The economy of the UAE’s northernmost emirates near the Strait of Hormuz, has grown 8 per cent year on year over the last two years as a strong industrial base has helped the emirate to cushion its economy from the financial crisis of 2008-09.
“We are going to build on the existing infrastructure to take the emirate’s economy to its next phase of growth,” Peter J Fort, Senior Economic Advisor to the Government of the Emirate of Ras Al Khaimah (RAK) and Chief Executive Officer of Ras Al Khaimah Free Trade Zone (RAK-FTZ), told Gulf News in an interview.
Credit rating agency Standard and Poor’s (S&P) last December affirmed its “A/A-1” long- and short-term foreign and local currency sovereign credit ratings for RAK as the government’s total borrowing remains as low as 26 per cent of its GDP (gross domestic product).
“Fiscally, RAK was well protected against external shocks thanks to the UAE’s strong external balances and its system of fiscal transfers and banking coordination,” S&P said. Looking forward, S&P said, “Outlook for RAK was stable, thanks to the government’s fiscal flexibility and the advantages being in the UAE.”
Ras Al Khaimah, which made the best use of the abundance of stones, clay and limestones — the most important natural resources extracted from adjacent mountains — to develop an industrial cluster of cement, ceramics and building materials, now boasts of hosting the world’s largest ceramic tiles manufacturers in the world, while its ports handle one of he largest break-bulk cargo shipments in the Middle East.
Fort said, the emirate is currently focusing to strengthen the three core sectors of the economy — tourism, logistics and industry.
“The number of tourists is expected to grow 20 per cent to 1.2 million this year, from 1 million last year,” he said. “A number of hotels are being opened this year, which will increase the hotel capacity by 45-50 per cent that will widen the choice for tourists.”
Waldorf Astoria, billed as the 7-star property in Ras Al Khaimah, will be opened later this year, followed by the 700-room Rixos Hotel on Al Marjan Island, in addition to four other hotels that are to open by December. The RAK Tourism Development Authority estimates that the existing room stock will be expanded from just below 3,000 to 10,000 by 2016.
“Besides, we are also focusing on the industrial sector that contributes 30 per cent to the emirate’s economy. We are planning to target large manufacturers to open factories and industrial units in Ras Al Khaimah which provides low-cost infrastructure and facilities for investors to benefit from,” he said.
His organisation, RAK FTZ which hosts 7,000 companies, is planning to expand infrastructure, commercial space and warehouse facilities. “We are expanding these by 50 per cent which could require an investment outlay between Dh200-300 million, as the existing facilities have been exhausted,” he said.
RAK International Companies — its offshore licencing arm, has already issued 8,000 offshore licences, he said.
The RAK Port management is currently undergoing feasibility study to expand the port to deeper waters to enable the berthing of bigger vessels in order to support the growth of the port. Fort said this could result in a joint venture with international investors.