Robust financial sector taking shape in capital
Anyone who regularly visits Abu Dhabi's Tourist Club Area or Reem Island will know that Al Maryah Island is beginning to burst into life. Yesterday marked the opening of The Galleria, the city's latest upmarket retail space, joining the new Rosewood Abu Dhabi hotel and a range of companies and law firms already operating on the island. Cleveland Clinic, the health care facility, is also moving towards completion.
From the point of view of the city's development, the centrepiece will be the establishment of the financial free zone on the island. Yesterday, The National reported that its board of directors had been appointed - an important step, because the board will lead the drafting of modern regulations to a rapidly developing section in the emirate, as well as appointing a management team. The free zone will be exempt from the federal laws of the UAE and the civil and commercial laws of Abu Dhabi, embracing global standards and regulations.
Developing a city like Abu Dhabi to a stage where it can compete on the global stage is a bit like completing a puzzle: pieces need to be slotted in, one at a time. The emerging free zone is an important component. It will attract large publicly-traded companies to the capital, as well as those companies that need to retain 100 per cent ownership.
The free zone arrives against the background of other substantial changes. In June, MSCI upgraded the UAE to "emerging market" status, reflecting the increasing maturity of the country's stock markets. Because of the upgrade, an inflow of capital from international investors is expected, further solidifying the stability of the UAE's financial sector.
Taken together, this financial infrastructure, confidence from international institutional investors and a rapidly changing regulatory environment means that many of the pieces required for a robust financial sector are falling into place. From the point of view of diversification of the economy - the centrepiece of the Abu Dhabi Vision 2030 - this will represent a significant leap forward.
Such changes are welcome. There are further steps that one could argue are as essential for the development of financial markets - like the long-awaited bankruptcy law. Such a law, in discussion since 2009, would decriminalise bankruptcy, reduce the cost of doing business in the UAE and make it easier for companies to flourish in good days and bad.
Taken together, the coming changes and those still proposed would turn Abu Dhabi into the city it deserves to be.
Published: August 28, 2013 04:00 AM