The insider view: Dubai
Published: 01 Oct 2014
We examine how business is conducted in cities around the world, with local experts acting as guides
Dubai’s economy expanded by 4.6 per cent in 2013 – its fastest rate of growth since before the global financial crisis in 2007. Last year its gross metropolitan product was nearly $89bn, according to the Dubai Statistics Centre.
Kartik Srinivasan ACMA, CGMA, FD for Norwegian coatings group Jotun in the Middle East, India and Africa, is based in Dubai. He attributes these encouraging statistics to the solid performance of industries ranging from manufacturing to hospitality.
“Dubai is the main motor of the UAE’s economic growth outside the hydrocarbon sector,” he says. “The economy has regained momentum, having fallen into recession back in 2009 because of the debt and property crisis.”
The International Monetary Fund (IMF) is confident about Dubai’s GMP growth prospects, expecting the city to record an average annual upswing of 5.6 per cent over the next six years.
“Big real-estate projects and huge spending in preparation for hosting Expo 2020 will drive this growth,” says Asim Al Abbasi FCMA, CGMA, CFO of Economic Zones World.
The IMF is also positive about Dubai’s ability to repay its debts. According to Al Abbasi, a recent IMF report (bit.ly/1wwdkxP) has predicted that Dubai’s public finances will swing to a small surplus of 0.5 per cent of GMP in 2014.
Dubai offers great potential for foreign exporters in a range of sectors. Al Abbasi says one of its key selling points is an import market, worth $17bn a year itself, that serves as the gateway to a regional market worth $150bn. Served by 170 shipping routes and 120 airlines, Dubai is also highly accessible, with no exchange controls, quotas or trade barriers.
Dubai has emerged as a leading regional commercial hub with state-of-the art infrastructure, according to Srinivasan.
“It has become the logical place to do business in the Middle East, providing investors with a unique and comprehensive value-added platform,” he says.
Authorities have deliberately created an environment that is well ordered without being unduly restrictive. “As a result, Dubai offers operating conditions that are among the most liberal and attractive in the region,” Srinivasan says. “There are many options open to international companies seeking to establish a business relationship here. It offers all the advantages of a highly developed economy, with infrastructure and services that match the highest international standards, facilitating efficiency, quality and service.”
He adds: “With its strategic location, tax-free living and strong economic outlook, Dubai is the ideal base for multinationals and other firms targeting markets in central and southern Asia, Africa and the Middle East.”
Al Abbasi agrees Dubai is a relatively straightforward environment in which to do business. Most notably, the UAE was ranked 28th out of 185 countries in the World Bank’s “Ease of doing business” index for 2013. The country scored highly on measures such as trading across borders and obtaining construction permits.
Customs and practices in Dubai vary widely from company to company and even between colleagues and clients, according to Srinivasan.
“The most important preparation an expat can make is to be flexible and understanding,” he says. “It’s also important to remember that you need a ‘majority’ Emirati partner in order for you to run a business in Dubai.”
Al Abbasi observes that the city has become highly cosmopolitan, with people of all nationalities living and working in the UAE.
“This melange, where East meets West, is reflected in the business culture of Dubai,” he says. “Having adopted the best practices from each resident, we have a well-defined culture here that’s unparalleled in any other location.”