Dubai is becoming less attractive for skilled employees

A survey in the UAE has revealed that Dubai is becoming less attractive for skilled employees due to the rising inflation.
The survey conducted by Bayt.com, a leading recruitment portal in the Gulf, and YouGov Siraj, an online research company, with over 50 employers and nearly 400 employees — expatriates and nationals — disclosed that 66 per cent of the employers feel that Dubai is becoming less attractive due to the rising inflation which is adversely affecting their chances of attracting the right talent.

The results, which were disclosed yesterday at the Dubai Economic Council (DEC) forum on The Future of Talent in Dubai, also noted that the residents' challenges included "the high cost of living, high inflation fuelled by obnoxious rents, falling dollar peg, compromising lifestyle to tackle inflation, traffic and parking woes".

Nevertheless, residents liked the emirate for its unprecedented growth, tax-free and crime-free environment.

On the employment front, however, the survey found that an overwhelming 90 per cent of human resources managers in private and public companies think recruiting employees is getting increasingly tougher than it was three years ago.

Some issues in finding the right talent include difficulty in hiring the right people and not being able to afford current salary levels. The biggest problem they face is finding people with leadership skills and passion for work. However, 68 per cent of organisations are ready or getting ready to address talent shortages.

The survey found that UAE nationals produce by far the highest turnover and are the toughest to retain, while Asian expats are the most loyal. They are also the second most likely to switch jobs. Well-qualified and good leadership skills is what employers expect, noted the survey.

Experts, on the other hand, observed at the forum that unless wage discrepancies between the private and public sector are not quickly tackled, companies in the private sector would continue to find it hard to lure young locals to work with them.

Dr Samer Kherfi, Assistant Professor of Economics at the American University of Sharjah, who gave a presentation on the wage structure in Dubai, said, "There is a large gap between the public and the private sector wages, where the private sector pays lesser. For equity purposes, Emiratis are paid more in the public sector. Besides, the pay structure is not linked to productivity."

He noted these are the reasons why the private sector finds it difficult to get Emiratis. "A lot of well-educated Emirati women are not part of the labour force and if they are, it could help deal with issues of labour shortage," he noted.

Khalid bin Zayed Al Nahyan, Chairman of the Executive Committee, DEC, said that if the skewed balance has to be corrected, incentives in the private sector have to be restructured and balanced. He noted that pay scales should match productivity, which needs to be assessed.

Dr John McHale, Associate Professor of Economics and Toller Family Research Fellow at the Queen's School of Business, Ireland, said, "The competition for talent is increasing in Dubai. The strength of the emirate is that it is employer driven. Highly skilled professionals are coming here to work."

/Khaleej Times/

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Strategic tie-ups to help curb food prices

Food companies across the Middle East are looking to develop closer relationships with the producers of raw materials and ingredients, as the price of foodstuffs globally continues to rise.

A study by Dubai Chamber, based on figures from the Economist Intelligence Unit (EIU), suggests that ten major food groups — including flour, milk and rice — have posted significant price increases in the UAE over the past year, with flour experiencing the highest average rise of 57.72 percent, according to a Press release.

While the authorities' agreements with retail outlets have provided some immediate relief, many companies within the region are looking to forge a direct relationship with ingredient producers to manage price rises in the short-term and ensure greater stability in the long-term. To provide support for companies looking to develop strategic ties, Dubai World Trade Centre is organising Ingredients Middle East, a trade show supporting the food manufacturing and processing industries. Exhibitors from around the world will showcase products including dairy ingredients, fruit products and extracts, herbs, spices and organic ingredients.

/Khaleej Times/

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UAE inflation estimated at 14%

Inflation in the UAE may have surged to a record 14% in 2007 as a result of strong domestic demand, reported Emirates Business 24/7 quoting a semi-official report.

"The phenomenon has become one of the most debated issues in the UAE because of accelerating inflation rates," the report from the Abu Dhabi Chamber of Commerce and Industry, citing government estimates, said.

"Inflation has steadily risen over the past three years to reach an alarming level in 2007, when it was estimated at as high as 15%. One of the root causes of this problem is the wave of hikes in petrol and diesel prices in the country, as such increases have led to higher construction costs, slashed the profit margin of the contractors and prompted house owners to raise rents sharply."

"The economic boom is another key factor for inflation, as it has led to a surge in domestic demand and this is normal in any country passing through a boom period. Growth rates over the past five years exceeded 15% in current prices and the pace is expected to be maintained in the coming years."

Dollar pegs force the UAE and four of its GCC partners, including Saudi Arabia and Qatar to track US monetary policy at a time when the Fed has been cutting rates to contain the fallout of a mortgage crisis and a weakening economy.

Pressures have been mounting in Gulf states to review the policy of pegging their currency to the weak US dollar, and analysts have suggested that revaluation, not a de-pegging would help in lowering consumer prices.

Earlier this week, Merrill Lynch said the US has effectively given Gulf Arab states the go ahead for making changes to their dollar-pegged foreign exchange policies, by recognising inflation as a problem.

In a report entitled 'US Green Light for the GCC', the US investment bank said the UAE and Qatar will probably move to a currency basket in the next few months, with their respective currencies appreciating 5% before the end of the year."

Citing a US Treasury report to Congress that for the first time mentioned currency and inflation issues in the six-member Gulf Cooperation Council, Merrill said the United States government had become more confident about the outlook for the dollar and therefore did not necessarily need Gulf support for its currency.

Saudi Arabia is unlikely to follow until late next year, Merrill said in the report.

Saudi inflation surged to a a 27-year high of 10.5% in April from 9.6% the previous month, government data showed last week.

In March of this year, Qatar sold its first certificates of deposits as it struggles with inflation at almost 14%.

With an inflation rate of 14%, the UAE would be suffering from one of the highest inflation rates in the region along with Qatar.

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Dubai enters top ten most expensive office markets

London's West End is once again the world's most expensive office market, but Dubai has now entered the top ten for the first time, according to CB Richard Ellis Group, Inc. (CBRE) Research's semi-annual Global Market Rents survey. The report tracks world markets with the highest as well as fastest-growing occupancy costs for the 12 months ended March 31, 2008. Moscow climbed to second position whilst Tokyo's Inner Central Five Wards, Mumbai's Nariman Point and Tokyo's Outer Central Five Wards rounded out the top five most expensive markets.

"Office occupancy costs are continuing to defy sluggish economic conditions and the credit crunch, as they rise faster than global inflation," said Dr. Raymond Torto, CBRE's Global Chief Economist. "These cost increases are dominated by emerging markets, caused by both supply and demand imbalance and the depreciation of the dollar relative to local currencies. In some of these emerging markets, Class A office space is seriously lacking."

Ho Chi Minh City had the fastest-growing occupancy costs during this period, up 94%. Moscow was not far behind at 93%, followed by Singapore at 86%. Overall, EMEA (Europe, Middle East and Africa) dominated the list of markets with the fastest growing occupancy costs, accounting for five of the top 10 and 19 of the top 50 markets. Worldwide, 88% of the 173 office markets monitored posted higher occupancy costs.

Among the most expensive markets, Singapore and Dubai were newcomers to the top 10. Singapore ranked ninth with an occupancy cost of $139.31 (occupancy cost in US$/sq. ft./annum used throughout this release), while Dubai debuted at number 10 with an occupancy cost of $128.49, ahead of Hong Kong, New York and Paris. With a near-doubling of occupancy costs, Moscow rose four places to second at $232.37. Midtown Manhattan was still the priciest market in North America, at $103.43, and ranked number 13 worldwide.

Asia Pacific

Ho Chi Minh City jumped from 45th to 23rd most expensive globally, with occupancy costs rising to $85.84. Occupancy costs in Tokyo's Inner Central Five Wards rose to $220.25, while Tokyo's Outer Central Five Wards increased to $175.35. Perth, Australia, joined the top 50 most expensive, coming in at number 41. Asia Pacific had 11 markets among the 50 with the fastest growing occupancy costs, paced by Singapore (86%) and Mumbai (41%).

Europe

At $299.54, London's West End remained the world's most expensive office market. Occupancy costs in that market are 29% higher than Moscow, where occupancy costs rose to $232.37, the world's second-most expensive; and 82% more than the City of London's $164.18 occupancy cost. In Europe, occupancy costs grew fastest in Moscow, with a 93% increase, and Oslo, Norway, with a 58% increase.

Americas

Four North American cities are among the world's Top 50 most expensive office markets: Midtown Manhattan (13th at $103.43); Calgary Central Business District (CBD) (42nd at $66.27); Toronto CBD (47th at $62.44); and suburban Los Angeles (48th at $62.06). Rio de Janeiro rose to $74.60 (32nd), while São Paulo increased seven spots to 35th at $71.41. North America totaled 16 of the top 50 markets with the fastest growing occupancy costs. The fastest gains were recorded by Miami (29%), Panama City (28%), Seattle (26%) and Houston (25%).

Top Ten Most Expensive Markets
(In US$ per sq. ft. per annum)

1. London (West End), England

2. Moscow, Russia

3. Tokyo (Inner Central), Japan

4. Mumbai, India

5. Tokyo (Outer Central), Japan

6. London (City), England

7. New Delhi, India

8. Paris, France

9. Singapore

10. Dubai, United Arab Emirates

About CB Richard Ellis

CB Richard Ellis Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world's largest commercial real estate services firm (in terms of 2007 revenue). With over 29,000 employees, the Company serves real estate owners, investors and occupiers through more than 300 offices worldwide (excluding affiliate offices). CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. CB Richard Ellis is the only commercial real estate services company named one of the 50 "best in class" companies by BusinessWeek, and was also named one of the 100 fastest growing companies by Fortune. Please visit our Web site at www.cbre.com.

Notes:

Global Market Rents is a survey of office occupation costs in 173 cities worldwide.

The Fastest Growing ranking is based upon occupancy costs in local currency and measure. The Most Expensive ranking is based upon occupancy costs in US$ per sq. ft. per annum.

The figures given in this release refer to occupancy cost. This represents rent, plus local taxes and service charges. The occupation cost figures have also been adjusted to reflect different measurement practices from market to market.

To obtain a full copy of the report or to arrange to speak with a CBRE expert, please contact Robert McGrath at 212.984.8267 or robert.mcgrath@cbre.com.

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First quarter exports of Dubai Chamber members climb to a record high

Exports of 6,592 members of Dubai Chamber of Commerce and Industry (DCCI) in the first quarter of 2008 reached a record high of AED 49 billion, posting a year-on-year growth of 36 % from the AED 36 billion for the same quarter of 2007. Compared to the AED 47 billion exports in the last quarter of 2006, the figure represented a 6 % increase, according to the Economic Bulletin of the chamber.

''The GCC countries remained to be the largest recipient of Dubai exports, with 45 % of total exports valued at AED 22.2 bn destined to the region, and an additional AED 3.5 bn or 7 %, within the UAE, the Bulletin said.

Saudi Arabia and Qatar, it noted, were the largest markets in the GCC, with total exports to these two countries posting respective quarter growth of 11 and 5 % to reach respective total values of AED 9.5 bn and AED 7.8 bn. In terms of growth, however, exports to Oman expanded most significantly by 36% to reach a quarter total of AED 1.9 bn.

On the other hand, total export to Kuwait during the quarter, valued at AED 2.2 bn, was just about the same level as in the previous quarter. Bahrain, though remaining to be the smallest GCC market for Dubai�s exports, nevertheless appeared to be an expanding market with exports growing by a little less than 5 % to reach AED 0.8 billion.

According to the fugures, about 33 % of Dubai�s exports were destined to India and to neighboring countries, with total value of AED 17.2 bn, posting a quarter growth of 3.2 %. Fastest growing markets were Jordan and India, registering respective growths of 18 % and 15 %. In terms of value, however, exports to Jordan, valued at AED 0.9 bn, was very much lower than the AED 2.4 bn exports to India.

On the other hand, significant contraction of export markets were noted for Libya and Yemen, with exports to these destinations declining by 28 % and 15 %, respectively. Exports to other destinations declined from AED 6.9 bn to AED 6.4 bn, for a quarter decline of 7 %.

By number of export shipments made during the quarter, 109 exporters remained to dominate exporting activities of Dubai Chamber members, making 200 or more export shipments each, with accumulated value of AED 20.8 bn, or 42 % of the total export value for the quarter.

The export performance monitoring system of the Dubai Chamber has been tracking a strong and continuing export performance of its member, beginning in the 2nd quarter of 2006, especially of those catering to large number of markets. However, the number of markets of a great majority of the exporters remained restricted to only about 3, limiting their exporting activities to less than 20 during the quarter. Thus, the need for support system to strengthen exporters� capabilities to access new markets remains a necessity.

/WAM/

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Soaring inflation hits expat lifestyles

The Gulf’s rocketing inflation is impacting the lifestyles of expatriates, with research revealing a drop in spending on extras such as eating out and holidays, research released on Tuesday has revealed.

Insurance firm Zurich International Life said in a report that the overwhelming majority of expatriates across the Gulf believed the current economic climate was causing them to tighten their purse strings and focus more on saving for the future.

The firm's Expatriate Wealth Monitor report found 85% of expatriates in Qatar, 82% of expats in Bahrain and 65% in the UAE felt rising prices were forcing them to change their financial priorities.

Inflation has hit record highs across the GCC due to rising global commodity prices and the falling value of the US dollar, to which all Gulf states, bar Kuwait, peg their currencies.

Zurich said fewer people were spending their money on their lifestyle compared to 2007, especially in the UAE where 30% fewer people said they were splashing out on eating out and holidays.

The research showed expatriates' priorities had shifted toward saving for their children's education, retirement and to send money home.

Paul Haran, regional director at Zurich Middle East, said continued economic uncertainty worldwide had seen everyone “tighten their belts” and the Gulf region no exception.

“What is interesting is that in a region associated with widespread wealth and booming economic growth, expats are now starting to feel the pinch,” Haran said in a statement.

Despite the impact of rising costs, the majority of expatriates surveyed said they enjoyed a better quality of life in the Gulf then in their home countries.

Just over 70% of expatriates in Bahrain said they had a much better lifestyle in the Gulf, followed by around 68% of expats in the UAE and Qatar.

The Zurich Wealth Monitor surveyed 700 expatriate professionals living in the UAE, Bahrain and Qatar on their approaches to financial planning and examined their views on the impact of the current economic climate on their financial affairs.

In the UAE the respondents were split 49% Asian, 25% Arab and Western 26%; in Bahrain 57% Asian, 30% Arab and 13% Western; and in Qatar 76% Asian, 18% Arab and 6% Western.
/Arabian Business/

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2008 Golden Rainbow UAE Free Zones Directory

Global Resources, a Dubai data bank and events organiser, has just announced the release of the 2008 Golden Rainbow UAE Free Zones Directory in the market this week.

The release of the UAE Free Zones Directory 2008 edition had been much awaited, by and large, in the UAE community owing to its reputation of dishing out comprehensive information on UAE business formation especially in the free zones.

The Directory which comes in both printed and CD-ROM versions, packs information on the thousands of companies established in the various free zones across the UAE.

Along with detailed contact information, the Directory serves up related knowledge in doing business in the UAE including country’s overview, economic reports, investment prospects, infrastructure, licensing procedures, social services and more.

For the user’s ease, the directory lists firms in the free zones in both industry category and alphabetical order.

No less than Sheikha Lubna Al Qasimi, UAE Minister of Economic and Planning, writes the foreword for the annual directory.

According to George Abraham, Global Resources Marketing Director, “The Golden Rainbow Directory has been very helpful to thousands of entrepreneurs and traders and contributes significantly to the UAE business community in terms of providing links between the free zones, the investors and the public” he adds, “The Directory is truly a wealth of resources for businessmen and the general public who want access to information on the free zones. It does say a lot that Sheikha Lubna herself endorses our directory. This only makes us improve the directory more and more. In fact, this year’s edition covers more information and update than ever before.”

The UAE free zones have been among the strong pillars of the country’s economic performance attracting much foreign investments, creating thousands of jobs, and facilitating the needed technology transfer of technology into the country.

Together, the free zones account for more than half of the country’s non-oil exports and underpin the UAE’s ranking as the third most important re-export centre in the world.
/AME Info/

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Find a solution to increasing food prices

There are few topics as emotional as food, or to be more exact, the price of food. Any cursory look at the headlines over the past three months shows that the price of what we eat has been a major news story.

"This has been partly due to the rising cost of fuel, partly due to the credit crunch and also partly due to greater demand from more nations becoming more cash-rich. But lack of planning has also been a factor", opined Gulf News in its editorial today.

Dubai-based English Language local daily added that nothing, obviously, is more urgent to people than what they will eat; all else is of secondary importance. And it may well be that as some time the international community, probably under the United Nations, will step in and demand that enough affordable food is grown and distributed to feed the planet's population.

It noted that "this will not happen tomorrow or next week but if food prices continue to soar it is quite feasible that the source of food and its quality and quantity will be at the very top of the global political agenda".

The paper added that asking companies to put a price cap on the food they sell is a short-term measure to ease the burden on people's pockets but offers within itself no long term solution. This can only be done by increasing the supply of food and possibly temporarily banning some types of food, such as marine life that are over-fished, to ensure their survival.

It reiterated that none of the options that are being considered are necessarily pleasant, but they are a lot better than the alternative.

The paper underscored that if the price the world pays to stave off hunger is the management of food to ensure that we are free from rampant starvation, then it is a price worth paying. There is enough food to feed the planet's population, but are there enough people in the world who will ensure food is available.
/WAM/

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Fuel prices account for 36 percent of inflation in UAE

Governmental departments, private sector organizations and researchers in the property, financial and energy sectors are increasing their shared efforts to determine the basic causes of the current inflationary pressures in the UAE, which have hit 12 percent, the highest rate since 1990.

Speaking of the current situation, Mr. Akbar Fakhruddin the Chairman of Fakhruddin Properties), said, "According to our market study, the basic three contributors to the ongoing soaring inflation are the skyrocketing rent of residential units, injecting unprecedented levels of liquidity in the UAE market by offering banking facilities on personal loans worth up to 25 times the person's salary, and the global increase in fuel prices, which account for 36 percent of the inflation in UAE economy, according to a report recently issued by Abu Dhabi Chamber of Commerce and Industry, as fuel prices impact operations in such sectors as energy, transport and construction."

"As we determine the causes, we should suggest solutions," continued Fakhruddin." The rising rent of residential and commercial units can be controlled by developing more residential projects. We believe that the property market will stabilise once the mega projects currently under construction, which are projected to address the current shortage within 3-5 years, have been completed. Regarding the issue of personal loans, we expect the UAE central bank to intervene and issue a new loan limit cap to confront the AED 12.5 billion rise in loan issuing within a year in a bid to gradually reduce liquidity flow to the market."

"And I think that combustibles prices should be subsidised in order to reduce operational costs, as the Government has the capability to support this sector. This will help to contain inflation and restrict it to reasonable rates, paving the way to gradually eliminate the rise in inflation," he concluded.

Economic and property analysts have been proposing measures to combat the rise in inflation, the most recent of these proposals was the call for the UAE Ministry of Economy to put out an index that would calculate the inflation rate in a move to arrest spiraling inflation. This proposal is under study, and some sources have revealed that, in a move unprecedented in the world, a survey system will be established to measure the inflation rate in the country every four months.

About Fakhruddin:
The Fakhruddin Group of Companies established in 1963 and quickly went from strength to strength based on its core values of providing quality products by understanding and then satisfying its customers' needs. Fakhruddin's track record in real estate development and property management has been marked by its exponential growth in the UAE. In the arena of an increasingly competitive market, Fakhruddin is committed to providing quality to its customers and increasing its market share, as It is now developing a series of signature projects in Dubai, notably the Maimoon Twin Towers, the Coral International Hotel Apartments and the Lake Central Towers. Using smart technology in its array of plush state-of-the-art facilities, the company's projects are proving quite popular in the country's real estate market.

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Dubai issues 14,185 licences

The Dubai Department of Economic Development (DED) issued 14,185 licences for various businesses in 2007.
This marked a 13 per cent increase over the number of licences issued in 2006, the department said in a statement.

A report published by DED’s Economic Studies Department stated that in 2007, the most number of licences were issued for commercial trading establishments – 11,344, followed by licences for professionals (2,408), tourism-related businesses (239) and industrial establishments (194).

DED also issued 637 Intlaq licences to UAE nationals for setting up small, home-based businesses.

Of all trade licences issued, 1,607 licences were for general trading, 1,206 were for watch and spare parts business, 1,130 for ready-made garments and 1,005 for gifts trade business.

Licence renewal recorded an impressive 138pc increase in 2007 to reach 65,888 licences as compared to 27,738 renewals in 2006. Modified licences recorded a 31pc increase over 2006, with 39,690 licences being modified.

The Intlaq programme which was launched in 1999 by the DED registered resounding success achieving a growth of 69pc in 2007 with 637 licences issued compared to 378 Intlaq licences in 2006. Under the Intliaq programme, commercial trading licences constituted 85pc of those issued.

Permanent as well as short-term commercial permits issued by the DED in 2007 recorded a 31pc increase to touch 4198 permits as compared to 3212 permits in 2006.

DED released 3,176 trademarks in 2007 compared to 2,131 trademarks during 2006 thus recording a 49pc increase. The short term permits registered a decrease of 31pc to 1,072 in 2007 as against the previous year.

DED issued 228 licences to foreign companies in 2007 recording a growth of 22pc over 2006. These include licences to companies from the UK, South Korea, Germany, India, Spain, USA and Japan, among other countries.

The report stated that 10,171 licences were issued in 2007 for the top ten economic activities registered by DED accounting for a 24pc share of the total licences issued. In 2006, these activities accounted for 9,165 licences and 25pc of the total licences.

The number of inspections undertaken by DED officers in 2007 reached 38,881. There was a drop in fines issued by DED demonstrating the increased awareness among businessmen and investors about DED’s rules and regulations.

Cases regarding trademark conflicts dropped by 29pc compared to 2006. Incidents related to consumer protection increased by 29pc over 2006. Remarkably, 95pc of the cases related to consumer protection that were presented in 2006 and 2007 were solved.

According to the report, the high quality work of DED employees during the year resulted in a 39pc increase in the speed at which transactions were processed.

'DED provides a varied and integrated bouquet of services ensuring that time and effort is saved by our clients and all their requirements are met effectively. The Report from the Economic Studies Department confirms the success of our initiatives and procedures, and affirms that investor interest in undertaking diverse businesses in Dubai continues to grow,” said Ali Ibrahim, deputy director general for executive affairs at DED.

“The department is strengthening efforts to attract further investment from abroad by maintaining and enhancing the excellent economic environment and providing incentives to investors, thus confirming Dubai's leading position as an economic powerhouse,' he said.
/TradeArabia News Service/

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Trade surplus to surge to $73b

Driven by higher oil revenues, the UAE's current account balance is projected to grow by a record $24.2 billion or 58 per cent in 2008 to $65.9 billion while the country's balance of trade is poised to surge 60 per cent to $72.5 billion in 2008, the International Monetary Fund (IMF) said.

In 2007, UAE's current account balance —the sum of the balance of trade (exports minus imports of goods and services), net factor incomes (such as interest and dividends) and net transfer payments (such as foreign aid) — rose by 16 per cent to $41.7 billion from $35.9 billion in 2006. The surge in the current account balance is driven by a record jump in exports of goods and services, analysts said.

According to the latest findings by the IMF, in 2008, the UAE's balance of trade will swell by $27.3 billion to $72.5 billion. In 2007, the country recorded a balance of trade of $45.2 billion, and in 2006 it was $38.7 billion. IMF's latest statistics projects UAE's exports of good and services to reach $206.5 billion in 2008 from $165.7 billion in 2007, while imports to grow from $120.5 billion in 2007 to $134 billion in 2008.

With a predicted 58 per cent growth this year, the current account balance will account for 27.5 per cent of the country's GDP in 2008. In 2007, current account balance accounted for 21.6 per cent of the GDP. According to IMF projections,

UAE's nominal GDP is expected to surge 24.5 per cent from $192.6 billion to $239.9 billion in 2008.

The upbeat current account surplus outlook given by the IMF is contrary to the forecast made by Oxford Economics, a world-leader in economic forecasting. According to Oxford Economics, despite the pick-up in UAE's non-oil revenues as the economy continues to diversify, the country's current account surplus is poised to decline to about 7.5 per cent of GDP in 2008 and to 3.5 per cent in 2009.

A country's current account includes, apart from its balance of trade, other transactions such as income from the international investment position as well as international aid. If the current account is in surplus, the country's net international asset position increases correspondingly.

According to the IMF, from 2002, UAE's current account surplus has been on an upswing, reaching $7.6 billion in 2003, $10.3 billion in 2004, and more than doubling in 2005 at $24.3 billion, and reaching $35.9 billion in 2006, and $41.7 billion in 2007.

Over the medium term, it is expected that the current account position will continue to be in surplus, supported by expected strong performance of non-oil exports. This will lead to further accumulation of official foreign assets. During the period 2008-2012, it is expected that the current account surplus to average 18 per cent of GDP.

UAE external debt constitutes mostly foreign liabilities of UAE commercial banks and private institutions. It is estimated that the UAE foreign liabilities have almost tripled over the past two years. For the period 2008-2012, it is expected that UAE's external debt to average 61 per cent of the GDP. Presently, there are no signs of external debt vulnerability associated with such borrowing given that UAE external position is a net creditor (i.e. foreign liabilities are more than offset by UAE foreign assets), but it would need to be monitored.

/KhaleejTimes/

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High living costs driving expats out of Gulf, says market research

Gareth Hitchings is planning his return to the United Kingdom, Filipino Josielynne Antes last month filed her papers to move to Canada, and India's Benny Phillip is waiting for a decision from Australian immigration.

All three once chose to move to the UAE to forge a career and build their futures in a tax-free sunshine paradise with an unrivalled quality of life.

But the dream they shared and shared with millions of other expatriates has turned sour as they struggle with the rising cost of living across the GCC.

Antes, an information technology co-ordinator whose salary has increased 200 per cent, said: "Everything is so expensive now that I am just at break-even."

"Although my salary is three times what I received in 2004, I feel my salary was still higher in 2004.

Dissatisfaction with the widening gap between salaries and the perceived cost of living are making more people consider switching jobs, industries and countries, a study by Bayt.com and YouGovSiraj has found.

And another study carried out by the two firms shows more than 70 per cent of the people in the UAE are unhappy with work.

Benny Phillip, 38, an automotive engineer, turned to leasing property to supplement his monthly salary, but even then, could only "just make ends meet".

"The cost of living here is so high. I have been here for 10 years but I have to leave as I cannot bear the cost anymore," he said.

"I am happy here, yes, but there is no permanent residency, so it is not for long term and the high cost prevents me from bringing my family here.

"I plan to leave the UAE and go to Australia hopefully by the end of next year."

Hitchings, originally from Surrey in the south of England, said: "I came to Dubai five years ago with the plan to stay for 10. But the cost of living now means that, with schooling fees for my two children, I have next to no money left at the end of the month.

"It seems I am working solely to be able to afford to stay in Dubai. What's the point?"

A combination of a falling dollar and the rising cost of living across the GCC has led to unprecedented levels of discontent among regional employees, the studies revealed.

The online survey polled 15,000 employees in six GCC countries across 20 industry sectors, including automotive, finance, advertising, IT and pharmaceuticals.

Across the GCC and across sectors, salary rises were far outstripped by perceived cost of living increases.

The disparity was most pronounced in Qatar, with a perceived average cost of living spike of 38 per cent, 22 per cent higher than salary increases.

In Dubai, living expenses are said to have risen by 37 per cent, representing a gap of 20 per cent between salaries and living costs.

The widening shortfall between salary increases and the cost of living has led many to consider dramatic steps. In Qatar, 50 per cent of respondents said increases in household expenses have led them to consider relocating to another country or returning home. Oman came in second, with 47 per cent, while Kuwait saw the lowest numbers of professionals looking to leave the country, at 32 per cent. In the UAE, 37 per cent had thought about moving abroad.

"The story here is not just about employees. The pinch is also being felt by businesses themselves, with many workers planning to move on," Nassim Ghrayeb, CEO of YouGovSiraj, said.

"These results reveal just how much of a headache the spiralling cost of living and weak dollar is having on employers, who also need to consider their margins," added the chief executive.

In the UAE, employers are taking the hit of this economic shortfall, with many employees considering job migration to improve finances. Forty per cent of the UAE workers said rising expenses might force them to look for a better job in the same industry and 24 per cent said they would consider switching to another industry.

In Saudi Arabia, corresponding figures were 45 and 19 per cent. Only 15 per cent of people in Qatar and 20 per cent in Oman said they would consider changing industries

"In terms of perceived cost of living increases and what this is doing to retention rates, the numbers are cause for concern," Rabea Ataya, CEO of Bayt.comBayt.comLoading..., said.

"Around 70 per cent of the survey's respondents said they've held two or more jobs in the past five years. On average, people change jobs about once every two years," Ataya added. "We also found that loyalty improved as salaries increased. Employers who do not close the gap between earnings and living expenses will have difficulty attracting and retaining people."

The recent localisation policies are also rubbing salt to the wound, says Mohammed Benayoune, head coach with the Achievement Centre International. "The problem here in the region, in my experience, has much more to do with loyalty. If you are an expatriate and you know that anytime there's a national who can sooner or later replace you, do you think you would still be engaged?" Benayoune, who is the former CEO of Aromatics Oman and Oman Polypropylene Director, told Emirates Business.

He said: "This is the challenge now, I'm not against localisation, in fact, I think it's a good policy. I am against the way they implement it. I have seen it implemented very well in some companies but some are not handling it very well."

In addition, the widespread racial discrimination is also a big factor behind some expatriates' decision to leave.

"Another reason I would like to go to Canada is the equality in the working environment," Antes said.

A British national who did not wish to be named said: "Many people, though highly qualified, don't get the job because of their background. I know this is discrimination, but it happens a lot in this part of the world."

Nigel Armstrong, editor of Dubai-based Future Fuels, told Emirates Business said: "In the West, you don't see advertisements specifying UK, US, Filipino or Indian national nor do you see ads specifying any age preference. It is simply not allowed.

"They've got equal opportunity regulations, which many countries in the Middle East don't have."

Albeit many expatriates have already made up their minds to migrate to another country or to go back home, most of them could not due to their mounting debts.

Data from Dubai Police shows that 42 per cent of inmates at Dubai Central Jail are there for failing to repay loans.

Consumer loans in the UAE surged almost 40 per cent in 2007 as the second-largest Arab economy struggles to contain inflation and resist calls for it to drop its dollar peg or revalue its currency. Loans to individuals rose to Dh43.46 billion on December 31, compared to Dh31.26bn a year earlier.

Consumer lending has almost doubled over the past four years, during which time oil prices have also more than tripled, helping drive the UAE economy and borrowing.

The high inflation is also fuelling absconding cases.

David Martin, RakBank business advisor, said: "The price increases, especially in house rents, cause a lot of people to just go back home. So whatever facilities or debt they had from the banks they just leave them.

"This has more effect on our customer base whose salary is below Dh5,000 a month," he added. "There has been increasing bad debt in that segment of customers. And we feel that this has been seen by other retail banks as well."

The UAE's Federal National Council has proposed stringent rules for personal loans to prevent more people falling deep into debt. At a meeting last week, officials urged the speedy creation of an independent credit bureau to regulate the multi-billion dirham lending industry. UAE courts have to settle thousands of debt-related cases despite the overall amount of personal debt in the UAE being relatively low at Dh43bn. There is also no system to track credit history and assess people's borrowing capacity.

A special committee reported that while banks were required to limit personal loans to Dh250,000, some were lending customers with low salaries more than 55 times their monthly wage. About 560,000 people borrowed nearly Dh700bn last year, government figures show.

The numbers

37% The percentage of expatriates planning to move abroad as living cost in the GCC rises
Dh700bn The amount 560,000 people borrowed from banks last year in the UAE, say government figures
42% The percentage of inmates at Dubai Central Jail who failed to repay loans, according to Dubai Police
15,000 The number of expatriate employees surveyed in the six GCC countries across 20 industry sectors.
/Business 24/7/

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Experts to bring the Euro perspective to the Gulf

Two senior figures involved in the European Union's currency union are to discuss what lessons can be applied in the move towards a GCC single currency.

Erwin Nierop, a lawyer by training, was involved in the establishment of three international financial institutions: the European Bank for Reconstruction and Development, the European Monetary Institute and the European Central Bank.

Most recently, he was head project manager for technical assistance to the Gulf Cooperation Council, helping to prepare a blueprint for Gulf monetary union.

Russell Krueger, a senior official at the International Monetary Fund (IMF), has extensive experience working on the statistical preparations of the European Monetary Union and has carried out research on union-building and regional financial integration projects in the Gulf, Africa and East Asia. He is currently on a one-year sabbatical leave for research on technical preparations for currency unions, with an emphasis on the lessons other regions can take from the European experience.

Both Nierop and Krueger will be speaking at the GCC Currency Forum 08, to be held on June 15 at the Monarch Hotel in Dubai.

Dr Armen Papazian, senior vice president responsible for development and innovation at Dubai International Financial Exchange (DIFX), will be delivering the keynote address.

The event is organised by ITP Events and Conferences, in association with Arabian Banking & Finance magazine. Gulf Custody Company is associate sponsor and Mayfair Pacific Asset Management is the exhibitor partner.

The event is also supported by Gulf Research Centre, the Emirates Securities and Commodities Assocation and the UAE Financial Markets Association. Source

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Being unique is the key to Dubai's growth

Being unique is the key to Dubai’s growth in all spheres of activities, Sultan Ahmed bin Sulayem, Chairman of Dubai World, the global holding company, said in his keynote speech at the 8th Global Travel and Tourism Summit at Madinat Jumeirah in Dubai today .

Addressing the session on ‘The Industry is Smart and It’s Getting Smarter,” Bin Sulayem said that Dubai took exceptional initiatives that many regarded as “crazy” at the time, but later proved to be successful.

He stressed the importance of being innovative and highlighted some of the glorious success stories that Dubai came up with in its march towards becoming a great business and tourist destination.

Bin Sulayem sited the example of Jebel Ali Port, which was once regarded as an unrealistic venture, but later proved the critics and analysis wrong by growing to become one of the biggest and busiest container terminal ports in the world. The port is now one of the main pillars of Dubai’s economic development.

Another successful initiative in the early 1990s, he noted, was the establishment of Dubai’s Department of Tourism and Commerce Marketing (DTCM), which formulated the comprehensive plan for the Emirate’s travel and tourism development with a vision for the future.

Dubai developed a fully integrated tourism offer by building a world class infrastructure, airports, airlines, ports and cruise terminals and hotels that are recognised the world-over.

However, there is nothing to beat the concept of Dubai’s new waterfront projects as far as uniqueness is concerned, he told the summit, which included leaders and decision makers from the travel and tourism industry, senior government officials and other dignitaries.

Referring to the brilliantly innovative projects such as The Palm Islands and The World launched by Nakheel, the urban development arm of Dubai World, Bin Sulayem told the Summit about what began as a small idea in the late 1990s to add a few extra kilometres to Dubai's shoreline, blossomed into one of the most astonishing achievements for the Emirate.

The idea was to increase Dubai’s beachfront to attract more tourists. The palm tree design was only incidental, Bin Sulayem recalled. What was more important was that we could add 70 kilometres of new beach to Dubai’s coastline.

“Back then, everybody was investing in Dubai’s real estate sector, but the challenge for Nakheel, as an urban developer, was to develop something unique in the sea, different from what was generally on offer,” Bin Sulayem underlined.

He spoke about the role of innovation in overcoming the environmental challenges that were associated with The Palm project, making a reference to the positive impact the project eventually had on the marine life. He specifically talked about Nakheel’s most laudable initiative, the Blue Communities, and its long term aim to provide leadership in the development of sustainable coastal communities which will ultimately lead to guidelines on coastal development.

He stressed the need for innovation to inspire ideas and technology to provide the answers to modern-day global challenges. It is technology that has enabled us to create such wonders of the world as The Palm Jumeirah, he said.

He also referred to the development of Dubai’s airport and the launching of Emirates, the airline that offers top class luxury to travellers.

The Chairman of Dubai World shed light on the ambitious plans to enhance Dubai’s luxury hotel industry and increase the number of hotel rooms manifold to accommodate the growing number of visitors.

Jean-Claude Baumgarten, President and Chief Executive Officer of World Travel and Tourism Council (WTTC), the organisers of the Summit, presented a gift to Bin Sulayem at the end of his keynote speech.

The two-day Summit, aimed at facilitating an open exchange of ideas among industry and government on the responsibilities that the travel and tourism sector should exercise as its global influence increases. Source

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Dubai Chamber urges UAE to revalue dirham by 15pc

Despite the government's categorical statement against currency revaluation, an official of the Dubai Chamber of Commerce and Industry has insisted that the UAE revalue the dirham by 15 per cent and move to a currency basket within two years.

Dr Eisa Abdelgalil, a senior economist at Dubai Chamber's Data Management and Research Department, cited the need for the government to tame inflation and the effects of a weak US dollar, to which the dirham is pegged at 3.67.

"According to our calculations, based on the drop of the dollar against the other major currencies, the dirham should be revalued by 15 per cent," he said.

He added that the UAE must act quickly to abandon the dollar-peg and move to a basket of currencies in a year before the deadline for the six Gulf Co-operation Council, or GCC, economies to create a single currency by 2010.

UAE Central Bank Governor Sultan bin Nasser Al Suwaidi put to rest last month all speculations, saying there was no plan to either revalue the dirham or abandon the dollar peg.

Abdelgalil addressed The Economic Seminar 2008 yesterday in which speakers highlighted the traders' expectations for this year, the need for businesses to embrace corporate social responsibility (CSR) and the factors driving inflation. Shaikh Abdullah bin Saud Al Thani, Governor of the Central Bank of Qatar, which holds the revolving chair of the GCC, said early this month that pressure on the Gulf economies via low interest rates and a weakening greenback have piled up.

Except for Kuwait, which abandoned the dollar in May, the GCC economies of Saudi Arabia, Bahrain, the UAE, Oman and Qatar have tracked the US interest rates cuts - done to ward off recession - despite having a five-fold growth in the last six years.

Abdelgalil said inflation in the UAE rose nine per cent in 2006 from two per cent in 2001, citing official data from the Ministry of Economy.

He added that the drivers of inflation include high rental fees, increasing wages, the influx of money supply, rising imports prices and currency depreciation.

Estimates by the NBAD put the country's inflation at a 19-year record of 9.3 per cent in 2006 and probably climbed to over 10.9 per cent last year. Other estimates have pointed out a 27-year high inflation of 8.7 per cent in Saudi Arabia, an 18-year record of 11.1 per cent in Oman and 13.7 in Qatar. Source

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Gulf Arabs put brakes on buying spree

Gulf Arab exporters awash with cash from record oil income have put the brakes on foreign asset buys as the global credit crisis promises more bargains later and the political spotlight falls on how they invest.

Economists say the battle against domestic inflation in the world's top oil-exporting region is capping spending at home, leaving sovereign funds that invest much of the surplus oil revenue struggling to find a profitable home for their money.

"They are doing a little bit of hoarding right now while they take stock of the situation," said John Sfakianakis, chief economist at SABB Bank, HSBC's Saudi affiliate.

"For two years they were on a buying spree. But there is an anticipation by sovereign wealth funds that financial assets will depreciate further as credit turmoil spreads in the West."

Acquisitions outside of the region by Gulf Arab buyers more than tripled to $89.13 billion in 2007 compared with the year earlier, according to London-based research firm Dealogic.

But buys slowed to $19.8 billion in the first quarter, down over 30 percent from the fourth quarter despite some big-ticket deals that helped shore up Wall Street financial institutions.

Growing sovereign fund acquisitions have raised concern among U.S. lawmakers about foreign influence and control over assets and questions as to whether investments are politically motivated. This may have made Gulf funds more cautious.

Aside from political scrutiny, funds have also taken some pain from their investments and are treading carefully until they get a better idea of whether the credit crisis has hit its nadir.

Citigroup and Merrill Lynch shares have lost about 20 percent each since Kuwait's sovereign fund and Saudi billionaire Prince Alwaleed bin Talal agreed in January to invest at least $5 billion in the U.S. banks.

"After initial forays, they've gotten their fingers burnt quite badly," said Ala'a al-Yousuf, chief economist in London at Gulf Finance House. "It showed that the worst was not over and they were a bit too hasty in buying into these institutions."

The massive transfer of wealth into the region from higher oil revenues has already unleashed startling economic growth among the Gulf's core OPEC members. Gulf country economies doubled in size from 2002 to 2006.

With crude prices reaching a record $117 a barrel, Gulf oil and gas revenues look set to come in at a new record this year, touching $435 billion versus about $380 billion last year, according to SABB estimates.

The price of U.S. oil futures has averaged $99.60 a barrel to date in 2008, up from $72.36 last year.

But government spending at home has not risen at the same pace as revenues in the Gulf as officials look to avoid swamping their economies, where they are already battling decades-high inflation. Currency pegs to the dollar have forced central banks to cut interest rates in line with the U.S. Federal Reserve even as they struggle to contain rising prices.

Migrant workers in the United Arab Emirates and Bahrain have rioted over the erosion of wages due to the declining dollar and inflation.

Saudi Arabia, the world's largest oil exporter, should see oil revenues grow to around $235 billion this year, up nearly 12 percent from about $210 billion last year, SABB data showed.

Despite the bonanza, spending in the kingdom -- contending with inflation at a 27-year high -- has been prudent, said Brad Bourland, chief economist at Saudi-based Jadwa Investment.

"Saudi government spending has risen about 15 percent per year, which is much less sharply than oil revenues have risen," Bourland said. "I don't see many examples of spending inappropriately, it's well-targeted, mostly on social needs in health and education, and infrastructure."

ASSESSING RISK

With Gulf investment funds commanding around $1.5 trillion of foreign assets, according to Bourland's estimates, Gulf investors are struggling for other places to park surplus cash.

Many petrodollars are typically recycled into U.S. treasuries, particularly by the region's central banks.

"With their currencies pegged to the dollar, central banks would tend to put money into the lowest-risk asset that currency is pegged to and that is treasuries," said Bourland.

But for more risk-hungry Gulf investors, interest rate cuts have made treasuries less attractive. Better investments would be euro-denominated bonds and, if they can stomach the risk, assets in emerging markets such as China, analysts said.

Middle East oil exporters were net sellers of long-term treasuries in six of the eight months since June 2007 for which the U.S. Treasury provides details. Cash still flowed into the U.S., but went into equities.

The same exporters' direct holdings of long- and short-term U.S. Treasury debt stood at just under $111 billion in June 2007. That was up about 22 percent on the year.

Gulf acquisitions in Asia are on the rise, with the top-10 deals in states including Singapore and Malaysia at $2.35 billion in the first quarter, Dealogic data showed.

"There is going to be a greater concentration on Asia," Sfakianakis said. "But they will probably go slow because Asia has not really decoupled from the West."

The U.S. Energy Information Administration estimates that the 13 members of the Organization of the Petroleum Exporting Countries will earn $980 billion in 2008, up from $676 billion in 2007. Below are nominal net oil export revenues in billions of dollars for 2007 and 2006. The EIA has not given individual country details for 2008.

2008 2007 2006

Algeria 50.4 44.6

Angola 43.8 31.3

Ecuador 7.8 7.4

Indonesia -4.2 -3.1

Iran 58.0 54.1

Iraq 37.8 31.8

Kuwait 54.9 50.6

Libya 40.6 35.6

Nigeria 55.5 52.1

Qatar 26.3 24.4

Saudi Arabia 194.0 182.8

UAE 63.0 57.5

Venezuela 47.7 43.4

TOTAL $980 675.5 612.5

(Reuters)

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DED issues 1,342 licences in March

The Dubai Department of Economic Development (DED) issued 1,342 licences in March 2008. The majority of these were issued in the commercial sector (1,095), followed by the professional sector (205), industrial (23) and tourism (19), according to a comprehensive report prepared by the Economic Affairs Division at the DED.

‘General trade’ led the list of the top 10 licensed activities with (151) licences issued, followed by ‘real estate brokerage’ (114), ‘paints and dyes’ (102), ‘floor and wall tiling’ (97), ‘carpenting and floor installation’ (96) and ‘watches and accessories’ (95).

‘Limited liability companies’ (LLCs) topped the list of issued licences according to legal status with 741 licences issued in March, followed by ‘Individual Corporations’ with 524. The total number of transactions during March 2008 reached 33,290. ‘Licence renewal’ topped the list of transactions with 7,265 (22 per cent) followed by ‘Licences amendment’ with 5,340 (16 per cent) and ‘Trade name’ with 4,719 (14 per cent).

The Intlaq scheme, an initiative by the Department of Economic Development to encourage more UAE nationals to set up businesses from home, received strong response with 68 licences issued in March 2008, a 94 per cent increase from March 2007. The scheme’s highest growth was recorded in the trade category, with 52 licenses issued.

In March, DED issued 18 new licences to branches of foreign firms from China, South Korea, Japan, The British Virgin Islands and elsewhere.

The Department of Economic Development (DED) was established in March 1992.
Source

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Dubai airport passenger traffic climbs 15%

Dubai International Airport said on Monday passenger traffic jumped 15% during the first quarter of this year, while cargo handling rose 10%.

The airport said just over nine million people passed through the regional travel hub during the quarter compared to just over eight million for the same period in 2007.

March recorded the highest figures of the quarter with 3.25 million passengers passing through the airport, while February registered the lowest figures with 2.97 million.

Passenger traffic is forecast to cross 40 million this year, rising to 60 million by 2010.

A total of 34.3 million passengers passed through the airport in 2007, up 19% on 2006.

Mohammed Ahli, director general of Dubai Civil Aviation Authority, said one the major factor behind the airport’s high growth rates was its ‘open skies’ policy.

“We have had new airlines joining us periodically…and our destination network has also expanded rapidly especially in recent years,” Ahli said in a statement.

“In 2008 the list of airlines serving Dubai has so far risen to 124, an addition of four since 2007, while we have added as many new destinations to our network and it presently stands at 207.”

The total amount of cargo handled by the airport during the first quarter reaching 399,718 tonnes compared to 362,919 tonnes for the same period last year.

March was the busiest month for cargo with over 144,954 tonnes handled, while February showed greater year-on-year growth, up 12.1%.

There were a total of 68,869 aircraft movements during the quarter, an increase of 8.5% year-on-year.

According to the International Air Transport Association (Iata), the Middle East and North Africa (Mena) region is set for the largest aviation growth in the world between 2008 and 2011, almost 40% higher than the global average.

Projects across the region have been valued at over $68 billion, with $21 billion in Dubai alone. Dubai’s new $10 billion Al Maktoum International Airport in Jebel Ali is set to become the world’s largest international airport. Source

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5% inflation target for ’08 'not feasible'

UAE's move to target inflation at 5 per cent this year to rein in sky-rocketing price increases would be ineffective unless the country adopts a flexible monetary policy, economic analysts said.

"There is a lack of flexibility in UAE's dollar-pegged monetary policy. Only a UAE currency that reflects the underlying economic fundamentals will serve as an effective tool to fight soaring inflation. Tracking the monetary policy of the US Fed, which has cut dollar rates will only serve to ignite UAE's inflation which is currently hovering around a record 12 per cent," a Dubai-based analyst said.

In its struggle to check recessionary trends, the Fed has cut rates by more than three percentage points in six months to 2.25 per cent while rendering the greenback weaker against most major global currencies. Consequent to this, the value of dirham, pegged to the dollar also dropped, sparking steep price hikes of imported items.

"Seeing as how the dirham’s value is diminishing due to the dollar peg, we ponder whether this (inflation targeting) seems like a realistic enough goal to set," say analysts Reem Mansour and Yasmin El Batrawy.

"We find it unfeasible for the Ministry of Economy to set an inflation target of 5.0 per cent for 2008, especially with the strong persistence to maintain the dollar peg, resulting in a lack of flexibility in monetary policy. We believe that for the UAE to begin targeting inflation in an effective manner, it is only reasonable that the Central Bank consider revising its monetary policy," said the analysts with HC Securities Brokerage.

Last month, the UAE in a move to arrest spiralling inflation set an inflation target of five per cent for 2008. Sultan bin Saeed Al Mansouri, Minister of Economy, said his objective was to bring down inflation by more than 50 per cent within this year. UAE's inflation, which was 9.7 per cent in 2006, and an estimated 11 per cent in 2007, is forecast to be more than 12 per cent this year on the back of soaring rents, increasing food prices, and a weakening currency pegged to a plummeting dollar.

Inflation targeting, as a promising monetary policy framework, will facilitate control of inflation and made monetary policy more transparent and accountable. An inflation targeting policy will favourably improve the competitiveness of the economy, financial market and business environment and has substantial impacts on the banking sector.

With the US economic data painting a gloomier outlook, the dollar is expected to drop further. "With expectation of a weakening dollar it does not look like the inflationary situation will be improving any time soon. Instead, it is more likely that imported inflation will be even more exacerbated, as the falling value of the dollar depletes the purchasing power of the dirham, causing imports to become even more expensive," they said.

Nations exporting to the UAE, such as India, which comprises 12.3 per cent of the UAE’s imports, Brazil, which makes up 1.3 per cent of the country’s total imports, and Sri Lanka, and Russia, have now started to quote prices of commodities in Euros rather than dollar, in order to ensure price stability.

Compounding the inflationary trend government expenditure on development projects and the increase in subsidies. Source

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The Government calls on traders to import 15 food products without conditions

The Ministry of Economy has called on traders, corporations and cooperative societies to import without conditions 15 food items, which have been removed from register of trade agencies.

Mohammed Ahmed bin Abdul Aziz Al Shehi, undersecretary of the ministry said that the traders, corporations and cooperative societies could exploit amendments of federal law number 18 of year 1981, on regulation of the trade agencies, which was issued in June 2006 based on 2005 decision, on writing off 15 trade agencies, to import these items into UAE markets without any condition to curb soaring prices and inflation.

He added that the written off items include dry milk, condensed milk, frozen and canned vegetables, child food, child milk, chicken, food oil, rice, flour, fish products, meet products, tea and coffee.

Al Shehi underlined that the aim of liberalising the basic food items is to eradicate monopoly and grouping, which hike prices, adding that the ministry also aims at creating competition among importers and traders- a move he said could reflect positively on market and consumers.

He noted that the ministry encourages cooperative societies to collectively import basic food items through the cooperative union as this move will help them offer preferential and competitive prices in the market in favour of consumers and local market as well.

Al Shehi said that the ministry would notify traders, corporations, companies, cooperative societies and custom checkpoints about the liberalisation of these basic food items. WAM

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