UAE Poised For 60% GDP Growth By 2010

by Lorys Charalambous, Tax-News.com, Cyprus

23 June 2006

Continued economic diversification will drive gross domestic product growth in the United Arab Emirates by as much as 60 percent by 2010, according to A.T. Kearney, the leading international management consultancy firm.

The company made its prediction as it announced its decision to establish a regional base at the Dubai International Financial Centre (DIFC) to serve its growing number of local clients and support the continued diversification and growth of the UAE economy.

“Our client base in the MENA region has grown exponentially over the past five years and requires not only international experts from our mature operations in Europe, the Americas and Asia, but also the close physical proximity of a local office. The DIFC provides us with a world-class location from which to grow throughout the region,” commented Dr. Dirk Buchta, Managing Director of A.T. Kearney in the UAE.

A.T. Kearney believes that UAE’s GDP can increase by 60 percent by 2010 based on three key drivers of economic diversification, namely: direct investment, internationalization and development of new industries.

The firm says that direct investment is necessary to evolve beyond the free zone concept and begin expanding into key industries. Examples include the decision by TECOM Investments, the investment arm of Dubai Internet City, to acquire a 35 percent stake in Tunisia Telecom for US$2.25 billion. Dubai Investments Group, Dubai Holding’s private equity arm also recently took a 60 percent stake in Maltacom for US$280 million.

The continued development of local companies through acquisition, as with Dubai Ports and its integration of CSX and P&O, will help grow existing domestic companies, according to the DIFC.

Also, the UAE Government is also investing heavily in new industries such as the aerospace conglomerate Dubai Aerospace Enterprise (DAE) - an investment vehicle which will channel some US$15 billion into a global aerospace manufacturing and services corporation.

Dr. Omar Bin Sulaiman, Governor of the DIFC, says that A.T. Kearney will be able to take advantage of growing opportunities throughout the region from its base at the DIFC.

“A.T. Kearney recognizes Dubai’s potential and has identified a growing need for expert management consulting services. The continued expansion and diversification of Dubai’s economy provides a unique opportunity for businesses such as A.T. Kearney to establish operations locally and throughout the region,” he observed.

A.T. Kearney recently supported the feasibility study and launch of Dubai Aerospace Enterprises. It is working with a number of other undisclosed clients on projects that will further the economic growth in the UAE.

“The world is watching the UAE — especially Dubai — both with admiration for its successes and anticipation of its next move. We believe the UAE will serve as an example to the whole region, furthering economic development and stability. We aim to participate in this development by helping our clients turn their strategies into reality,” added Dr. Buchta.

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