Interview: Mohamed Al Musharakh
To what extent has the pandemic affected foreign direct investment (FDI), and which sectors stand to benefit after the pandemic?
MOHAMED AL MUSHARAKH: Despite the challenges that the pandemic caused in 2020, Sharjah attracted around Dh800m ($217.8m) in FDI, with a strong rebound occurring in July compared to the second quarter of the year. The Sharjah government released a stimulus package of around Dh1bn ($272.2m), which mainly focused on reducing some government-imposed corporate fees and supporting companies through local banks in the emirate, either by ensuring financing via corporate loans or by renegotiating the terms of existing loans. Small and medium-sized enterprises were another focus of government stimulus.
Sharjah’s economic and investment authorities are developing new solutions and strategies to attract greater FDI flows in the post-pandemic era. The world has changed, and economies must adapt the way they pursue their goals. A reorganisation of priority sectors has refocused attention on technology, advanced manufacturing, food security, smart cities, and bio- and agro-technology. Health care, especially following the announcement of a new health care city in Sharjah, is similarly attracting growing interest in the wake of the crisis.
Ongoing research and development efforts, particularly in the field of technology, are drawing increased attention to these trending sectors. At the same time, tourism – ranging from eco- and adventure tourism, to archaeological and family tourism – will represent another major focus area for attracting post-pandemic FDI.
Where do you see opportunities to strengthen the system of incentives for investing in Sharjah?
AL MUSHARAKH: Sharjah has launched several programmes to incentivise foreign investment. The majority of these initiatives aim to improve the ease of doing business through a variety of strategies, mechanisms and institutions. Examples of programmes include Sharjah Start-up Studio, the Access Sharjah Programme and the Sharjah Investors Services Centre (SAEED). The last of these is a one-stop shop launched by Invest in Sharjah that provides a wide range of services to all foreign investors, whether they want to invest on the mainland or in one of the emirate’s six economic free zones. Additionally, Invest in Sharjah can connect investors to different government entities and identify specific opportunities, particularly when it comes to public-private partnerships.
Invest in Sharjah provides free consulting services to international investors on where to set up a business in the emirate, how to do it and which legal structure to adopt. The office also offers access to regional experts with the purpose of identifying different investment opportunities based on the specific focus of individual clients. Furthermore, Invest in Sharjah recently completed a research project with consultancy PwC that aims to identify high-potential sectors and related investment opportunities in the emirate. Together, these initiatives and programmes should help to attract more FDI and enhance the investment ecosystem.
Which source markets are likely to generate the most FDI in Sharjah in 2021?
AL MUSHARAKH: The emirate is likely to continue receiving FDI from the UK, China and the US – with the US expected to increasingly look to the UAE as an investment destination, especially after the country’s recent trade challenges with China.
When it comes to foreign investment, the ease of doing business in the UAE is the most attractive in the region, and the level of infrastructure development will continue to make the country an appealing and safe destination for all forms of foreign capital.
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