The Report: Ras Al Khaimah 2013

Bolstered by burgeoning cement and ceramics industries that draw on the natural resources of the Hajar Mountains, Ras Al Khaimah has one of the GCC’s most diversified economies. Continued investment in infrastructure is enabling further economic growth and encouraging foreign investment. A number of opportunities are becoming available to investors, ranging from health care and pharmaceuticals to real estate, energy and transport. The government is also looking to leverage the natural beauty of the emirate’s beaches, mountains and deserts to build up tourism, with the focus increasingly turning to the private sector to expand capacity within the hospitality industry.

Country Profile

The fourth-largest emirate of the UAE, Ras Al Khaimah may be small, but its geography is varied and it boasts significant resources that have enabled it to complement the hydrocarbons wealth of its neighbours. Home to the largest rock quarry in the Gulf, RAK has built strong cement and ceramics industries, while its 64 km of coastline holds potential for tourism, a sector that the government is working to grow. Developments across all modes of transport are expected to further boost opportunities for investment, aided by the emirate’s free trade zones and business-friendly policies. This chapter contains interviews with Sheikh Saud bin Saqr Al Qasimi, Ruler of Ras Al Khaimah, and Sheikh Mohammed bin Saud Al Qasimi, Crown Prince of Ras Al Khaimah.

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Ras Al Khaimah’s economy is well diversified, with five sectors accounting for more than 8% of GDP each: resource extraction and related services; trade; financial services; government services; and construction. Manufacturing is the mainstay of the economy, comprising 26% of GDP. Free zones have been crucial to the emirate’s economic growth, with the government offering investors a range of incentives to set up shop. By improving transport links with neighbouring GCC states, the government hopes to realise new gains and investments into each of these areas. Tourism is also expected to benefit from improved infrastructure, including sector-specific facilities that boost the emirate’s appeal as a destination. This chapter contains an interview with Sheikh Ahmad Saqer Mohamed Al Qasimi, Chairman, Ras Al Khaimah Free Trade Zone.

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Financial Services

Ras Al Khaimah was relatively unaffected by the global financial crisis and is well positioned to benefit from growth in neighbouring emirates and the wider region. Financial services in RAK are dominated by the retail banking segment, but the sector as a whole is likely to benefit from the regional construction projects and infrastructure works designed to keep pace with growing populations and commercial needs, as well as major event-driven projects. Several players offer wide variety of sharia-compliant services in the banking sector, while the insurance industry serves the upwardly mobile population and offers one of the most promising avenues for investment in the emirate. This chapter contains an interview with Kris Babicci, CEO, Commercial Bank International.

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Industry & Retail

As part of its “20-20” strategy, under which no single sector should account for more than 20% of GDP or 20% of the fiscal surplus, the government is working to diversify the local economy. Growth is expected in the industrial sector in line with efforts to expand downstream capacity, extending production across the supply chain. Improvements to electricity capacity are planned as well, which promise to benefit local manufacturers and enterprises. Tourism is another area of focus, with plans to leverage the emirate’s natural beauty. This chapter contains interviews with: Sanjay Hinduja, Chairman, Gulf Oil International and Yousef Obaid bin Easa Al Neaimi, Chairman, Ras Al Khaimah Chamber.

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Construction & Real Estate

In many ways Ras Al Khaimah’s construction sector is the backbone of the local economy, with a number of major infrastructure projects enabling development across a range of sectors. The emirate is home to several major building materials producers, and it is well placed to serve the growing GCC market. Local projects such as the development of Al Marjan Island lend further support to the expansion of the construction sector. RAK’s real estate market remained relatively stable during the global financial crisis relative to other emirates, although the value of some luxury holdings fell. The government has substantially liberalised laws concerning foreign property ownership, allowing foreign nationals to own the freehold of properties in their own name, which looks set to boost foreign investment in the peal estate sector. This chapter contains an interview with Naser Bustami, Group General Manager, Stevin Rock.

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Taking advantage of the emirate’s strategic location, several projects aimed at improving transport offerings are now under way. Etihad Rail will link the area to Oman, as well as support several key energy and infrastructure projects. RAK International Airport continues to drive growth in the sector, with revenues rising by 31%in early 2013. There are also plans to construct a 32-km ring road that will allow trucks and other commercial traffic to circumvent urban areas, facilitating industrial trade. This chapter contains an interview with Captain Colin Crookshank, General Manager, RAK Ports Group.

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With strong industrial growth and demand for electricity on the rise, Ras Al Khaimah’s energy needs are expanding. This is being met by broadening the number of players in the sector. Aside from the Federal Electricity and Water Authority, several international firms have become major players in the emirate’s energy sector. RAK is working to ensure greater energy independence by boosting access to alternative sources for generating electricity as well as desalinating water. This work is covering areas such as clean-coal technology and other alternative sources of energy. As a result, RAK is becoming a centre for renewables research and development and projects that are in progress related to this could position the emirate as a leader in this field. This chapter includes an interview with Anil Sardana, Managing Director, Tata Power.

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Ras Al Khaimah has made significant progress over the last five years in building the infrastructure and institutions required to anchor a robust health care sector. Both population growth and changes in lifestyle have led to an increase in the demand for and cost of health care services in the emirate. Public facilities are meeting the majority of this rising need, although private service providers are also looking to enter the market, leading to improved choice for patients. The market for diabetic care looks set to continue to grow, meaning there should be opportunities for a full range of services, offering considerable opportunity for private investors.

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Like the other emirates in the UAE, Ras Al Khaimah’s development strategy is centred on transitioning to a knowledge-based economy. The government thus places a strong emphasis on both human and social development, with a particular focus on improving education. In 2010 the Education 2020 plan was expanded by the Ministry of Education to include 10 strategic objectives and 50 initiatives to be implemented over the decade, including a focus on improving basic skills in communications, English and maths. Vocational training is another priority area, with an emphasis on skill-specific training driven by recent economic diversification, especially in the tourism sector. The government recognises that to maintain the policy of Emiratisation, new entrants to the workforce must be sufficiently skilled to take up jobs available to them, and the education strategy focuses on achieving this.

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The government has prepared a 10-year development strategy to help guide sector growth, and a central part of this strategy is leveraging the private sector. To this end, the government is actively partnering with private operators to help promote tourism and is developing a reputation for managing public-private partnerships in the sector. Ras Al Khaimah continues to raise its profile as a tourist destination, having doubled its number of visitors in the past two years, and the focus is now on niche markets such as ecotourism, cruises and health. Major new hotel projects such as Al Marjan Island will add much-needed capacity, while improved transit links to nearby emirates should also help to support growth.

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The Guide

This chapter highlights two forts in the emirate, one of which now serves as the National Museum. The Guide also contains listings of some of the leading hotels and resorts and features contacts details for government offices and services. It also contains useful tips and information for business and leisure visitors alike.

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