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RAK on the right track for further growth

Interview - February 21, 2012
Since 2002, RAK’s GDP has grown at an average rate of 17% a year. United World talks to Mr. Naser Ahmad Salmeen, Director General of RAK Chamber of Commerce, about the region’s spectacular performance

How would you assess the economic performance of RAK in recent years?

RAK is an industry-based economy. That is why it was not greatly affected by the recession. In fact, based on a Financial Times’ report during that time, it registered growth during that crucial period. It was categorized as No1 for FDI in the region, followed by Dubai and Abu Dhabi. In 2010, RAK's GDP was US$4 billion, growing at an average rate of 17% a year (from 2002).

In October 2010 RAK welcomed a new Ruler following the sad passing of His Highness Sheikh Saqr bin Mohammed Al Qasimi. What would you say have been the major accomplishments and challenges for His Highness so far?

After the unfortunate passing of His Highness Sheikh Saqr bin Mohammed Al Qasimi a couple of years ago, his son, His Highness Sheikh Saud bin Saqr Al Qasimi took over.  

H.H. Sheikh Saud bin Saqr Al Qasimi has been active long before the passing of his father. Since he took over, we have witnessed a major move. We all feel a strong push towards the economy. If you look around RAK, you will see a lot of infrastructure activities, and many sectors are developing day by day.

There is a significant growth on the number of customers and people coming into the Emirates. You can see that in the hotel reservations. The occupancy rate in RAK is more than 95%. Things are definitely improving. The benefits of being in the Emirates can be felt in the economy.

We continue to be optimistic about the future, and believe that we can expect more good things to come from our leader, H.E. Sheikh Saud bin Saqr Al Qasimi.

Kindly comment on the His Excellency’s new strategic plan.

The recent initiative of creating an overall strategic plan for RAK is another positive thing from the new administration. This is the first time for RAK to demonstrate a unified effort from all the local departments. We are all working on putting the strategy forward. The strategic plan is mostly driven by economic growth. It puts emphasis on the well-being of the people here (including the expatriate population), and takes social impact into perspective. There is also a focus on FDI and international business. We feel that this orientation to the economy is good because more businesses will start.

We are still in the process of forming the strategic plan. We expect it to be done in about 2 to 3 months. There are certain angles for each sector that we need to focus on (e.g., R&D and the like). Interestingly, we are seeing more research-based studies, focusing on specific sectors. These are departments within RAK (e.g., the Land Department, the Chamber of Commerce, the Investment Development Office, etc.). These are solid and collaborative efforts that include intensive deliberation. 

Some of the advantages for businesses to operate in theUAE include the option to locate in the Free Trade Zones. Can you tell us more about RAK’s Free Trade Zone?

A lot of good things can be said about our FTZ. For instance, RAK’s FTZ includes the membership of more than 5,000 listed companies. The one at Al Jazeera Al Hamra has more than 6,500 members/investors. 

What are some of RAK’s competitive advantages?

RAK is very rich in natural resources (especially limestone). We have about six cement factories, whose products constitute more than 70% of what is produced in the UAE. Other thriving sectors include pharmaceuticals, IT, and so on.  

RAK’s GDP has grown from $1.8bn in 2002 to $4.4bn in 2010, a remarkable 142% growth over 8 years, an average of 17% annually. What has been the main driving factor for this positive trend?

Even during the recession, RAK's economy continued to thrive. RAK's competitive advantage is reflected in the number of registered companies here (and it continues to increase).

It has to do with the Emirates’ strategy, which entails making things grow and encouraging more investment in the respective sectors. Apart from our rich natural resources, RAK is also topographically diverse, from mountains to deserts, to coastal areas (an attribute unique to RAK in terms of the Emirates). Mountainous areas are logistically close to areas that produce limestone, cement and the like.

Because RAK is industry-oriented, 26% of its GDP comes from its local industries. That is more than what you will find in the other places in the Emirates. All these, along with the government’s supportive nature, encourage a lot of entrepreneurs to set up factories here. RAK is a cost-effective venue for investment. Even start-up companies find it strategic to start their businesses here.

Another attraction is RAK's proximity to Dubai (we are only 45 minutes away). On top of which, there are the ports and the infrastructure that we have available.

We understand that RAK is positioning itself to be a hub for specific sectors. Please tell us more about this?

Yes, part of His Highness’ vision is for RAK to become a hub for certain sectors. For instance, the RAK Airport intends to make space for cargo activities. The initial investments for this venture are set to be introduced some time between June and July. There is also the program for aviation training and parking for the flights. All these are set to encourage more business within RAK.

Another interesting development is the RAK Maritime City. It targets companies that need to be near the ports. The government is working on this. The IDO (Investment Development Office) can give you more information about it.

With regards to automobile assembly, there is the Ashok Leyland plant. Ashok Leyland is one of the top automobile assembly companies. There is an effort to attract more companies like this into RAK.  
As for hotels and tourism, it is open. They are inviting investors to come. The local population of RAK is increasing day by day. More companies are setting up here. We see more facilities and infrastructure development. There are big investments in the sector from the government. The IT sector is one of the government's top priorities. They are looking into a lot of things. They are also working on developing banking and insurance. There are also some things in the pipeline for healthcare. 

The strategic plan will outline our branding strategy. It is a collaborative effort. The good thing about RAK is that it is relatively untapped. You can do so much here.

You mentioned Tourism is an opening sector wishing to be grown. What can RAK offer to the average tourist?

Apart from business, RAK is a great place for a holiday. You can visit any one of our resorts and relax. These are the things that one can look forward to in coming to RAK. People like going to the mountainous areas to cool off. The UAE is naturally hot and humid, but here, the mountains are generally cool places to visit. In fact, you can even see snow on top of the mountains at some points of the year. This is very interesting to the people living here. This sort of thing is very rare in these parts of the world and in fact, snow in RAK makes the headline news. 

On top of which, we get more rain in RAK (something that people in this region particularly like). People like coming here to enjoy our good weather.

Tourism is indeed a strong point for RAK, and we can expect more good things to come from the sector in the coming years. It is poised to be a major player in the tourism industry.

How important is the US market be for RAK?

RAK has a lot of products that it can offer for export (e.g., ceramics, cement, etc.). In terms of imports, RAK is looking for things related to IT services, technology, and innovation. They can be a major player in these areas. RAK needs infrastructure, technology, power, management, consultancy, and so on.

RAK is part of the UAE and very close to Dubai. It is not far. Once you know Dubai and Abu Dhabi, you will be easily familiar with RAK. The only thing is that we need to expand our infrastructure further.

Note that infrastructure is driven by the people and the demand. Once you have more investment, you will have more infrastructure. 

The RAK Chamber of Commerce & Industry is the second oldest Chamber in the UAE. What is the role of the Chamber and what does it do for RAK?

We play the standard role that every Chamber of Commerce & Industry plays in the world. The RAK CCI is a knowledge-based organization that provides economic information. The Chamber organizes trade missions to other parts of the world. Last year, we had participation from over 150 people (both locally and internationally), and the number has grown.

We also receive international delegations. We act as host and offer them business tours. We try to give them as much support as possible.

The Chamber also functions as a base to help businesses establish themselves within RAK. We support them in their respective fields and assist them as necessary.

Last year, we went to Australia. As a result, we have some businesses starting already (including a group in healthcare). We have a number of success stories. Whenever there is contact, there is business. Something good happens. 

Under you leadership as the Director General, what is your vision for the Chamber over the coming years?

I would like for the Chamber to play a more critical role in the Emirates, as a major promoter of the Emirates. We want to focus on the services we offer to the public and highlight our success stories. We want to increase the level of support we offer to the international community.

The Chamber acts as a mediator, voicing out the sentiments of the business sector about certain policies implemented by the government. That is where we want to be. We want to back the businesses up should they encounter problems. We want to offer the sort of meaningful assistance to makes life easier for our entrepreneurs and investors. We want people to see RAK as a conducive place for business. We aim to make sure that we satisfy all their needs.

The new leadership will introduce the new vision. It will cover collaboration with other parties. Everybody is doing their own thing. We are trying to get everybody together, so that we can all find ways to encourage further foreign investment. This way, we have one language, one slogan, one mission, and one vision. This may take some time, but we are working hard on it. After all, why should we compete when we can collaborate? In the next two years, things will be totally different.

We are offering new services and expanding our R&D. We are planning B2B meetings for the business community at a regional level. We intend to actively participate in international conventions, road shows and exhibitions abroad.  

RAK CCI prides itself on transparency. It is key to its operations because it must establish trust. Business people will feel more secure knowing that they have a credible institution supporting them.