RAK on right path to achieve solid growth

DUBAI — The Government of Ras Al Khaimah (RAK) "has set about firmly on the path of diversifying the Emirate's economy and has put in place the perfect policy and infrastructure environment to achieve its goal," according to a report issued by Global Investment House (GIH).

By A Staff Reporter

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Published: Mon 5 Feb 2007, 9:16 AM

Last updated: Sat 4 Apr 2015, 9:49 PM

The report praises RAK for leveraging its geographic location at the entrance to the Arabian Gulf and its proximity to Dubai, along with its natural endowments — namely the availability of abundant agricultural and mineral resources.

And it praises the three agencies — Investment & Development Office (IDO), Ras Al Khaimah Free Trade Zone (RAKFTZ) and RAK Investment Authority (RAKIA) — who, it says, have been at the forefront of the government's initiatives in this direction.

The report states: "The contribution of the manufacturing sector to the Emirate's GDP has grown at a healthy rate in recent years. Trade is an important contributor to the economy too. Besides, the Emirate also has the potential to be marketed as an attractive tourist location."

As well as its existing cement and ceramic manufacturing companies, the Emirate has two free trade zones. By the end of 2006, industrial units numbered about 600, or 25 per cent, of the total of about 2,400 companies already registered with the RAKFTZ. RAKIA has so far attracted steel manufacturing, food processing, diaper manufacturing, and energy equipment assembling units.

The report states: "Fully functional free trade zones are, therefore, likely to contribute gradually increasing share to the non-oil GDP of the Emirate in the medium-long-term."

Outside the free trade zones too, the sector has seen a spurt in activities, according to the report. The number of manufacturing establishments in the Emirate has grown at a healthy rate over the last four years, with a corresponding growth in investments and workforce. Above all, the sector has also attracted a high level of fixed capital formation. Gross capital formation in the sector was the highest across all sectors in 2004, representing 15 per cent of the total gross capital formation in the Emirate that year, it states.

The government has also set in motion measures to improve its port infrastructure. "The recent opening of the new container terminal at RAK's Saqr Port by KGL Ports International should give further fillip to the Emirate's foreign trade," GIH writes.

"The Kuwait-based company is said to have invested $70 million in the current phase, part of a $250 million investment plan to increase the capacity of the port. The port's capacity is likely to be enhanced from the current 350,000 twenty-foot-equivalent units (TEUs) to three million within five years. The Emirate is also improving its Ras Al Khaimah port facility with an investment of Dh110 million. The second phase is likely to see construction of a 400-metre berth at a cost of Dh28 million. The port plays an important role in the country's exports and re-exports. It receives a large number of medium and large ships and dhows from neighbouring countries."

The real estate sector too is opening up to expatriates and, given its close proximity to Dubai, "a healthy demand for housing units in RAK during the coming few years can reasonably be expected, driving a robust demand for building and construction activities in the medium-term," predicts GIH. Real estate projects worth over Dh17 billion ($4.7 billion) are currently in various stages of development across the Emirate. The projects span residential, commercial and tourism developments.

On the tourism front, a new five-star beach resort has just been opened in the Emirate. The number of hotels in the Emirate is expected to reach 25 in the coming few years. And the newly established Ras Al Khaimah Airways is likely to add to the government's tourism push, the report predicts. "The natural beauty of the Emirate, along with the improving tourism infrastructure, is likely to bring in tourists in increasing numbers moving forward," it states.

The report also praises the RAK government for creating an infrastructure conducive to free trade and enterprise, especially a regulatory set-up that encourages business investments. "The regulatory and legal systems not only provide incentives for local investments, but also encourage foreign investments," it says.

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