An Emirate Without Oil: How Sheikh Saud Has Positioned Ras al-Khaimah for Economic Success

December 3, 2013 prolog Comments Off on An Emirate Without Oil: How Sheikh Saud Has Positioned Ras al-Khaimah for Economic Success

The emirate of Ras al-Khaimah (RAK) is located near the Strait of Hormuz, which divides the Persian Gulf from the Gulf of Oman and the Arabian Sea. The eastern part of the emirate consists of low, sandy plains that, as you move westward, rise to form a scenic mountain chain. RAK has naturally occurring sulfur springs and fertile agricultural land. Its proximity to the water has also fostered a rich maritime tradition.

shake 300x200 An Emirate Without Oil: How Sheikh Saud Has Positioned Ras al Khaimah for Economic Success

There’s just one caveat: In a region dominated by vast petroleum reserves, RAK has no oil wealth. Yet the country boasted a gross domestic product of eight percent in 2012, which was double the GDP of UAE as a whole. Also, the country’s booming tourism industry hosted more than a million visitors for the first time in RAK’s history. Business registration grew by 25 percent, and the unemployment rate stayed relatively low at 6.7 percent. Between current Emir Sheikh Saud bin Saqr al Qasimi (click to read more about his Highness) and his father and predecessor, Sheikh Saqr bin Mohammad al Qasimi, RAK has become a model for creating a thriving Middle Eastern economy without oil.

A Foundation for Economic Success

Sheikh Saqr ruled RAK from 1948 to 2010. During his reign, the British pulled out of the Arabian Gulf, and an alliance between six emirates created UAE on Dec. 2, 1971. RAK became the seventh emirate in the alliance, joining UAE in 1972. Sheikh Saqr laid the groundwork for a modern economy by encouraging growth in tourism, manufacturing and trade. RAK was notable for its ceramics industry, led by RAK Ceramics, which remains the largest manufacturer of bathware and ceramic tiles in the world.

In 2010, when Sheikh Saud became emir, he brought an international perspective forged when he attended American University in Beirut and the University of Michigan. Even as RAK’s crown prince, he was heavily involved in creating a modern economy. He reorganized many government entities and established economic reforms. He also turned his eye outward and focused on making RAK attractive to foreign investors.

 

RAK Free Trade Zone

The RAK Free Trade Zone (FTZ) was established in 2000, but it has blossomed under Sheikh Saud’s guidance to include over 5,000 companies in a wide range of industries. Sheikh Saud worked with RAK FTZ to establish business-friendly policies and infrastructure that would attract foreign investment. Some of these include:

  • 100-percent tax exemption and 100-percent foreign ownership
  • Unrestricted capital and profit repatriation
  • Modern communication networks
  • Increasingly transparent legal and regulatory framework
  • Unfettered access to RAK’s airports and seaports

These policies, coupled with RAK’s proximity to Dubai, have encouraged investment from countries like India, the United States and Germany. RAKFTZ is also wooing countries like South Korea, Iraq, Kenya and Tanzania.

Al-Qasimi Foundation

In addition to courting foreign investors, Sheikh Saud has brought attention to important domestic issues. He established the Al-Qasimi Foundation for Policy Research in 2009 as a think tank designed to fund the best current global policy research, and to shape that policy to fit both RAK and UAE culture. High-priority areas for policy advancement include health and well-being, community development and education.

The Al-Qasimi Foundation plays a major role in shaping RAK society. In addition to extending research grants to doctoral and faculty scholars, the foundation provides seed grants for new areas of research. The foundation also hosts Fulbright Scholars, and it nurtures the workforce of the future by providing scholarships for RAK students who want to study overseas. Community engagement is also a foundation goal, and this initiative includes sponsoring cultural and community events, hosting online forums to build community relationships and providing RAK citizens with volunteer opportunities. Although the emirate remains a monarchy, these engagement forums are encouraging healthy debate and dialogue among citizens.

RAK’s Future

Although RAK still relies on industries like ceramics, glass and pharmaceuticals, foreign investment and tourism continue to be the country’s top economic goals. Key tourism target markets include Germany, Russia, the U.K., Italy, Austria and Switzerland. Sheikh Saud set the goal of having 10,000 hotel rooms in RAK by 2016, and in 2012, the Waldorf Astoria opened its first Middle Eastern hotel in RAK. By working with its resources and maintaining engagement with the world, RAK seems to be doing just fine — with or without petroleum.

 

About the Author: Francine Hustis is a graduate student earning a degree in Middle Eastern Studies.

 

Image by Richter from Wikimedia Commons

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