Interview: Sheikh Saud bin Saqr Al Qasimi
How much has the emirate’s investment strategy been affected by the global economic crisis?
SHEIKH SAUD BIN SAQR AL QASIMI: Success and adversity alike are opportunities for reflection. That said, there is no better way to deepen our understanding of our challenges (and how best to address them) than enduring a crisis. In RAK, we weathered the economic storm better than most. Now we are working to cement our progress to date and position ourselves strongly for sustainable growth in the future. Broadly speaking, we continue to emphasise the good governance practices of transparency, consistency and accessibility. Last year, we formed an Executive Council to improve coordination and accountability among government agencies. It will provide a space for spirited debate about how we can improve the overall management of the emirate. Foreign investors will appreciate efforts to institutionalise our investment and regulatory organisations – we want corporate interaction with the public sector to be streamlined and efficient. Finally, we remain receptive to the needs of our stakeholders, both locally and around the world, and actively solicit their input to make the emirate more flexible and resilient.
Matching infrastructure to population growth is problematic anywhere. What is your approach?
SHEIKH SAUD: There always exists the risk that ambitiously paced infrastructure development will surpass demand. A strategy of timid conformity to precedent, however, is guaranteed to fail. Making a calculated bet on your own success is not the same thing as taking a leap into the unknown. In the UAE, the leaders of each emirate and policymakers at the federal level have not shied away from bold and ambitious development strategies that aim to consolidate this country’s place among the world’s leading nations.
The achievements of the last several decades speak for themselves. Yes, we built world-class highways when there was no immediate need for them. Yes, we built world-class ports before circumstances compelled us to. But these projects were not based on fantasy. We took the right steps, we did the right research, and we put in enough work and thought to fuel transformation.
I think we proved ourselves to be ahead of the curve. Consider our airports, and how the UAE has emerged as a global hub for travel. Were our initial investments in upgrading passenger capacity guaranteed to pay off? Of course not, but we believed in our calculated decision-making and our people’s determination to follow through. Success is never assured, and missteps cannot always be avoided. You have to work hard for success, and sometimes you have to change the plan, the management and even the entire model to achieve the best possible results.
What else can enhance transparency to create a more attractive investment environment?
SHEIKH SAUD: In an investment context, transparency requires simplicity. When regulators articulate a set of clear expectations, managers and entrepreneurs can do their part responsibly and efficiently. Complex rules and regulations, on the other hand, stifle a business’s incentive to grow and expand. In RAK, we are working to make sure that investors and regulators alike understand exactly what we require of them, and that the standards to which they are held are reasonable and fair. We expect no less from ourselves as an emirate, and the RAK government tries to lead by example. Our high credit ratings in recent years demonstrate our own transparency, as well as our fiscal discipline: we are one of the few governments not only in the region but in the world to maintain consolidated balance sheets. We have confidence and pride in our way of doing things, but we also take feedback seriously. This openness has been one of our greatest assets in attracting world-class companies to Ras Al Khaimah. If you are doing business here, we want to hear about your experience and how we can make it better.
How does RAK’s investment programme in Africa complement your other overseas investments?
SHEIKH SAUD: The focus of our investment strategy remains RAK and the broader UAE – we do not have an explicit foreign investment programme. However, growth is not possible without friends and partners, and our relationships sometimes take us overseas. Emiratis are traders by heritage; we learned a long time ago that the most valuable partnerships, commercial or otherwise, are based on respect and mutual benefit. Through our own rapid growth, we developed expertise in certain fields that we can now exchange with friends – in Africa and elsewhere – seeking to carve out a niche in today’s increasingly global economy. We only contribute to projects when we can truly add value and view our involvement as a long-term investment in the prosperity of our emirate and the broader international community. In time, I believe that our overseas presence will attract new projects to RAK and help to develop the right environment for innovation and economic cooperation.
As RAK’s government continues to encourage more innovation, what are the longer-term ambitions for the emirate as a centre of research and development? What role will education play in this process?
SHEIKH SAUD: I think this is crucial. A commitment to research makes a country richer, and the greatest achievements of nations are the product of their human resources – the intellectual property of mankind. Achievement, however, is not automatic. As we’ve seen so many times, innovation is driven by risk takers – people willing to put themselves on the line for a new idea. A government cannot purchase innovation, but it can foster a community that cultivates, attracts and supports innovators. An education system that emphasises creativity and global awareness is one fundamental building block, and we are working on a number of projects to improve the quality of our primary, secondary, and higher education offerings. Another important requirement is a pro-growth regulatory structure that allows entrepreneurs and investors to reap the rewards of their success. Finally, since research is at its core collaborative, we need to do our best to bring foreign talent to RAK. Smart, well-educated people tend to gravitate toward each other regardless of geographic or cultural differences. We have tried to accelerate this process by highlighting RAK’s diversity; it is a place where anyone can feel at home, regardless of where in the world they come from.
Are there misconceptions of competition among emirates?
SHEIKH SAUD: Contrary to some media portrayals, cooperation, not competition, defines relations between and among the seven emirates. Each emirate benefits from the prosperity of the others, and we are well aware of our fundamental interdependence. To take just one example, there is no question that our neighbours’ establishment of enterprises like Emirates Airlines, Etihad Airways and Air Arabia has materially benefitted the tourism sector – hotels, restaurants, cultural attractions – here in RAK. In countless ways, expanding markets in Abu Dhabi and Dubai are huge sources of opportunity for companies here, whether for building supplies and construction materials or the finished products produced by our factories. From an investor’s perspective, this dynamic is a huge asset. Each emirate prioritises different areas (and offers a different atmosphere and lifestyle) while allowing free and open access to the other six. The nation as a whole, in turn, serves as an active gateway to the Gulf region and the international community at large. In the UAE, diversity is not viewed as a source of competition, but rather as a source of strength. This philosophy is what is truly special about our country, and what makes it by any measure such an exceptional place to live and do business.
Do you think the message of the UAE as a single entity is sometimes lost in media coverage?
SHEIKH SAUD: Media coverage is not always an accurate reflection of reality. Rather than listen to the words, take a closer look at the deeds. If you consider the care with which our president and prime minister propose and develop policies that benefit all seven emirates, you will begin to understand the deep unity we feel in this country. We are all Emiratis working together toward the same objective.
History has proven again and again that a centrally planned economy never works as efficiently as one driven by market forces. In all things, there is a need for central coordination, but it should not come at the expense of individual creativity. I believe we’ve struck a good balance here in the UAE – it is what allowed us to survive the global economic crisis and emerge stronger than ever.