Amid the razzamatazz of the Annual Investment Meeting in Dubai, Arif Amiri, the chief executive of the Dubai International Financial Centre (DIFC), slipped in a golden nugget of news.
Dubai has been ranked 13th in the latest league table of the world’s best places to do financial and investment business. That is the highest ever position reached by Dubai in the survey by the Long Finance initiative, a prestigious international body that since 2005 has been ranking global financial centres.
The 19th version of this biannual survey is dominated by the likes of London, New York, Singapore, Hong Kong and Tokyo (the top five). No surprise there, but what is astonishing is the identity of some of the places Dubai has beaten – better than Luxembourg, Geneva, Shanghai, Frankfurt and Beijing, for example.
It is by some way ahead of anywhere in the Arab world, although Abu Dhabi gets an honourable mention, at 26. Casablanca, at 33, is also noteworthy. But Dubai’s performance, from a city that barely had a financial industry of any global significance in 2004, is exceptional.
What has happened in the past 12 years can be summed up largely in a four-letter acronym: DIFC. The centre has single-mindedly pursued a strategy to make finance the fourth column of Dubai’s economic infrastructure, alongside the “three Ts” – trade, transport and tourism.
DIFC recovered quickly from the global financial crisis and last year – even as the oil price and regional markets were plummeting – clocked up its best-ever year-on-year performance, with a 27 per cent rise in new members.
It is on track to reach the goal set last year to treble in physical and financial size. That does not look so ambitious now if the compound rate of increase is anywhere near last year’s level.
On the AIM sidelines, Mr Amiri modestly pointed to the work of his predecessors and to the strategists who identified the need for a financial hub in the region that achieved international standards in hard and soft infrastructure.
DIFC has the eye-catching architecture, but is also has the more practical attraction of world-class regulatory and courts systems.
Both hard and soft infrastructure are due to receive a boost. In the next few weeks the DIFC will unveil details of the “Spine” development, which will add thousands more feet of commercial, leisure and residential space in probably the biggest single physical initiative since 2004.
Mr Amiri also mentioned the potential for further development of DIFC’s capabilities in “fintech” – financial technology – which is the latest boom sector in the banking business. He sees Blockchain, the digitalised ledger system, as crucial to the centre’s future. A party of DIFC executives is travelling to the US, home of the Blockchain phenomenon, to learn how to apply the techniques, especially in the area of trade finance, prioritised as a DIFC growth area.
With Abu Dhabi also flagging up its fintech ambitions, a collaborative approach seems essential to make the UAE a financial technology hub.
It can only be a matter of time before Dubai breaks into the top 10 of the world’s elite financial hubs.
fkane@thenational.ae
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