Beyond The Economic Downturn: Here's What The UAE Should Focus On For The Nation To Emerge Stronger In The Long Term We have to make sure that we are able to create an environment in which the product and services offered from the UAE are able to compete in the global market, both in terms of price and quality.
By Roberto d’Ambrosio Edited by Aby Sam Thomas
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The UAE has consolidated its position as one of the most attractive jurisdictions for foreign direct investments (FDI), and the inflow of capitals have been in a steady upward trend, with an obvious pause during the first month of the COVID-19 pandemic. That said, the crisis saw the UAE still perform remarkably well as compared to its direct competitors, thanks to a timely and well-managed reaction to the challenges posed by the pandemic.
Since the recovery from the Great Financial Crisis started to unfold, the UAE has shown its strength as a global economy, and the last data on the attractiveness for foreign investment are well beyond encouraging. This is thanks to its resilience to the current geopolitical tension and supply chain disruption that are affecting the global economy, as well as to the strategic vision of the UAE leadership. The latter is what guided the economy to be open to business, still abiding to the highest standards in terms of quality of service offered at the government level, while also making sure to attract those investments that are instrumental to the strengthening and diversification of the UAE economy.
While we all know that the political stability, the quality of services, the stability of the local currency, and the outstanding offer in terms of healthcare and education are all very well-known factors contributing to the attractiveness of our jurisdiction, we need to analyze what really stabilizes the inflow of capital and new business generation, and what businesses and professionals need to look for to participate in the long-term success of the UAE. As I see it, what makes a business competitive, and, therefore, successful and sustainable in the long term revolves essentially around the following points:
Pursuit of the highest possible quality in the product and services offered
The ability to compete effectively also in terms of cost to quality ratio within a globalized market
The ability to attract and retain the best talents from all over the world
These three factors are, of course, interconnected, and they flow from the purely business-related aspects, to factors that are linked to the personal lives of market- and business-experienced mid-senior managers and high-skilled professionals. These are the people that drive innovation, that manage change, that create opportunities, that possess the background and experience to navigate the fluctuations that the global financial business environment faces from time to time. These are the people that all the top jurisdictions worldwide compete for. These are the people that have choices, within the region and outside of it. Attracting and retain them is key to success.
Related: Four Factors That Allowed The UAE To Emerge As The New Frontier For Global Entrepreneurship
This element is evidently very clear in the strategic thinking of the UAE leadership, who are working towards the nation's goal of being one of the most sought-after countries to live in, investing a great amount of financial and human resources to make the UAE a lifelong choice for the best global talents. As business and professional practitioners, at all levels, our role in participating and supporting this challenging vision is to make sure that our focus is not on the short term, strictly financial-related individual success, but to be ourselves strategically oriented, being able to sacrifice a part of the short-term gains to lay the foundation for medium- to long-term sustainable success.
The attractiveness of the UAE for FDIs and ultra-high-net-worth individuals (UHNWI) and the related record capital inflows might be tempting in relation to maximizing short-term returns, but that would definitely not be a wise choice. We have to make sure that we are able to create an environment in which all needed factors feel welcome, and in which the product and services offered from the UAE are able to compete in the global market, both in terms of price and quality.
When it comes to those individuals that are key to sustainable growth, this concept applies to all those elements that they cherish the most, from financial services, to healthcare, to real estate, to education. If, on the contrary, the focus is on the short-term gains, to exploit the current situation to the maximum possible extent, the risk is to harm the competitiveness of jurisdiction, either by creating excessive turnover on key positions, or creating excessive pressure on the prices of the proposed products or services, or even by losing those key people to other competing jurisdictions.
To avoid such an harmful outcome, while we all agree that market forces determine the level and cost of product and services within our jurisdiction (as well as those in our competitors), and that they are instrumental to attract further investment capital, we must prevent excessive speculative behaviors that may lead to losing attractiveness, and isolate those that indulge in the temptation of offering inadequate product and services, in terms of both quality and price, ultimately harming the efforts of archiving the goals set by the UAE leadership, betraying the very purpose of their strategic vision.
Related: The Role Of Digital Banking In Bolstering The UAE's SMEs
