UAE continues to attract foreign direct investment

Published July 17th, 2010 - 05:35 GMT

As it celebrates its Silver Jubilee, Jafza, the flagship entity of Economic Zones World, has played a key role in attracting Foreign Direct Investments (FDI) into the UAE, with new inbound projects and the expansion of existing businesses during 2009-10.

A combination of an excellent investment atmosphere and a customer-centric business policy have helped raise the number of investors from outside the Middle East to 3,500 – 54 per cent of the total of 6,512 companies in Jafza. The number rises to 5,125 when regional investors, other than from the six GCC states, are added.

This sterling performance has enabled Jafza to play a central role in the flow of foreign investments into the country, which amounted to US$ 69 billion, according to figures announced by the UAE Ministry of Economy in June 2010.

Salma Hareb, CEO, Economic Zones World, said; "Jafza consistently strives to contribute to the national drive to attract foreign investments. This has been a focus for us over the past 25 years. We are proud and privileged to be a factor in the nation's economic development in a measurable way. We remain committed to continually creating an ideal environment for investors to use as a gateway to the entire region, and beyond."

Asian and European companies, that have been steadily increasing their profile in the free zone, include many from China, India and Russia, three of the four economic powerhouses that form the BRIC group (the fourth being Brazil).

Between 1999 and Q2 of 2010, the number of companies in Jafza grew exponentially – from 1,134 to 6,550, a growth of almost 600 per cent. The investment flow, which was growing at a steady pace, saw a steep rise in 2003 when the boom set in and continued until the start of the recession in 2008.

The growth did not stop even during the downturn, with the number of companies rising from 6,179 in 2008 to 6,413 in 2009 and 6,550 by Q2 of this year. In the first half of this year, Jafza has leased 572 new facilities (63 per cent more than 350 for the same period in 2009). 200 of these have been existing customers expanding, which is a positive indicator of the recovery of the economy.

In H1 2010, Jafza has received an impressive number of inbound projects. New arrivals so far have included Mitsubishi Corporation, Petrochina, JVC Professional, Proclad Stream-Flo, Schoeller-Bleckman and Isuzu Motors, among others.

Jafza is also witnessing a sharp rise in the number of manufacturing units. There has been a 50% growth in the number of manufacturing units between 2005 and 2009. Even between 2008 and 2009, when the regional economy was hard hit by global recession the number of new entrants in the industrial sector in Jafza saw a growth of 40 per cent.

Salma Hareb added; "There has been a qualitative improvement in the FDI that Jafza has attracted over the past two years, with proportionately more well-established manufacturers and service providers moving here in search of stable operational bases. Our value proposition was, and continues to be, integrated infrastructure, the best international practices and exceptional customer service."

25 years from its inception in 1985, Jafza's key strength remains an ideal set of logistics matrices which allow the fastest lead times for the movement of goods. Its competitiveness, measured as per World Bank parameters, including 'Ease of Doing Business'; 'Dealing with Licenses'; 'Employing Workers'; and 'Registering Property' rank it No. 1 in the Middle East today. 

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