The Report: Ras Al Khaimah 2012
With some of the fastest-growing free trade zones in the region, Ras Al Khaimah has witnessed impressive economic expansion and diversification across key industries in recent years, and is on its way to becoming an important investment destination in the Gulf. Indeed, RAK has long been an economic centre, due to its geographic location, which sits near a number of trade routes between Europe and East Asia. Much more recent developments within the broader region have promoted RAK’s reputation as an up-and-coming player in the Middle East. In 2011 its stability stood in sharp contrast to the political volatility elsewhere in the region, as well as the ongoing economic uncertainty affecting markets across the globe.
Country Profile
This chapter provides information about RAK’s geography, economy, population, natural resources and political system. It also includes an overview of the large-scale development programmes that have been put in place in RAK over the past 10 years – projects that have aided the emirate’s reputation as an up-and-coming player in the Middle East and further afield. The industrial sector, which today accounts for a majority of the emirate’s export revenues, is the result of a great deal of long-term planning by the state. Furthermore, RAK has a number of competitive advantages for industrial development, including a prime location on the Strait of Hormuz and a substantial amount of undeveloped, affordable land. To secure economic growth, RAK is focusing on expanding water supply, as well as its number of power plants. Looking ahead, RAK’s reputation as an up-and coming regional leader in higher education could also be a major advantage in the wake of the Arab Spring; the emirate can expect to see increased interest from investors seeking calm markets. This chapter includes an interview with Sheikh Saud bin Saqr Al Qasimi, the ruler of Ras Al Khaimah, and Sheikh Mohammed bin Saud Al Qasimi, the crown prince.
Explore chapterEconomy
Ras Al Khaimah stands out in the Gulf as one of the region’s most diversified economies. Investment spread across manufacturing, tourism, retail, high-tech industries and construction has been underpinned by improvements in infrastructure and connectivity. Quarrying, mining and manufacturing accounted for some 30% of GDP, followed by financial services, at 14.4%. In particular, the metal sector has seen rapid expansion in recent years, with several companies setting up factories in RAK’s industrial zones to process various metals. At the same time, tourism and related sectors such as real estate and retail are expected to grow, with plans to expand RAK International Airport in the pipeline. These include new arrivals and departures lounges, cargo facilities, parking and office space. New efforts are also being made to develop long-term growth drivers within the emirate. Several local research institutions have been set up in recent years, and over the long term this will facilitate the growth of high-tech industries by improving the pool of local engineering talent. This chapter includes an interview with Jim Stewart, the CEO of RAK Investment and Development Office.
Explore chapterFinancial Services
Despite the lingering effects of the 2008-09 international economic downturn and the more recent political unrest in the region, Ras Al Khaimah’s financial services sector is expected to grow substantially, fuelled by steady expansion in retail banking, Islamic financial services (IFS) and the insurance segment. Indeed, annual deposit growth at UAE banks reached a high of 16% in April 2011. However, financial institutions face a host of challenges; perhaps most notably, the real estate and construction sectors continue to face difficulty in terms of obtaining loans from banks. Local banks are under pressure from the government and central bank to increase lending further, in an effort to boost overall economic growth. Despite these issues, RAK has received consistently high ratings from two of the most prominent credit ratings agencies, thanks to its continuing development, social and political stability, and membership in the UAE.
Explore chapterIndustry and Retail
Industry accounted for more than 30% of RAK’s GDP in 2010, reflecting the emirate’s positioning as a leading manufacturing centre within the UAE and broader region. Although the global credit crunch of 2008 did affect some of RAK’s industries, the emirate’s industrial base grew overall, which has made for a more diverse and resilient economy. RAK’s free trade zones and industrial parks continue to offer a business-friendly environment that has attracted industrial investment. Moreover, foreign ownership of companies based in free zones is unrestricted, with no income, sales or corporate taxes levied. The results of this have been clear; in 2011 RAK FTZ was home to more than 5000 firms from 106 countries. In the same year, 2033 licences were granted, an increase of 17% on the 1740 in 2010. Additionally, RAK has continued to see growth in its traditional areas of strength – including building materials and pharmaceuticals – and in new areas, such as metals. This chapter includes an interview with Dr Ayman Sahli, CEO of Julphar.
Explore chapterConstruction & Real Estate
Ras Al Khaimah’s construction sector remains a key component of the emirate’s growing economy. Following the 2008-09 economic downturn, the emirate’s construction industry seems in good shape, with a number of notable projects already under way. In particular, the government is expecting to welcome 1.2m visitors in 2012, which is spurring sizeable expansion in the hotel segment. The construction and building sector was worth $620.62m in 2010 – about 10% of RAK’s overall economy, according to the RAK Department of Economic Development. Furthermore, partly as a response to the challenges of the downturn, and to stabilise their economic outlook, construction firms are adopting new strategies, such as diversification, consolidation and expansion. Authorities have also begun pushing for more environmentally friendly building practices, with oversight from the RAK Environmental Protection and Development Authority. This chapter includes an interview with Louis-Armand de Rougé, CEO of RAK Marjan Island Football.
Explore chapterTransport
In recent years an expanding population, a growing industrial base and the increasing number of tourists visiting the emirate have driven RAK’s transport infrastructure growth. Taken together with storage and communications, the transport sector contributed an estimated 6.55%, or about $313.6m, to the economy in 2010. To cater for the 40% increase in the number of registered motor vehicles over two years since 2009, road networks are expanding. New projects, such as the RAK Ring Road, will facilitate more direct travel routes and will serve to alleviate major congestion points. Moreover, the emirate also recently opened its fifth seaport, and work to upgrade the airport and expand air traffic routes is also under way. With the number of tourists visiting RAK widely expected to grow, in April 2012 airport authorities announced plans to increase passenger handling capacity from 500,000 to 2m. This chapter includes an interview with Colin Crookshank, Group General Manager of RAK Ports.
Explore chapterEnergy
Ras Al Khaimah’s lack of oil and gas resources – relative to other emirates – has encouraged growth in non-hydrocarbons sectors. The most significant of these is industry, which now accounts for around 30% of GDP. However, this high rate of industrial development means that demand for electricity has soared in recent years, becoming the single biggest constraint on expansion in RAK. The government has therefore made power supply a priority in recent years, investing in improvements in generating capacity. Both the federal authorities and the emirate are investing to ensure energy supply in RAK. For example, research is under way in RAK towards developing a smart grid, one that responds to peaks and troughs in demand and compensates accordingly, making the system as a whole more resilient. Furthermore, investments in renewable energy sources – particularly solar and wind – could go a long way toward reducing energy prices and fuelling long-term industrial development. Given the high levels of solar irradiance RAK receives, solar energy is a niche area being explored and has much potential.
Explore chapterHealth
As demand for medical treatment rises, the health care sector in RAK has to meet new demands and challenges. Population growth, which climbed to 8% between 2008 and 2010, has necessitated more health care investment and infrastructure upgrades. Indeed, health sector costs in the UAE have tripled in the past decade and, as RAK’s citizens have free access to medical care at public institutions, the government is paying for the bulk of this rise. Yet RAK is meeting these challenges, opening two new hospitals and implementing a number of health care facility upgrades. Moreover, RAK is positioning itself as a medical tourism centre. Hospitality and good care with low prices are key components. For example, a nationwide mandatory insurance programme is expected to take effect, redistributing health-related costs between the government and citizens. Steps are also being taken to increase the number of Emirati students studying medicine and nursing to reduce the labour shortage, and awareness campaigns are promoting the long-term benefits of a healthy lifestyle.
Explore chapterEducation
As the government of RAK makes the necessary changes to drive growth forward and transition to a knowledge-based economy, one thing is clear: education and educational reform are of prime importance. One important measure will be the establishment of a council by RAK’s ruler, Sheikh Saud bin Saqr Al Qasimi, which will regulate and monitor institutions of higher education in the emirate. Furthermore, several programmes have been introduced to improve the quality of teaching, including a teacher exchange that allows educators to observe different pedagogical methods. More specifically, the government plans to address three key issues in the higher education system: low English-language proficiency; students opting for careers in the public sector rather than the private; and overall quality standards. Given the correlation between education and a strong economy, the government’s and other actors’ reforms should have a strong impact on growth in the emirate in the long run. This chapter includes an interview with Sheikh Nahyan bin Mubarak Al Nayhan, Minister of Higher Education and Scientific Research.
Explore chapterTourism
Though one of the smaller emirates in the UAE, RAK is developing as a tourism destination. The emirate received 835,200 tourists in 2011, a significant increase over the previous year, which saw 600,000 visitors. There are hopes that these figures will continue to rise to reach 1.2m by 2013. To facilitate this, RAK International Airport is currently being expanded at a cost of $27m. New runways are being built and passenger and cargo terminals are being extended. The RAK Tourism Development Authority (RAK TDA) has also set a target to add 10,000 hotel rooms by 2016. Going forward, the emirate is looking to capitalise on cruise tourism by creating tailor-made excursions for cruise arrivals, who are expected to exceed 20,000 in the 2012-13 season. This chapter includes an interview with Victor Louis, COO of Ras Al Khaimah Tourism Development Authority and CEO of Ras Al Khaimah Hospitality Group.
Explore chapterThe Guide
Ras Al Khaimah has a rich history. This chapter examines a recurring theme of RAK’s past, the emirate’s defence against foreign incursions. The area that now makes up present-day RAK was historically a popular target for invaders due to the location at the entrance of the Gulf. This maritime potential made RAK an important shipping point throughout the ages. Indeed, RAK drew military challenges from not only Islamic clans in the Gulf, but also imperial powers such as the Sassanid, Dutch, Portuguese and British empires. This chapter also includes a listing of the leading hotels and resorts, as well as useful telephone numbers and facts for visitors, including information about language, weather, visas, currency and more.
Explore chapterTable of Contents
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