Strategies for business innovation in a slowing global economy will be discussed in Dubai this week, as the three-day Annual Investment Meeting 2016 (AIM) kicks off today at the Dubai World Trade Centre. It will showcase investment opportunities for small to medium-sized enterprises, shine a spotlight on emerging markets and offer cross-border investment ideas for multinationals.
The UN’s World Investment Report says foreign direct investment (FDI) inflows will reach $1.5 trillion (Dh5.5 trillion) this year, and $1.7 trillion in 2017. The UAE ranks 22nd worldwide as an FDI destination and wants FDI to contribute 5 per cent of GDP over the next five years. Accumulated foreign investment in the country was $126 billion at the end of last year, up from $115 billion at the end of 2014, largely due to investment in manufacturing and heavy industries such as aluminium and petrochemicals, as well as in tourism and aviation. Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, says the country is a safe and sought-after investment magnet due to its security and political stability. The ministry is currently working on an FDI law to regulate guarantees, incentives, and clarify institutional framework.
As AIM 2016 examines how FDI is changing in the global economy, we list the reasons to attend.
Sustainable progress
This year’s event will take a broad look at the United Nations’ sustainable development goals (SDGs). These are a set of targets that UN member states must use to frame political policies through to 2030. They include ending hunger and poverty, making education universally available (pictured) and safeguarding the environment.
The OECD says private investment can be a powerful development enabler: it can create jobs, build skills, spur innovation, provide essential infrastructure and services, boost economies and strengthen governance standards. A seminar on methodologies and policy approaches is one of the highlights of AIM 2016.
Juma Mohammad Al Kait, Assistant Undersecretary for Foreign Trade Affairs at the UAE Ministry of Economy, says the seminar will help decision-makers implement the SDGs. With stakeholders from governments, multinationals, and other local and international attending the event, the possibilities for strengthening sustainability and the role of FDI will be considered, he adds.
Oil and energy
Although oil prices have dropped substantially over the past 18 months, the sector remains a great opportunity for many companies, due to the lower costs of raw materials and the increase in demand for products with higher profitability margins, says Dawood Al Shezawi, Head of the AIM 2016 organising committee.
The decline benefits the world’s oil-importing countries, such as India, China and some European nations. US refineries also benefit. The event hopes to help investors take advantage of the downturn, and to develop well-defined investment strategies. Areas of opportunity include the renewable and clean energy sectors, where investment is rising. Last year, the installation of wind and solar photovoltaics grew by 30 per cent worldwide, Bloomberg reports.
New data shows that investments in the sector grew in 2015 to six times the 2004 total, despite the strength of the dollar and low commodity prices.
Opportunities for SMEs
In light of the new law on SMEs, AIM this year will feature a range of intensive discussions around small to medium-sized enterprises in emerging markets. FDI is directly related to the SME sector, and the UAE hopes to increase the sector’s contribution to the country’s GDP from the current 60-70 per cent. Industry-specific challenges, relationships with financial markets and financing options will all be discussed.
“The UAE recognises the role of youth in promoting SMEs, and that is why the government has issued several laws to facilitate issuance of trade licenses, established many funds to support them, and launched several initiatives to promote SMEs,” said Al Mansouri. AIM 2016 will provide an overview of the SME sector and present successful case studies from around the world.
A close look at India
The country, a rare bright spot on the world’s economic radar, will have its biggest-ever participation at the event.
India has recently further liberalised foreign direct investment in a variety of sectors, and the UAE’s strong trade channels with the Asian giant works as a stepping stone for investors. “The trade relationship between India and UAE has been on a positive note as bilateral trade is valued at $70 billion currently,” says Kulwant Singh, CEO and MD, Lama & Carfare Groups, and a member of the IBPC. “We expect 20-25 per cent growth in these figures in the next two years. Nearly half of the overseas money transfers from the UAE head towards India. In 2014, individual remittances from the UAE to India — the largest receiver of remittances in the world — rose to between $12 billion and $15 billion,” he adds.
UAE-China ties
Although global headlines are dominated by China’s slowing economy, the nation continues to provide plenty of opportunity for investors. It has been the largest recipient of FDI since 2014, when, together with Hong Kong, it recorded $232 billion, or nearly a fifth of global investment. China is the UAE’s second-largest trading partner and the Emirates acts as a gateway to about 60 per cent of China’s merchandise exports to the regional markets, Al Mansouri explains. Non-oil trade volume between the countries crossed $46 billion in 2014, a 28 per cent growth over 2013. The figure for the first half of 2015 was $24.1 billion.
Al Shezawi says AIM 2016 will showcase promising investment opportunities in China’s Guangdong Province, one of its largest administrative districts, and Guangzhou city, China’s city of wholesale.
The UAE-China relationship offers tremendous opportunity to capitalise on the new Silk Road initiative, which focuses on connectivity and cooperation among countries in Eurasia, and which is expected to positively impact around 4.4 billion people with trade of $10 trillion over the next five years. The project aims to help development in more than 60 countries.
Chance to network
World leaders and ministers attend the event to pitch their countries as investment destinations. This year will see Rustam Minnikhanov, President of Tatarstan (in Russia); Giorgi Kvirikashvili, PM of Georgia; Aisha Abubakar, Nigeria’s Minister of State for Industry, Trade and Investment; Dalia Khorshid, Egypt’s Minister of Investment; Immanuel Ngatjizeko, Minister Of Industrialisation, Trade and SME Development in Namibia; Volodymyr Demchyshyn, Minister of Energy and Coal Industry of Ukraine; and Dr Carlos Lopes, Executive Secretary of the Economic Commission for Africa. An invitation-only cocktail lunch allows attendees to meet, network and exchange ideas in a confidential and comfortable environment.
More information on the event is available at Aimcongress.com
