Profile:
Emirates: Sharjah
Emirates: Sharjah
Sharjah, which possesses a thriving economy while maintaining its rich cultural heritage, accounts for 47% of industrial Gross Domestic product (GDP) in the United Arab Emirates, a position it looks set to maintain thanks to its well-developed free trade and specialised industrial zones, serviced by an integrated transport system and highly-developed infrastructure. Education is a priority in Sharjah, and the leader Sheikh Sultan's commitment to this is evident in the science foundation, two universities and seven museums that have opened over the past decade. The emirate's construction and real estate sectors are booming, as is the burgeoning tourism industry, capitalising on Sharjah's natural and historical assets.
ISBN: 978-1-902339-02-3
ISSN (Online): 1759-328X
ISSN (Print): 1759-3271
TABLE OF CONTENTS
COUNTRY PROFILE
Sharjah has achieved the right balance between striving forward with economic development and respecting its unique cultural heritage, with visitors to the emirate welcomed by ornate minarets, green parks and dhows, the traditional ships of the region. The last UAE census, undertaken in December 2005 by the Ministry of Economy and Planning, put the total population of the seven emirates at 4.1m, with Sharjah accounting for 793,573 of this figure, making it the third most populous. Sharjah is also the third biggest emirate in terms of land mass at 2600 sq km. It is the only emirate with ports on the Gulf and the Indian Ocean, thus occupying a crucial axis at the hub of global trade routes, ensuring its place as a centre of international commerce.
POLITICS
Sharjah is at the forefront of promoting economic liberalisation and diversification in the UAE while retaining its unique cultural and traditional identity. The leadership of Sheikh Sultan Al Qasimi is key to this bridging of the old and the new. In May 2008, for example, he donated over $218,000 to the UAE's fourth theatre season in which six theatrical groups performed across the country. Sharjah also leads the way in terms of schooling, and again, Sheikh Sultan is instrumental in this, having made his political debut as the UAE's minister of education. Sharjah is part of a UAE-wide initiative to reduce the imbalance of local and foreign labour and is at the forefront of the drive to democratise the UAE's political process; bringing women into the political system, for example. Sharjah's ‘My Emirate is Clean' campaign showed that its leadership is willing to take the initiative when it comes to green issues. Indeed, the country presents a fertile ground for forward-looking, environmentally aware investors. On the foreign policy front, Sharjah's ongoing dispute with Iran over ownership of Abu Musa island showed no prospect of a breakthrough in 2007, although the two retain long-standing trade relations.
The chapter includes interviews with Sheikh Sultan bin Mohammed bin Sultan Al Qasimi, Crown Prince and Deputy Ruler of Sharjah and Dominique de Villepin, former Prime Minister of France while Mike Moore, former Director-General of the World Trade Organisation (WTO) and former Prime Minister of New Zealand, shares his views on the role of the Gulf Cooperation Council (GCC) in the global economy.
THE ECONOMY
Sharjah's economy continues to grow off the back of a robust manufacturing sector which contributes almost half of the UAE's industrial capacity, close international trade relations and a well-developed infrastructure. Indeed, the emirate has been a major contributor to the UAE's economic success since it came into being 37 years ago, with record economic growth in 2006 seeing Sharjah's economy expand by 19.9% from $9.5bn to $11.6bn, according to Sharjah Economic Development Department (SEDD) figures. Much of this success can be attributed to the creation of the 10m-sq-metre Hamriyah Free Zone, which was constructed in 1995 and is home to 1100 companies and rising. Projects such as this are attracting overseas investment; indeed, Hamriyah is one of the only places in the UAE that permits 100% foreign ownership of businesses and properties, as well as complete import and export tax exemption. Foreign investors are also being attracted by the relatively low prices of energy and water, kept at affordable rates by large government subsidies and the low cost of land in the emirate which, although rising, remains far cheaper than neighbouring Dubai. The government is focusing increasingly on public-private sector partnerships and has launched a campaign to remove unnecessary red tape to encourage trade and investment. On the international trade stage, Sharjah is forging closer links with Pakistan, China and South Africa.
The chapter includes an interview with Ali bin Salem Al Mahmoud, Director-General, Sharjah Economic Development Department (SEDD) and Salah Tahir Al Haj, Director-General, Sharjah Municipality while John Sculley, former CEO of Pepsi and Apple, shares his views on globalisation and transformational leadership.
FINANCIAL SERVICES
The banking sector has witnessed strong growth in the UAE, with assets rising from $120bn in 2004 to $235.5bn in 2006, off the back of an influx of petrodollars and continued economic success. Differentiating between the financial sectors of the individual emirates can be difficult as the seven are united by a common currency and governed by the same national regulatory authorities, namely the UAE Ministry of Economy and the central bank. Despite this, a strong sense of regionalism exists and family ties and local businesses are an important part of the financial services picture. Indeed, Sharjah's banking sector consists of large national, regional and international players. Relative to their size, Sharjah's top four banking entities - Bank of Sharjah, Sharjah Islamic Bank, United Arab Bank and Invest Bank - punch above their weight, generating more profit than the average Emirati bank. Sharjah's insurance market is likewise comprised of local, national and international players and is set to receive a boost through the expected introduction of compulsory health insurance for expatriate workers by their employers in 2009. To the future, the UAE's capital markets, currently young and immature, are set to develop with the UAE's Securities and Commodities Authority scheduled to develop a book building system in 2008 and the introduction of new investment tools. Meanwhile the popularity of sharia-compliant finance is on the up.
The chapter includes a roundtable discussion with Mohamed Abdalla, CEO, Sharjah Islamic Bank; Bertrand Giraud, CEO, United Arab Bank; and Verouj Nerguizian, General Manager, Bank of Sharjah as well as an interview with Shaikh Faisal Khalid Sultan Al Qasimi, Chairman, Emirates Insurance Association. Anouar Hassoune, Analyst, Moody's Islamic Finance, shares his views on increasing complexity and future expectations.
TRANSPORT
Sharjah has been an important trading hub through the centuries and nowadays its strategic location, with access to the Gulf and the Gulf of Oman, is as vital as ever. To capitalise on its blessed position, Sharjah has three major ports: at Khorfakkan on the Gulf of Oman and at Khalid and Hamriyah on the Gulf coast. All three are being expanded and upgraded for the future: a free trade zone has been set up next to Hamriyah for example, and this is expanding quickly, with new cement, steel and chemical plants planned. Taking to the skies, Sharjah International Airport is fast emerging as one of the most important in the region, served by over 40 airlines flying to 250 worldwide destinations, with passenger numbers in 2007 standing at 4.3m, a 43% increase on 2006. Sharjah-based low cost carrier Air Arabia is a vital part of this, with growth figures that are the envy of the aviation world and big plans for the future, including expanding its fleet and forging deals such as one with Nepal's Yeti Airlines to use Kathmandu as a hub for flights to India and Kuala Lumpur. Hitting the roads, Sharjah is currently undergoing a massive road expansion programme, the aim of which is to ease the emirate's congestion woes. However as the number of drivers in Sharjah looks set to grow, some believe projects such as the building of another expressway above the Al Wahda Road and the widening of Emirates Road will not be enough, and to this end the government is carrying out a comprehensive study into public transport options.
The chapter includes interviews with Sheikh Abdullah bin Mohammad Al Thani, Chairman, Sharjah Civil Aviation Department; Peter Richards, General Manager, Gulftainer and Ahmed M Al Shamsi, Chairman, Sharjah Transport.
ENERGY
Sharjah has been successful in attracting foreign and domestic investors into its energy sector and for decades local companies, such as Crescent Petroleum, have worked in competition and cooperation with internationals such as BP. Much of this strategy has been borne of necessity as Sharjah possesses only a small fraction of the UAE's substantial hydrocarbons reserves, about 1.5bn barrels (as compared to Abu Dhabi's 92.2bn barrels) and 5% of the UAE's total gas reserves. Sharjah consumes a lot of energy however; it is home to around 40% of the industries based in the UAE. The emirate's government has, therefore, enlisted the help of BP to develop a national energy plan, running until 2025, which is expected to emphasise the importance of diversifying supply and boosting the amount of renewable energy capacity. Indeed, as the economy grows, infrastructure is struggling to keep up. Infrastructure basics such as water, sewage, gas and electricity for new projects now require roughly two years time lag, meaning that if a building development is finished ahead of time the developers must nonetheless wait to be connected to the grid. There is talk, with the aim of providing greater efficiency, of privatising Sharjah's utilities. To the future, the outcome of the Iran gas deal is crucial in addressing Sharjah's long-term energy strategy while the government is pursuing a gas deal with Abu Dhabi's Dolphin Energy, a company which began exporting to Sharjah in April 2008 and already imports natural gas from Qatar to other areas of the UAE. In the meantime, the addition of new capacity in water and electricity plants teamed with increased efficiency and conservation measures should keep the lights turned on.
The chapter includes an interview with Al Whaleed Khalid bin Khadem, Director-General, Sharjah Electricity Water Authority (SEWA); Rashid Saif Al Jarwan, General Manager, Dana Gas and Steve Peacock, President, BP Middle East and South Asia.
TOURISM
Sharjah's tourism sector is enjoying its day in the sun; take Qanat Al Qasba's trademark 60-metre high, 42-gondola ‘Eye of the Emirates' ferris wheel, part of the city skyline, as proof. The number of guests staying in Sharjah's hotels and apartments increased from 981,501 in 2004 to 1.46m in 2007, a rise of 48.4% over the four-year period and new tourist accommodation is still being built, with the number of hotel and apartment rooms increasing by 819 or 14% between 2006 and 2007. Sharjah is carving out a distinct niche for itself in tourism in the Gulf, focussing on cultural draws and attracting families rather than the more jet-set party crowd drawn by the bright lights of neighbouring Dubai. As well as culture, Sharjah is attracting tourists with its array of natural wonders; pristine beaches, beautiful sand dunes and rustic parks. The authorities are capitalising on these natural attractions with initiatives such as the Emirates Desert Park and the affiliated Breeding Centre for Endangered Arabian Wildlife, located 20 minutes from Sharjah, while the Wasit Nature Reserve is a must for birdwatchers. Meetings, incentives, conferences and expositions (MICE) tourism remains important, as business travellers tend to spend more per day than pleasure visitors, while the emirate is busily promoting its delights abroad, with China and Scandinavia seen as key exporters of tourists to Sharjah in the future. All of this activity in the sector is being ably catered for by Sharjah-based low cost carrier Air Arabia, which is predicted to transport between 3.6m and 4m passengers in 2008, up from the 2.7m fliers it took under its wing in 2007.
Sheikh Sultan bin Ahmed bin Sultan Al Qasimi, Chairman of the Sharjah Commerce and Tourism Development Authority (SCTDA); Adel Ali, CEO, Air Arabia and Marwan J Al Sarkal, CEO, Al Qasba provide interviews.
CONSTRUCTION & REAL ESTATE
Sharjah is currently home to a flourishing forest of towering construction cranes; proof, were it needed, that the emirate is enjoying a construction boom. The property market is in rude health, according to the UAE's Ministry of Planning, which acclaims Sharjah as possessing the most high-profile property market among the Northern Emirates, with demand driven by a growing population, a shortage of residential property and rents that are on average 30% less than other areas of the UAE. There was bad news for non-GCC expatriates in 2007 however, when Sharjah passed new laws restricting the leasing rights of non-GCC citizens. However the emirate is expected in the latter part of 2008 to pass additional legislation opening up property rights to Arabs who are not from GCC countries. As well as residential, the retail and office space segments are booming while Sharjah is about to embrace the island life, as, like other emirates, artificial islands take form in the sea. Sharjah's Nujoom Islands development will be built on a plot of land more than 5.6m sq metres off the emirate's northern coast, with the initial phase of construction estimated to cost around 35% of the total cost of the project- $4.9bn.The island will include 40 towers containing residential and commercial space, alongside 145 apartment buildings, four hotels and five yacht clubs. Sharjah showcased all this exciting activity at the “Sharjah International Investment and Real Estate Exhibition: Acres Middle East 2007” in December 2007. To the future, growth is expected to continue in the construction sector, despite the rising costs of building materials, as population growth demands new homes and the infrastructure to service them.
Talal Al Sorayai, Deputy Chairman, SNASCO and Salah Butti Ben Butti, Director-General, Directorate of Town Planning and Survey (DTPS) provide interviews. The chapter also looks at the construction and real estate projects in Sharjah which are making the headlines.
INDUSTRY
Sharjah is the UAE's workshop; home to 45% of the country's industrial activities and contributing 40% of industry-derived contribution to GDP. There are a number of reasons why Sharjah fares well in industrial terms, not least the fact that its geographical position makes it something of a transport hub, which it capitalises upon through a well-developed infrastructure. This fortunate geographical position means that Sharjah is bang in the middle of one of the fastest-growing regions in the world as well as being in close proximity to central Asia, the Indian Subcontinent and Africa which, between them, provide a pool of 2bn consumers. The emirate has capitalised on its fortuitous location by creating a stable economic and political environment and introducing investor-friendly policies, such as zero corporate or income tax, the establishment of free zones, no export or re-export tax, maximum 5% import duties and free currency transfers. In terms of size of industrial segments, fabricated metals and equipment works lead the pack, making up nearly a quarter of all industrial establishments according to the 2006 Sharjah Statistical yearbook, followed by chemical and plastics products producers and wood products. The marine services segment is pegged as one to watch in the future, as is the textiles sector, which is attracting investment through a policy of improving the quality and reducing the costs of boutique goods. All this activity in the industrial sector means good news for the retail segment in Sharjah; rapid economic growth makes consumers more willing to spend and the retail market is turning, to this end, towards large malls such as the Sharjah City Centre and the Sahara Centre.
The chapter includes a viewpoint from Sheikh Khaled bin Abdullah bin Sultan Al Qasimi, Chairman, Sharjah Department of Seaports and Customs and Chairman, Hamriyah Free Zone Authority (HFZA) and interviews with Ahmed Mohammed Al Midfa, Chairman, Sharjah Chamber of Commerce & Industry (SCCI); Kamal Nath, Indian Minister of Commerce and Industry; and Osman Sultan, CEO, du.
HEALTH & EDUCATION
Presented with a growing and ageing population, the private sector is increasing its involvement in healthcare in the UAE, with the government's announcement in 2007 that the Ministry of Health (MoH) was relinquishing its traditional role as a healthcare provider and instead making the transition to a more regulatory role. International private healthcare providers currently operating around the globe, particularly in Asia, are likely to be among the first players to enter this new market leaving the UAE government able to concentrate its efforts on combating the threat of non-communicable diseases through a range of preventative measures such as blood screening and education programmes; Sharjah instituted a smoking ban in public places in 2008. In 2006, Sharjah's population was served by five hospitals, 17 primary health care centres, two secondary health care centres with a combined 129 units, a further health facility with 15 units and a dental clinic with 11 units; this number is set to receive a boost with the allocation by the government of $95m towards the building of a new 200-bed maternity hospital, the largest in the UAE, which will also house an $5.44m open-heart surgery centre, located at the site of the existing 360-bed Al Qasimi Hospital. In a bid to attract staff, the newly formed Emirates Health Authority (EHA) initiated a set of programmes in August 2007 designed to make the public sector more attractive to workers, with salaries for physicians in Sharjah and the other Northern Emirates being brought into line with those of their counterparts in Abu Dhabi and Dubai and incentives such as free healthcare for family members being offered. Meanwhile compulsory health insurance for expatriate workers by their employers is expected to be introduced in Sharjah in 2009.
Sharjah has a long history as a centre of learning, becoming, in 1956, the first of the emirates to offer women an education. Education remains a priority in Sharjah and the UAE as a whole with spending on the sector comprising 25% of total annual government expenditure ($1.93bn) and private sector involvement on the increase; some 40% of students are now taught privately. Sharjah is at the forefront of the UAE's educational development, building relationships with foreign universities and holding an annual exposition for higher education institutions and students, the Education Show. The third Education Show, held in 2007, featured participants from the UK, Malaysia, Germany, Oman, Russia and India. Sharjah certainly possesses some educational institutions to boast about; Sharjah Education City, established in 1988 for example, attracts students from not just the UAE but also the wider Gulf region and is one of the most advanced of its kind in the Middle East. Its newest addition, the Judicial Studies and Training Institute, was officially opened in January 2008, with the aim of improving the quality of judicial and legal cadres in the UAE. Indeed, the emirate is looking for opportunities to expand its influence outside the Gulf region with, for example, Sharjah's ruler Sheikh Sultan funding a multi-million dollar project at Canada's McMaster University in Ontario, Canada to establish a chair in global Islam.
The chapter includes interviews with Sheikh Mohamad bin Sager Al Qasimi, Director, Sharjah Medical District and Assistant Undersecretary, Federal Ministry of Health; Winfred L Thompson, former Chancellor, American University of Sharjah (AUS) and Fawzia Hassain bin Gharib, Director, Sharjah Education Zone, UAE Ministry of Education.
CULTURE
Sharjah's unique identity within the UAE along with its burgeoning tourism industry are dependent to a large extent on its culture and a vast amount of resources have been channelled into cultural projects, with much of the momentum coming from Sharjah's ruler Sheikh Sultan bin Mohammed Al Qasimi. A prime example of this commitment to preserving traditions is the Sharjah Heritage and Arts area, located in the heart of Sharjah, the buildings, historical sites, narrow alleyways and souks of which have been completely renovated and are major tourist attractions. Many of Sharjah's abundant museums are centred in this area, for example the Islamic museum which houses a range of artefacts and manuscripts dating back more than 1400 years and Sharjah Art Museum, the largest gallery in the Middle East, featuring modern expressionism art from around the Arab world. To promote Sharjah's cultural life the Sharjah Museums Department was established in 2006 and now oversees 24 sites around the emirate. The SMD is also responsible for publishing a range of guide books in different languages and staff training as well as pioneering new museums and upgrading existing ones. Sharjah also has its very own film festival, the Prerna Film Festival, which debuted in 2008 at the Sharjah Institute of Art and Theatre and featured short and feature-length films from Arab, Brazilian, Indian, Argentinean and other filmmakers, while the Arab Theatres Authority (ATA) was inaugurated in Sharjah in August 2007, charged with enhancing cooperation and support amongst member theatre organisations from across the Arab world. ‘One of the biggest challenges that Sharjah, and indeed the world, faces is globalisation,' Yousuf Aydabi, director of the planning directorate at the Department of Culture and Information, told OBG. ‘The world should stay a mosaic; it is more beautiful if it is more than just one colour.'
The chapter includes an interview with Manal Ataya, Director, Sharjah Museums Department.
THE BUSINESS GUIDE
In conjunction with Morison Menon Chartered Accountants, OBG explores the taxation system, examining facilities and incentives offered by the emirate's ports and free zones in particular. Saju Augustine, Partner, Morison Menon Chartered Accountants, shares his views on Sharjah as a premier destination. This chapter also includes a review of the laws of the United Arab Emirate compiled in conjunction with Bin Shabib and Associates. Highlighted issues include the fact that new laws are required to protect workers and investors and a look at how the UAE is updating its legal system to encourage international commerce and trade and keep pace with ongoing economic development. Rashid Ahmed bin Shabib, Founding Partner, Bin Shabib and Associates shares his views on Sharjah's economic prospects and development.
THE GUIDE
We explore the Sharjah Museum for the Art of Arabic Calligraphy and Ornamentation and the emirate's Archaeology Museum, two of the highlights of Sharjah's abundance of 24 museums. This chapter also invites the reader on a stroll round Bait Al Naboodah, the restored 1845 family home of a pearl merchant, one of Sharjah's oldest houses. Also included in this section are hotel listings for some of the finest establishments in the emirate; a listing of various agencies, banks, emergency numbers and government offices; and facts for those planning to visit the emirate.
