although it is unclear if the recent uncertainities in the Middle East have anything to do with it.
There are, however, talks of capital inflow from toubled Arab economies such as Egypt, Tunisia, Libya, Syria and Yemen that could boost the UAE economy, especially Dubai due to its competitive advantage.
"We don't have clear indicators with regards to this specific issue, but we can say that our membership has increased since the start of the year. Whether this is a direct influence of the political upheavals in other Middle Eastern countries is unknown," Abdul Rahman Saif Al Ghurair, Chairman of the Dubai Chamber of Commerce and Industry, said in an interview with Gulf News.
"Historically, Dubai has been and will continue to be a safe and stable environment for businesses to prosper. The city offers a number of investment opportunities locally and is also strategically placed to offer a gateway to other markets across the Middle East, Africa and Asia. As such it is an attractive place for companies to base their operations.
"During the first quarter of 2011, more than 2,500 new members joined the Chamber, which means that there are at least as many new companies operating in Dubai. This took our membership over the 120,000 mark. In percentage terms, this was an increase of 4 per cent over the same period last year."
He elaborated his thoughts on the economy in this interview.
Gulf News: What is your overall view on Dubai's economy? Which sectors are picking up growth the most and why?
Abdul Rahman Saif Al Ghurair: Dubai's economy is picking up pace and all signals point to stable and sustainable growth this year of between 3 per cent and 5 per cent. This is positive news considering uncertainty still exists globally and proves that Dubai's economy is robust.
The main sectors driving growth are trade, tourism and financial services. These sectors emerged as the main engines of the economy post crisis as the focus shifted away from construction and real estate sectors. However, trade has always been a major contributing factor to Dubai's economy so it is not surprising that this sector has continued to see growth throughout the recovery and beyond. Tourism is seeing robust growth with passenger numbers are up at Dubai International Airport with very strong projections for the next decade. Meanwhile, developments in the banking sector are encouraging more responsible lending practices which will have a positive long-term impact on the financial sector and help increase investor confidence in Dubai.
What are the challenges faced by the economy this year?
With sustainable growth predicted this year, Dubai's economy is on the right track. Rebuilding investor confidence is one challenge that we face, however steps are already being taken to address this issue and we are seeing a renewed interest from overseas and expect foreign direct investments to increase this year.
When do you see the real estate and construction sector picking up?
Property prices are beginning to stabilise across Dubai with the latest data showing just slight declines in certain areas. This is positive news for the industry as prices are levelling out and some properties, especially villas, are holding their value despite new stock coming on stream. I think the real estate sector will continue to see static prices for the rest of the year, but moving on from that prices will begin to rise again, just not at the pace seen pre-crisis. As for the construction sector, while it has certainly slowed, it still accounts for at least 10 per cent of Dubai's GDP. Work is continuing on the majority of projects and the government is still spending on infrastructure projects.
When do you see employment gaining momentum?
The employment market is already seeing improvements. A lot of firms are already recruiting, while many others planning to do so in the next few months. The mood amongst our members is positive and I think that is reflective of the business community as a whole.
What policies should the government take to accelerate growth?
The government's continued investment in infrastructure, services and education will help accelerate growth. The Companies Law and Competition Law, which are currently being drafted, will also give a boost to the business community and improve investor confidence in Dubai.
How many members does Dubai Chamber have?
We now have more than 120,000 members.
How do you evaluate export and re-export performance during the first quarter of 2011 and how do you expect it to perform throughout the rest of the year?
Trade is one of the main pillars of Dubai's economy, having recorded continuous growth throughout 2010 and into the first quarter of 2011. Our members' exports and re-exports in the first quarter were valued at Dh58.7 billion, compared to Dh50.8 billion for the same period in 2010. This is a year-on-year growth of 15.6 per cent, which is a positive indicator for the sector going forward.
Do you have an increase in the number of certificates of origin during the quarter?
If exports and re-exports increase then so do the number of certificates of origin because they are both directly related to one another. According to our figures, the number of certificates of origin increased by 10 per cent during the first quarter of 2011, compared to the first quarter of 2010. A total of 168,558 certificates of origin were issued during the first three months of this year, compared to 153,330 during the same period last year.
What are the new initiatives that you are providing to the business community to enhance competitiveness?
Our Economic Research Department works hard to ensure our members are provided with the most up-to-date information on current market conditions. For example, we are able to provide indicators of the competitiveness of Dubai's exports in major markets through Reveal Comparative Advantage (RCA) analysis, while we have also developed new indices and databases to examine Dubai's import vulnerability.
How do you evaluate the legal environment in Dubai and what are your activities in this profession?
Dubai's legal sector is known for its transparency and clarity. At the Chamber, we also invest a lot in our legal services and provision.
What are your expectations for the economy for the rest of this year?
With stable growth recorded during 2010 and positive figures for the first quarter of 2011 my expectations for the economy are positive. If you also take into account Dubai's stable investment environment, range of international conferences and increased investor confidence the economy is well supported to record growth of 3-5 per cent in 2011.
Major event
The IBA Annual Conference will be held in Dubai from October 30 to November 4.
It is the first time the conference will be held in the Middle East and it will offer the region's legal profession the chance to network with more than 4,500 international counterparts. Dubai Chamber is the host in collaboration with the IBA. With a membership of more than 30,000 lawyers and 200 bar associations, the IBA is the world's leading organisation of international legal practitioners, bar associations and law societies. It influences the development of international law reform.
