Interview: Yousef Obaid bin Easa Al Neaimi
To what extent can public-private partnerships (PPPs) offer a useful model for future investments?
YOUSEF OBAID BIN EASA AL NEAIMI: The PPP model will continue to prove useful for future investments, as the government has taken resolute steps to address concerns regarding the supply of energy for local industries. Through each of the free zones in RAK the PPP set up is an attractive option for investors. On the one hand, investments for heavy industries can be made through the free zones of Al Hamra and Al Ghail, as well as the RAK Maritime City Free Zone, while on the other hand, investment in light industries can be achieved through the RAK Free Trade Zone. Each provides different benefits and caters to the specific needs of investors. These are only 45 minutes away from Dubai, which brings another advantage to consider. On top of this, there are other models useful for investment in the long term. Outside the free zones, partnerships are available between local and foreign businesses, where the structure of ownership of an established company is 51% for the local partner and 49% for the foreign investor. This model provides different benefits that may attract investors. The strategy ahead will be to further promote the benefits of PPPs, as well as other models that may adapt better to the needs of investors. The government will continue to focus on the development of the free zones to ensure that further investment is made in these areas.
How is the private sector being encouraged to play a greater role in the economy, particularly given that many larger entities are quasi-governmental?
AL NEAIMI: The private sector can be both local and foreign. At the local level, significant support from the authorities in the UAE is helping to encourage young generations of Emiratis to be entrepreneurial. More specifically, central government has instructed all authorities to give priority to the local private sector for national projects. If there are any national companies that meet the requirements of local projects, these will be given priority over non-national ones. This initiative will give a big push for the development of the local private sector in all of the emirates, including RAK.
The local government is also very active in attracting foreign investment, as we have seen from the large number of companies operating in RAK. Nationally, the federal government is finalising a new law to allow 100% foreign ownership of projects to boost foreign direct investment in the country. This will increase the presence of the foreign private sector in the UAE’s economy, and by extension, in our emirate as well.
Which factors have been key in the 21.6% rise in imports in RAK for 2012, and how do you anticipate this trend developing in the medium term?
AL NEAIMI: The main factor is the need for additional raw materials coming from the GCC, Asia or Europe.
The increase is a direct result of the growing number of new companies, factories, manufacturing plants and industries opening in RAK. This is the reason why the demand has grown so much in the last few years, which has caused the re-exports to grow as well. Contrary to what many may think, this is a positive sign, as it is proof of the growth that RAK is experiencing. We are confident this trend will continue in the near future.
In what way is strategy being developed to attract investment, as the focus shifts from West to East?
AL NEAIMI: Strategy is developing in line with the UAE becoming a global centre, and therefore great developments in terms of infrastructure are happening here.
This is central for investing in the UAE, and many companies look at this country as a stepping-stone as they move from West to East. We have seen this already being the case with many international companies setting up in RAK, as the emirate benefits from such focused attention in the country. Moving forward, RAK needs to capitalise on its five ports, roads and air facilities until new developments are in place, in particular the Etihad Rail project. This will give us new opportunities to improve our industries and attract more investment.
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