The Report_Ras Al Khaimah_2015

9781910068427
THE
REPORT
Ras Al Khaimah
2015
ECONOMY RETAIL ENERGY
HEALTH TOURISM FINANCE
INDUSTRY CONSTRUCTION EDUCATION
TRANSPORT REAL ESTATE INTERVIEWS
www.oxfordbusinessgroup.com

CONTENTS RAS AL KHAIMAH 2015 5
Box text
THE REPORT Ras Al Khaimah 2015
ISBN 978-1-910068-42-7
Editor-in-Chief: Andrew Jeffreys
Managing Editor, Middle East: Oliver
Cornock
Editorial Manager: Geoff Cooke
Group Managing Editor: Alistair Taylor
Chief Sub-Editor: Barbara Isenberg
Deputy Chief Sub-Editors: Martin
Stegman, Laura Nelson
Senior Sub-Editor: Jennie Patterson
Web Editor: Lorraine Turner
Sub-editors: Usman Ahmedani,
Abraham Armstrong, Danya
Chudacoff, Michael Gibson, Sam
Inglis, Krystell Jimenez, Jamie Leptien,
Amy Stapleton
Contributing Sub-editor: Miia
Bogdanoff
Analysts: Paige Aarhus, Tom Hill
Senior Editorial Researcher: Susan
Mano lu
Editorial Researchers: Sara Costa,
Billy Fitzherbert, Teresa Meoni,
Souhir Mzali, Jenna Oelschlegel
Creative Director: Yonca Ergin
Art Editor: Meltem Muzmuz
Graphic Assistants: Gülhan Atbas,
Arzu Çimen
Illustrations: Shi-Ji Liang
Photographer: Mourad Hammami
Production Manager: Selin Bolu
Operations & Administration Manager:
Burçin Ilgaz
Logistics & Distribution Coordinator:
Esra Sezgin
Logistics Executive: Öznur Usta
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46
Viewpoint: Tony Abbott, Former Prime Minister
of Australia
ECONOMY
Drive to diversify: The emirate is aiming to
expand high-priority sectors
Interview: Sheikh Ahmad bin Saqr Al Qasimi,
Chairman, Ras Al Khaimah Free Trade Zone
Return to debt markets: The emirate issues its
first sovereign sukuk in a decade
Attracting interest: Streamlining the licensing
process to enhance the business environment
FINANCIAL SERVICES
Fertile soil: Financial services sector ready to
reap the benefits of economic expansion and
regulatory changes
Interview: Peter England, CEO, National Bank of
Ras Al Khaimah
Regulatory rewrite: Prioritising balance sheet
health for banks and insurers
INDUSTRY & RETAIL
On the right path: The emirate has much to
offer manufacturers
8
14
18
19
21
SNAPSHOT
RAK in figures
PROFILE
On course: Benefitting from its location and
natural resources, the emirate continues on
the path of development and growth
Interview: Sheikh Saud bin Saqr Al Qasimi,
Supreme Council Member and Ruler of Ras Al
Khaimah
Looking east: Trade with Asia is growing
A stable supply: Drivers and change in
GCC-Africa investment
A booming manufacturing industry – cou-
pled with a diversification drive and efforts
to capitalise on the UAE’s rising profile as a
global investment destination – is reaping
benefits for RAK’s economy, which contin-
ues to show strong growth. The emirate is
driving up foreign investment through a
continued expansion of its free zone net-
work and has plans to further develop its
tourism, education and health care sectors.
Fertile soil
Page 38
Drive to diversify
Page 26
The financial sector has remained strong, with a par-
ticularly dramatic increase being seen in the emirate’s
Islamic finance activity. Planned construction projects
in the UAE are expected to drive high demand for
building materials in RAK over the coming years, while
regulatory changes have led to increased activity in
the banking and insurance industries in line with Ba-
sel III requirements. Setting new capital and liquidity
standards, the new regulations limit insurance compa-
nies’ investments in various instruments and sectors.

CONTENTS RAS AL KHAIMAH 2015
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6
On the right path
Page 46
Chairman: Michael Benson-Colpi
Director of Field Operations: Elizabeth
Boissevain
Managing Director, Middle East: Jana
Treeck
Project Director: Ivana Carapic
Field Operations Executive: Meltem
Okur
Field Operations Assistant: Arda Özgen
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53
54
55
56
57
60
In terms of contribution to GDP, manufac-
turing and retail ranked first and second in
the RAK Department of Economic Develop-
ment’s “2014 Statistical Yearbook”. Primary
and secondary industry is flourishing in tax-
free zones, while redevelopment and new
projects in the mall segment are also set to
ensure healthy growth continues in retail.
65
67
68
72
76
81
83
86
93
Appetite for construction: A range of new
residential developments are going up
Interview: Abdullah Rashed Al Abdooli,
Managing Director, Al Marjan Island
Rise and shine: The real estate sector is a
growing contributor to GDP and is set to
benefit from a fresh injection of investment
Value for money: Property size, quality and
affordability remain major draws for the
emirate
TRANSPORT
Hub and spoke: Increasing GCC connectivity
further enhances the value proposition for
businesses
Interview: Cliff Brand, General Manager, RAK
Ports Group
Air force: New deals and strategies take hold at
the emirate’s airport
ENERGY
In high gear: A variety of new projects and
opportunities are set to be switched on
Interview: Richard Menezes, Managing
Director, UTICO
In the zone: RAK FTZ is set to attract more
international players
Interview: Yousef Obaid Al Nuaimi, Chairman,
RAK Chamber of Commerce and Industry
Up and coming: New firms are setting up shop
Green day for rock: Cement and rock players
are focused on keeping up with new regulations
Talking shop: Consumers can expect greater
variety in the near future
CONSTRUCTION & REAL ESTATE
Building value: Affordability and rising demand
are driving the sector forward
Building value
Page 60
Construction in RAK is driven by the emirate’s
housing, hospitality and infrastructure plans,
but also by its role supplying projects across
the region. Sector activity was healthy in 2014,
and a continuing pipeline of work for Du-
bai’s Expo 2020 is boosting the market. RAK’s
emerging popularity is also encouraging de-
mand for real estate and hospitality develop-
ments. The property market has shown robust
growth and is profiting from new investments.

CONTENTS RAS AL KHAIMAH 2015 7
Following a decade of investment in both
publicandprivatefacilities,thehealthcare
sector in RAK is set to see major growth.
New specialty services are expected to
serve the growing number of patients
suffering from the increasing prevalence
of lifestyle-related diseases, although the
absence of mandatory medical insurance
is a constraint for existing sector players.
With little in the way of hydrocarbons
reserves and limited domestic explora-
tion, the energy sector has expanded
on the back of its two major upstream
players. Both have interests in interna-
tional exploration and production and
aim to improve domestic power supply
through private sector investment and
the development of renewable energy.
Treatment table
Page 98
In high gear
Page 86
Hub and spoke
Page 76
Benefitting from the UAE’s high standard
of road networks and proximity to some
of the world’s busiest airports and ports,
RAK offers many logistical advantages to
businesses locating in the emirate. The
Vision 2021 national development plan,
meanwhile, aims to see the UAE build
transport infrastructure that will rank
among the world’s best in under a decade.
The emirate’s tourism sector has
been enjoying a period of growth and
profitability. The average room rate
in the emirate rose by 67% between
2011 and 2014, and in March 2015
the Tourism Development Authority
reported occupancy levels of 70%, an
8% increase on the previous year.
Keys to growth
Page 114
94
95
98
103
104
106
112
114
121
122
124
125
127
134
136
Far and wide: The emirate’s main players are
looking abroad for promising exploration and
production opportunities
The more the better: Population and economic
growth underline the need for water
HEALTH
Treatment table: The health care network is
expanding to meet the growing needs of
residents
Interview: Dr Myung-Whun Sung, CEO, Sheikh
Khalifa Specialty Hospital
Specialty care: Investing in local treatment
facilities to boost offerings
EDUCATION
Making the grade: Reforms are under way to
improve educational quality
A profitable lesson: Private institutions are
drawing the attention of financiers
TOURISM
Keys to growth: A proliferation of new hotels
and developments bodes well for continued
expansion
On the island: Further progress is expected on
a major development
On track: Efforts to develop and promote the
sector are ongoing
THE GUIDE
Dark horse: Equestrian culture is alive and
kicking in the emirate
Restored glories: The village of Jazirat Al Hamra
has an intriguing history
Where to stay: Hotels
Listings: Important numbers
Facts for visitors: Useful tips for new arrivals

SNAPSHOT
8
RAK in ﬁgures
SOURCE: RAK Ministry of Interior
Bus Mini-bus Heavy vehicles Light vehicles Motorcycles
2009 379 225 3471 3799 114
2010 511 263 3265 42,315 126
2011 746 343 2961 44,528 142
2012 779 363 2918 48,681 192
2013 797 362 2957 52,848 218
Vehicle registration renewals by type, 2009-13
SOURCE:RAKDED
Consumer price index, 2009-14
0
30
60
90
120
150
Q4
14
Q3
14
Q2
14
Q1
14
1312111009
GDP (excluding free zones), 2009-13 (Dh bn) SOURCE:RAKDED
0
6
12
18
24
30
20132012201120102009
SOURCE: RAK DED
Non-metallic minerals 18,159
Wood products 15,265
Equipment manufacturing 10,663
Chemical & plastics 6364
Textiles & leather 4023
Metallic industry 2047
Food & beverage 938
Paper, printing & publishing 422
Other 268
Labour force by industrial segment, 2013

SNAPSHOT
9
Residential
Commercial
Agricultural
Federal gov't
Industrial
Other
69
23
3
2
2
1
Electrical & water consumption, 2013 (%)
SOURCE: RAK DED
Avg. apartment sales price, Q4 2014 (Dh per sq ft)
SOURCE:Asteco
0
400
800
1200
1600
2000
High-endMid-endAffordable
DubaiAbu DhabiRAK
SOURCE:RAKDED
Industrial ﬁrms & investment, 2009-13
0
800
1600
2400
3200
4000
No. of industrial ﬁrmsInvestment (Dh m)
20132012201120102009
Non-oil foreign trade, 2009-14 (Dh bn)
SOURCE:RAKDED
0
1.6
3.2
4.8
6.4
8
Trade balanceTotal importsTotal exports
201420132012201120102009
SOURCE: Middle East Council of Shopping Centres, Al Hamra Real Estate, Al Naeem Mall
Name Size GLA Levels Units Weekly footfall Year of opening
Al Hamra Mall 41,000 22,000 2 135 55,000 2010
Al Manar Mall 45,000 30,000 1 120 154,000 2000
Al Naeem Mall 140,000 56,000 4 200 n/a 2015
RAK Mall 69,000 36,000 3 97 163,000 2012
Safeer Mall RAK 80,011 29,778 2 94 10,000 2008
Malls in RAK, 2015
Manufacturing & quarrying GDP, 2009-13 (Dh bn)
SOURCE:RAKDED
0
1.6
3.2
4.8
6.4
8.0
QuarryingManufacturing
20132012201120102009

SNAPSHOT
10
Central Bank of UAE total assets, 2014 (Dh bn)
SOURCE:CBUAE
0
70
140
210
280
350
Dec.Nov.Oct.Sept.Aug.JulyJuneMayApr.Mar.Feb.Jan.
Auto
Cargo & transport
Other
Fire
Theft & life
90
4
4
2
1
Insurance policies issued by type, 2013 (%)*
SOURCE: RAK Chamber of Commerce
*Figures have been rounded up so do not equal 100
Higher education enrolment, 2008-13
SOURCE:MHESR
0
800
1600
2400
3200
4000
201320122011201020092008
German
Other European
Russian
British
French
American
Other
48.2
22.4
18.8
7.4
1.6
1
0.6
Foreign tourists by nationality, 2013 (%)
SOURCE:RAKTourismDevelopmentAuthoritySOURCE:RAKDED
Ministry of Public Works projects, 2009-13
0
240
480
720
960
1200
Total cost (Dh m)Number of projects
20132012201120102009
Building permits issued by type, 2014
SOURCE:RAKMunicipality
0
600
1200
1800
2400
3000
Community
housing
OtherRepairExtensionGovt.Comm.Villa

11SNAPSHOT
National bank
branches
Money exchange
houses
Foreign bank
branches
Head office
31
22
6
1
Banks in RAK, 2014
SOURCE: RAK DED
Wholesale, retail & repair GDP, 2009-13 (Dh bn)
SOURCE:RAKDED
0
0.7
1.4
2.1
2.8
3.5
20132012201120102009
SOURCE: RAK DED
Pregnant Nursing services Maternity & childcare Dental Treatment
Emirati 6248 224,061 22,865 7830 155,545
Non-Emirati 7067 401,697 28,670 16,270 344,065
Patients in primary health care centres by service & nationality, 2014
Annual water production, 2011-14 (m gallons)
SOURCE:RAKDED&FEWA
0
1000
2000
3000
4000
5000
BurairatGhalilahNakheel
2014201320122011
Passenger movements at RAK Int'l Airport, 2010-14
SOURCE:RAKInt'lAirport
0
100,000
200,000
300,000
400,000
500,000
20142013201220112010

13
Proﬁle
Resources underpin cement and ceramics industries
Free zones catalyse growth in the industrial sector
Rising international proﬁle as a tourism destination
GCC economic ties with Asia and Africa growing

14
RAK has built several different engines of economic growth
PROFILE OVERVIEW
Pearling was a major part
of the emirate’s culture
and economy, and as
recently as the start of the
20th century the industry
employed 22,000 people
and exported £1.7m worth
of pearls worldwide.
The area that included the
modern-day UAE has long
been home to civilisations,
with archaeological
evidence of these dating
back thousands of years to
the 4th century BCE.
Ras Al Khaimah holds a unique position among the
seven emirates that make up the UAE. It has a rich
and long history that revolves around trade, with
its exports mainly driven by copper and pearl in
the past. Making the most of its vast reserves of
clay, limestone and sand found on the Hajar Moun-
tains, RAK has built a flourishing manufacturing
sector that has served as an engine for growth
over the past two decades, and in recent years the
emirate has also raised its profile as a tourist des-
tination. Meanwhile, RAK’s expanding free zones
have attracted more than 15,000 international
companies to the emirate.
HISTORY: The area that comprises the mod-
ern-day UAE has long been home to civilisations,
with archaeological evidence of some of these
dating back thousands of years. Beginning in the
4th century BCE, the Dilmun civilisation, centred
in what is now Bahrain, controlled the region from
Kuwait to Qatar, with a related culture holding
sway in the UAE and Oman.
The area around RAK later became known as
Julfar, a name referenced by Arab writers around
the time of the Islamic conquest of the Northern
Emirates in the 7th century CE. Julfar subsequently
moved near to modern-day RAK City, where it
thrived, becoming a major regional trade centre in
the 16th century. Julfar gradually lost prominence
as the modern city of RAK developed, and by the
18th century this new city was linked to the Al
Qasimi tribe to which the ruling family belongs.
The Al Qasimi tribe dominated trade in the lower
Gulf in the 18th century, pitting it against the
British East India Company and setting the stage
for British military involvement. After bombard-
ing the emirate in 1809 and 1816, British naval
forces invaded it in 1819 to control the growing
dominance of the Al Qasimi tribe. British occupa-
tion would have significant political and economic
effects on the region. British forces occupied RAK
for three years before the tribe’s leader signed
a treaty establishing RAK as a protectorate in
exchange for military protection in 1820.
The British signed similar treaties with a num-
ber of sheikhdoms in the region around the same
time, leading to the creation of the so-called Tru-
cial States, a political entity which was to endure
until the withdrawal of the British from the region
in 1971. Among other effects, Britain’s suppres-
sion of foreign attacks on the coast enabled RAK’s
pearling industry to emerge as one of the emir-
ate’s major sources of income and employment.
PEARLING: Dating back centuries, the tradition of
pearling has been as much a way of life and culture
as a source of income. The UAE National Media
Council writes that, “Pearling was never merely a
trade or a means of subsistence for the popula-
tion. It was an entirely integrated social system,
which has left a rich heritage of traditions.” At its
peak at the beginning of the 20th century, the Gulf
pearling industry employed over 22,000 people
and exported £1.7m worth of pearls, according to
the UAE National Media Council.
Shortly after the First World War, however, the
advent of Japanese cultured pearls and the global
recession of the 1920s had a severe impact on the
industry. One of RAK’s major trade partners, India,
placed a high tax on Gulf pearls, making exports
extremely expensive. These factors contributed
to the collapse of the industry, leading to several
years of economic decline in RAK.
FORMING THE UAE: By the mid-1960s, the UK
was facing its own economic and political pres-
sures and decided to end the treaty to protect
Qatar, Bahrain and the seven emirates and with-
draw from the region. The rulers of Abu Dhabi and
Dubai, along with Sharjah, Ajman, Umm Al Quwain
and Fujairah, formed a union and established the
Beneﬁtting from its location and natural resources the emirate
continues on the path of development and growth
Oncourse

15
PROFILE OVERVIEW
Sheikh Saud bin Saqr Al
Qasimi has ruled RAK since
2010, following the passing
of his father, Sheikh Saqr.
The Supreme Council, a
body made up of the seven
rulers of the emirates,
governs the UAE at the
federal level.
RAK, like the rest of the UAE, is governed by a hereditary monarch
the changes, an electoral college, or representa-
tive group of citizens, elects half of its members,
while the other half are appointed by the Supreme
Council. The first elections were held in 2006. RAK
is allocated six representatives in the FNC.
DEMOGRAPHICS: RAK’s population has grown
over recent years, rising from about 267,000 in
2009 to 413,000 in 2010, according to the RAK
Department of Economic Development (RAK
DED). This increase, however, is due to both natu-
ral growth and the introduction of new and more
accurate data-collection methods. Population
growth has risen by an average of 2% annually
between 2011 and 2013 to 438,000, according to
RAK DED’s “2014 Statistical Yearbook”.
GEOGRAPHY & CLIMATE: RAK has a total land
area of approximately 1700 sq km and is the
fourth-largest emirate in the UAE, accounting for
about 2.17% of the country’s territory on land. RAK
borders the emirates of Umm Al Quwain, Fujairah,
Sharjah and Ajman, as well as neighbouring Oman.
Despite its relatively small size, the emirate boasts
a varied landscape with 64 km of coastline, fertile
plains and desert land, as well as the Hajar Moun-
tains, which reach heights of up to 1900 metres.
The weather varies over the course of the year,
ranging from hot and humid in the summer (with
highs often above 40°C) to cooler and drier in the
winter months (with highs of 25-30°C).
NATURAL RESOURCES: RAK is home to one of the
world’s largest rock quarries, as well as high-qual-
ity deposits of limestone and clay, which underpin
the emirate’s cement and ceramics industries. It
is also home to some agriculture, with the plains
around Digdaga producing fruit, vegetables, milk
and poultry for the local market.
While the UAE has the world’s seventh-largest
proven reserves of oil, equal to around 97.8bn
barrels according to BP’s “Statistical Review of
UAE in 1971. RAK followed suit in 1972, while Bah-
rain and Qatar remained independent.
Formalising the seven emirates into a country
and preparing a constitution were key to helping
catalyse an era of economic and political growth
in the newly formed country. Sheikh Saqr bin
Mohammed Al Qasimi, who ruled RAK from July
1948 until October 2010, led the emirate through
this period and is credited with putting in place
the systems and processes that have enabled it to
develop from a small regional centre into a mod-
ern economy, as well as uniting various tribes.
POLITICAL FRAMEWORK: RAK, like the other
emirates of the UAE, is governed by a hereditary
monarch. Sheikh Saud bin Saqr Al Qasimi has ruled
RAK since 2010, following the passing of his father,
Sheikh Saqr. The Supreme Council, a body made up
of the seven rulers of the emirates, governs the
UAE at the federal level. The country’s president,
currently Sheikh Khalifa bin Zayed Al Nahyan,
also serves as the head of the Supreme Council.
The president is generally the ruler of Abu Dhabi,
while the ruler of Dubai customarily serves as the
vice-president and prime minister.
According to the UAE’s constitution, the federal
government is mandated with oversight of foreign
affairs, national defence, immigration, education
and public health care. Most other issues are left
to be handled by the local governments of the indi-
vidual emirates. The Supreme Council is granted
legislative and executive powers and ratifies all
the laws in the country. The Council of Ministers,
which is headed by the prime minister, acts as the
executive branch. The prime minister, who also
serves as the vice-president, proposes a Cabinet
that has to be approved by the president.
The Federal National Council (FNC) is a 40-mem-
ber advisory body that represents the interests
of each emirate. In 2005 the government imple-
mented reforms to give it more oversight. Under
Deposits of limestone and clay underpin the ceramics industry

16
RAK’s GDP totalled $8.4bn in 2013, the ﬁrst year income from free trade zones was taken into account
PROFILE OVERVIEW
The RAK Free Trade Zone
was set up in 2000 and
includes several sections,
such as the Business Park,
Industrial Park, Technology
Park, Aviation Park and the
Academy Zone, and is now
home to around 8000 ﬁrms.
While the establishment
of the UAE coincided with
the growth of the regional
hydrocarbons industry, RAK
does not have similar oil
reserves and has instead
focused on pursuing
industrial growth.
manufacturer. In 2014 Sheikh Saud sold 30.5% of
RAK Ceramics’ shares to Cayman Islands-based
Samena Limestone, which is a subsidiary of private
equity firm Samena Capital.
Julphar, which is otherwise known as Gulf Phar-
maceutical Industries, is RAK’s other globally
recognised brand. It was established in 1980 by
RAK’s ruler and has since become a global leader
in the industry. Julphar has 12 production facili-
ties, with the newest launched at a cost of $9.6m
in Addis Ababa, Ethiopia in 2013. Julphar plays a
major role in RAK’s health sector and is driving
local investments, including a multimillion-dollar
facility for the manufacture of insulin.
CATALYSING GROWTH: RAK’s government has a
number of initiatives designed to attract invest-
ment into the local industrial sector, including
the RAK Free Trade Zone (RAK FTZ) and the RAK
Investment Authority (RAKIA), both of which run
dedicated free zones in the emirate. In 2000 the
government set up RAK FTZ, which has a number
of parks in the emirate, including the Business
Park, Industrial Park, Technology Park and RAK
Academic Zone. The free zone has become one
of the fastest growing in the UAE and is home to
more than 8000 companies from over 100 coun-
tries and 50 industry sectors. It offers companies
100% tax exemption, 100% foreign ownership,
business-friendly laws and regulations, and access
to RAK’s airport and seaports, as well as to trans-
port and logistics facilities in neighbouring Dubai.
RAK FTZ reported a successful year in 2013, when
it signed 2900 new companies, up close to 30% on
the previous year, and renewed 5100 licences for
existing tenants. Natasha Ridge, executive director
of the Sheikh Saud bin Saqr Al Qasimi Foundation
for Policy Research, told OBG, “How do we get to
where we need to be to become a competitive
force and to strengthen the fabric of this city –
these are the questions we ask ourselves daily.”
World Energy 2015”, the overwhelming majority,
or around 92.2bn barrels, are in Abu Dhabi.
RAK’s reserves are more modest. DNO Interna-
tional, a Norwegian explorer and producer that
merged with local energy firm RAK Petroleum in
2011, produced 12,000 barrels of condensate and
100m standard cu feet (scf) of natural gas in the
emirate in 2012. As of the end of 2012, accord-
ing to DNO, gross remaining recoverable reserves
amounted to 13.8m barrels of oil, condensate and
other liquids and 105.5bn scf of gas.
THE NEW ECONOMY: The establishment of the
UAE coincided with the growth of the region’s
hydrocarbons industry. Abu Dhabi was the first
emirate to export oil in the early 1960s, followed
by Dubai near the end of the decade. As RAK did
not have similar oil reserves, it instead decided to
pursue an industrial growth strategy that comple-
mented the investment programmes being carried
out in Abu Dhabi and Dubai. RAK DED reported
total GDP rose by 7.6% in 2013, reaching Dh25.9bn
($7.05bn), or 1.8% of the UAE’s total GDP. RAK
DED’s figures for 2013 also took into account free
trade zone (FTZ) income for the first time, which
boosted overall GDP to Dh30.95bn ($8.4bn).
RAK established the Union Cement Company in
1972 to make the most of its natural resources –
the Hajar Mountains are a rich source of crushed
rock and limestone for use in the production of
building materials. Set up in the Khor Khwair Indus-
trial Area, the Union Cement Company has grown
to become a regional player with a total cement
production capacity of around 4.8m tonnes.
Following RAK’s success with the Union Cement
Company, Sheikh Saud established RAK Ceram-
ics, a ceramic tile producer, in 1991. Since then
the company has grown to become a conglomer-
ate with a presence in 160 countries worldwide
and is recognised as the world’s largest ceramics
RAK is home to the world’s largest ceramics manufacturer

17
In an effort to diversify the economy, tourism has been singled out as a sector with growth potential
PROFILE OVERVIEW
In line with its growth
strategy, the emirate is
also looking to tourism as
a means of diversifying its
economy, as RAK can offer
visitors much in the way of
natural attractions, from
beaches to mountains and
desert vistas.
The RAK Investment
Authority was established
in order to manage and
promote developments at
the Jazeera Al Hamra and Al
Ghail industrial parks, and it
acts as a one-stop shop for
establishing businesses.
TOURISM: Building on its established successes
in industry, the emirate is now working to further
diversify its economy. Tourism, in particular, has
been singled out as a sector with growth potential.
RAK has much to offer in this regard; it provides
travellers with access to beaches, mountains and
the desert, all within a 45-minute drive from Dubai
International Airport – or, indeed, an even shorter
drive from RAK International Airport, which is
served by an increasing number of airlines.
ENERGY: Although the emirate has little in the
way of hydrocarbons reserves, the local oil and gas
industry has focused expansion on its two major
upstream players: RAK Gas and RAK Petroleum.
The two companies have interests in interna-
tional exploration and production, and have been
involved in improving domestic power supply, as
well as the development of renewable energy. Util-
ities have seen new challenges as rapid population
and industrial growth generate greater demand.
The Federal Electricity and Water Authority con-
tinues to supply the majority of RAK’s utilities,
although the RAK Electricity and Water Authority
has been established to generate greater domes-
tic capacity, alongside an increase in private sector
involvement (see Energy chapter).
OUTLOOK: With oil and mainly gas accounting for
around 5% of GDP, the sharp drop in oil prices has
little direct impact on RAK. It has a solid manu-
facturing base serving the UAE and beyond, and
demand for RAK’s construction materials – a key
pillar of the economy – is likely to remain firm. The
incentives on offer in its free zones have helped
to make it a major destination for foreign direct
investment in the Gulf, while RAK also continues
to benefit from its location on major trade routes
in the Strait of Hormuz. Now the government has
set its sights on further diversification by expand-
ing into the education, health and tourism sectors.
RAKIA was set up five years after RAK FTZ in
order to manage and promote developments at
the Jazeera Al Hamra and Al Ghail industrial parks,
and the authority serves as a one-stop shop for
establishing businesses. It has been undertaking
a massive investment programme that aims to
catalyse growth. RAKIA has also witnessed rapid
expansion in recent years and is home today to
some 7000 companies and manufacturers, a
22% rise over the 5718 companies operating in
2012. Another key player, the RAK Investment
and Development Office (RAK IDO), is the central
government office responsible for implementing
development policies, managing the emirate’s
credit rating, handling government investments
and identifying investment opportunities.
In 2009 the emirate received an award for “Most
Attractive Place in the Middle East for Foreign
Direct Investment” from fDi Magazine, a publica-
tion that is part of the UK’s Financial Times Group.
Aside from the ease of doing business, one major
draw is that costs in RAK are significantly lower
than in Dubai and Abu Dhabi. RAKIA, RAK IDO
and the RAK FTZ provide additional benefits that
support foreign investment. In 2014 RAKIA was
chosen as “the best free zone in the Middle East”
by the Global Banking and Finance Review, as well
as “the best free trade zone in the GCC” by Inter-
national Finance Magazine.
CREDIT RATING: RAK is considered an attractive
and safe investment destination, and interna-
tional credit ratings agencies Standard & Poor’s
(S&P) and Fitch Ratings have maintained RAK’s
“A” sovereign credit rating for 2015, pointing to
a solid foundation for growth in the years ahead.
In fact, its trade balance has become increasingly
favourable, with RAK DED reporting exports more
than doubling from Dh3.23bn ($879.2m) in 2009
to Dh7.07bn ($1.9bn) in 2014. S&P also cited the
emirate’s limited direct reliance on hydrocarbons.
The local oil and gas industry has focused on upstream expansion

18 PROFILE INTERVIEW
Are you concerned that the numerous projects
that are currently under way, along with the
increasing drive to attract foreign nationals to
the emirate, could dilute Ras Al Khaimah’s her-
itage and traditions somewhat?
SHEIKH SAUD: I am not concerned about this at
all. If we believe in the strength of our culture and
heritage, and if we also believe in our ability to
marry these cornerstones of our identity to those
of progress and economic development, this will
allow us to adopt best practices, and will keep
us moving forward. This is exactly what we have
done in the past and what we will continue to do
in the future. For thousands of years, the people
of this land have excelled at trade with different
cultures, something we continue to do today. In
spite of this, we have not lost sight of our heritage.
We have kept one foot firmly rooted in our rich
history and identity, while the other continues to
strive forward, ensuring the long-term sustainable
development of our society.
In the past, you have spoken about the impor-
tance of innovation and entrepreneurship,
identifying education and a conducive regula-
tory environment as key. How is policy current-
ly developing in this regard?
SHEIKH SAUD: Having a good education system is
a must for any place that aspires to high levels of
development. Providing the younger generations
with the necessary skill sets to be able to take on
responsibilities and meet the various challenges of
modern-day life is absolutely essential.
However, it is not as easy as simply establishing
excellent schools. The broader civil framework
must be in place, which includes strong institu-
tional bodies, the rule of law and leadership.
While it is undoubtedly important to create
this framework within which individuals can excel
– which is what we are currently doing – there is no
such thing as guaranteed success. It is our responsi-
bility to provide individuals with every opportunity
to succeed. In the end, of course, it comes down to
the will and drive of the individual person.
How is strategy being developed in RAK at
present in order to meet the infrastructure
needs of the emirate’s growing population?
SHEIKH SAUD: The emirate of RAK collaborates
with the federal government on an overall cohe-
sive infrastructure strategy in order to serve our
people, and to help facilitate growth not only in
our emirate, but in the wider UAE.
We have invested heavily in our ports, airports,
roads and highways, sewage systems, power plants
and renewable energy platforms.
We also aim to constantly upgrade and maintain
our infrastructure to ensure that it keeps pace
with what is an ever-changing and dynamic mar-
ketplace, continuing to deliver for our growing
population while enhancing our commitment to
the shared prosperity of the UAE.
To what extent do you believe that the low-
cost carrier hub model is set to transform the
emirate’s status in the aviation sector?
SHEIKH SAUD: The low-cost carrier model has
been a great addition to the emirate and to the
entire country, adding an important new dimen-
sion to our flourishing aviation sector.
RAK International Airport recently signed an
agreement with Qatar Airways that will bring the
introduction of direct flights between Doha and
RAK on a daily basis. This is an exciting agreement,
and one that reflects the growing economic ties
being formed between this emirate and the wider
region. It is also one that will be of great signifi-
cance in the development of our tourism sector.
OBG talks to Sheikh Saud bin Saqr Al Qasimi, Supreme Council
Member and Ruler of Ras Al Khaimah
Progressreport
Sheikh Saud bin Saqr Al Qasimi, Ruler of Ras Al Khaimah

19
GCC-Asia trade was initially founded on Asian countries’ energy needs
PROFILE ANALYSIS
The expanding trade
relationship between
the GCC and Asia is not
surprising given lagging
growth in the West, with
growth rates for the US
below 3% for the past ﬁve
years while China
saw average straight-line
annual growth of 8.9%.
Many Gulf businesses
have directed their focus
to East Asia, which is now
the recipient of more than
40% of all GCC exports, not
including Japan, which saw
its share fall from 23% in
2000 to 15% in 2012.
Following a difficult period for the international
shipping market, in 2012 the container route from
Shanghai to the Gulf through Dubai saw the sec-
ond-highest rate of freight growth in the entire
Asian region. This was part of an emerging trend
of the maturation of GCC-Asia trade. A relation-
ship that was once just based on energy demand is
diversifying and the GCC is seen as a viable market
for Asian goods and investment, a key transit point
– given its developed infrastructure – for the
fast-growing markets of Africa, and a high-quality
producer of goods and services in its own right.
SHIFTING PATTERNS: The change in emphasis
of GCC trade patterns is clear. The focus of Gulf
business is moving eastwards. East Asia, exclud-
ing Japan, is now the recipient of more than 40%
of all GCC exports, according to Deutsche Bank
research. While Japan remains the region’s largest
export market, its share has fallen from 23% at the
turn of the century to 15% in 2012 as emerging
Asian economies absorb increasing volumes of
goods and services. India jumped from the GCC’s
10th-largest trading partner in 2000 to second in
the list in 2012. It now accounts for 10% of Gulf
exports. Similarly, China has emerged as a vital
market for the economies of the Arabian Pen-
insula, itself accounting for almost 10% of GCC
exports, up from 4% a little over a decade ago.
This eastward shift is not too surprising given
the continuing travails of many developed West-
ern economies. With the sluggish recovery from
the financial crisis in the EU and the US, Gulf
economies have had to look elsewhere. For exam-
ple, the UK, which is a traditional trading partner,
has experienced faltering growth in the last
five years, while the US has fared little better,
with annual growth rates below 3%. Conversely, in
the same period, China recorded average straight-
line annual growth of 8.9% and India achieved 7%.
While much attention has been focused on this
as a result of the global financial crisis, the trend
is actually much older. Indeed, three decades ago
the OECD countries made up as much as 85% of
GCC trade. However, growing by an annual average
of 11% between 1980 and 2009, emerging market
trade accounted for 45% of total Gulf imports and
exports by the latter year, according to figures
from the Economist Intelligence Unit.
“The old adage that modernisation equals West-
ernisation doesn’t hold anymore,” Narayanappa
Janardhan, a political analyst based in the UAE and
the author of Boom Amid Gloom: The Spirit of Pos-
sibility in the 21st Century Gulf, told OBG.
ENERGY: The GCC-Asia trade relationship was
initially founded on the energy requirements of
established and emerging Asian economies, and
the pivot to emerging markets is partly a product
of GCC hydrocarbons producers satisfying the
energy needs of those fast-growing economies. In
2013, for example, China accounted for almost a
third of global oil demand growth and consumed
10.7m barrels of oil per day, and the country
became the largest net importer of oil globally in
2014. GCC producers have made a substantial con-
tribution to China’s energy needs.
As of 2009, Saudi Arabia was China’s largest
supplier of oil, providing 500,000 barrels per day,
or 30% of the country’s total oil imports. The UAE
and Oman have also gained substantial amounts
of revenue from oil exports to China, while Qatar
is by far the largest liquefied natural gas (LNG)
exporter to China. The state shipped 6.73m tonnes
in 2014, as well as supplying a 90,000-tonne LNG
cargo in August 2014 to the China National Off-
shore Oil Corporation. Even so, this is not the only
market for GCC hydrocarbons exporters, with
South Korea and Japan also absorbing significant
Gulf crude and gas supply. The two countries are
Trade with Asia is growing and diversifying
Lookingeast

20
Public sector spending and the offer of large-scale contracts have drawn attention from Asian firms
PROFILE ANALYSIS
Asian firms are driving many
signature projects in the
GCC. There are currently
44 Japanese companies
and 20 South Korean firms
operating in the Gulf.
billions. “There is major growth towards Africa,
so you are seeing imports from the East that
are bound for re-export to Africa,” Nadia Abdul
Aziz, the managing director of RAK-based Union
National Air Land & Shipping Company, told OBG.
ASIA: GCC investment in Asia is on the rise. The
UAE was the third-largest investor in Pakistan in
the five years to 2012, with $1.4bn, or 9% of Paki-
stan’s total foreign direct investment (FDI). The
UAE was also among India’s largest sources of
inward FDI, ranking 10th between 2000 and 2013,
and contributing $2.6bn, or 1% of inflows. Saudi
Arabia is another significant investor in the region.
In 2011 the country ranked fifth in terms of FDI
inflows into Malaysia, for example. Much of this
interest is focused on areas that remain important
strengths for GCC economies, namely the services
sector and construction. For example, GCC shar-
ia-compliant banks, such as Kuwait Finance House
and Saudi Arabia’s Al Rajhi Bank, have begun oper-
ations in Malaysia and, like many of their regional
counterparts, are looking to capture an increasing
share of the Islamic fixed-income market. In other
segments, UAE heavyweights such as real estate
developer Emaar and port operator DP World have
significant interests in Asia. Medical tourism is also
leading to more opportunities. The emirate’s lead-
ing private hospital, RAK Hospital, is targeting new
foreign patients from Asia in line with the UAE’s
medical tourism strategy, and in January 2015 RAK
Hospital partnered with India’s Shalby Hospital to
offer a new knee replacement surgery.
With many Asian economies shifting their focus
from exports and trade to domestic demand, there
are opportunities for Gulf companies to tap into
the emerging middle class in developing Asian
economies and broaden the scope of GCC involve-
ment across Asia. The entry of Asian firms into Gulf
markets is unlikely to slow any time soon, while his-
toric links between the regions also look likely to be
reinforced and expanded over the coming years.
Qatar’s largest LNG markets. The state supplies
crude oil as well as 18% and 30% of all Japanese
and Korean LNG imports, respectively.
LOOKING BEYOND ENERGY: However, the rela-
tionship between the two regions can no longer
be defined simply by the GCC’s hydrocarbons
reserves. “It has been driven by energy on one
level, but you also see growth in trade as well. It
has worked both ways,” said Janardhan. “The GCC
countries realise they have to look beyond oil and
beyond expatriates. You see them trying to tap
into the money that was being remitted.” He also
pointed to the improvement in the GCC’s regula-
tory infrastructure, including free zone industrial
areas, freehold property and maturing stock
markets, as measures that have captured Asian
investment or retained Asian money that would
have been remitted. “The GCC views Asia as more
than an oil importer now,” said Janardhan.
INBOUND INVESTMENT: Indeed, Asian firms are
driving many signature projects in the GCC. There
are currently 44 Japanese and 20 South Korean
firms operating in the Gulf. In Qatar the major-
ity of the first entrants helped to develop oil and
gas assets, but now can be found in a variety of
industries, including ICT, health care and manufac-
turing, among others. These companies are most
notably involved in construction, with iconic pro-
jects like the new airport, Doha Metro, Msheireb
Downtown, and roads and expressways.
Moreover, it is not just public sector spending
and the offer of large-scale contracts that have
drawn attention from Asian firms. The region’s
modern infrastructure and efficient processes,
in addition to its location, are alerting firms to
its potential as a logistics base. Just as Singapore
has become a major trading hub for its Asian hin-
terland, Dubai has positioned itself as a logistics
centre for a catchment area with a population of
UAE developers and port operators have significant interests in Asia

21
GCC states import as much as 90% of their food
PROFILE ANALYSIS
While Saudi Arabia began
a wheat programme in the
1970s, the Kingdom later
abandoned the project to
avoid depleting its aquifers
further and, like many
GCC states, found itself
depending on food imports.
The region’s
less-than-hospitable
environment and growing
population have made food
security a priority, with the
strategy shifting from price
controls and subsidies to
investing in landholdings
abroad.
The push among GCC states to invest in Africa came
about in earnest following the 2007-08 global food
price crisis, and targeted agricultural land and
strategic commodity production. Agribusiness,
sovereign wealth funds and other agri-investment
vehicles were the main players. Primarily state-led,
the investments at that time centred on framework
agreements with the host market, guaranteeing
purchases and providing subsidised credit.
Fast forward and in October 2014 the Dubai
Chamber of Commerce noted that Gulf entities
had contributed over $30bn to African infrastruc-
ture development over the previous 10 years, a
substantial figure when one considers the GCC’s
relatively recent start of outreach to the continent
and its origins in agriculture-focused investments.
The trend positions the GCC well for capitalising on
that growth, while simultaneously providing direct
positive implications for food security. Arguably of
more importance is the maturation of investment
strategy towards the region from that early focus
to more complex investments across a range of
burgeoning sectors including infrastructure, con-
struction, telecoms, and banking and finance.
FOOD SECURITY: With a less-than-hospitable
environment for crop production and vulnera-
bility to geopolitical forces affecting the region’s
food supply, food security strategies among GCC
states have historically concentrated on price
controls, consumer subsidies, strategic stockhold-
ing and trade diversification. GCC states also face
an expanding population, with growth of around
40% expected by 2030 over 2010 figures. This has
already led to pressure on food supplies, while
prices are increasingly exposed to geopolitical fac-
tors and the impacts of climate change. GCC states
import as much as 90% of their food.
The traditional method of averting the local
impact of food price volatility and supply disruption
has typically been through subsidies and wage
hikes, but this is unsustainable over the long term
in light of concerns over inflation and the rising
cost of the welfare state. GCC governments have
recognised the critical need to establish consist-
ent supplies of staple foods such as rice and grains,
with early strategies focusing on self-sufficiency.
As such, Qatar at one point sought to produce a
full 70% of its food domestically by 2023. This was
to be achieved through the use of desalination and
hydroponics. However, this approach was soon
found to be inadequate for safeguarding food sup-
plies and keeping prices stable and affordable.
LOCAL ATTEMPTS: Saudi Arabia’s wheat pro-
gramme began in the 1970s, but the Kingdom
found its aquifers being depleted as a result. As the
world’s greatest importer of barley, rising meat and
dairy production has also meant a growing need
to import greater amounts of strategic commod-
ities, including corn and barley, to use as animal
feed – a full two-thirds of world barley exports are
used by Saudi Arabia to feed its sheep. By 2008
the kingdom had declared it would gradually end
production of wheat and instead concentrate on
building up reliable sources abroad.
GCC states will remain dependent at least
through the medium term on energy exports for
importing and financing food supplies. A decline
in the price of petroleum products will therefore
undermine their ability to sustain this offset on
costs to domestic consumers, weakening their
ability to pay for the welfare model.
Qatar imports about 90% of its food needs, with
this expected to increase 153% over the next dec-
ade as the population grows, making the country
vulnerable to prices fluctuations. The state, like
most other GCC nations, has invested in land acqui-
sition in Africa in order to meet demand, notably
Sudan and Kenya, among several other locations.
Drivers and change in GCC-Africa investment
Astablesupply

22
Land lease and production sharing deals provided to GCC investors should aid small-scale farmers
PROFILE ANALYSIS
The GCC region’s plans
for investment in Africa
are facilitated by the
widespread recognition on
the continent that FDI is a
way to provide employment
and further development
through both capital and
skills transfer.
The current phase of GCC investment in Africa
appears set to address many of the earlier struc-
tural weaknesses and, in the process, help develop
a more viable long-term investment environment
in many parts of the continent. This includes shifts
on the foreign investor side, and also locally among
African governments and key stakeholders. Coun-
tries like Zambia and Kenya are devising terms for
land use that could help stabilise conditions on the
ground. Leases in Zambia are likely to be provided
for no more than 25 years, and will come with a
requirement that crops produced on the land be
split up to 50-50 between exports and the local
market. Likewise in Kenya, there will likely be land
leases as opposed to outright sales.
BECOMING PARTNERS: Africa’s appetite for for-
eign direct investment (FDI) remains strong. FDI is
more widely recognised in Africa as a way to help
provide employment opportunities and develop
“expertise technologies and capital for improving
infrastructure such as roads, education and health
facilities”, as noted by the Centre for Interna-
tional Governance Innovation. Local stakeholders
in Kenya have shown themselves to be “willing to
accept and participate in land leases, provided
they include certain provisions”, such as 15-year
maximums, and that they be “renewable subject to
mutual negotiation”. This involvement would con-
trast with the historical trend in which landowners
were typically excluded from negotiations.
Helping to ensure a greater degree of trust
among local communities will provide for more
sustainable investments in agriculture, and will
have positive knock-on effects for other sectors as
well. In Kenya, for example, public-private partner-
ships (PPPs) received a boost in 2013 with the PPP
Act coming into force, “in order to strengthen the
legal and regulatory framework for PPPs… [and]
remove duplication and overlap”.
Incentives being promoted to lure back inves-
tors after an at-times rocky start include the Kenya
Investment Authority signing a double tax agree-
ment (DTA) with Qatar in April 2014. The deal will
protect investors from tax on repatriated profits
after they have already paid in their country of
investment. A “reciprocal agreement” was also
signed that is meant to “guarantee Kenyan and
Qatari businesspeople of rights to their assets
in the two countries”. Kenya that month also had
a draft DTA with Iran and the UAE, and a memo-
randum of understanding was signed between
KenGen and Nebras Power Company of Qatar.
In early 2014 African representatives presented
land lease and production sharing deals to GCC
investors as a means to aid small-scale farmers
and to also ensure food supplies for locals. Ghana,
for its part, has offered tax-free agreements for
investment in agriculture in the country’s north,
with the premise of sharing part of the produced
crops with the domestic market. But much is still to
be done in terms of regulation. Kenya, for instance,
STRATEGIC SOURCING: Along with sourcing from
Eastern Europe and farther afield in South Amer-
ica and Asia, GCC investors began looking more to
Africa – East Africa in particular – where available
farmland was seen as a way to provide domestic
populations with reliable sources of key agriculture
products. Countries targeted in the first phase
included Sudan, Ethiopia, Mali, Mauritania, Mozam-
bique and Tanzania, along with the North African
countries of Morocco and Egypt.
Many African investment destinations them-
selves, however, suffer from profound food
insecurity and political risks. Indeed, the Horn and
Sahel regions of the continent are the most fam-
ine-prone places on the planet. This has presented
foreign investors with a steep learning curve when
it comes to navigating African markets and relying
on those destinations for strategic commodities.
Local concerns over land rights and food security
presented serious operational and reputational
risks for Gulf investors. Early risks relating to land
use were due in large part to the absence of ade-
quate land ownership regulation, with Oxfam
reporting that up to 90% of land in sub-Saharan
Africa was unregistered, placing local residents at
greater risk of being displaced for new projects.
LOCAL GAINS: Many African governments have
shifted their emphasis to boosting local benefit, a
trend that is likely to reach beyond agriculture in
the coming years. This presents new challenges
for investors; however, it can present longer-term
benefits and opportunities as well. In a model for
how this can be achieved, the UAE’s Al Dahra Hold-
ing enforces a 50-50 sharing formula, according to
Khadim Al Darei, its vice-chairman, in a statement
given to local media in early 2014. According to Al
Darei, Al Dahra has avoided some of the problems
encountered by other foreign investors by actively
creating jobs for locals and sharing its produce.

23
Among other sectors, the African telecoms market holds promise for GCC-based operators
PROFILE ANALYSIS
Investment in African
infrastructure will require
$2.6trn by 2030, according
to the Dubai Chamber of
Commerce, but the interest
of both large and small
ﬁrms may help to share the
risk more evenly, as well as
encourage smaller projects.
sub-Saharan Africa, seeking a controlling stake in
Inwi in Morocco, where it had a 15% stake. Qatar’s
Ooredoo also operates in Tunisia and Algeria.
For Gulf investors, the unique support for the pri-
vate sector from state backers is likely to be a key
factor in helping investors weather further storms.
Saad Khalil, the director-general of the King Abdul-
lah Initiative for Saudi Agricultural Investment
Abroad, told the World Food Security Summit in
Dubai in February 2014 that the solution must now
come from partnerships between the private and
public sectors, with the government encouraging
risk-taking through the provision of interest-free
loans and partnerships with the Saudi Agricultural
and Livestock Investment Company.
CHALLENGES REMAIN: Many of the core chal-
lenges experienced in the Gulf’s earlier experiment
with African agriculture and land investment will
no doubt be encountered in other sectors in the
future. At the top of the list of risks facing Gulf
investors in Africa remain operational risks, the
honouring of contracts, a lack of skilled labour and
technology, currency volatility, political risk and
the change of government policies, in particular in
the midst of longer-term projects.
THINKING LONG TERM: Encouragingly, foreign
investors and African governments alike appear
to have taken heed of lessons learned. They are
demonstrating increasing commitment to bolster
structural mechanisms that should bring improve-
ment to the investment environment. This applies
to agriculture, but also sectors such as energy
and infrastructure. Moreover, a shift towards the
inclusion of landowners and local stakeholders
– as well as ensuring greater and more tangible
benefits for the local communities – presents
the opportunity for developing a more viable and
sustainable destination for the GCC’s strategic
long-term investments on the African continent.
still lacks a regulatory framework for foreign land
deals, and specific guidelines on managing the
leasing of foreign land are absent from policies.
BEYOND AGRICULTURE: According to the Dubai
Chamber of Commerce, Africa’s infrastructure
needs will require investment of $2.6trn by 2030.
Hamad Buamim, the chamber’s president, has
pointed out that it is not only larger firms that are
set to seize opportunities in Africa, but small com-
panies too. During the October 2014 Africa Global
Business Forum held in Dubai, Buamim noted
that “given the perceived risks associated with
mega-projects in several African markets, small-
er-scale projects have become increasingly more
appealing, especially in the energy industry.”
GCC investors, he added, are especially well
positioned for smaller-scale projects in Africa.
Underscoring the government’s confidence in the
African market, the chamber had plans to open
offices in Ghana, Mozambique, South Africa, Kenya,
Uganda and Angola. On similar lines, non-oil trade
between the emirates and Africa jumped 141%
from 2009 to 2013. The top non-oil partners that
year were Egypt, Libya, Sudan, Ghana, Mali, Tan-
zania, Nigeria, Kenya, Algeria, the DRC, Cameroon,
Ethiopia, Zimbabwe, Senegal and Morocco.
GROWING FOOTPRINT: Qatar’s sovereign wealth
fund is also expanding its reach in Africa, includ-
ing through “impact investments” with social and
environmental benefits. While Qatar Holding’s
$400,000 investment in 2013 to support the agri-
cultural supply chain in East Africa was a modest
start, the potential for the fund to bring substan-
tial impact should not be discounted. This may
especially be the case through its support for pri-
vate sector investments. With backing from the
fund, Qatar National Bank bought a 12.5% stake in
Togo’s Ecobank Transnational in September 2014.
The bank is already present in Libya, Mauritania,
South Sudan, Sudan and Tunisia, and through its
Egyptian business Société Général.
Africa’s potential for GCC telecoms is also show-
ing signs of growth, though there have been
some setbacks as well. The UAE’s Etisalat was in
late 2013 the biggest player from the Gulf in Afri-
ca’s telecoms sector, taking a controlling stake in
Gabon Telecom, and later that year a $5.3bn stake
in Maroc Telecom. This was despite Etisalat expe-
riencing an underwhelming year in Africa in 2013,
with a year-on-year contraction of 1% by June of
that year (excluding Nigeria) and a 9% contraction
in Egypt alone. Smaller UAE companies at that time
were pulling back their stakes: Warid Group sold
off its Uganda operations, and Emirates Interna-
tional Telecommunications, a subsidiary of Dubai
Holding, decided to offload its 35% stake in Tuni-
sie Telecom. Saudi Telecom Company maintains its
75% stake in Cell C of South Africa. In 2010 Zain
sold most of its sub-Saharan operations to Bharti
Airtel for approximately $9bn. In late 2013 Zain was
looking to concentrate on North Africa rather than

24 PROFILE VIEWPOINT
Tony Abbott, Former Prime Minister of Australia
Australia’s links with the Gulf states are close and
getting closer. Australians and citizens of Gulf states
are spending more and more time in each other’s
countries, the security relationship is growing and
business relationships are booming.
In 2014 Australia and the GCC traded $11.7bn in
goods, an increase of 7.2% over 2013. Negotiations
on a free trade agreement (FTA) with the GCC have
been suspended since 2009. This is far too long when
we know that an FTA is in the interests of all our coun-
tries. Our trade is complementary, our exports and
imports are not in direct competition and we are all
interested in long-term growth. For these reasons, I
am hopeful that negotiations will resume soon.
The GCC is an important market for our agricultural
and food exports, valued at $2.4bn in 2014. With an
FTA, high-quality Australian goods would become
more readily available at even more affordable prices
in the GCC. World-class Australian service providers
in health, education, engineering, construction and
event management would be more accessible.
Australia is open for business. We welcome for-
eign investment that benefits the investor and is in
line with our national interests and priorities. Invest-
ment from the Gulf states already exceeds $20bn in
Australia. An FTA would allow this to increase even
further. Australia has also embraced significant
investment from Gulf sovereign wealth funds, includ-
ing in infrastructure and tourism. For example, the
Abu Dhabi Investment Authority – through the Accor
Group – is the largest owner of hotels in Australia.
Australia’s Asset Recycling Initiative has opened up
significant opportunities for stakeholders to invest
in privatised brownfield assets. Sale proceeds will be
re-invested in quality new infrastructure projects.
This, in turn, leads to investment in Australia.
Our aviation industry is enhancing links between
the people of our regions and improving service
for consumers and trade. Around 150 direct, return
flights by Emirates, Etihad, Qatar Airways, Qantas and
Virgin operate between the Gulf and Australia each
week. The airline industry has demonstrated phe-
nomenal growth, benefitting all involved.
Close to 35,000 Australians call the Gulf states
home. Additionally, 300,000 Australian tourists visit
the UAE every year and there are 10,000 students
from GCC countries enrolled in education institutions
across Australia. The partnerships between Qantas
and Emirates, and Etihad and Virgin Australia, will
continue to bring our people closer together.
Our relationship also extends into the important
issue of national security. Australian and Gulf leaders
share the highest of priorities – to keep the people of
our nations safe. What’s happening in Syria and Iraq
threatens Australia and the wider Middle East region.
Australia is strongly committed to working with the
UAEandourotherpartnersintheGulftocountervio-
lent extremism. Together we are strengthening the
security of the Gulf through the military campaign to
disrupt, degrade and ultimately defeat Daesh. Aus-
tralia supports the initiative of the UAE, developed
in partnership with the US and others at the Wash-
ington Summit in early 2015, to establish regional
expertise in countering violent extremism (CVE). We
hosted our own Regional CVE Summit in June 2015
to consider how governments, civil society and local
communities can better challenge violent extremism.
My visit to the UAE in January 2015, similar to the
many visits to the Gulf that senior Australian minis-
ters have made in recent times, was very productive.
The Australian government has since announced
its intention to open a new embassy in Doha, which
will add to our existing diplomatic representation in
Riyadh, Abu Dhabi, Dubai and Kuwait City. My gov-
ernment sees the fast and evolving relationship with
the Gulf states as important and full of potential. We
will continue to strengthen this partnership based on
afoundationoffriendship,historyandcommongoals.
Tony Abbott, Former Prime Minister of Australia, on Australia’s
deepening relationship with the Gulf states
Astrongerpartnership

25
Economy
Streamlined licensing makes opening a business easier
The tourism sector is targeted for development
Limited impact from decline in international oil prices
The emirate’s free zones are attracting global ﬁrms

26
The tourism sector is viewed as a key growth area for the emirate
RAK’s GDP growth was
reported at 7.6% in 2013,
reaching $7.05bn. This
accounts for about 1.8% of
the UAE total, which was
$400.1bn the same year.
A series of major regional
events are expected to
drive ongoing expansion
efforts, resulting in
increased demand for
cement, ceramics and glass,
all of which are produced
in RAK.
ECONOMY OVERVIEW
Home to sizeable reserves of clay, limestone and
sand, but few petroleum resources and fewer than
500,000 residents, Ras Al Khaimah holds a unique
position among the UAE’s seven emirates, main-
taining a less frenetic pace of life even as its GDP
growth rises above the national average.
RAK’s path towards economic diversification start-
ed early, and has seen it transform into an industrial
and manufacturing hub, supported by targeted re-
source development, a fast-expanding network of
free zones, and government efforts to promote and
incentivise investment.
RAK’s challenges are largely related to its fast
expansion and demographics. Rapid economic ex-
pansion has strained the emirate’s existing power
and water supply. Although RAK benefits from fed-
eral support and spending, falling oil prices have
also dimmed the UAE’s outlook in 2015.
RAK’s direct dependence on oil revenues re-
mains limited, and major regional events, including
Dubai’s World Expo 2020 and the 2022 FIFA World
Cup in Qatar, are expected to drive demand for ce-
ment, ceramics and glass, underpinning expansion
in a host of sectors. RAK’s uninterrupted growth
path, rising attractiveness as an international in-
vestment destination and dramatically lower busi-
ness costs should see GDP and foreign investment
remain robust in 2015, lending an optimistic out-
look to near- and long-term growth prospects.
LOCAL BENEFITS: The emirate’s varied topogra-
phy has given it a considerable competitive advan-
tage. The Hajar Mountain range runs through the
emirate, offering a significant supply of limestone
to support a large and maturing cement industry,
which will be especially beneficial in the lead-up
to major, infrastructure-intensive events in the re-
gion. At the same time, an abundance of local clay
has enabled RAK Ceramics, established in 1991 by
RAK’s ruler, Sheikh Saud bin Saqr Al Qasimi, to be-
come the world’s largest supplier of ceramic tiles,
while vast quantities of sand have led to a robust
portfolio of glass manufacturing companies, many
of which operate out of the RAK Investment Au-
thority’s (RAKIA) network of industrial parks.
Free zone development has been extremely
beneficial to ongoing economic diversification ef-
forts, and today the emirate’s free trade zone (FTZ)
network, under development by RAK FTZ, RAKIA
and RAK Maritime City, stands as one of the fast-
est-growing globally, with rapid expansion leading
to an influx of international tenants and billions of
dollars in new investment in recent years.
By capitalising on its natural resources and fo-
cusing diversification efforts on the industrial,
manufacturing and mining segments, the emirate
created a springboard for future expansion into
the high-priority education, health care and tour-
ism segments. RAK also continues to benefit from
its location as the closest emirate to the major
trade routes through the Strait of Hormuz, hosting
five port facilities, one of which will be connected
to the planned GCC national railway network, which
is expected to be operational by 2018.
RECENT GROWTH: The RAK Department of Eco-
nomic Development (RAK DED), the official au-
thority for statistics and the authority for business
licensing and inspections, reported that total GDP
rose by 7.6% in 2013 to reach Dh25.9bn ($7.05bn),
or 1.8% of the UAE’s total GDP, which stood at
Dh1.47trn ($400.1bn) in the same year. In 2013
RAK DED also published GDP figures that take FTZ
income into account for the first time, and report-
ed that in total RAK’s GDP reached Dh30.95bn
($8.4bn) in 2013, or 2.1% of the UAE total. Although
RAK-specific details have not yet been released, the
UAE’s Ministry of Economy (MoE) reports that the
UAE’s total GDP rose by 4.8% to reach Dh1.54trn
($419.2bn) in 2014. As of mid-May 2015 ratings
The emirate is aiming to expand high-priority sectors
Drivetodiversify

27
The emirate has garnered a
favourable trade balance in
recent years, with exports
more than doubling from
$879.2m in 2009 to $1.9bn
in 2014.
RAK’s population was recalculated in 2010 and revised upward to 413,000; it reached 438,000 in 2013
ECONOMY OVERVIEW
all rating of “AA+”. The agency reported that RAK
benefits from low debt and a strong fiscal surplus,
as well as the UAE’s overall economic strength, but
emphasised that institutional weaknesses, which
have led to a limited availability of data in the emir-
ate, continue to constrain RAK’s rating. The agen-
cy highlighted lack of data on national accounts,
balance of payments and monetary data as areas
in need of improvement, with the government al-
ready moving to establish a dedicated government
statistics centre in a bid to improve its transparen-
cy and attractiveness to foreign investors.
RISING INVESTMENT: RAK benefits from broader
national growth, and the UAE’s standing as a top
global investment destination has helped bring a
sizeable amount of new businesses to the emir-
ate. The UAE rose three places on the World Bank’s
2015 ease of doing business survey, and stands as
the only Middle East economy in the top 25 of the
189 countries surveyed. The UAE ranks first world-
wide in the paying taxes category and fourth place
globally in dealing with construction permits, get-
ting electricity and registering property.
In addition to these competitive advantages,
RAK offers significantly lower costs of living and
of doing business – the cost of establishing a new
company in RAK FTZ, for example, is lower than it is
in other emirates (see analysis).
The emirate’s attractiveness as a rising industri-
al, manufacturing and mining centre has resulted
in a surge of new businesses and investment in
recent years, and RAK DED reported issuing 1791
non-FTZ new business licences in 2014, a five-year
high; the issuance of new licences had previously
peaked at 1790 in 2010, before falling to 1474 in
2011, 1465 in 2012 and 1377 in 2013.
INDUSTRIAL STRENGTH: Industry remains RAK’s
greatest strength, and RAK DED reports that the
mining, quarrying and manufacturing segments
agency Fitch expected RAK’s real GDP growth to
slow from 6.5% in 2014 to 4-5% over 2015 and 2016.
RAK DED reports strong economic GDP growth
in the years to 2013, and the emirate was largely
unaffected by the global financial crisis of 2009.
That year the UAE’s GDP fell by 5.24% before re-
covering to reach 1.64% in 2010, 4.9% in 2011 and
4.68% in 2012. For its part, RAK was able to sustain
GDP growth of 4.4% in 2009, 6.03% in 2010, 29.9%
in 2011 and 5.3% in 2012, according to RAK DED
data, although the 2011 spike was primarily the re-
sult of an increase in available data overall.
POPULATION & INFLATION: RAK’s estimated pop-
ulation was up significantly, from 267,000 in 2009
to 413,000 in 2010, the result of a population ad-
justment at the federal level.
Growth rose by an annual average of 2% between
2011 and 2013 to reach 438,000, according to RAK
DED’s “2014 Statistical Yearbook”. Although popula-
tion estimates remain difficult to obtain – the UAE
has not conducted a national census since 2005,
and many RAK residents divide their time between
the emirate and Dubai – population growth has cer-
tainly accelerated since 2009.
Inflation has also been rising in RAK, albeit at a
slower pace than the national average, and reached
2.9% in September 2014, the highest inflation rate
in five years. RAK DED reports that the emirate’s
consumer price index (CPI) rose by 2.7% in 2010, in-
creasing from 111 to 114. Inflation hit 2.6% in 2011
and 2.8% in 2012, before moderating to stand at
1.4% in 2013. Quarterly economic reports issued
by RAK DED show that inflation gained pace again
throughout 2014, however, with the CPI rising from
122 in 2013 to 125.3 in 2014, a 2.7% y-o-y increase.
CREDIT RATING: RAK is considered an attractive
and safe investment destination, and in May 2015,
Standard & Poor’s (S&P) affirmed its “stable” out-
look for the emirate, assigning it “A/A-1” long- and
short-term foreign and local currency sovereign
credit ratings. The agency said this decision was
supported by robust prospects for economic
growth, the vast supply of materials for building
and infrastructure projects in the GCC region and
the diversification of RAK’s export markets.
Indeed, the emirate’s trade balance has be-
come increasingly favourable in recent years; RAK
DED reports robust export growth between 2009
and 2014, with exports more than doubling from
Dh3.23bn ($879.2m) in 2009 to Dh7.07bn ($1.9bn)
in 2014. S&P also cited the emirate’s limited direct
reliance on oil as a positive factor, as well as the
government’s strong balance sheet, with a sov-
ereign Islamic bond (sukuk) issuance expected to
further bolster government coffers (see analysis).
In May 2014 S&P downgraded its outlook for the
emirate to “negative” as a result of the many feder-
al statistical adjustments, but upgraded RAK back
to “stable” in November, though the issue remains
a concern. Fitch affirmed its rating for RAK at “A”
in November, two notches below the UAE’s over-

28
Manufacturing stands as
the single largest economic
sector in the emirate,
contributing 25.1% of GDP,
followed by retail,
wholesale and repair
(12.1%), government
services (9.9%), ﬁnancial
services (8.6%),
construction (7.5%), real
estate (6.9%) and
transportation (6.4%).
ECONOMY OVERVIEW
The number of industrial ﬁrms in RAK climbed to 2164 in 2013
terials, with the first wave of building expected to
kick off in late 2015.
Perhaps more promisingly, the 2022 FIFA World
Cup will be hosted in Qatar, which is preparing to
spend an estimated $70bn on new construction
projects. It has already reported rapid inflation in
the cost of construction materials, putting RAK in
a favourable position to capitalise on surging de-
mand for cement, glass and ceramics. Industrial
growth has also been driven by efforts to promote
and incentivise RAK’s free zones.
FREE ZONES: RAK’s free zones contributed a com-
bined Dh5.04bn ($1.4bn), some 16.3% of total GDP
in 2013, and are a significant growth driver for the
emirate, with new investment in these zones to-
talling well over $1bn between April and Novem-
ber 2014. RAK offers three free zones to foreign
investors – RAK FTZ, RAKIA’s Al Ghail and Al Hamra
industrial parks, and RAK Maritime City.
RAK FTZ was established in 2000, and today of-
fers four specialised free zone parks: the Business
Park, for office clients; the Technology Park, for
trading and light to medium manufacturing; the
Industrial Park, for heavy manufacturing; and the
RAK Academic Zone, for educational institutions.
The authority’s portfolio of clients has doubled in
the past four years to more than 8000 internation-
al firms from over 100 countries.
RAKIA has developed and managed free zone and
non-free zone jurisdictions in RAK since 2005. At
two industrial parks in Al Ghail and Al Hamra, RAKIA
is home to over 7500 companies and manufactur-
ers in various sectors, including metal, chemicals,
food, plastics and automotives, a 22% increase over
the 5718 firms operating there in 2012.
RAK Maritime City is the youngest of the emir-
ate’s free zones, having opened in May 2011 with
the aim of providing easy port access to industrial
exporters. The site will host a port facility covering
8m sq metres, and including a 5-metre quay wall
and deep harbour entrance. Special areas are des-
ignated for operations including warehousing, tank
storage, general cargo handling, industrial produc-
tion, and shipbuilding or repairs.
Stakeholders at all three free zones have been
active in promoting the available benefits, which
include tax exemptions and 100% foreign owner-
ship rights. RAK FTZ, in a bid to target new tenants
from East Asia, has also established a new window
with dedicated language services for prospective
East Asian tenants, while RAKIA established a new
tenants’ committee in 2014 to facilitate better
communication between tenants and its executive
management (see analysis).
A number of new tenants have established a
presence in the emirate as a result, most recently
when the UAE-based recycling firm, Asian Fibres,
announced that it plans to invest $100m to build
the MENA region’s largest regenerated polyester
staple fibre production facility in November 2014.
The facility, which will be located in RAKIA’s Al Ghail
collectively accounted for 34.3% of total GDP at
production factor cost in 2013, meaning the total
value of all goods and services produced in the
emirate excluding subsidies and indirect taxes. Of
this, manufacturing stands as the single largest
economic sector in the emirate, contributing 25.1%
of GDP, followed by retail, wholesale and repair
(12.1%), government services (9.9%), financial ser-
vices (8.6%), construction (7.5%), real estate (6.9%)
and transportation (6.4%).
According to the department, the number of in-
dustrial firms in the emirate has grown significant-
ly in recent years, rising from 168 firms in 2009 to
2164 in 2013. Total investment by these firms was
estimated at some Dh3.16bn ($860.2m) in 2013, a
3.9% increase over Dh3.04bn ($827.5m) in 2012.
The manufacturing sector is poised for signifi-
cant future expansion. The ongoing preparations
for Dubai’s World Expo 2020, which will entail an
estimated $6.9bn worth of new development pro-
jects, are set to drive demand for construction ma-
GDP (excluding free zones), 2009-13 (Dh bn)
SOURCE:RAKDED
0
6
12
18
24
30
20132012201120102009

31
The government’s new
e-Dirham system will
ease payment and
authentiﬁcation services
for certain import and
export activities.
ECONOMY OVERVIEW
The goal is to increase tourism’s contribution to GDP to 9% by 2016
invoices, as well as other related fees, via the new
electronic e-Dirham card.
ONGOING DIVERSIFICATION: Although industri-
al activities remain the engine of RAK’s economy,
the government has been active in promoting and
developing further economic diversification, and is
putting added emphasis on the tourism, education
and health care sectors, which currently comprise
a relatively small proportion of total GDP.
RAK DED does not measure health and educa-
tion’s standalone total contribution to GDP, and hos-
pitality comprised some 2.8% of GDP at production
factor cost in 2013.
The RAK Tourism Development Authority (RAK
TDA) has targeted raising the sector’s contribution
to GDP to 9% in 2016, and the emirate appears to
be on track to meet this goal. In February 2015 RAK
TDA announced that tourism revenues in the emir-
ate exceeded the Dh1bn ($272.2m) mark in 2014,
while the total number of hotel nights spent by
visitors to the emirate rose by 72% to reach 2.14m.
Industrial Park, is expected to create 600 new jobs
when construction finishes in 2015.
Earlier in June 2014, French and Belgian firm PGS
Group, a global manufacturer of wooden pallets,
expanded into the Middle East with the establish-
ment of a subsidiary in RAK FTZ.
The firm, which achieved consolidated turnover
of €170m in 2013, aims to reach €500m in turnover
during the next five years by expanding its RAK FTZ
facilities. India’s Zuari Agro Chemicals, meanwhile,
announced plans to invest Dh3.5bn ($952.7m) in
RAK Maritime City in April 2014.
The investment will see the construction of an
integrated di-ammonium phosphate manufactur-
ing facility (see Industry chapter).
UTILITIES CHALLENGE: Access to reliable, af-
fordable electricity has been a concern for free
zone tenants. In an effort to reduce the electricity
tariff, an agreement with Federal Electricity and
Water Authority (FEWA) and RAKIA was finalised
giving FEWA the full responsibility for providing
power to RAKIA’s tenants in the Al Hamra and Al
Ghail industrial parks, which will ensure the availa-
bility of a stable power supply at competitive rates.
RAK FTZ announced in February 2015 that it had
built eight new substations and a new switching
station to connect all warehouses in its technol-
ogy cluster to FEWA’s national grid. The emirate
has also announced plans to significantly increase
available power and desalinated water supply, with
a number of new projects expected to take place
in partnership with the private sector. For exam-
ple, utility provider Utico has plans to invest over
$450m in new utilities infrastructure in the emirate
– as well as a 270-MW clean coal power plant.
Despite the positive signs, several major planned
projectshave been delayed in recentyears,and fed-
eral authorities have reported a decline in electric-
ity and desalination production at the same time.
Construction of new utilities infrastructure will be
critical for the emirate, and represents perhaps the
most pressing challenge to future industrial invest-
ment and expansion (see Energy chapter).
E-DIRHAM SYSTEM: In August 2015 the govern-
ment announced it would be shifting to an elec-
tronic system to facilitate the payment of govern-
ment fees for certain services.
The e-Dirham system, launched through a part-
nership with the National Bank of Abu Dhabi and the
Ministry of Finance, will reduce the time required
to deliver services to end users and strengthen the
collections process for government agency pro-
viders. According to the ministry, the e-Dirham will
enable fee collection for authentication services
pertaining to certificates of origin and invoices for
imported goods that are provided by the Ministry
of Foreign Affairs.
The card will reduce inter-agency bureaucracy
for individuals and companies conducting import/
export business, as they will be able to pay for au-
thentication services for certificates of origin and
SOURCE:RAKDED
Consumer price index, 2009-14
0
30
60
90
120
150
Q4 2014Q3 2014Q2 2014Q1 201420132012201120102009

32
Visitors from the GCC
region constitute the
largest proportion of
tourists travelling to RAK.
With arrivals to the airport
climbing, visitor numbers
are poised to rise.
ECONOMY OVERVIEW
Fees for private schools in RAK are much lower than in other emirates
the near term, while longer-term plans include
launching new routes to Kuwait and Bahrain. Qatar
Airways will also start services to RAK in February
2016. Passenger numbers at the airport are fore-
cast to reach 600,000 by the end of 2015.
HEALTH CARE: In addition, the government is also
targeting value-added tourism through renewed
efforts to develop its medical tourism industry, in
line with the UAE’s broader strategy to transform
into a global medical tourism hub, with more than
1m medical tourists expected to visit the coun-
try annually by 2020. The emirate’s leading private
hospital, RAK Hospital, for example, is increasing-
ly targeting new foreign patients from Asia with a
range of specialty services, moving in January 2015
to partner with India’s Shalby Hospitals to offer a
new knee replacement surgery which will cut oper-
ating and recovery times substantially – patients will
spend 15 minutes or less on the operating table and
walk within three hours of the surgery.
Perhaps most significantly for future health
care and health tourism efforts, the long-awaited
Sheikh Khalifa Specialty Hospital (SKSH) was offi-
cially inaugurated in February 2015. The six-storey,
Dh1bn ($272.2m) facility focuses on tertiary treat-
ment, cancer and heart care, speciality services
that had been largely unavailable in RAK. When
fully operational, the authorities expect SKSH will
not only keep patients from travelling abroad for
treatments, but eventually serve as a regional hub
for this type of care (see Health chapter).
EDUCATION: The education sector is also poised
for expansion over the coming years, following
several years of robust growth at both private
K-12 schools and in RAK FTZ’s dedicated education
zone, where the majority of private post-secondary
institutions are concentrated.
Efforts to focus on science- and math-based
education and renewable energy have seen a host
of new research and development facilities estab-
lished in recent decades, most recently when Goog-
le unveiled its first-ever UAE-based innovation hub,
located in RAK, which is expected to serve around
500 students annually. As is the case across many
other sectors, RAK’s lower cost of living will sup-
port growth, with private primary, secondary and
post-secondary tuition fees standing considerably
lower than elsewhere in the UAE.
OUTLOOK: Its industrial, manufacturing and min-
ing sectors are its greatest strength, particular-
ly in the lead-up to Expo 2020 and the FIFA 2022
World Cup, but RAK’s rising population and eco-
nomic fundamentals have allowed it successes in
knowledge-based diversification. With investment
in other sectors rising, the emirate’s health, edu-
cation and tourism sectors are poised to increase
their contribution to GDP in the coming years. The
emirate’s expansion is linked to the UAE’s national
growth and RAK is set to benefit; projections for
the country stand at 4.5% in 2015, and the emirate
is expected to continue outpacing national growth.
This growth was driven by an influx of new ho-
tels coming on-line, most notably facilities on Al
Marjan Island, a cluster of four man-made islands
extending 4.5 km into the Gulf and slated for fu-
ture development. In 2014 the islands welcomed
the 315-room Marjan Island Resort and Spa, Dou-
ble Tree Hilton’s 484-room resort and spa, and the
655-room Rixos Bab Al Bahr Resort. As a result of
these and other facilities, the emirate’s total supply
of hotel beds rose by two-thirds between Septem-
ber 2013 and September 2014, reaching 5000.
Regional GCC visitors, including UAE nationals,
continue to constitute the largest proportion of
tourists, with visitor arrivals set to rise further in
the wake of new activity at RAK International Air-
port, after low-cost carrier Air Arabia, based in
Sharjah, began offering services in May 2014.
Company officials announced plans to extend
services beyond the initial routes to Jeddah, Cai-
ro and Muscat. Air Arabia is expected to launch
new routes to Pakistan, Bangladesh and India in
Non-oil foreign trade, 2009-14 (Dh bn)
SOURCE:RAKDED
0
1.6
3.2
4.8
6.4
8
Trade balanceTotal importsTotal exports
201420132012201120102009

33
ECONOMY INTERVIEW
Given the increasing diversiﬁcation in the free
zone,whatsectorsdoyouseehavingthegreatest
potential outside of industry and tourism?
SHEIKHAHMAD: OneofthemaingoalsofRAKFTZis
consolidating and strengthening our traditional core
industrial manufacturing sector. While diversification
is necessary to long-term sustainable growth, we
must not lose focus on our industrial roots, which will
continue to play an integral part in our advancement
up the economic value chain. With that being said, we
need to come up with a sustainable economic mix; an
economy made up of industry and services.
A wider ecosystem of businesses, made up of link-
age and support sub-sectors, will increase diversifi-
cation, and contribute to broader economic expan-
sion and overall growth rates. Education will be the
catalyst in developing a wide-reaching and more har-
monious economic mix. Education is also the number
one determinant of long-term economic growth and
could very well lead to multiplier effects down the
line. In order to expand the breadth and depth of our
education sector, we are appealing to a wide variety
of academic institutions to set up in RAK. These in-
clude university branch campuses, higher education
providers, early learning centres, vocational bodies
and professional development institutes. Finally, the
health sector has received major impetus with the
opening of Sheikh Khalifa Specialty Hospital. In time,
we expect RAK FTZ to attract health sub-sectors that
can help enhance overall operations. We foresee best
practices emerging quickly with the addition of nurs-
ing schools, wellness centres and research labs.
What factors are drawing businesses to the FTZ?
SHEIKH AHMAD: Working with RAK FTZ means that
businesses benefit from closer proximity to major
markets including the Gulf, the wider Middle East,
South Asia, Africa and Europe. RAK FTZ is currently
home to 8000 companies from over 100 countries
and more than 50 sectors. We encourage business
owners and entrepreneurs to set up a company in
the free zone by offering myriad incentives that can
help them rapidly become thriving enterprises. These
include a tax-free environment, 100% business own-
ership, freedom from Customs duty, high-quality fa-
cilities, fast-track licensing and visa processes, and
business support services that allow businesses to
set up and grow profits as quickly as possible. We also
allow the construction of labour accommodation on
site, which helps business owners eliminate costs as-
sociated with labour transportation.
The benefits RAK FTZ offers come at a competitive
cost. Prices for our comprehensive business packag-
es are up to 50% lower than in other free zones in the
UAE. We devised lower cost structures to help our
clients maximise return on investments. Moreover,
we have made a concerted effort to modernise our
facilities and make each one customisable in the free
zone. No matter which type of park, i.e. technology,
heavy industry or academia, each will be tailor-made
to suit the needs of the businesses at hand. We strive
to become the most welcoming, efficient and easy
investment destination in the world by continuously
developing new services and facilities that are specif-
ically designed to support business growth.
What is being done to equip young Emiratis with
the skills needed by the job market?
SHEIKH AHMAD: RAK FTZ places a high priority on
recruiting, training and retaining talented UAE na-
tionals. This can be seen in our recruitment policy,
where 20% of our employees are Emirati.
We have also implemented the Tatawuri Initiative
and the UAE Empowerment Programme, which aim to
hone and expand the skill-sets of Emiratis.
In addition, work-experience programmes on offer
can bridge potential skill gaps that may emerge in the
transition between the classroom and the workplace.
Sheikh Ahmad bin Saqr Al Qasimi , Chairman, RAK FTZ
OBG talks to Sheikh Ahmad bin Saqr Al Qasimi, Chairman, Ras
Al Khaimah Free Trade Zone (RAK FTZ)
Contributingtogrowth

34
Favourable market conditions have made bonds increasingly attractive
RAK deployed a $500m
sovereign sukuk in 2015 to
raise capital for upcoming
infrastructure projects, its
ﬁrst such move since 2005.
Bonds, both Islamic and
conventional, have been
increasingly utilised by
public and semi-privatised
entities in the emirate
recently.
ECONOMY ANALYSIS
Although the government of Ras Al Khaimah is not
known for frequent bond issuance, it returned to the
debt markets in 2015 with the deployment of a $500m
sovereign sukuk (Islamic bond). Bonds, both Islam-
ic and conventional, have been increasingly utilised
by public and semi-privatised entities in the emirate
recently, and despite earlier indications that the gov-
ernment would seek a syndicated loan to raise capital
for new projects, debt market conditions are more fa-
vourable at present, as evidenced by RAK Bank’s recent
decisions to both issue and tap a new bond, its first
since 2005. With RAK’s spending set to rise as it moves
to improve public services and roll out new projects, a
sovereign sukuk will underpin expansion in the emirate,
and highlight the rising attractiveness of Islamic finan-
cial products both in RAK and the wider UAE.
SUKUK DEVELOPMENT: With the emirate enjoying
strong budget surpluses since 2009, bond issuance
from RAK’s government has been rare; however, in-
creasingly favourable market conditions, falling nation-
al growth projections for the UAE and ongoing market
volatility have made bonds an increasingly attractive
option for the emirate’s government. At the same time,
the UAE’s push to develop Islamic finance has had an
impactonthestructureofnewdebtinstrumentsinthe
country, and RAK has been active in issuing sukuk to fi-
nance government spending, moving in October 2013
to issue a $500m, 3.297%, five-year instrument priced
at a spread of 175 basis points (bps) over mid-swaps.
In June 2014, the emirate sent requests for propos-
als for an Islamic bond deal, around the same time that
Sharjah and Bahrain also started talks with bankers on
similar deals. Unlike the other two, however, RAK did
not immediately appoint banks to arrange the deal,
and in August 2014 local media reported that RAK had
issued a request for proposals for a syndicated loan, in-
dicating that it was looking at alternative options.
The government favoured the sukuk option, an-
nouncing in March 2015 that it had set the price for its
$1bn, dollar-denominated sukuk, issued under an ijara
structure, at 125 bps over mid-swaps. The government
also selected Al Hilal Bank, Citigroup, JP Morgan and
the National Bank of Abu Dhabi to arrange roadshows
in London, and the deal was printed in late March, ac-
cording to media reports, garnering $2.5bn of orders.
TURNING TO MARKETS: With the IMF expecting the
wider GCC to lose $300bn in 2015 should oil prices
remain depressed, and equities markets increasingly
bearish, a turn towards bond issuance is expected to
bolster government revenues in RAK if federal spend-
ing and investment income fall. In May 2015 the IMF
lowered its GDP growth forecast for the UAE to 3.2%
in 2015 and 2016, as a result of lower crude prices,
which fell 55% between June 2014 and August 2015.
Analysts have also lowered their outlook for the UAE’s
financial services sector as a result of an anticipated
slowdown in real estate and equities markets, with
the UAE Insurance Authority issuing investment reg-
ulations for insurance firms in February 2015 in a
bid to reduce losses (see Financial Services chapter).
Under the UAE’s constitution, education, health,
security, welfare and the majority of social spending
are administered at the federal level, while emirates
are in charge of infrastructure, natural resources and
economic strategy. RAK has benefitted from this: the
Dh1bn ($272.2m) Sheikh Khalifa Specialty Hospital, for
example, was financed by a grant from the Ministry of
Presidential Affairs. With growth forecasts diminished
and the emirate facing rising electricity and water
demand, a sovereign bond should enable new invest-
ment to meet RAK’s infrastructure needs. Conditions
are favourable, as evidenced by RAK Bank’s move to
issue a benchmark bond in 2014. The bank re-entered
the market for the first time since 2005 with a $500m,
3.25% issuance on the Abu Dhabi Securities Exchange
in June 2014, and re-opened the bond in February
2015, increasing it to $800m. The bank said debt
markets were more favourable than syndicated loans.
The emirate issues its ﬁrst sovereign sukuk in a decade
Returntodebtmarkets

35
The emirate’s free zones ca-
ter to both local and inter-
national entities of all sizes:
small and medium-sized
enterprises, large
multinationals, and local
and international
corporations.
The emirate’s free trade zones offer competitive incentives to businesses
ECONOMY ANALYSIS
Streamlining the licensing process in order to enhance the
emirate’s business environment
Attractinginterest
In a bid to attract new foreign investment inflows
across a host of high-priority sectors, the govern-
ment of Ras Al Khaimah launched a number of new
initiatives for prospective and existing businesses in
2014. The RAK Department of Economic Develop-
ment (RAK DED) recently announced plans to work
with the UAE’s Ministry of Economy (MoE) to improve
the emirate’s business environment, with the new
agreement slated to streamline and de-centralise
business licensing procedures, in addition to attrib-
uting new fee collecting responsibilities to RAK DED,
highlighting the growing cooperation between feder-
al and emirate-level governments.
At the same time, existing businesses within RAK
Investment Authority’s (RAKIA) network of industri-
al parks are benefitting from services established to
enhance communication between RAKIA’s executive
management and park tenants, including the Ten-
ants Committee, an online community portal and
a client relations department. RAK Free Trade Zone
(RAK FTZ), meanwhile, is shifting its strategy to focus
on the quality of its tenants as it makes way for new
companies from East Asia, in a bid to support healthy,
sustainable long-term growth.
PREPARATION OF PROJECTS: With few petroleum
resources and a smaller population than Abu Dha-
bi and Dubai, RAK has benefitted from decades of
growth in industry and manufacturing, and rising
recent investment in its education, health care and
tourism sectors. At the federal level, the MoE is re-
sponsible for preparing projects under the nation’s
Vision 2021 development plan, including identifying
the stages, legislation and proposals necessary to
move major projects forward, in addition to conduct-
ing studies examining the activities across various
ministries and sectors.
Until recently, the MoE granted final approval for
all new business licences issued in RAK, with RAK DED,
which is legally responsible for managing statistics
and producing official RAK-specific data, coordinat-
ing with the MoE to carry out emirate-level licensing.
FREE ZONE INVESTMENT: The government has in-
troduced several initiatives aimed at attracting new
foreign investment in recent decades, including a
network of FTZs and industrial parks, under the aegis
of RAK Maritime City, RAK FTZ and RAKIA, which run
a number of dedicated free zones in the emirate. RAK
Maritime City, established in 2011, holds the govern-
ment’s newest free zone, spanning an area of 8m sq
metres, with plot sizes starting at 25,000 sq metres,
and larger 40,000-sq-metre plots offering tenants
exclusive berths and jetties. Free zone authorities
hope to attract between 40 and 50 tenants active in
the steel, petrochemicals and fabrication industries.
RAK FTZ was established in 2000 and has over
8000 businesses in 50 sectors from more than 100
countries. The FTZ holds four separate specialised
clusters for the business, technology, industrial and
education sectors. The zone has seen its occupied
space expand significantly in recent years, with fDi
magazine reporting a 24% increase in 2013, as near-
ly 3000 new firms established operations that year.
“RAK FTZ is making a significant contribution that not
only benefits RAK but also contributes to the eco-
nomic development of the entire UAE,” Ramy Jallad,
acting CEO of RAK FTZ and RAKIA, told OBG.
RAKIA was founded in 2005 to strengthen the in-
vestment climate in RAK and it has played a promi-
nent role in the growth of the emirate. After several
successful investments, the company’s key role was
transformed and RAKIA began to concentrate on
attracting regional and international businesses to
RAK. Small, medium and large multinationals, as well
as local and international corporations, have been
drawn to the firm’s industrial parks.
The authority reports that over Dh1bn ($272.2m)
has been invested in RAKIA’s parks to date, which has
resulted in the development of 26m sq metres of land

The Report_Ras Al Khaimah_2015

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