Globalisation birthed a new understanding of how countries can create a symbiosis to attain sustainable economic development. The direct outcome of globalisation — that is, the freedom and ease of moving people, capital, technology and resources around the world — is the only way 21st century economies can be enabled, boosted and even sustained.
For countries to be able to attract foreign direct investments (FDI), especially in a globalised world, it is imperative to have a vibrant and diverse economy with an infrastructure that allows it to be connected locally, regionally and, most importantly, globally. FDI do not stick to a certain set of rules or guidelines, and it is important for countries seeking investments to provide the ideal business environment that allows the inflow to attract a high skilled workforce, remain on the cutting edge of technology, and implement best practices.
Job creation remains one of the most immeasurable benefits of FDI. For instance, 2,815 new jobs were created in Sharjah in 2017 — a whopping jump of 174 per cent compared to 2016. The $1.63 billion we attracted in FDI inflows in 2017, recording a 102 per cent annual growth, triggered this.
It is vital economies be receptive to foreign investment. It is equally important to provide a suitable climate and a business-friendly environment. The growth of an FDI culture worldwide is essential to meeting the UN Sustainable Development Goals set for 2030.
Since FDI is driven by an investor’s goals, what role does Invest in Sharjah play to guide and support them? Our primary roles can be summed up as:
* Coordinating with the government, semi-government and private sectors to present the most lucrative and feasible investment and expansion opportunities to foreign investors, in consonance with the UAE’s national identity and economic development plans.
* Offering Invest in Sharjah’s comprehensive services and expert consultancy to identify and direct foreign capital into specific sectors, especially emerging sectors, for it to grow comprehensively. This is vital, especially since the 2008 financial crisis showed economies globally the costs of unplanned growth.
* Utilising our international partnerships bring in latest technologies and capacities into Sharjah to elevate the emirate’s and the UAE’s investment environment for new as well as existing businesses.
As I have already mentioned, there is a strong relationship between foreign investment and economic growth. Larger inflows of foreign investments are needed for an economy to achieve and sustain a high trajectory of economic growth. Additional benefits include knowledge transfer, building capacities of the local workforce, job creation, expertise sharing, better relations between nations, and even cultural exchange.
Locally, the will to increase FDI inflows drives businesses as well as the government to invest in the creation of new market sectors, the development of existing ones, offer supplementary and value-added services and boost governance and transparency practices in presenting the realities of the local economy to build trust among foreign investors.
The UAE leadership understands the key role FDI will continue to play in the nation’s economic diversification process. We are aware and embrace the fact that we do not live in a primarily oil-driven economy anymore.
The new UAE FDI law will be a stepping stone in the nation’s efforts to building a knowledge-based economy. Alongside encouraging FDI inflows into logistics, tourism and health care projects, the law signals a massive strategic effort at attracting quality investments in sectors such as knowledge, innovation and advanced technology, which constitute a challenge for sustainable development.
The UAE Ministry of Economy’s additional suggestion to create an FDI Unit is also hugely exciting, as for the first time, the local economy will reach a level of transparency in presenting the latest and most accurate information to foreign investors for them to have a clear picture of the economic realities upon which to base their decisions.
Sharjah’s unique offerings to foreign investors
First and foremost Sharjah offers a stable, diverse and investor-friendly economy with a year-on-year growth amid the constant turbulences being experienced worldwide. In addition, the return on investment in Sharjah is one of the best in the region due to its business infrastructure, strong ties with international markets and a huge import-export network, in addition to being home to large regional and international companies.
The emirate is also home to more than 55,000 SMEs, considered a key driver of the FDI environment in Sharjah since big corporations rely on these SMEs to provide cost-effective products and services essential to diversifying their operations and maximising returns.
Sharjah’s economic diversity profile is one of the richest in the UAE and the region, that provides a plethora of opportunities for foreign investors to tap into. To explain this in numbers, non-oil businesses contributed Dh88.5 billion to Sharjah’s GDP, including sectors like manufacturing, mining and construction, retail, tourism, SME, among several others.
Mohammad Juma Al Musharrkh is CEO, Sharjah FDI Office (Invest in Sharjah).