Dubai: preparing for Belt and Road for 25 years

Delegates at this week’s Dubai Investment Forum explored Dubai’s role as an entry point into ‘the ninth largest economy in the world’

Dubai’s position as the leading gateway to the high-potential markets of the Gulf Cooperation Council (GCC) was the focus of discussion at the recent Dubai Investment Forum. Delegates, who included high-level representatives from both the Dubai government and international private business, reflected upon growth prospects for the bloc, as well as Dubai’s offering as a facilitator of trade and access to the GCC and beyond.

“If you put the six Gulf states together they represent an economic bloc that is the ninth largest economy in the world,” noted Michael Hasbani, Partner at global consultancy firm EY. “If the six states continue to work together closely and harness each other’s strengths, the GCC can become by 2030 the sixth largest economy in the world.”

The region is expected to benefit from considerable infrastructure spend over the coming years as nations look to diversify their economies in the wake of the oil price slowdown. Delegates pointed towards high-profile events such as Expo 2020 Dubai and the Qatar World Cup in 2022, as well as spending in Saudi Arabia, where there is expected to be a significant focus on private sector participation across a range of sectors. Dubai’s position as a global trade, tourism and logistics hub, as well as its high rankings for ease of doing business, mark it out as the most promising gateway into these markets, delegates said.

“Dubai intends to be the most business-friendly city and a preferred investment destination by 2021,” said Rudolph Lohmeyer, Director, Global Business Policy Council, AT Kearney. “The future for Dubai, which centres on being a connector, is very promising. There is a vision to act as a regional gateway, both the accelerator of trade within this incredibly attractive region, and also the facilitator of the free movement of goods, services and people across the region.”

According to ratings agency S&P, overall capital spending in the GCC over the next four years will reach US$480bn. Government spending on projects, including infrastructure contracts awarded between 2016 and 2019, will be US$330bn, while the estimate for required overall funding through to 2019 is US$604bn, of which US$100bn will be needed for infrastructure projects. According to the agency, there is a gap of US$270bn between estimates of capital spending on projects, and project contracts awarded, suggesting that governments will turn increasingly to alternatives such as Public-Private Partnerships.

The future for Dubai, which centres on being a connector, is very promising. There is a vision to act as a regional gateway, both the accelerator of trade within this incredibly attractive region, and also the facilitator of the free movement of goods, services and people across the region

Rudolph Lohmeyer, Director, Global Business Policy Council, AT Kearney

“There is a wealth of development and future investment opportunities that can be accessed from one point,” said Fahad Al Gergawi, CEO of Dubai FDI, the emirate’s overseas investment promotion agency. “When you come to Dubai, you are not just coming for Dubai itself: you are a partner in growth and you can utilise this pivotal hub to do business in the region. Dubai is not an island; we are a proud member of the GCC and a proud member of our region.”

“Most multinational businesses here in Dubai are using this as a base to cover the Middle East and Africa,” agreed Naveed Kamal, Head of Corporate Banking, MENA, Citibank UAE. “It’s to do with the cost of doing business, and the ease of doing business, and the fact that we have such a massive presence of global multinationals across a range of industries is, I think, evidence of this.”

Delegates added that Dubai was perfectly positioned to play a vital role in the realisation of China’s Belt and Road plan. “The Belt and Road strategy was launched in 2013, yet Dubai has been preparing for that for 25 years,” said Mark Beer, CEO of DIFC Courts, the judiciary authority of the Dubai International Financial Centre. “The UAE attracts 60 per cent of all FDI into the GCC, and 50 per cent of all FDI-related jobs come to the UAE. We’re ready, and we’re trusted.”

The event, now in its second year, is a chance for private and public sector players to meet and identify opportunities for innovation, with the aim of accelerating the use of capital, technologies and talent towards sustainable economic growth.