Last year saw intensified economic growth for the Northern Emirates. Economic diversification moved forward and infrastructure projects were announced as a way to help keep up with the progress and to transform the emirates into a regional centre for transportation of cargo and passengers, as well as a major point of trade and commerce. Construction work in the Northern Emirates is occurring around the clock and will continue to complement its growing economy.
In Dubai, the rising cost of living has meant the Northern Emirates have been an affordable option for those working in the neighbouring giant. In Sharjah, which is the largest emirate in the north, and Ajman, which is the smallest, residential, commercial and infrastructure construction surged. The real estate frenzy in these two emirates targeted middle-income buyers while freehold housing projects took off, giving incentive for residents to buy property. In the last several years, non-nationals, who make some 90% of the residents in the Northern Emirates, have been able to purchase property in each of the respective emirates.
A record number of real estate developments got underway this past year, sparked by liberalisation of ownership laws throughout the emirates. However, regional investment bank EFG Hermes has warned that a property price decrease could come this year
The biggest project for the Northern Emirates in 2007 was with the Sharjah Investment Centre, which awarded Darwish Engineering Emirates a contract worth Dh 500m ($136m) to develop infrastructure on a 32m square foot plot of land located in Sharjah close to the international airport and the Hamriyah Free Zone. The massive project will start early this year and boost the local economy, being used for commercial, industrial and residential units.
In 2007 authorities in the UAE implemented regulations to require all non-Emiratis to carry private health insurance, similar to an initiative introduced in Abu Dhabi. Sharjah in particular is set to see a large benefit, as it is home to 11% of the UAE's insurance market, with two locally incorporated insurance companies, Al Buhaira National Insurance Company and Sharjah Insurance. These firms saw revenue growth double from 2002 to 2004, which was followed by further expansion in 2005 and 2006. The general insurance sector in the UAE as a whole witnessed a 40% jump in 2005, and is forecast to see another quick rise following the implementation of the new legislation. Some industry players expect an additional 15% to 20% annual growth in the next five years.
Improving the transport infrastructure in the region remained a top priority with Ajman, Sharjah and Ras Al Khaimah (RAK) all witnessing port expansion projects. Upgrades at Sharjah's Khorfakkan Container Terminal saw capacity double to 3m TEUs (twenty-foot container equivalent units) while the first phase of a project at RAK's Saqr Port saw capacity rise to 350,000 TEUs, which is expected to increase to 3m TEUs by 2012.
The Ajman Port, although much smaller in size, saw yearly wharf tonnage reach 1.3m tonnes in 2006-2007. The number of containers handled increased to a total of 41,138 in 2006-2007.
Due to an increasing number of residents in the UAE, commuters faced mounting congestion. Much-needed public transport got a boost. In November 2007, Sharjah unveiled a public transportation plan to address the traffic issue. Authorities said they would be working to establish 19 bus routes, nine service stations and 142 new buses to support 80,000 passengers per day. The government signed a deal with KGL Passenger Transport Services of Kuwait. Bus routes are expected to start early in 2008. Meanwhile, a project introduced in the middle of 2006 to improve road infrastructure continued in an effort to reduce traffic bottlenecks.
Along with surface traffic, the Sharjah airport saw significant increases in passenger and cargo numbers. With the rise of the region's first low-cost air carrier, Sharjah-based Air Arabia, passenger traffic at the airline rose 58% to 1.23m in the first half of 2007 over the previous year. This led officials to announce in November that they were seeking funding that is expected to be used to fund expansion of the airport's current terminal or a new runway.
Ajman is expected to have an international airport by 2011. The airport will facilitate flights that are 65% cargo based and 35% passenger based. Structured mostly for cargo and supplemented with low-cost carriers, authorities anticipate more than 1m passengers will use the airport in the first three years as a less hectic alternative to the Dubai and Sharjah airports. Such moves will help keep the Northern Emirates a competitive place to do business in the company of international giants.