Economic performance has been quite positive in the UAE with 3.8% GDP growth in 2011. These results are naturally quite heavily interlinked with the hydrocarbons sector and its sustained high oil prices. Given most of these natural resources are concentrated in Abu Dhabi, please comment on the economic performance of the country and the economic make up of Sharjah.
Sharjah is part of the UAE and it operates within the system of the UAE. When we talk about the UAE, it is one wealthy country because of the oil and gas it possesses. Sharjah is the third largest city, and its economy is very diversified. While it has a little bit of oil and gas, there is extensive exploration which we hope will discover more in our Emirate. Currently Sharjah’s GDP (gross domestic product) consists of the services industries, industrial contributions and logistics as well as imports and exports. It is a diversified economy.
Sharjah is the industrial capital of the UAE and is positioned as an SME (small and medium-sized enterprise) center simply because of the competitiveness of the supply chain for SMEs. Sharjah has also been positioned as a commercial hub for different regions, and this has been done by setting up regional centers for different countries. At the moment we have five, which are India, Egypt, China, Romania and the USA.
As you mentioned Sharjah is the industrial capital of the UAE and in fact represents 40% of the UAE’s industrial GDP. Please tell us about the infrastructure behind this and why companies come to operate here? For example, I know that there are subsidies for water and electricity, which can reduce costs by 35%.
Sharjah’s infrastructure is competitive region-wise. We have the right port, airport and road infrastructure as well as telecoms. The country is safe, and this is very important. Also the country is governed by a strong legal system, so as an investor, your investment is protected. We have a very transparent legal system and laws and regulations that also help investors to come over and invest their money here.
You can be in a good position to grow in the GCC (Gulf Cooperation Council) market, east Africa, north Africa, central Asia and of course the neighboring regions like Iran and Iraq, without forgetting of course southeast Asia and India and China. All these regions are in the range of two to five hours away. Also I think we have great human capital. While our population is very local, the country is very diverse, and I think this is one of the competitive advantages of the UAE. We have over 200 nationalities here. People love to live and work here. I think this also brings a competitive advantage to the UAE and Sharjah, vis à vis the region. So as you can see from that perspective as an investor who wants to set up their businesses here, they can do it in a very cost-effective way.
What challenges do foreign companies generally encounter when coming to this region?
The challenges relate to understanding the local environment better, and that is normal. When you move to a new country, naturally it will take you some time to understand local laws and regulations. But because the system is very transparent and open, you can do your homework way before you come here. Another element is how to unlock the opportunities around this region, and again you cannot do that without being here and without having a presence here.
You mentioned the challenge of understanding the local environment better, and in fact a new U.S. Regional Trade Center has just been announced to open later in the year. Tell us a little bit more about this and the ties between the U.S. and Sharjah, and how these are looking to increase.
The ties between the U.S. and Sharjah are related to the U.S. and the UAE governments. It is a very strategic, strong and friendly relationship on all fronts. When it comes to business, Sharjah has a special and unique relationship with the U.S. in key sectors like education. Sharjah has the largest American university in this region, the American University of Sharjah. We are trying to develop another angle of this relationship with the U.S. Department of Commerce, by setting up the American Regional Trade Center, which is the first of its kind in Sharjah. This will allow American companies, especially SMEs, to come to this region under a governmental umbrella where they can be sure that their rights will be protected. This center will act as a business development center for these companies in the first year, so they can come, see the market and get to know it and study it, try to do some business and get some projects, and if they feel there is business for them here, they can go out and establish their company in the normal way.
In addition to this there is the Sharjah Chamber of Commerce, which has been here since 1970 and operates as the organized voice of the private sector. Please introduce us to more of the specific duties performed by this Chamber?
The Chamber’s objective of course is to protect and promote its members. It does this with different activities, local and international promotions, events, launching projects like the SME initiatives and road shows. We also work on developing human capital by working with the private sector and developing and training young nationals. We have different initiatives to promote our international ties, like the trade centers. We have five of them now with China, India, Romania, Egypt and the U.S., for example. These are some of the activities we do.
From a legal perspective, we have the commercial arbitration center, so that is another dimension when it comes to making doing business easier in Sharjah. Whenever we have commercial issues, they can come here to the Chamber and resolve their issues in one or two days. We also have the Sharjah Expo Center. It organizes more than 20 exhibitions per year to promote Sharjah and attract business here, and also help companies that are based in Sharjah to do business with their regional counterparts, and also open opportunities to our businesses based in Sharjah.
Another institution which is under the umbrella of the Sharjah Chamber of Commerce is the Sharjah Institute of Technology. It is a vocational training institute which aims to develop technical skills and competencies for young men and women. It is one of a kind.
Is there any final message you like to send to our readers?
The world is moving very fast and we are in tough times. Companies all over the world have to be very creative and very proactive, seeking opportunities. There are still lots of opportunities here and our region is continuously growing. This makes the region very important and I would encourage companies to come and use Sharjah as a springboard to access opportunities around this region.
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