Author : Nithya
Dubai International Financial Center, the tax-free business park for financial-services companies, will help neighboring Abu Dhabi set up its financial district if needed, its chief executive officer said.
“Our strategy is always to collaborate with Abu Dhabi and the federal authorities,” Abdulla Mohammed Al Awar said in an interview in Dubai on Tuesday.
“One financial center is not sufficient” for the Middle East, North Africa and South Asia region, and DIFC is prepared to share its experience of operating the center in the past six years.
Dubai set up DIFC in 2004 to attract international banks, asset managers and insurers to help diversify its economy. Abu Dhabi, the richest of the seven states that make up the United Arab Emirates and holder of about 8 percent of the world’s oil reserves, is also boosting investments in industry, tourist attractions and infrastructure to diversify away from oil.
International banks such as Goldman Sachs Group Inc., Citigroup Inc. and HSBC Holdings Plc., which have their regional offices in the DIFC, have boosted their presence in the Middle East over the past five years as rising oil wealth has boosted demand for financial advice. Bahrain and Doha in Qatar have also set up financial districts to attract foreign banks.
Abu Dhabi’s plan to develop a financial district is still in the “early stages” and may not clash with Dubai’s ambitions as “there are opportunities for various niches,” Al Awar said. Most companies that have set up offices in the DIFC “have a footprint across the region from Africa to the Middle East, South Asia and some even cover Europe,” while Abu Dhabi’s financial center may be more focused at its own economy, he said.
Abu Dhabi’s state-owned Mubadala Development Co is creating a new business hub on Sowwah Island, a project that could serve as the emirate’s financial hub.
Dubai’s government borrowed $20 billion last year from Abu Dhabi’s government, two of its banks as well as the U.A.E. central bank to help state-owned companies facing problems raising funds through the financial crisis.
“Rivalry is something of the past, given what has happened in the global economic crisis,” Marwan Ahmad Lutfi, deputy CEO and head of business development, said. “The more global companies there are in this region the better it is.”
Source : Bloomberg
