Dubai is back at the top of fDi’s Middle East Cities of the Future ranking after losing ground to Manama two years ago. Dubai scored higher than any other city for economic potential, business friendliness, infrastructure and quality of life.
Saudi Arabia’s commercial capital, Jeddah, which was not ranked by fDi’s 2007 survey, takes second place, reflecting recent development of both the city and its infrastructure, closely followed by Abu Dhabi in third place, up from sixth in 2007. Ras Al Khaimah in the United Arab Emirates (UAE), which is still competitive on costs, ranks as fDi’s most attractive city for FDI.
“This is an exciting time,” says Kamal Ahmed, chief operating officer of Bahrain’s Economic Development Board. Oil-rich governments across the Gulf are investing heavily in infrastructure and human resources to stimulate non-oil industries and this has created unprecedented levels of investment opportunities for foreign investors.
Mr Ahmed says: “More companies are relocating, standards of living are rising as a whole and all countries are booming as a result.” Despite the financial crisis, he says the Middle East has remained liquid, although the difficulty of attracting international bank finance has made developers reluctant to announce large new projects.
“We have no plans to slow development. If we continue to utilise our resources wisely, we’ll see the Gulf region become a much more important regional economy, maybe not on the same scale as China and India, but a much more important market, particularly as we move towards economic integration.”
Rising investment in real estate, particularly in the Gulf states, has driven costs higher and fDi’s 2008/09 rankings reflect this. Despite less sophisticated infrastructure, lower-cost alternatives are moving higher up fDi’s rankings. Alexandria, Cairo, Amman and Aqaba all score in the top five cities for costeffectiveness – behind Sanaa in Yemen – but ahead of major cities in the Gulf.
Free trade zones
The long-established Jebel Ali Free Zone keeps its place at the top of fDi’s ranking of special economic zones. Saudi Arabia’s King Abdullah Economic City, one of the world’s largest construction projects, ranks at number two. By 2020, the Saudis expect two million people to live and work in a city that will be four times the size of Manhattan and one of the most high-tech cities in the world.
Bahrain’s International Investment Park, located adjacent to the new Khalifa Bin Salman Port (due to open December 2008) and a short drive from both the international airport and causeway to Saudi Arabia, ranks third. The new zone has been given a key role in Bahrain’s ambition to transform itself to become a gateway to the Gulf.
Meanwhile, fDi’s introduction of a ‘ones to watch’ category reflects the large number of dedicated investment zones under construction or at the planning stage. Saudi Arabia’s breathtakingly ambitious King Abdullah Economic City project is the judges’ clear winner in this category, followed by Dubai World Central’s Aviation City.
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