Interview: Suhail Mubarak bin Athaeeth Al Ameri
Could stability in the construction sector lead to accelerated demand for value-added products?
SUHAIL MUBARAK BIN ATHAEETH AL AMERI: The construction sector is one of the largest sectors in the GCC region. Over the last two years, the sector has recovered and regained the confidence of investors. Indeed, recent reports have estimated the value of planned construction projects in the GCC at around $1.09trn, suggesting a positive outlook for the years ahead.
This growth will be supported by government plans to promote sustainable development, including new investments in road networks, power, water and alternative energy plants, railways and airport projects. Growth will also be fuelled in the coming years by the demand generated from events nearby such as the 2020 World Expo in Dubai. Moreover, significant investments are planned in housing, healthcare and education infrastructure projects.
How can public financing be made available to support the development of downstream industries as well as the sector as a whole?
SUHAIL: Ensuring sustainable public financing is crucial for the development of infrastructure and mega-projects. The government in Abu Dhabi has taken a leading role in developing mega-projects such as Khalifa Industrial Zone Abu Dhabi, the Industrial City of Abu Dhabi and Etihad Rail.
However, sustainable long-term financing for industrial mega-projects remains unavailable at the moment. Projects rely instead on banks to satisfy their financing requirements, with relatively short loan tenures subject to market interest rates.
Elsewhere, strategic, large-scale projects benefit from long-term, low-interest financial loans that are typically extended by a government agency. The availability of public financing for project development has already proven to be successful in the UAE and the wider region. For instance, the Khalifa Fund has been very active since its establishment in providing lending to UAE nationals for ventures involving small and medium-sized enterprises (SMEs). Indeed, SME financing is an area that is very well catered for by the government, and there have been no issues regarding the availability of government funding to promote SMEs in the industrial sector.
To what extent can the government build a trade-oriented economy while also ensuring the continued protection of the local metals industry?
SUHAIL: The protection of domestic industries is a topic of great importance in today’s world. Ensuring sufficient protection requires paying attention to the interests of various parties, all the while keeping in mind consumer rights as a top priority. As a national company, we are clearly very supportive of calls for the protection of local industries to support their growth in a sustainable manner.
However, while we demand the protection of our industries, we are not afraid of competition – as long as it is conducted fairly and legally. We also understand the importance of maintaining a free market and respecting all the agreements we have entered into that enshrine the principles of free trade and economic cooperation.
Moreover, we are aware that the potent combination of a free economic system, lower taxes, and sustainable and reasonably priced energy sources will be able to enhance the competitiveness of our national products in foreign markets in the long run. This has benefitted companies in the sector including Emirates Steel, which exported the first-ever shipment of structural heavy sections from the UAE to the US in 2013 for use in the building and construction sectors. It therefore remains essential for governments to protect national economies from trading malpractice, particularly the abuse of international free trade. This can only be achieved by developing and implementing fairer, more transparent and pre-emptive measures to end such abuse.
