Political and Economic Development
Ras Al Khaimah (RAK), the fourth-largest of the United Arab Emirates, is building on its vast natural resources (including its natural beauty) as well as its strategic location to develop a thriving, modern economy that has already attracted some AED 100 billion in foreign direct investment.
Creating Conditions for Sustainable Growth
HH Sheikh Faisal bin Saqr Al Qasimi
The emirate’s forward-thinking leaders are creating ideal conditions for private-sector growth. As Crown Prince Sheikh Saud Bin Saqr Al Qasimi points out, “RAK has an environment that is very straightforward for business. My vision is to help RAK realize its tremendous latent potential.”
RAK’s economy is unique in the region in that it is not dependent primarily on oil; the emirate has been promoting its non-oil sectors for many years and has created a strong foundation for further growth. Wholesale and retail trade accounted for over 16 percent of GDP in 2005, while the hospitality, crude oil, real estate, financial services, manufacturing and construction industries are also making significant GDP contributions.
Strong GDP performance
RAK’s GDP rose by 18.1 percent in 2005 alone to reach USD 2.5 billion, or 1.9 percent of the UAE’s total GDP. Between 2001 and 2005, the emirate’s GDP grew by an average 10 percent per year. Over the past three years alone, RAK has attracted more than 140 industries and more than USD 1 billion in foreign direct investment. The new ventures range from small factories producing glass bottles to auto and truck manufacturing facilities and plants producing commodities and polystyrene.
Political stability
Political and economic stability are other key advantages RAK offers investors. RAK has been ruled peacefully since 1948 by Sheikh Saqr Bin Mohammad Al Qasimi, and Sheikh Saud, who became Crown Prince (and the de facto ruler) in 2003, is carrying on the tradition of fostering a thriving modern economy based on transparency, free-market principles and incentives for foreign direct investment.
Billions in new investments planned
RAK currently has the third-highest level of project investment relative to GDP in the UAE (USD 25.9 billion) and accounts for a full five percent of total GCC project investment. The RAK Investment Authority (RAKIA) anticipates around USD 13.6 billion in inward investment over the next few years, with around 60 percent of that total in “lifestyle development” (including tourism) and the rest in industrial development. RAK’s Investment and Development Office (IDO) plans to increase its spending to AED 30-40 billion over the next two years alone, with 60 percent of that total targeting services, tourism, real estate, health and education.
Sectors with particularly strong investment appeal
Tourism is one of RAK’s high-potential sectors and the government is doing everything it can to boost the local tourism industry through investing in state-of-the-art infrastructure and related services. RAK has varied natural wonders that are unique in the Gulf region, ranging from rugged mountains to hot springs, pristine white-sand beaches, lush oases and dramatic deserts. Investment in hotels, resorts, tourism infrastructure and related projects will allow investors to tap in to the Middle East’s fast-growing tourism sector.
Shipping, mining, agro-industry and more
Key sectors also include shipping, logistics and related activities, thanks to RAK’s strategic location on major shipping routes in the Arabian Gulf and its long tradition as a maritime trading center. The government has targeted shipbuilding and maintenance, warehousing, cold storage facilities, transport and distribution of foodstuffs and other commodities, and packaging as activities with excellent growth prospects in RAK.
Mining, minerals exploration, extraction and quarrying projects are another growth opportunity in RAK, as the success of local cement and other mining-related operations have proved.
The agro-industrial sector also has promise in RAK thanks to the emirate’s fertile lands and history of successful agricultural ventures. With its run-off water from mountains, RAK has been able to support the cultivation of vegetables, fruits and grains as well as dairy production, while fishing is plentiful in the Gulf. Food processing is one of the emirate’s most promising activities.
Incentives for investors
In addition to its tax-free investment opportunities, free repatriation of profits, stable economy and business-friendly government, RAK is strategically located for international trade-oriented ventures. Set on busy international air and sea routes, RAK provides easy access to regional markets in Kuwait, Bahrain, Qatar, Iran, Saudi Arabia, Oman and Yemen, as well as to key transit routes to and from Europe, North America, the Indian sub-continent and the Far East.
RAKIA has proved instrumental in promoting RAK and in creating an investor-friendly business sector. Among its successful initiatives is the RAK Free-Trade Zone (RAKFTZ), which has already registered over 2,400 companies. The zone offers full ownership of businesses, full exemptions from tax and commercial levies and 100% repatriation of capital and profits, as well as the chance to register companies offshore without establishing a physical presence in the free-trade zone. HH Sheikh Faisal bin Saqr Al Qassimi, RAKFTZ Chairman, comments, “RAKFTZ is always committed to attracting technology-based industries that will add value to the UAE industrial sector.” CEO Oussama El Omari adds, “We in RAKFTZ are dedicated to providing continued support to our investors. Supporting our clients is always a priority.”
World-class infrastructure
RAK’s government has made significant investments in the country’s infrastructure in order to support new business growth. Investors can count on an extensive and well maintained road network, a growing international airport that includes up-to-date facilities for air-cargo services, well equipped port facilities that include Saqr Port (now being upgraded and expanded in a USD 250 million program), a cutting-edge telecommunications network, a choice of available building space, adequate water resources and low-cost utilities. In addition, the emirate’s world-class financial sector provides the business support that international investors demand.
A focus on human resources
To continue to fuel stable, sustainable growth, the government is focusing on preparing its people for the global economy of tomorrow. As Sheikh Saud commented in a conference held in RAK earlier this year, “It is not the buildings or the roads or the mountains or the beaches that make a country or a city great; rather, it is the people, for without people of excellence, people of knowledge and skills, everything else will sooner or later amount to very little.” As part of its drive to upgrade its education and health-care sectors, the government has welcomed foreign investment in these fields. Among American investors in RAK are Tufts University and Methodist International, which recently announced investments totaling USD 50 billion in RAK’s new Health Cluster complex.
Creating “conditions for excellence”
Sheikh Saud also commented at the conference that he would continue to stress efficiency and transparency in government processes, simplicity in the business sector and a sustainable and ecologically sound infrastructure. “We are trying to create the conditions for excellence in every sphere of our operations, the conditions that will make Ras Al Khaimah relevant in the global economy,” he commented.
