DIFC highlights Dubai's drive to generate regional FDI'Press Release22 May 2005 12:20 pm
“The DIFC will help to open the door to greater FDI” Says Dr Omar Bin Sulaiman in his address to World Economic Forum in Jordan
The Middle East attracts less than 1% of the estimated global pool of foreign direct investment (FDI) Dr Omar Bin Sulaiman, Director General of Dubai International Financial Centre Authority (DIFCA) told delegates gathered in Jordan for the World Economic Forum.
“Whilst the GCC attracted $1.81 billion of FDI in 2003, an improvement of 64% of the previous year, and the wider Arab region attracted more than $7 billion, this is still a drop in the ocean when put into the global context.” Said Dr Omar
“In fact, we as a group of nations are investing significantly more in other countries outside the region, than we are receiving. It is now time we made the Middle East a lure for FDI.”
Citing UAE’s track record in developing a market for FDI, Dr Omar Bin Sulaiman highlighted the areas that need to be improved throughout the region for FDI to materialise.
“We need clear and transparent legal systems, we need to ensure fair and equitable treatment of foreign investors, we must provide better governance. Barriers to trade must be removed, facilitating licensing and eliminating hidden non-tariff barriers.
Highlighting the role the DIFC will playing facilitating region wide FDI, Dr Bin Sulaiman added,
“Financial markets play an important role in enhancing the growth effects of FDI and act as a channel for FDI into a country. A major contributor to that influx of FDI is a recognised Capital Market. An investment community, built and based around a credible stock exchange will greatly enhance both the opportunity for FDI as well as the benefits that FDI will realise for the local economy.”
Dr Omar Bin Sulaiman explained the significance of the DIFC initiative in creating a gateway for wealth to enter the Middle East in a secure, liberal but very strictly regulated environment where Western best practice in procedures and legislation is adopted. He further explained the role the DIFX will play in attracting investment from the West and Middle East into regional businesses and utilities.
“The Dubai International Financial Centre will play a direct role in facilitating FDI by acting as a platform and conduit for the flow of capital to and from the region.
DIFC has the makings of a world-class regulated and transparent financial centre, a secure, liberal but very strictly regulated environment, based on best practices of leading jurisdictions from around the world.
”Through the DIFX, an international stock exchange, the DIFC will enable and facilitate the numerous privatisations planned in the region. It will provide a vehicle for local industry to seek international investment in a liquid, well regulated environment. DIFC will also encourage M&A activity to produce bigger and more competitive business units- that are attractive to foreign ownership. Legal assurance will be provided by DIFC’s court and judicial system where disputes can be tried under any established legal framework. The DIFC will link the existing markets of the East and West and will generate global awareness of the investment opportunities that exist in the UAE and wider region. Such a highly regulated truly international environment will also serve as a catalyst for the development and enhancement of the smaller financial markets of the Region. Meanwhile, DIFC will be a direct contributor to development of the skill levels and knowledge in the local economy, crucial to attracting FDI."
Dr Omar Bin Sulaiman ended his presentation on a positive note, stating how the UAE, and others in the region can attract substantial foreign investment.
“Certainly, the UAE has the right conditions: Sound macro economic policies, positive attitudes, political stability, good infrastructure, fair and transparent laws, low business transaction costs, the availability of banking services, low or no tax, 100 percent repatriation of profits. All of these are essential if the massive potential of the region is to be achieved.”
Dr Omar was speaking as a panellist at a session titled, “The Allure of the Middle East - Attracting FDI.” The panel was moderated by Augusto Lopez-Claros, Chief Economist and Director, Global Competitiveness programme, World Economic Forum. Other panel members were Mahmoud Safwat Moheildin, Minister of Investment of Egypt, Abdul Hafeez Shaikh, Minister of Privatization and Investment of Pakistan, Clyde C. Tuggle, Senior Vice-President, Worldwide Public Affairs and Communications, The Coca-Cola Company and William Warren, Senior Vice-President, Executive Communications and Global Public Affairs, Computer Associates International.
The DIFCA enjoys a long and symbiotic relationship with the World Economic Forum and is a regional summit partner of this event. Commencing on the 20 th of May, government ministers, diplomats, economists, academics, business leaders and politicians will discuss and debate issues of global importance and of particular relevance to the Middle East in a series of seminar sessions and presentations.