Sharjah: Shaking off the looming global recession blues and the recent oil slump, Sharjah has been expanding its economy to attain sustainable development.
Reinvigorating growth aspirations, the current general budget sets the stage for a new economic order with a judicious fiscal largesse. Job creation has picked up.
Manufacturing has improved, with more than 30 per cent of the UAE’s manufacturing industry based out of Sharjah, the emirate has already earned a reputation for producing high-quality goods. Even the housing industry has shown signs of activity. The emirate holds untold promise, and optimism about future growth remains high.
“The general budget has taken into consideration changes in the global economic situation and underscores the capabilities of Sharjah to move forward and achieve sustainable growth,” Waleed Al Sayegh, Director-General of Finance at the Government of Sharjah, said when approving the budget in February.
Suffice to say, the traditionally resilient education- and culture-focused emirate was buoyed by 8 per cent growth in GDP last year. Far more important is that the economy seems to be on a stable footing.
Inflation has fallen, the current-account deficit has shrunk, and, according to Moody’s Investor service, the scrapping of fuel subsidies will help improve the UAE’s consolidated fiscal balance by 0.6 per cent of GDP in 2016. All of this gives more reasons to believe that Sharjah — which receives extraordinary financial support from the federal government if needed — could take flight.
To move closer to its potential growth rate, this year’s budget has taken some remarkable measures, including 46 per cent of its Dh20.3-billion budget to stimulate the economy; infrastructure development; promotion of investment in a national workforce; making capital markets more efficient; and 2,500 jobs to be created for UAE nationals.
Expansion
At the same time, in a sign that the economy is on course for robust expansion for the rest of the year, the Sharjah Economic Development Department (SEDD) has stepped up efforts to strengthen trade, while directing huge investment toward the industrial sector. The Industrial Affairs Department estimates that the contribution from this sector to the emirate’s GDP may grow to as high as 25 per cent by 2025.
The real reason for hope is the prospect of expanding economic relations with highly developed countries.
Amal Jassim Habash, Deputy Director of Commercial Affairs at SEDD, said in a statement earlier this year that the department’s activities reflect a “sincere shift of the emirate into becoming a diversified economy, based on knowledge and sustainability”.
In February, SEDD and a delegation from the Japan External Trade Organisation discussed ways to strengthen trade and investment relations in order to develop and enhance communication between the business communities in Sharjah and Japan, according to national news service WAM.
Aviation projects
Also last month, the London-listed business jet operator Gama Aviation announced plans to build a Dh29.37-million aircraft maintenance hangar at Sharjah International Airport as part of its $15 million (Dh55.1 million) total investment at the airport.
The airport, which has traditionally served mainly budget flights, was upgraded when the British company opened an executive terminal for luxury business travel in 2014.
According to global credit rating agency Standard & Poor’s, Sharjah’s non-oil economy is supported by a relatively diverse production base, with the four largest sectors being real estate and business services (21 per cent); manufacturing (16 per cent); mining, quarrying, and energy (13 per cent); and wholesale and retail trade (12 per cent).
Credit ratings
S&P, affirming the emirate’s A/A-1 long- and short-term foreign and local currency sovereign credit ratings, estimated GDP per capita at $28,700 this year, with relatively robust economic growth.
His Highness Dr Shaikh Sultan Bin Mohammad Al Qasimi, Supreme Council Member and Ruler of Sharjah, “has been instrumental in implementing the emirate’s long-term economic and social development objectives”, the ratings agency added. “We do not expect a change in the government’s policy stance.”
Known for its educational infrastructure and state sponsorship of arts and culture, Sharjah has about 20 designated industrial areas, while the two largest free zones — Free Zone Authority and Sharjah Airport International Free Zone — host more than 13,500 companies from 157 countries across various sectors.
Last October, government-owned Sharjah Asset Management launched Al Saja’a Industrial Oasis, a 14 million square foot industrial estate near the airport that is expected to create as many as 20,000 jobs.
Another reason that augurs well for the economy is, unlike most other emirates in the UAE, Sharjah has passed a law enabling expatriates to own property in the emirate on long leases. The first such development on offer will be Tilal City, a Dh2.4-billion development by Tilal Properties on Emirates Road. The handover of properties is expected by the end of this year.
Following the success of Tilal City, in January the Sharjah Investment and Development Authority (Shurooq) signed a partnership agreement with Emaar Properties and Eagle Hills, an Abu Dhabi-based property developer, to establish a new real estate company in Sharjah called Omran Properties, aimed at strengthening cooperation in the area of investment, supporting commercial, industrial and real estate projects in Sharjah.
Furthermore, paving the way for a growth platform for entrepreneurs and established businesses looking to set up bases in the emirate, Sharjah Chamber of Commerce and Industry recently signed partnerships with Twitter, Forbes Middle East, Brag Events and Careem to strengthen the emirate’s status as a regional and international destination for innovation and entrepreneurship.
This was followed by the launch of the Sharjah Entrepreneurship Centre, or Sheraa, at the American University of Sharjah in January. A Shurooq initiative, Sheraa encourages the younger generation to jump-start their projects.
The emirate’s aim to be the hub for trade, manufacturing and entrepreneurship has a huge chance to kickstart a take-off, and as a statement of intent, the 2016 budget gets full marks. That’s a pretty good start.
