Stepping up efforts to attract foreign investment to its shores, Sharjah is reaching out to the global market to spur growth at home, though the emirate is facing stiff competition in an increasingly tight global market.
Spearheading this drive is the Sharjah Investment and Development Authority (Shurooq), a state agency established in 2009 and tasked with promoting investment and development and putting in place both infrastructure and regulations to facilitate economic growth. One key tool in achieving these goals and increasing the flow of foreign direct investment (FDI) is international road shows to showcase Sharjah’s investment appeal.
Shurooq’s most recent marketing efforts were directed at Malaysia, which is considered a good fit for Sharjah as it has enjoyed sustained economic expansion in line with that of the emirate, and is also seen as Asia’s sharia-compliant finance hub, which could boost bilateral banking and capital links.
The Sharjah delegation’s five-day round of meetings kicked off on September 2. The delegation met with state officials and representatives of the private sector, including companies involved in transport, air cargo, logistics, health care and renewable energy.
According to Marwan Jassim Al Sarkal, the CEO of Shurooq, Malaysia could develop into a significant source of investment and business cooperation. “Malaysia is one of the most important and influential economic players in Asia and, as in other countries around the world, we are eager to showcase the vast range of opportunities available in Sharjah to investment authorities, economic institutions, companies and individuals,” he told local media.
“Sharjah’s business attractions, existing investment opportunities, tourism facilities, strategic geographical position, advanced infrastructure, investor-friendly legal framework and the highly developed transport networks which allow easy access to local and international markets, were all highlighted during the various meetings,” Al Sarkal said at the end of the tour.
Key to attracting investors from Malaysia and elsewhere is Shurooq’s strategy of underscoring the flexibility of investment regulations and the tax-free investment scheme, he added.
Both Hong Kong and mainland China are also firmly in Sharjah’s sights. In mid-June, Shurooq officials led a delegation to Beijing and Hong Kong, showcasing the emirate’s tourism and business credentials and seeking to highlight Sharjah’s appeal as both a holiday and investment destination.
Efforts to increase the flow of foreign investment have been helped by the diversity of the product on offer. For example, no single sector accounts for more than 20% of the emirate’s GDP; manufacturing comes closest, with an estimated contribution of around 19%. This broad-based economy means there are broader opportunities for investors.
However, while Sharjah’s economy may have much to commend itself to investors, the same can be said of many other locations in the region, with other emirates in the UAE and countries around the Gulf offering access to free trade zones, a solid infrastructure backbone and cheap utility charges. Sharjah also faces the difficulty, as do its rivals, of attracting investment at a time when the global economy appears to be entering a new phase of uncertainty, with Europe’s debt woes having the potential to have an impact far beyond the boundaries of the eurozone.
Combined with the slowing of many of Asia’s leading economies, including China – one of Sharjah’s FDI targets – overseas investors may hold off on committing to new projects, at least until the global situation becomes clearer.
It is too soon to say if Shurooq’s recent sweeps through Asia will bear fruit, though early indications are that both the Chinese and Malaysian trips met with a good response. In the meantime, the investment agency has other promotional campaigns in the pipeline, with Singapore, Turkey and Germany identified as potential sources of FDI, an indication that Sharjah is spreading its net as widely as possible in the search for investment.