oxford business group - ras al khaimah 2012

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ECONOMY ENERGY INDUSTRY

REAL ESTATE HEALTH FINANCIAL SERVICES

TRANSPORT EDUCATION THE GUIDE

TOURISM CONSTRUCTION INTERVIEWS 9 7 8 1 9 0 7 0 6 5 6 0 6

THE REPORTRas Al Khaimah 2012

9

ProfileDiverse geography features coast, plains and mountains

Political liberalisation efforts expand rights for women

Businesses attracted to free zones and industrial parks

Key economic sectors include industry, trade and tourism

Growing population expected to reach 750,000 in 2020

PROFILE SNAPSHOT

The local population is estimated to be around 300,000 people

Boasting 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. The emirate is

on its way to becoming an important investment

destination in the region.

Nestled in the northern part of the UAE, RAK lies

between the base of the Hajjar Mountains and the

Gulf. This location has supported the success of RAK

as a destination of choice for investors and tourists

alike. Endowed with kilometres of silver, sandy coast-

line in the west, desert plains bounded by the Haj-

jar Mountains in the east and a green belt in the south

with flourishing date palms and vegetable gardens,

RAK has a diverse landscape that is unique in com-

parison to other emirates.

RAK has strong links with the other emirates via

its modern highway network, connections which

have been useful as it has pushed ahead with a drive

for economic development in recent years.

FOUNDATIONS: Located on historical trade routes

running from Europe to East Asia, RAK was a stopover

point for merchants from as far away as China. RAK’s

history dates back to around 5500 BCE, and in pre-

Islamic and Islamic times the area was known as Jul-

far. RAK is the home of the Qawasim tribe, which built

a reputation in commerce, dominating trade in the

lower Gulf region in the 18th century. At times the

tribe held land on various islands in the Gulf, as well

as in Pakistan and other parts of the UAE.

FORMATION: RAK became part of the Trucial States,

which were established by the General Maritime

Treaty with Britain in 1853. Their formation ush-

ered in a period of stability, which was previously

threatened by the Ottomans, Portuguese and Per-

sians, the dominant powers in the region at the time.

RAK’s location was used for controlling shipping

routes to and from India, which was occupied by the

British empire up to the 19th century. Following

British withdrawal from the region between 1968

and 1971, six emirates came together to form the

modern-day federation of the UAE in 1971. RAK,

which was the UAE’s seventh and final emirate, joined

the federation soon after, in February 1972.

GEOGRAPHY & CLIMATE: The UAE occupies some

83,600 sq km on the southern and eastern shores

of the Gulf. RAK is the fourth-largest emirate in the

federation, containing 2478 sq km. Located along

the Gulf, near the Strait of Hormuz, RAK is just 65

km away from the Iranian coast, 250 km from the

Omani border and in close proximity to a number of

other Gulf states. The emirate’s geography is diverse,

with 65 km of coastline, fertile plains, as well as the

Hajjar Mountains, which reach heights of up to 1900

metres. Temperatures in the summertime often

reach the upper 40s with high humidity. In winter

the weather is pleasant and remains relatively dry.

POPULATION: According to the latest figures from

mid-2011, the total population of the UAE stands at

around 8.3m. Population growth is estimated to be

5.9% per year, while nearly half of nationals are

under the age of 19. The government estimates the

current population at 300,000 and will undertake a

full census in 2012. The population is forecast to

reach 750,000 by 2020. While UAE nationals offi-

cially make up less than 20% of the total in the coun-

try, RAK has a higher proportion, at about half.

POLITICS: Sheikh Saud bin Saqr Al Qasimi has been

the ruler of RAK since his father, Sheikh Saqr bin

Mohammed Al Qasimi, passed away in late October

2010. Sheikh Saqr, who began his reign in 1948,

was one of the long-serving leaders in the region

and was responsible for the 1972 decision to join

the UAE. On a federal level, the Supreme Council, a

body that is made up of the rulers of the constituent

emirates, runs the UAE, whose president is Sheikh

Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi.

The Supreme Council ratifies all the laws in the

country, while the Council of Ministers, a 20-mem-

ber cabinet headed by the prime minister, is the

10

A rising starWelcoming investment to its many expanding sectors

www.oxfordbusinessgroup.com/country/UAE: Ras Al Khaimah

PROFILE SNAPSHOT

executive branch of the government. The Federal

National Council, a 40-member consultative body,

represents the interests of each emirate when

reviewing proposed laws.

In 2005 the government announced a policy of

political liberalisation. At the end of 2006 elections

were held for half of the seats in the Federal Nation-

al Council, while the other half are appointed by the

government. Elections were held again in late Sep-

tember 2011, and the emirate currently has a total

of six representatives in the council.

ECONOMY: GDP growth in RAK was 8% in 2011 and

the government expects that growth in 2012 will be

roughly the same. According to the RAK Department

of Economic Development, in 2010, the latest year

for which figures are available, mining, quarrying and

manufacturing accounts for about 30% of GDP, fol-

lowed by financial services at 14.4% and wholesale,

retail and repair services at 11.7%. The country ben-

efits from an open economy, high per capita income

levels and a large annual trade surplus on the back

of its energy exports. Unlike Abu Dhabi, RAK does

not have substantial deposits of oil and gas, although

it does produce small amounts of liquefied petro-

leum gas and condensate.

A variety of sectors drive the emirate’s economy,

including industry, trade and commerce, tourism

and real estate. Several local players have emerged

as international success stories over recent years

in industries including pharmaceuticals, ceramics

and cement. Capitalising on its natural resources,

the UAE’s first cement company opened in RAK in

early 1970s and is now the country’s largest pro-

ducer. Local company RAK Ceramics is the world’s

largest ceramics producer, exporting to more than

150 countries. The region’s first pharmaceuticals

and medical supplies firm, Julphar sells its products

on the global market, meeting standards set by bod-

ies like the US Food and Drug Administration.

TRADE ZONES: Established in 2000, the RAK Free

Trade Zone is home to more than 5000 active firms

from 106 countries. It is 100% tax-free and offers

100% ownership, along with a number of other incen-

tives and value-added services.

The formation of the RAK Investment Authority

(RAKIA) in 2005 has helped boost competitiveness

in the industry, trade, commerce, tourism and real

estate sectors. RAKIA was set up to develop and

manage industrial parks, which includes the free

zones and industrial zones in Al Hamra and Al Ghail.

RAKIA has managed to attract more than $3bn in

industrial investments and lured over 700 businesses

from around the globe. RAKIA’s industrial parks have

businesses from a wide range of industries; cur-

rently there are 4170 onshore firms and thousands

more registered through RAKIA’s offshore facility.

The emirate has embarked in an ambitious devel-

opment programme which has achieved total growth

of more than 50% over the past four years, with a

positive outlook for 2012.

NATURAL RESOURCES: With 9% of the world’s oil

reserves and 5% of gas reserves, the UAE has one

of the highest per capita GDP levels in the world.

The lion’s share of these resources belongs to Abu

Dhabi, which has 95% of the oil and 92% of the gas

in the UAE. RAK’s total gas reserves amount to around

33.96m cu metres, and its total oil reserves are esti-

mated at some 400m barrels, or around 0.4% of the

UAE’s total estimated reserves.

RAK boasts the biggest rock quarry in the Gulf

region, and it has been blessed with high-quality

limestone and clay deposits, which underpin the

emirate’s successful cement and ceramics indus-

tries. The fertile plains in the south-east around

Digdaga produce fruits and vegetables, as well as

milk and poultry for the domestic market.

LANGUAGE: The official language of the UAE is Ara-

bic, though English is widely used in business circles.

In addition, a significant portion of the expatriate

population speaks languages from the subcon-

tinent, such as Hindi, Urdu, Malayalam and Tamil.

11

THE REPORT Ras Al Khaimah 2012

Fruits and vegetables are produced in the south-east on the fertile plains around Digdaga

The emirate has a long history, dating back to around 5500 BCE

PROFILE OVERVIEW

Sheikh Saud has been promoting a reformist agenda since 2003

Over the past decade the emirate of Ras Al Khaimah

has developed a reputation as an up-and-coming play-

er in the Middle East and further afield. In 2011 RAK’s

status continued to grow, despite political volatility

elsewhere in the region and ongoing concerns about

international financial stability. This is largely the result

of a series of ambitious development programmes put

in place over the past 10 years which have positively

impacted a substantial number of areas, such as indus-

try, trade, foreign investment, education and health care.

The government, with Sheikh Saud bin Saqr Al Qasimi

at the helm, is expected to continue to invest in all these

areas in the coming years. This bodes well for both ongo-

ing development and the emirate’s growing interna-

tional reputation as a business-friendly, financially

sound investment destination.

AN HISTORIC PAST: RAK has been an economic cen-

tre off and on for thousands of years, due to its geo-

graphic location, which sits near a number of ancient

trade routes between Europe and East Asia. The ear-

liest of a series of archaeological finds in modern-day

RAK and the UAE dates back to the third millennium

BCE, when the area was home to an ancient civilisa-

tion active in fishing, copper smelting and trading. Oth-

er excavation activities in the emirate have uncovered

remnants of a number of major Sassanid-era (224-651

CE) settlements, in addition to wooden houses con-

structed during the Qahtani empire, which was active

during the 8th and 9th centuries.

In 1819 the British took control of the Northern Emi-

rates. After three years of occupation, Sheikh Sultan

bin Saqr Al Qasimi, the leader of the influential Al

Qawasim clan (and Sheikh Saud’s ancestor) that had

controlled the area since the early 18th century, signed

the General Maritime Treaty with Britain, establishing

RAK as a protectorate in exchange for protection from

the Ottomans, who were threatening the region.

From the mid-1800s through the late 1960s, RAK

was a member of the Trucial States, a group of British-

aligned sheikhdoms in the Gulf that included all of the

emirates and part of present-day Oman. RAK’s loca-

tion was primarily used for controlling shipping routes

to and from India during this time.

THE MODERN ERA: In 1972 RAK joined the recently

formed UAE – the other six emirates (Abu Dhabi, Dubai,

Ajman, Sharjah, Fujairah and Umm Al Quwain) had

come together only a short time before – signalling

the beginning of a long period of development and mod-

ernisation. Sheikh Saqr bin Mohammed Al Qasimi, who

had been in power in RAK since 1948, oversaw the emi-

rate’s accession to the new nation, and is credited with

transforming RAK from a rural, agrarian society into

the economically dynamic emirate it is today. When he

passed away in October 2010, the sheikh was in his ear-

ly 90s and had been in power for nearly 60 years, mak-

ing him the world’s longest-serving ruler.

Though Sheikh Saud formally succeeded his father

in 2010, he had been in charge of the day-to-day oper-

ations of the emirate since 2003, when he was appoint-

ed crown prince and deputy ruler. Previously he served

as chief of the Ruler’s Court and chairman of the RAK

Municipal Council. Since 2003 Sheikh Saud has worked

to roll out an ambitious reform agenda, with a focus

on attracting foreign investment, building up major

local industries and improving inhabitants’ quality of

life, primarily by investing in large-scale health and

education initiatives. He has also worked to boost trans-

parency in both government and the private sector.

ONE FOR ALL: The seven emirates that make up the

UAE are administered from the federal seat in Abu

Dhabi, which oversees a handful of key sectors, includ-

ing national security and defence, currency and fiscal

policy, labour relations, foreign affairs, immigration,

education standards and communications policy, among

others. Outside of these key areas, each individual emi-

rate is free to undertake new developments and poli-

cies as it sees fit. RAK has used this autonomy to invest

heavily in industry, education and health care.

At the national level the emirate is represented by

Sheikh Saud, who sits on the Supreme Council – the

The seven emirates in the

UAE are administered on a

federal level from the

federation’s capital in Abu

Dhabi. Apart from a few

key areas, however, each

emirate is largely

autonomous.

12

Mover and shakerEncouraging economic growth with an eye towards social development


PROFILE OVERVIEW

presiding federal body – alongside the rulers of the oth-

er six emirates, including Sheikh Khalifa bin Zayed Al

Nahyan, the ruler of Abu Dhabi, who is also the UAE’s

president, and Sheikh Mohammed bin Rashid Al Mak-

toum, the ruler of Dubai, who acts as the country’s

prime minister and vice-president.

The UAE’s government is organised into executive,

judicial and legislative branches. The executive branch

comprises the Supreme Council and the Council of

Ministers, or the cabinet, which is overseen by the

prime minister and two deputy prime ministers, with

membership made up of the UAE’s 22 government

ministers. The legislative branch is overseen by the

Federal National Council (FNC), which is made up of

40 representatives, half of whom are elected by the

Electoral College – a group of prominent citizens – and

half of whom are appointed by the Supreme Council.

The number of representatives each emirate sends to

the FNC is a function of its population and size. RAK

and Sharjah, for example, each send six representa-

tives (three elected and three nominated by the ruler),

while Abu Dhabi and Dubai send eight and the remain-

ing four emirates send four.

Though the FNC has been active since the UAE was

founded in the 1970s, until the mid-2000s the ruler of

each emirate appointed all representatives for his

respective area. This changed in 2006, when the UAE

staged its first-ever public election. Around 6000 promi-

nent Emiratis made up the Electoral College in the first

contest. During the nation’s second round of nation-

al elections, which took place in late September 2011,

this number jumped to 129,274 (see box). Due to the

infancy of electoral politics in the UAE, the FNC cur-

rently remains an advisory body, though its powers

have grown in recent years. In December 2008, for

example, the Supreme Council introduced a package

of constitutional amendments that increased the FNC’s

reach and powers considerably. These included an

amendment that extended representatives’ terms from

two years to four years and another that broadened

the FNC’s purview to include international agreements

and treaties. The FNC is expected to continue to gain

powers in the coming years.

LEADING LOCAL DEVELOPMENT: While RAK is a major

player on the national stage, the emirate’s rising inter-

national reputation is primarily the result of the local

government’s policies and development programmes.

The biggest firms in RAK, for example, are located in

industrial areas operated by RAK Free Trade Zone (RAK

FTZ) and the RAK Investment Authority (RAKIA), both

of which were created and are overseen by the gov-

ernment. RAK FTZ, which was established by royal

decree in May 2000 and remains 100% government-

owned today, is home to more than 5000 firms spread

throughout four separate industrial parks. In 2011 the

entity saw 2033 new company registrations in total,

up 17% on the 1740 firms registered in 2010. In par-

ticular, RAK FTZ has worked to attract small and medi-

um-sized enterprises (SMEs) in several sectors. RAKIA,

set up by royal decree in 2005, operates two industri-

al parks and a variety of business entities in the emi-

rate. A handful of RAK’s largest firms are based in

RAKIA-operated areas, including RAK Ceramics, the

largest ceramics producer in the world with an annu-

al output of 117m sq metres. RAK Ceramics exports to

over 150 countries. Furthermore, RAK boasts the largest

rock quarry in the Gulf region, as well as high-quality

limestone and clay deposits, which help contribute to

the ceramic sector’s dominance.

In addition to the industrial areas, the authority over-

sees RAK Offshore, a one-stop shop for setting up a

business in the emirate. In 2008 and 2009 RAKIA made

a number of major investments in foreign markets –

including Georgia, Indonesia and India – though since

late 2010 it has been working to divest itself of most

of these holdings and focus on investments at home.

Both RAK FTZ and RAKIA have become major points of

investment and trade between RAK and a wide variety

of foreign entities and governments in recent years,

strengthening international cooperation and trade

relations. In 2012, for example, Michael Corbin, the US

ambassador to the UAE, visited RAK FTZ and Maritime

City, among other centres of investment, in an effort

to highlight the importance of RAK-US trade relations.

LOCAL PRIORITIES: Like the UAE as a whole, RAK’s

economy has remained well insulated against the long-

term negative effects of the 2008-09 international

financial crisis, unlike parts of the EU and the US. With

this in mind, the local government has continued to

invest heavily in social reform programmes at home.

In addition to launching a number of new universities

in recent years, the government’s ongoing higher edu-

cation improvement programme includes initiatives

aimed at boosting the quality of education in the emi-

rate in an effort to better prepare local students to com-

pete in the job market (see Education chapter). The

Sheikh Saud bin Saqr Al Qasimi Foundation is also help-

ing to develop and foster research collaboration in

both RAK and the UAE as a whole, while the RAK Cen-

tre for Advanced Materials is poised to become a

regional leader in high-tech science for both the UAE

13


The government has launched a number of initiatives to boost investment, including a free trade zone

Industrial parks in the

emirate are mainly run by

two institutions, both

government-controlled:

the RAK Free Trade Zone

and the RAK Investment

Authority.

PROFILE OVERVIEW

and the region. Similarly, in conjunction with the fed-

eral Ministry of Health, RAK has been investing heavi-

ly in a project to improve the emirate’s health care

facilities (see Health chapter). RAK’s e-government ini-

tiative, launched by Sheikh Saud in 2003, has also ben-

efitted from government support in recent years.

CHALLENGES: While RAK has accomplished quite a

lot over the past decade, the emirate faces a number

of ongoing challenges. As the industrial sector has

grown, the local power network has been strained,

which has been a major issue for energy-intensive

manufacturers and other industrial concerns. In an

effort to overcome this issue, the Federal Electricity

and Water Authority (FEWA) is in the midst of a Dh1.4bn

($381.1m) project to develop the electricity infra-

structure in the Northern Emirates.

The emirate’s booming industrial sector also faces

growing competition from other industrial areas with-

in the UAE and throughout the region. While RAK FTZ

and RAKIA have both grown substantially in recent

years, increasingly they vie for foreign investors with

well-funded industrial areas in Abu Dhabi and Dubai,

for example. The UAE dominated fDi Magazine’s 2011-

12 “Free Zones of the Future” study, with 15 of the top

25 free zones located in the country. RAKIA’s indus-

trial park took second place, while RAK FTZ took fourth.

OUTLOOK: Despite these challenges, RAK is expected

to continue to take on a prominent role in the UAE for

the foreseeable future. Government-led economic lib-

eralisation has resulted in a thriving industrial sector,

which has in turn boosted RAK’s reputation both at

home and abroad. A number of ongoing social reform

programmes are expected to turn the emirate into a

major regional player in the areas of higher education

and health care in the coming years. Similarly, as inter-

net penetration rates continue to improve through-

out the UAE, RAK’s e-government project will have a

growing impact. All this should help ensure RAK remains

a key part of not just the UAE’s economy, but also a

vital piece of the economic framework of the region.

14

A number of development initiatives are under way, while international investments are also on the rise

Female participation in

public life has expanded,

thanks to a number of

social reforms, the opening

of RAK Women’s College,

support to female

entrepreneurs and an

increased role in politics.


IN THE PUBLIC SPHERE

On September 24, 2011 more than 5000 of Ras Al

Khaimah’s inhabitants – including a substantial

number of women – elected three new local rep-

resentatives to the UAE’s Federal National Coun-

cil (FNC), the 40-member organisation serving as

the national legislature. Political participation by

women has jumped substantially in recent years.

In RAK, women have benefitted from reforms that

have opened new opportunities in several areas.

EXPANDING PROFILE: Female participation in

public life has jumped substantially. Social reforms,

often with a focus on women and children, have

been a major component of Sheikh Saud bin Saqr

Al Qasimi’s rule. The number of higher education

institutions has increased rapidly as well. In 2000

RAK was home to a single university. Since then 13

additional institutions have opened. These include

the public RAK Women’s College, which is part of

the federal Higher Colleges of Technology system,

in addition to a variety of private institutions.

The local government has also worked to encour-

age women to start businesses and seek employ-

ment, with Sheikha Hana bint Jumaa Al Majid, Sheikh

Saud’s wife, being a major advocate for entrepre-

neurship among local women. In 2008 she organ-

ised a contest for female entrepreneurs, with a

grand prize of Dh100,000 ($27,220). Additionally,

she played a major role in setting up a business cen-

tre at RAK Women’s College, which offers advice,

mentoring and assistance with business licences.

POLITICAL PARTICIPATION: The UAE’s female

population has stepped into the limelight in recent

years. In the 2011 elections some 46% of the

129,271 members of the Electoral College – com-

posed of Emiratis chosen by the Supreme Council

– were female. This represents a substantial

improvement over the 2006 elections, when around

18% of the college was female. Perhaps more impor-

tantly, 85 of the 469 Emiratis that campaigned for

a spot in the FNC in 2011 were female.

In RAK, women accounted for 38% of the 16,850

locals chosen to vote in the 2011 elections. This

number is expected to rise in the next round of

national elections, tentatively scheduled for 2016.

At the same time, RAK boasted the highest per-

centage of female candidates. Of the 60 candi-

dates that campaigned for one of the three spots

allocated for elected representatives from RAK on

the council, 16 were women, which equates to

around 27% of the total nominees, compared to

21% in Umm Al Quwain (UAQ), 20.9% in Dubai,

18.8% in Abu Dhabi, 17% in Sharjah, 14.7% in Ajman

and 14.3% in Fujairah. When the election finished,

only one women had won a spot in the FNC (Sheikha

Isa Ghanem Al Ari, elected in UAQ), but the jump

in female participation is a good sign for the future.

PROFILE ANALYSIS

The emirate has a reputation as a stable place to do business

In his introductory remarks at the 2011 Global Arab

Business Meeting (GABM), held at the Al Hamra Con-

vention Centre in Ras Al Khaimah in October 2011,

Sheikh Saud bin Saqr Al Qasimi, the ruler of RAK, spoke

of new opportunities created by the unrest that has

swept through North Africa and the Middle East in

2011 and early 2012. “The real challenge is how we

can provide good governance to the people, which I

believe begins with transparency,” he said. “Govern-

ments should have the courage to bring in trans-

parency, which allows them to address challenges

rather than accumulating problems.” Sheikh Saud’s

remarks highlight an important aspect of the demon-

strations – in a handful of relatively wealthy Middle East-

ern nations, including the UAE, the Arab Spring has

opened up new space for political dialogue and, poten-

tially, long-term economic growth. At the 2011 GABM,

business leaders from all over the Arab world expressed

cautious optimism about the opportunities for sus-

tainable expansion created by the ongoing protests.

The idea that the Arab Spring will act as a catalyst for

political reform and economic expansion is increasingly

prevalent. According to a mid-2011 report by the Econ-

omist Intelligence Unit, annual real GDP growth in the

Middle East is expected to average 4.8% for the peri-

od 2012-15, nearly twice the projected rate in North

America and second only to Asia.

MOVING FORWARD: In the short-term future, the

region’s major hydrocarbons-producing countries –

the UAE, Saudi Arabia and Qatar, in particular – stand

to benefit the most from the Arab Spring. With insta-

bility elsewhere in the region, these countries should

gain both from investors looking for stable markets and,

to a lesser degree, tourists looking for new destina-

tions. The UAE, which has been working to improve pub-

lic participation in government since 2005, is poised

for rapid economic expansion.

TIME TO SHINE: RAK in particular has made a name

for itself in recent years as a secure and stable place

to do business, especially in the industrial sector. RAK

has benefitted from ambitious development initiatives

by Sheikh Saud, who has worked to guarantee good

governance and transparency in an effort to encour-

age economic growth. The emirate boasts a number

of growth drivers and other competitive advantages

that should stand it in good stead in the post-Arab Spring

economic climate. Like the rest of the UAE, RAK’s local

population boasts relatively high incomes for the region.

The emirate’s financial sector, dominated by the Nation-

al Bank of RAK (RAKBANK), fared well in the wake of

the international economic downturn (see Financial

Services chapter). Lending at RAKBANK continued

largely unabated through 2009 and 2010.

RAK’s financial industry is underpinned by the thriv-

ing local industrial sector. The emirate’s numerous

industrial zones, operated by the RAK Investment

Authority (RAKIA) and RAK Free Trade Zone (RAK FTZ),

are well positioned to benefit from foreign firms that

are looking to set up shop in the UAE due to instabili-

ty elsewhere in the region. The Arab Spring has been

especially hard on small and medium-sized enterpris-

es (SMEs). Both RAK FTZ and RAKBANK have worked

to cater to SMEs in recent years, which bodes well for

those looking to relocate to the UAE.

BY THE BOOK: 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.

Sheikh Saud has worked to boost research activities

in the emirate. In 2009 the École Polytechnique Fédérale

de Lausanne (EPFL), a major Swiss technical universi-

ty, partnered with RAKIA to open a campus in RAK.

The government has also worked to improve the

quality of education on offer in RAK, encouraging a focus

on teaching creative thinking and practical profes-

sional skills. This focus bodes well for RAK’s ability to

benefit from the rapidly changing regional economic

climate. Taking into account the focus on education,

the burgeoning industrial sector and the UAE’s advan-

tages, RAK is well positioned to capitalise on the new

economic opportunities created by the Arab Spring.

Annual real GDP growth in

the Middle East is

estimated to average 4.8%

for the 2012-15 period,

second only to the

projections for Asia.

15


With unrest linked to the

Arab Spring affecting some

countries in the region,

Gulf states like the UAE can

expect to see increased

interest from investors

looking for more stable

markets and from tourists

seeking new destinations.

Season of changeThe Arab Spring has the potential to create new economic opportunities for the emirate

PROFILE INTERVIEW

Sheikh Saud bin Saqr Al Qasimi, Ruler of Ras Al Khaimah

Which sectors will provide RAK with the great-

est growth over the next few years, and what

steps are being taken to attract investors?

SHEIKH SAUD: GDP in RAK rose by 8% in 2011, and

I am confident the rate in 2012 will at least match

that. Two sectors in particular, industry and tourism,

will provide continued economic growth and will

allow RAK to maximise its assets.

Over the years, we have not only attracted inter-

national groups to establish businesses here, but we

have also developed top-tier companies at home.

Stevin Rock and RAK Rock, for instance, are good

examples of this in the building materials industry.

They lead the market in supplying aggregates to the

UAE and the region.

To foster further growth, industrial parks, such as

Al Hamra and Ghail, free zones and a maritime city

have all been specifically designed to attract

investors. RAK has an industry-friendly tax system,

competitive production costs and excellent infra-

structure, including ports, airports and roads. For

example, expansion at Saqr Port has made it the

largest bulk port in the Middle East. This highlights

the importance our infrastructure currently has

when it comes to supporting the development of

industrial companies in RAK.

With regard to tourism, the Ras Al Khaimah Tourism

Development Authority (RAK TDA) is identifying areas

to increase long-term sustainable growth. The num-

ber of four- and five-star hotels in RAK and their high

occupancy rates point to the success of its strate-

gy. Our current challenge is to build more hotels to

reach a target of 10,000 rooms by 2016. We are aim-

ing for 1.2m visitors in 2013.

What new infrastructure projects are in the

pipeline for the emirate, and how have investors

reacted to these proposed investments?

SHEIKH SAUD: The biggest projects coming up are

the inter-emirate road, which will soon be extend-

ed to RAK, and Etihad Rail, which is being developed

in concert with the other emirates. The rail project

has significant potential. Shipping cargo via the rail

network would simplify delivery, reduce vehicle traf-

fic and improve road safety. We are also studying

plans to expand the RAK airport to cater for the

expected increase in demand.

In addition to this, we are seeking to attract more

investment in RAK Maritime City and have already

seen positive feedback from foreign investors. IT

systems are consistently reviewed to make them

more accessible and investor-friendly. Alongside

promoting industry and tourism, we also want to fur-

ther improve the quality of life in RAK by the gov-

ernment’s focus on upgrading schools, hospitals

and other public facilities.

How can alternative energy strategies be used

to minimise the impact of energy shortages when

it comes to economic expansion?

SHEIKH SAUD: The federal government is invest-

ing heavily in the upgrade of the electrical supply

infrastructure, while at the same time a couple of

independent power projects have been initiated,

which have been instrumental in addressing short-

ages. It is indicative of the “can do” spirit in Ras Al

Khaimah that several industrial companies have

turned the energy situation into an opportunity.

A number of cement companies are now under-

taking waste heat recovery techniques to make their

operations more efficient and become more com-

petitive within their industry. They have switched

their fuel from diesel to coal and are continually

looking for ways to become more efficient.

That said, here in RAK we want to raise the over-

all efficiency levels of our industries by reducing

energy waste. In addition to conservation tech-

niques, we are also looking into how the emirate

can implement alternative methods of energy gen-

eration across different sectors of the economy.

16

Big plansOBG talks to Sheikh Saud bin Saqr Al Qasimi, Ruler of Ras Al Khaimah


PROFILE INTERVIEW

The focus on conservation extends to our munic-

ipal waste system through our waste recovery

scheme. And with regard to landfill, we have iden-

tified several ways of turning waste into gas, which

can serve as an alternative source of energy.

The overarching idea is to invest in feasible, sus-

tainable projects, as it is important for the future of

the emirate to have alternative sources of energy,

fostering growth across all areas of the economy.

We have a duty to turn the very important issue of

high energy consumption into a solution for our

energy needs.

What efforts are being undertaken with regards

to fostering the development of the education

system in the emirate? Are there any particular

areas of focus?

SHEIKH SAUD: Over the past 40 years, our whole

country has witnessed tremendous transformational

changes, and we have come a long way as a result

of these changes.

Education is the foundation for growth across

sectors. Our aim is to refine the “pyramid of knowl-

edge” and work on ways to upgrade our education

system by improving the overall quality of our teach-

ers and professors in both the secondary and ter-

tiary systems, as well as by revising the curricula in

place in local schools.

The Al Qasimi Foundation for Policy Research is

at the heart of this work. The foundation has been

working with the RAK Education Zone to assess Eng-

lish language teachers in our government schools,

addressing any skills gaps.

The Al Qasimi Foundation is also conducting a

study to help understand why the proportion of Emi-

rati males who continue into higher education is

relatively small. Our aim is to give the population of

RAK the choice of being able to stay in the emirate

while still attaining a high-quality education, as

well as to attract students from outside the emirate.

In what ways is the emirate working to position

itself as a first-choice destination for tourists as

well as for foreign investors? What role does

RAK TDA play in this?

SHEIKH SAUD: I strongly believe that, given the

close proximity to key tourism source markets such

as Europe, Asia and Russia, RAK will be able to become

a leading tourist destination.

By the very creation of RAK TDA, we have consol-

idated all tourism-related activities under one enti-

ty, establishing a one-stop shop for investors that

can provide all of the necessary information, includ-

ing data and feasibility studies.

RAK TDA’s primary objective is to position the emi-

rate regionally and on a global level as a leisure,

adventure and value-for-money destination. Its two

divisions, tourism and hospitality, have been active

in both identifying and developing tourism projects

to increase the number of visitors and achieve over-

all growth for the sector.

I have already mentioned the significant growth

in the number of four- and five-star hotels and

resorts. One major project – and yet another inter-

national brand to come to the emirate – is the UAE’s

first Waldorf Astoria hotel, which is scheduled to

open in late 2012.

If location is important for tourism vis-à-vis Europe,

Asia and Russia, it is equally significant for indus-

trial and other investments as well. You have already

seen the steps that we have taken in developing

industrial parks, free zones, ports and a maritime city.

But this is not the end of the process. It is only the

beginning.

We want to maintain a fluid business environ-

ment where the government is quickly responsive

to investors’ needs, monitoring new ideas and striv-

ing for perpetual improvement. We are continually

scrutinising our policies to simplify them, as well as

increasing the level of transparency, which is right-

ly an extremely important issue for our investors.

17


PROFILE INTERVIEW

Sheikh Mohammed bin Saud Al Qasimi, Crown Prince of Ras Al Khaimah

What diversification strategy is being undertak-

en, particularly with regards to enhancing RAK’s

attractiveness to foreign investors?

SHEIKH MOHAMMED: RAK’s economy is already diver-

sified and the emirate is aiming to expand further. The

economic diversification programme implemented in

RAK has created a fairly mixed economy, and the gov-

ernment has strived to espouse an economic vision

of openness. This will help RAK become more signifi-

cant in a rapidly evolving and interconnected global

economy. We are concentrating on developing tourist

attractions, and, at the same time, we are promoting

industry. We have industrial parks that allow compa-

nies to share the success of existing industries.

We are seeking to achieve sustainable growth

through attracting investments, taking full advan-

tage of RAK’s competitive advantage in terms of its

geographic location. Being close to the Strait of Hor-

muz allows for maritime bulk trade and tourism devel-

opment. The mountains are also a great asset for the

tourism and industrial sectors, particularly in the field

of cement and building materials.

Today, efforts are under way to make RAK an investor-

friendly destination. RAK is a first-choice location for

investors, thanks to business-friendly legislation that

gives the investor the security to locate here. For

investors, RAK is accessible, corruption-free and com-

petitive in terms of cost. To attract more foreign

investors, it is essential to market the emirate abroad,

and today, we are looking to develop relations with coun-

tries that are more open to making investments.

Which sectors will provide RAK with the greatest

growth potential in the coming years?

SHEIKH MOHAMMED: I am particularly keen to see

the tourism and industry sectors expand, as I believe

these two areas will provide RAK with the best growth

potential in the coming years. With regards to the

tourism sector, we have already set up the Tourism

Authority, and we are trying to streamline all hotels,

restaurants and services offered to visitors. We want

tourists to visit RAK more than once, and I am confi-

dent the emirate can become a number-one desti-

nation as it possesses many attractions: we have the

UAE’s longest stretch of coastline, the Hajjar Moun-

tains, year-round sunshine and a history stretching

back 7000 years. Located close to the regional eco-

nomic centre of Dubai, RAK differs as it is smaller and

more traditional. It is an attraction for those wanting

to see another side of life in the Arabian Peninsula.

Hotel capacity is increasing, and the airport is being

expanded to match tourism sector growth. Great

potential also lies on Marjan Island, where the Real

Madrid Island Resort is scheduled to open in 2015.

We have not forgotten the main GDP contributors such

as industry either. Given that we already have estab-

lished players in the market, more entrants are look-

ing to come to the emirate and share the success of

its expansion. Moreover, we also aim to ensure devel-

opment is environmentally friendly and we have a

range of industry and tourism projects specifically

designed with ecology and habitat protection in mind.

How would you assess RAK’s relationship with the

other emirates as well as the wider region?

SHEIKH MOHAMMED: While all of the emirates are

different, they complement each other in various

ways. When a visitor comes to the UAE, they see the

diversity of the country’s topography and the beau-

ty of that diversity. On an economic level, with each

emirate’s economy expanding, the Gulf states have

become better business partners for each other – not

just locally but globally. Furthermore, as countries

surrounding the UAE become richer, they will provide

us with more opportunities to do business, which I

regard as a motivation to develop the whole of the

UAE. Each emirate has a responsibility in this expan-

sion, and what RAK has to offer is an advantageous

fiscal policy, a strategic geographic location, politi-

cal stability and a competitive business environment.

18

Becoming a top destinationOBG talks to Sheikh Mohammed bin Saud Al Qasimi, Crown Prince ofRas Al Khaimah


PROFILE ANALYSIS

The local government has made numerous investments in industry

As the industrial sector has expanded over the past

decade, demand for power and water in Ras Al

Khaimah has grown exponentially. Consequently, in

recent years RAK, like many of the other Northern

Emirates, has experienced sporadic power outages

and water shortages. This is an issue in the emirate,

as it is home to a number of energy-intensive man-

ufacturing companies and other industrial firms.

Unannounced power cuts could hurt revenue at

many of these firms, which rely on electricity to

power production. Similarly, RAK’s growing popula-

tion and steadily increasing urbanisation have result-

ed in rapidly rising demand for potable water, a very

limited resource in the UAE.

The local government has been working closely

with the Federal Electricity and Water Authority

(FEWA), the federal utility that oversees the elec-

tricity and water supply in the Northern Emirates,

to overcome these shortages. In an effort to boost

power supply, both the RAK Investment Authority

(RAKIA) and FEWA have set up new power infra-

structure in recent years, and the emirate is expect-

ed to benefit from a new desalination plant by 2013.

While ramping up energy and water supply in the

Northern Emirates – and in particular RAK and Shar-

jah, which have seen the greatest shortages – is a

national priority, local and federal authorities are also

working to boost environmental protections at home.

Balancing these two priorities has been a key focus

over the past few years. As of early 2012 the gov-

ernment had managed to pursue both simultane-

ously, primarily by focusing on developing new clean

sources of energy. RAK, home to a nascent but active

and technologically advanced sustainable energy

sector, is leading the charge.

POWERING UP: In the 1990s and early 2000s, RAK’s

power supply was more than sufficient. The emi-

rate was powered by a mix of gas from local fields

and imports from Abu Dhabi and other energy-rich

neighbours. RAK first faced power shortages in

2003-04, soon after the local government began

making major investments in the industrial sector.

Securing enough energy to power a number of large-

scale manufacturing plants has been a challenge

ever since. By 2006 RAK was suffering occasional

blackouts, due in large part to burgeoning industri-

al demand for power, the steadily expanding popu-

lation and urbanisation. Outages normally took place

in the summer months, when air-conditioner use

overloaded the power grid.

In 2008 and 2009 FEWA purchased electricity

from the Abu Dhabi Water and Electricity Authori-

ty to make up for the local shortage. At the same

time, the authority began to develop plans to upgrade

the power grid in the Northern Emirates and find

new sources of energy to ensure future supply. In

mid-2009 RAKIA completed work on two new pow-

er stations, which now supply power to the indus-

trial zones at Al Ghail and Al Hamra. A connection

between the two plants, which have a combined

capacity of 129 MW, is being constructed so that

idle capacity can be utilised. The 40-km pipeline is

due to come on-line by the end of 2012.

RECENT EVENTS: In March 2011 Sheikh Khalifa bin

Zayed Al Nahyan, the UAE’s president, announced

that the federal government would invest Dh5.7bn

($1.55bn) in power and water infrastructure proj-

ects in the Northern Emirates, including building a

handful of additional power plants and substations,

improving the transmission network and boosting

capacity at a number of older power stations. In

October 2011 FEWA completed work on a number

of smaller power stations in the Northern Emirates,

including one in Masafi, output of which is split

between RAK and Fujairah; one at Al Sawan, in RAK;

and one in Al Nuaimiya, in Ajman. Two months lat-

er, in December 2011, the authority finished con-

struction at the second Al Rifaa power substation

in RAK. These projects are part of the first stage of

FEWA’s overarching development plan for the area.

The UAE’s federal

government is planning to

invest some $1.55bn in

power and water

infrastructure, while RAK

has also added power

plants to boost capacity.

19


Protect and preserveExpanding the supply of power and water and promoting sustainability

PROFILE ANALYSIS

WATER WORLD: Water consumption in the UAE is

higher than in almost any other nation in the world.

In 2010, according to local news reports, the coun-

try’s per capita water consumption rate was around

500 litres per day, which is some 82% higher than

the world average. According to an early 2012 report

released by the Abu Dhabi Environment Authority,

annual water consumption in Abu Dhabi exceeds

local supply almost 26 times over. At the current rate

of use, local ground resources there will be deplet-

ed by the end of the year 2050.

With this in mind, the great majority – around

90% – of the UAE’s potable water supply is produced

by desalination. After Saudi Arabia, the UAE is the

largest producer of desalinated water in the world.

Six of the country’s 70 desalination plants are locat-

ed in RAK. The newest plant – which includes desali-

nation and wastewater treatment components –

was set up in the Al Ghail industrial area in April 2010

by RAKIA. The majority of the production coming

from the plant goes to large-scale manufacturers

and other nearby industrial firms.

FEWA, in conjunction with the federal govern-

ment and the water authorities in Abu Dhabi and

Dubai, has launched a number of new water-relat-

ed projects in recent years. As part of the recently

announced Dh5.7bn ($1.55bn) federal investment

in the water and power infrastructure in the North-

ern Emirates, FEWA is undertaking a handful of major

water-related projects.

The authority will build a 100-km water pipeline

from Kalba, in Sharjah, to Dibba, which sits at the

north-eastern tip of the UAE, at a cost of Dh900m

($245m). The line will supply 23m gallons of water

per day to Fujairah and the town of Khor Fakkan in

Sharjah, which is home to a major container termi-

nal. FEWA is also working on a Dh300m ($81.7m),

60-km pipeline that will be able to supply 18m gal-

lons of water per day to Umm Al Quwain and a

Dh158m ($43m), 36-km pipeline to help supply RAK.

In mid-2011 parts of RAK experienced a water

shortage as a result of a desalination plant in the

central Al Nakheel area breaking down. In response

FEWA announced plans in December 2011 to build

a new desalination plant in the emirate, with a capac-

ity of 15m gallons per day. The project, which is

expected to be completed by 2014, will primarily sup-

ply water for industrial use.

Additionally, in early 2012 FEWA completed work

on two 5m-gallon reservoirs in RAK. The two tanks,

which cost Dh21m ($5.7m) to construct, will hold

enough water to supply the emirate for two full days

in an emergency situation. According to Mohammed

Mohammed Saleh, the director-general of FEWA,

the authority is also in the process of building two

10m-gallon tanks in RAK.

A CENTRE FOR SUSTAINABILITY: RAK’s recent

investments in environmental protection and alter-

native power have the potential to turn the emirate

into a regional leader in clean energy and water in

the coming years. The RAK Environment Protection

and Development Authority (EPDA) has worked close-

ly with the federal Ministry of Environment and

Water to introduce programmes aimed at reducing

the emirate’s environmental footprint.

The authority, which was set up by royal decree

in 2007, oversees a number of initiatives, including

a recurring desert clean-up effort; a programme to

monitor and curb dust emissions at major industri-

al plants; and a wide variety of educational pro-

gramming for schools and the general public.

In early March 2011 the EPDA organised an inter-

national conference entitled “Global Warming: Water

and Land Use”, which took place at the Al Hamra Con-

vention Centre in RAK and was hosted by Sheikh

Saud bin Saqr Al Qasimi, the emirate’s ruler.

The conference attracted guest speakers from a

number of major US-based organisations, including

the National Aeronautics and Space Administration,

the National Oceanic and Atmospheric Administra-

tion, and the University of Maryland.

SOLAR WORKS: The Centre Suisse d’Électronique

et de Microtechnique (CSEM), a Switzerland-based

sustainable energy firm that established a presence

in RAK in 2005 as part of a joint venture with RAKIA,

is developing a number of ambitious new solar tech-

nologies and processes in the emirate.

The company’s flagship project involves floating

massive solar arrays in the shallow waters off RAK.

The “solar island” project, which was still under devel-

opment as of mid-2012, has attracted attention

from solar energy firms around the world.

CSEM is also working on a number of other proj-

ects, including solar-powered air conditioners and

solar polygeneration technology, which could poten-

tially boost efficiency at power and desalination

plants. Finally, the firm is currently working to set

up a testing facility for new solar and new thermal

technologies, which may have the potential to even-

tually attract more alternative energy firms to move

ahead with setting up their operations within RAK.

20

The emirate is exploring a number of solar projects, including a possible “solar island” off the coast

In an effort to expand

water supply, FEWA is

planning to build a 100-km

water pipeline capable of

supplying 23m gallons per

day, at an estimated cost

of about $245m.


PROFILE ANALYSIS

Proximity to a number of trade routes is an advantage for firms

A substantial number of new international econom-

ic agreements have boosted Ras Al Khaimah in recent

years, largely as a result of government-led industri-

al development measures put in place over the past

decade. The emirate has established trade relation-

ships with a diverse group of nations, including Tan-

zania and the US. Rising export revenues have allowed

the government to invest heavily in ambitious social

reform programmes. Similarly, as the emirate’s rep-

utation has grown, it has attracted an increasing

amount of foreign investment.

BACKGROUND: Since the UAE was created in the

early 1970s, trade and economic ties have been at

the centre of the country’s foreign policy. The rise of

Abu Dhabi and Dubai as regional financial and tourism

centres, respectively, in the late 1990s and first half

of the 2000s was closely related to an increase in inter-

national economic cooperation between the UAE and

a number of major economic powers. Even in the

wake of the 2008-09 international financial down-

turn, which had a negative impact on the country –

though not nearly to the extent of many Western

economies – the federal government has highlight-

ed the importance of expanding and deepening eco-

nomic integration. The topic of trade ties was a cen-

tral talking point at the 2011 Global Arab Business

Meeting, held in RAK in early October. According to

a speech delivered at the event by Sheikha Lubna

Khalid Al Qasimi, the UAE’s minister of foreign trade,

continuing to ramp up economic integration – in par-

ticular with nations in the Middle East and North

Africa – is the best way to ensure regional peace and

stability, not to mention steady economic growth.

A HISTORY OF GROWTH: RAK boasts a number of

competitive advantages for industrial development.

The emirate’s location on the Strait of Hormuz means

that local exporters and trans-shipment firms have

direct access to one of the world’s busiest shipping

lanes. The proximity of the strait translates into ship-

ping prices that are considerably lower than in the

UAE’s other major economic centres in Dubai and

Abu Dhabi. Additionally, RAK is not nearly as built-up

as many of its neighbours. The emirate has a sub-

stantial amount of undeveloped, affordable land,

which is a boon for industrial firms looking to set up

shop in the Gulf. Finally, RAK is home to sizeable

amounts of a wide variety of mineral deposits. Exten-

sive limestone deposits in the Al Hajjar Mountains, for

example, have resulted in the development of a thriv-

ing construction materials segment, making RAK a

main supplier in the UAE for construction materials.

THE LONG GAME: In addition to these natural advan-

tages, the emirate has benefitted from decades of

careful government oversight, with an eye to devel-

oping the industrial sector. RAK’s current status as a

growing economic player in the UAE and further afield

is the result of a long period of economic liberalisa-

tion, government investment and reform.

The industrial sector, which today accounts for the

great majority of the emirate’s export revenues, was

launched in the 1970s and 1980s by Sheikh Saqr bin

Mohammed Al Qasimi, who ruled RAK from 1948 until

he passed away in 2010. Sheikh Saqr played an inte-

gral role in setting up the UAE’s first cement factory

in 1974. He was also one of the founders of RAK

Ceramics in the 1980s. Today the firm is the largest

ceramics manufacturer in the world.

After Sheikh Saud bin Saqr Al Qasimi, Sheikh Saqr’s

son, took over the day-to-day operations of RAK in

2003, he introduced a series of ambitious economic

reforms and targeted investments in the industrial

sector. Sheikh Saud’s government has focused on

improving the emirate’s transport and industrial infra-

structure and increasing transparency requirements

for government players and private sector firms, with

the long-term goal of boosting overall economic diver-

sification. In recent years RAK has benefitted from the

development of a modern transport network. RAK is

home to five interconnected ports, an international

airport and a series of major road links. RAK is also

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.

21


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.

Trading upBoosting economic ties increases regional integration

PROFILE ANALYSIS

expected to play a major role in the planned UAE-wide

Etihad Railway network, which is currently in the ear-

ly stages of development.

INDUSTRIAL HEAVYWEIGHT: Perhaps the gov-

ernment’s most important move in terms of devel-

oping the industrial sector was setting up the RAK Free

Trade Zone (RAK FTZ) in May 2000 and, five years lat-

er, the RAK Investment Authority (RAKIA). These two

entities, which remain 100% owned and operated by

the government, have had a major impact on the emi-

rate’s industrial development. RAK FTZ- and RAKIA-

operated industrial areas are home to the majority

of the emirate’s largest and most successful compa-

nies. The planned RAK Maritime City will provide sim-

ilar incentives for maritime-based industry.

The industrial sector, which includes steel produc-

tion, mineral processing, limestone quarrying and

manufacturing, is responsible for nearly one-third of

RAK’s GDP, according to the RAK Department of Eco-

nomic Development (RAK DED). Foreign investment

has stagnated slightly in other parts of the region as

a result of the Arab Spring (see analysis), but RAK has

remained popular among international and local

investors alike. Indeed, as costs and risks rise else-

where in the region, RAK may benefit from a bump

in business. “There is a migration of companies from

other GCC countries and the Middle East into RAK,”

Alex Thomas, the general manager of marketing at

RAKIA, recently told local press. “They are conscious

about cost.” According to RAK DED, the emirate’s

economy grew by 8% in 2011.

AROUND THE WORLD: While federal diplomats in

Abu Dhabi handle the UAE’s official foreign policy, each

emirate is allowed to pursue trade and economic

relations with as many foreign entities as it likes. RAK

has made good use of its autonomy in this area by

ramping up foreign trade in recent years. Business-

es operating in RAK hail from a variety of locations.

RAK FTZ is home to over 5000 firms from more than

106 countries, including, notably, India, Egypt, the US

22

Both RAKIA and RAK FTZ have seen a sizeable uptick in registration numbers over the past few years

Trade with the US has

ramped up considerably. In

early 2012 the CEO of RAK

FTZ met with the US

ambassador to the UAE to

discuss plans for future

cooperation.


and the UK. As of early 2010, around 95% of these

firms were small and medium-sized enterprises

(SMEs). In 2011 RAK FTZ saw 2033 new firms regis-

ter to do business in RAK, a 17% jump on 2010. Sim-

ilarly, in the first six months of 2011, around 800 new

companies were registered with RAKIA, up 31% over

the same period in 2010. The authority is home to

more than 3000 firms. While the majority of these

companies registered under manufacturing licences,

there has been increased interest in trade licences

in recent years as well, according to RAKIA.

MAJOR PARTNERS: While RAK does business with

companies from both hemispheres, the emirate main-

tains especially close ties with a handful of nations

and areas. China and India are both leading trading

partners, for example. Around 30% of the firms reg-

istered at RAKIA at the end of 2009 were based in

the sub-continent. Similarly, European companies

accounted for 18% of the firms registered with RAKIA,

Asian firms for 7%, US-based companies for 3%, and

Russian and other Commonwealth of Independent

States-based firms for around 2%.

RAK’s thriving tourism market has the potential to

attract new hoteliers and other tourism-related com-

panies from around the world in the coming years. A

handful of local organisations are working to boost

trade ties in foreign markets. For example, in mid-May

2012 RAK FTZ sent a delegation to Pakistan, with the

goal of attracting Pakistani businesses to invest in the

emirate, either in the form of foreign direct invest-

ment (FDI) or by setting up new companies in the UAE.

The delegation participated in a series of seminars in

Karachi and road show events in smaller economic

centres throughout the country. RAK FTZ is already

home to a substantial number of Pakistan-based firms,

which are active in a wide variety of industries. In an

effort to boost ties with Korean and other East Asian

firms, RAK FTZ also recently sponsored the UAE’s

inaugural Made In Korea exhibition, which was held

in Abu Dhabi in mid-May 2012. Contacts made at the

event are expected to eventually lead to new busi-

ness opportunities for Korean firms looking to set up

shop in the UAE and vice versa.

Trade with the US, in particular, has ramped up

rapidly. In the past decade the UAE’s exports to the

US jumped by 18%, from $971.1m in 2000 to $1.15bn

in 2010, according to official statistics. In 2010, the

most recent year for which data is available, the UAE

was the US’s largest export market in the Middle East,

and the 21st-largest overall. The two countries trade

a wide variety of products, including manufactured

metals, chemicals, transport equipment, machinery

and electronics, among others.

Both RAK and the US are working to encourage addi-

tional trade in the future. In early 2012 Oussama El

Omari, the CEO of RAK FTZ, met with Michael Corbin,

the US ambassador to the UAE, to discuss future

cooperation plans. “The visit is an opportunity to rein-

force our positioning as a business hub geared at

helping SMEs and global businesses to set up in the

region,” El Omari told local press during the meeting.

Finding a nichePage 56

With the emirate’s free zones work-

ing to encourage new industrial ven-

tures, RAK is positioning itself as a

manufacturing centre for both the

UAE and the wider region. While

ceramics remains the largest industrial

segment, other areas are also posting

strong numbers. Due to economic

growth, the appetite for more expen-

sive goods is increasing, both for

the mid-market and luxury segments.

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PROFILE

A rising star: Welcoming investment to its

many expanding sectors

Mover and shaker: Encouraging economic

growth with an eye towards social

development

In the public sphere: Emirati women are taking

on a growing role in public life

Season of change: The Arab Spring has the

potential to create new economic

opportunities for the emirate

Interview: Sheikh Saud bin Saqr Al Qasimi,

Ruler of Ras Al Khaimah

Interview: Sheikh Mohammed bin Saud Al

Qasimi, Crown Prince of Ras Al Khaimah

Protect and preserve: Expanding the supply of

power and water and promoting sustainability

Trading up: Boosting economic ties to

increase regional integration

ECONOMY

A broader view: Diversified base continues to

expand as investment-friendly policies draw

in FDI

Interview: Jim Stewart, CEO, Investment &

Development Office, Government of RAK

Niche potential: Promoting research and

development in high-tech industries

New goals in sight: Encouraging foreign

investment in a range of areas

Moving on up: The transition towards

higher-value finished and semi-finished

products continues

FINANCIAL SERVICES

Ramping up: Solid fundamentals underpin

expansion

Top banks: A look at the leading financial firms

Building new businesses: Financing for SMEs is

becoming easier to come by

A broader viewPage 24

One of the region’s most diversified economies,

RAK boasts sizeable tourism, manufacturing,

high-tech, retail and construction sectors,

among others. Balance is the aim, with the state

following what is know as the “20:20” rule: no

one sector should make up more than 20% of

GDP or more than 20% of the fiscal surplus.

Growth is expected to continue, with a partic-

ular focus on exploiting underserved niches.

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INDUSTRY & RETAIL

Finding a niche: A wide variety of

opportunities exist for investors

Interview: Dr Ayman Sahli, CEO, Julphar

A friendly location: Free zones, industrial

parks and other services cater to

foreign investors

Pushing production: An open-door policy

paves the way for FDI

A diversifying offer: The appetite for

higher-end products is growing

CONSTRUCTION & REAL ESTATE

Pushing ahead: Developments are helping

to spur on projects in several new

segments

Bouncing back: By diversifying its strategies,

the industry is overcoming difficulties

brought about by the international financial

crisis

Interview: Louis-Armand de Rougé, CEO,

RAK Marjan Island Football

The move forward: Modest gains are a positive

sign for future growth

Accessing credit: Increased mortgage

options facilitate greater investment

TRANSPORT

Accommodating growth: Expanding capacity

across road, rail, air and sea

ISBN 978-1-907065-60-6

Editor-in-Chief: Andrew Jeffreys

Editorial Director: Peter Grimsditch

Regional Editor: Oliver Cornock

Editorial Manager: Jean Charles Ben

Sichou

Chief Sub-editor: Alistair Taylor

Deputy Chief Sub-editor: Jennie

Patterson

Web Editor: Barbara Isenberg

Sub-editors: Danya Chudacoff, Elyse

Franko-Filipasic, Sam Inglis, Elise

Laker, Esther Parker, William Zeman

Contributing Sub-editor: Miia

Bogdanoff

Analysts: Nick Anderman, Ben

Campbell, Henry Harding

Senior Editorial Researcher: Susan

Manoğlu

Editorial Researchers: Thomas Bacon,

Owen Barron, Souhir Mzali, Adeline

Oka

Art Director: Yonca Ergin

Deputy Art Director: Cemre Strugo

Art Editor: Meltem Muzmuz

Illustrations: Shi-Ji Liang

Photographer: Mark Hammami

Production Manager: Selin Bolu

Operations Manager: Yasemin Dirice

Logistics & Distribution Coordinator:

Esen Barin

Operations Assistant: Öznur Usta

OBG would like to thank its local

partners for their assistance and

support in the research of this project.

CONTENTS RAS AL KHAIMAH 20126


CONTENTS RAS AL KHAIMAH 2012 7


Moving up the ranksPage 122

The tourism sector is growing steadily, with work

ongoing to expand hotel capacity to keep pace

with rising visitor numbers. In 2011, two gov-

ernment initiatives were started to promote and

oversee tourism. The RAK Hospitality Group,

which manages government-owned tourism

assets, is helping facilitate further investment

and growth as the emirate becomes an increas-

ingly well-known destination. Such changes go

hand-in-hand with the rising volume of tourists.

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Paving the way: Roads, bridges and bus

routes are being expanded to meet the

needs of a growing population

Taking to the skies: Plans in place to make the

aviation segment more competitive

Interview: Colin Crookshank, Group General

Manager, RAK Ports

ENERGY

Securing supply: New investments in

generation capacity and alternative sources

Stronger together: A merger deal helps to

diversify and expand reserves

Responding to demand: Boosting private

sector involvement in utilities

HEALTH

Healthy expansion: Addressing a growing

demand for services

Ready for the challenge: A revamped

medical industry to address growing demand

EDUCATION

Steps forward: Reforming with an eye towards

a stronger economy

Interview: Sheikh Nahyan bin Mubarak Al

Nahyan, UAE Minister of Higher Education and

Scientific Research

Aim high: Tertiary education is set to receive

greater attention

TOURISM

Moving up the ranks: Adding new

infrastructure and building awareness to

support continued growth

Interview: Victor A Louis, COO, Ras Al Khaimah

Tourism Development Authority (TDA) and

CEO, Ras Al Khaimah Hospitality Group

Clear goals: Authorities aim for steady sector

expansion

Securing supplyPage 96

While RAK has very limited supplies of oil and

gas, in some ways this has worked to its advan-

tage, prompting it to diversify its economy.

However, increasing demand for electricity

means it must ensure its energy security. It aims

to do this by reactivating the Saleh gas field,

improving the efficiency of existing power

plants and promoting the use of renewables.

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THE GUIDE

A line in the sand: Given its strategic location

at the entrance of the Gulf, the emirate has a

history of defending against foreign

incursions

A room with a view: Details for some of the

leading hotels and resorts in the emirate

Listings: Telephone numbers for

government offices, chambers of commerce,

foreign missions, banks, legal & accountancy

services, hospitals and educational

institutions, car hire, and more

Facts for visitors: Useful information for new

arrivals

Chairman: Michael Benson-Colpi

Director of Field Operations: Elizabeth

Boissevain

Regional Director: Michelle Solomon

Country Director: Caroline Nguyen

Field Operations Executive: Meltem

Okur

Field Operations Coordinator: Zeynep

Akdamar

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authors and publisher accept no

responsibility for any errors it may

contain, or for any loss, financial or

otherwise, sustained by any person

using this publication.

Updates for the

information provided in this

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