The success of any global financial and business centre depends on its good name and the trust accorded by the businesses and financial houses that use it. The core of generating this trust comes from good laws to regulate activity and stop crime, coupled with transparent and consistent enforcement of these laws. This week, Dubai took a significant step forward in monitoring and administering the process that will generate this international trust in Dubai as a business and financial hub with the creation of the Dubai Economic Security Centre, which has been tasked with maintaining Dubai’s position as a global financial and business hub and protect it from crime.
In any financial centre, it is a challenge to keep the laws and regulations aware of market requirements and permit successful activities without unnecessary restrictions on businesses. However, at the same time, it is imperative to take a wider view on how businesses should not damage the economy or allow crime. This is not easy and is a continuously changing process, which can easily fail. This has happened often, even in the best-run centres, as with the absurd failure to manage the monetisation of junk mortgages in the United States in the years up to 2008, which led to the collapse of the entire global system in 2009 and 2010.
It is also vital that any business regulation meets international norms because in a global age, any business can choose to move to a more lenient regime. Nevertheless, quality business still gravitates to those centres that carry a good name and may be prepared to put up with more regulations if that necessary inconvenience pays dividends by allowing larger margins and attracting more respectable customers. This is why it is important for Dubai to earn the trust of international businesspeople in its laws and in the effectiveness of its financial hub. This requires more than just writing good laws and has to be followed by effective and consistent enforcement.
Given these requirements it is encouraging that the Dubai Economic Security Centre has a wide-ranging brief that covers seeing how to stop crime, implement best-practices, protect investors, predict and manage negative economic trends that can jeopardise the stability of the markets, among other responsibilities. This means that Dubai has a significant economic and business watchdog that will monitor and advise all other government agencies for the wider benefit of the market and the economy as a whole.
