This paper has argued that foreign direct investment (FDI) is a prudent measure needed to kick-start our manufacturing sector and forward other economic initiatives. While the UAE is known for investing in other countries and not traditionally associated with incoming capital expenditure, FDI brings with it much more than cash. It brings expertise and the spark required to build infrastructure needed to sustain large-scale projects.
This is most recently evident in Unilever’s decision to open a Dh1 billion consumer goods factory in Dubai. The announcement that Majid Al Futtaim will create a new distribution centre for the Carrefour hypermarket chain in Dubai is another demonstration of this principle in action. Given the UAE’s geographic position, Carrefour aims to base itself here as it expands into Africa, the Middle East and Central Asia.
As such, the Dubai distribution centre will necessitate the creation of projects to sustain its operation. When new distribution centres or consumer goods factories are opened, they require several other enterprises in other sectors, such as transport, to sustain them.
This aspect of the project is critical to the creation of a viable manufacturing industry, which is a cornerstone of plans to transform the economy away from hydrocarbon profits. The creation of this infrastructure ensures that that the dirham is stretched to its maximum potential inside the economy.
There is also the issue of technological expertise. As The National has reported, the new distribution centre will use advanced energy-saving measures that are forecast to reduce energy output by 50 per cent. The skills and expertise required to engineer more efficient distribution facilities will be translated into new projects and ultimately boost the sector as a whole. These developments are all critical for the diversification of the economy and the enduring strength of our currency.
