The UAE government is committed to developing its non-oil sectors in a bid to diversify its economy. It has made giant strides in this regard, and is undertaking initiatives to boost various sectors. It is also making significant efforts to attract foreign investments. Akber Naqvi, Executive Director of Al Masah Capital, identifies four sectors that are particularly lucrative for foreign investors.
Overall healthcare spending in UAE is estimated to increase by 6.9 per cent a year, from US$ 14.0 billion in 2013 to US$ 19.6 billion in 2018. In 2014, the private sector made investments worth US$ 66.4 million in the UAE healthcare sector, and two UAE-based hospitals successfully listed on the London Stock Exchange. In the same year, Vice President and Prime Minister of UAE and Ruler of Dubai H.H. Sheikh Mohammed bin Rashid Al Maktoum executed a new law mandating health insurance for all Dubai residents. The country currently has the largest number of hospitals accredited by the Joint Commission International (JCI) in the MENA region.
According to Al Masah Capital, the expanding expatriate population (which currently constitutes 88.5 per cent of the total population in UAE) has led to a growing demand for private schools with international facilities and curricula. The number of international schools in UAE is estimated to have doubled from 2004 to 2014. Additionally, airlines and telecom sectors in the country are driving the demand for technical and vocational training. In 2007, the government created a special economic zone, the Dubai International Academic City (DIAC), to provide tax benefits to higher education institutions. It is currently the largest free zone dedicated to higher education in the world.
3. Food and Beverage
UAE’s rapid urbanisation and its growing popularity as a tourist destination have provided a significant boost to its food and beverage (F&B) sector. According to KPMG, the number of F&B outlets in the country is estimated to increase by 1,600 by 2019. The government is trying to cement Dubai’s position as a hub for re-exporting food products to other parts of MENA by encouraging private companies to set up food storage and distribution facilities in the country. The F&B sector will also require considerable investments to support the demand from the 20 million tourists expected for the Dubai Expo in 2020.
Dubai is slated to become the predominant trading hub in the MENA region owing to its superior logistics and infrastructure, which enable smooth and consistent movement of goods and services. More than 4 billion people are estimated to live within 8 hours (by flight) of Dubai; this covers key markets in Africa and Asia. Of all sectors, logistics is the most strongly associated with global trade. Although its performance could be adversely affected by any downturn in world trade, the UAE government’s commitment to improving infrastructure and legislation will likely drive growth in the sector and help sustain returns.
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Source: Entrepreneur Middle East