Dubai to get more jobs and investment
Dubai can expect a major boost in investment and employment over the next 12 months as companies scramble to increase their business in the emirate. The Leaders in Dubai Business Forum 2006 – Doing Business in the GCC Survey is one of the most comprehensive survey of its kind to be conducted in the GCC region in recent years.
Its results reflect the opinions of more than 400 of the regions most senior corporate and public sector leaders and provide an insight into the future plans of key companies and industries operating in the GCC Co-operative Council countries.
A continuing employment and investment boom can be expected in the GCC over the next 12 months with the UAE, and Dubai in particular, likely to be the greatest beneficiaries.
However, if it was not for the difficulty of doing business there, Saudi Arabia would be the place favoured for expansion by many businesses.
Of the 403 business leaders and decision makers who responded to the Leaders in Dubai Business Survey, a huge majority indicated they plan to increase their investment and the number of people they employ in the GCC within the next 12 months.
The executives, who comprise mainly Chief Executive Officers, Managing Directors and General Manager, represent companies doing business in the GCC but with headquarters in 28 different countries.
More than 92% expect to increase the amount of business they do in the GCC over the next 12 months and almost 80% expect the profit they derive from their GCC businesses to increase at a greater rate than the average profit they derive from the rest of the world over the next five years.
More than 63% of the respondents represent companies with an annual turnover of more than US$10million and 14.5% represent companies that turn over more than US$500 million per annum. More than 44% of them derive 75% to 100% of their income within the GCC.
While almost three-quarters (72.2%) said they intend to increase staff in the GCC, less than 5% plan to reduce employee numbers.
The number planning to increase their investment in the region is even higher, with 83.8% saying they intend to pump more money into the area and less than 3% (2.8%) intending to reduce their investment.
The UAE is clearly voted the easiest country in the GCC to do business in, while KSA is considered the most difficult. Despite that, KSA is the country most favoured behind the UAE by companies to do more business in.
Of the emirates, Dubai is clearly the most favoured with almost 52% of companies saying they do most of their GCC business in the Emirate and 23% saying they want to do more there. However, Abu Dhabi fares poorly with only 4.5% of companies saying they do most of their business in Abu Dhabi. The good news for the capital is that 13.4% want to do more there. The other emirates are being virtually ignored by the respondent companies with only 3.3% doing most of their GCC business in emirates other than Dubai or Abu Dhabi.
Bureaucratic delays, visa problems and a lack of skilled labour are considered the most serious problems affecting business and are ranked as having a moderate to a severe impact on companies by the majority of respondents.
Lack of corporate governance, poor attitude, lack of punctuality and government fees and charges are also considered problems.
Economic growth in the region; the economic outlook, commercial and social development, the region’s young demographics; standard of living and tax benefits are all considered major positives for business.
Despite complaints about bureaucratic delays and government fees and charges, the general standard of government in the GCC is considered to help businesses.
Climate, language, cultural differences, religious differences, ethics, the working week, poor infrastructure and the political situation is considered to have little or no impact on doing business in the GCC.
Not only do the majority of companies have a local shareholder or partner, they also have one or more GCC nationals on their executive team. Almost 40% use locally developed technology but less than 23% have an investment portfolio on GCC stock markets and less than 10% of non-real estate companies have invested in real estate in the GCC.
Most find raising capital in the region relatively easy and consider their exposure to inflation to be only moderate or low.
Overall the survey showed a very positive business outlook for the region while highlighting some issues – such as bureaucratic delays, lack of skilled labour and visa problems – that, if improved would enhance the outlook even further.
The Leaders in Dubai Business Survey was specifically designed to gather statistically credible data on business attitudes and intentions in the GCC region.
The survey was formulated by Fusion Marketing & Management LLC on behalf of IIR, with input from leading English and Arabic business journalists. Four of the survey questions were submitted by business journalists from Al Arabiya.
The survey was sent by email on two occasions to a database of several thousand CEO’s/Chair people/Vice Presidents etc of businesses in the UAE, KSA, Jordan, Lebanon, Oman, Qatar, Kuwait, Bahrain, Egypt and Syria.
Distribution and receipt of the survey and compilation of the data was handled by US-based company, SurveyMonkey. The Survey consisted of 26 questions designed to determine the attitude and aspirations of senior executives of companies doing business in the GCC.