Abu Dhabi is drawing up incentives to attract foreign investors, including changes to corporate

ownership laws, as the emirate seeks to boost foreign direct investment growth beyond 14.5 per
cent a year, a government official said on Monday.
“What you can expect is further opening of ownership in the emirate of Abu Dhabi in coordination
with the [UAE] Ministry of Economy,” Ahmad Bin Ghannam, acting executive director of
international economic relations at Abu Dhabi’s Department of Economic Development, told the
media during an event in Dubai.
“The other part is specific incentives for sectors, of course manufacturing is an important sector
for us, and others…Expect major changes in Abu Dhabi in the coming year with regard to
investment incentives and investment protection policies."
Asked whether these changes would take the form of legislative reforms, Mr Bin Ghannam replied:
“Yes, exactly…Abu Dhabi is about to announce new policies.” More details will be revealed at
the Annual Investment Meeting (AIM) global forum taking place in Dubai next week, he said.
The federal Ministry of Economy is working on a long-awaited UAE investment law expected to
dramatically change the commercial landscape of the country, particularly in the non-oil sector,
by allowing 100 per cent foreign equity ownership in certain sectors. The law was expected to be
ratified in the first quarter of 2018.
The UAE's efforts to boost FDI flows is part of measures aimed at boosting the contribution of the
non-oil sector to the economy to 80 per cent by 2021 from the current 70 per cent.
Mr Bin Ghannam said Abu Dhabi wants to introduce further measures to incentivise business
development and increase FDI levels beyond the 14.5 per cent year-on-year growth registered in
the emirate alone in 2017.
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Read More:
Abu Dhabi eyes FDI to grow double-digit with new investment body
UAE working on laws to boost non-oil sector contribution to 80% by 2021
UAE leads in the race to the post-oil, knowledge-based economy
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The UAE recorded $10.3 billion of inward FDI in 2017, up 6.7 per cent from $9.6bn in 2016,
according to the Federal Competitiveness and Statistics Authority.
The government is working to position Abu Dhabi as an “international focus point” for foreign
direct investment, he said, in line with UAE-wide plans to increase FDI levels as the global
economy rebounds after a sluggish few years.
A further increase in FDI is expected this year, said Abdullah Al Saleh, undersecretary for foreign
trade at the UAE Ministry of Economy, during Monday’s press conference. He didn't exact figures
for the forecast increase.
Traditional sectors such as petrochemicals and industrial have seen large volumes of FDI but
emerging business areas such as e-commerce and blockchain present fresh opportunities for
foreign investors, Mr Al Saleh added.
Rising protectionism in some global markets is a potential barrier to FDI as US President Donald
Trump embarks on imposing 25 per cent tariff on steel imports and 10 per cent tariff on imports
of aluminium.
Like many countries, the UAE has asked Washington to exempt it from the new policy, fearing a
detrimental impact. Mr Al Saleh did not comment directly on the tariff, but said the UAE does not
believe "protectionism is a tool" to protect an economy and ensure its sustainable economic
growth. For its part, the UAE seeks to “cooperate with other countries to remove obstacles” to
trade and business growth.
Meanwhile, Egypt, China, Russia, India and Greece are attractive destinations for outbound FDI
from the UAE, said Jamal Al Jarwan, secretary-general of the UAE International Investors
Council. “We are seeing growth [in those markets], and Egypt is one of the most favoured
investment destinations for Emirati investors,” he said.

Pakistan

Pakistan is not typically the first country that springs to mind for an international businessman or
investors in general when asked where you think some of the best opportunities in the world are.

Compared to many other developing countries, there has not been much investment in
infrastructure, with the country still suffering from patchy electricity, internet and
telecommunication services as well as dealing with an archaic financial system which slows the
flows of capital, making it overall a difficult country to interact and do business with.

At the same time the country continues to suffer from its international reputation of being an
‘unsafe’ state, both to visit and do business with due to repeated negative media attention every
time an attack happens, as well as its continued battle with radicalism in the north scaring many
international investors away.

All of this has meant that a country that has a huge potential has been held back, running slowly
in first gear. Yet we believe the country is full of opportunities that have the potential to be
unlocked over the coming years. The fundamentals of the country are not hugely dissimilar than
those of India 15 years ago, counting a very large, young, dynamic & entrepreneurial workforce
still at much lower wages. The ingenuity and hunger of its people, their desire to grow and achieve
combined with their command of the English language and focus on computer science has created
a hugely untapped workforce.

At the same time, on the international landscape, more and more services are being developed over
the internet meaning that the quality of the work and labor force is becoming more and more
important than the country it came from. Low interest rates have meant that international investors
have struggled to deploy capital to get returns and are sitting on larger piles of cash than ever
before. Finally, China has committed to making a big bet on Pakistan with its economic corridor,
attempting to partner with Pakistan to deal with its ever increasing trade.

As we go into 2018, we believe Pakistan should start trying to unite and agree to start looking
outside of its borders. The international business community is clamoring for access to high quality
talent and services, and the international investment community is struggling to get safe and
reliable returns.

If consensus can be developed within the country on where internal resources should be directed
and the support needed from the international community, the country has the opportunity to start
catching up to India and become a much stronger and influential country.

Surprisingly Pakistan has not changed as much as I would have expected/hoped it would have
since my first visit. Comparing with how far India and China have sprung forward over the past
10 years, I would say whilst Pakistan has improved slightly, by and large there hasn’t been as much
progress relative to other countries. The one area where a lot of progress seems to have been made
is around the development of its workforce from an IT perspective. There seems to be a healthy
number of very competent technology savvy individuals. This has translated into a burgeoning
‘start-up’ scene.

On the positive side, I would also like to mention and commend the work ethic, ambition and
integrity of Pakistanis which have definitely surprised me. For many developing nations, the
population is relatively stagnant, but I would say people in Pakistan are hungry for opportunities.
On the flipside, Pakistan is not acting in much unity as a whole, trying to make big bounds forward
which are actually holding the country back. Everyone seems to just be worrying about their own,
instead of realizing their full potential.

Additionally, I recently signed a partnership agreement with a Pakistani company. For me, the
experience of working with professionals in Pakistan has been very favorable overall, I must admit.
The team we invested in has a great business model, that we believe has the potential to scale, and
it is being set up in very similar ways that an American or European company would. Whilst the
company is doing well, we have a lot more work to do to get it beyond Pakistani borders.

Moreover, technological advancement in Pakistan is rapid and I would agree that it is one of the
biggest steps Pakistan has taken over the past 10 years. That being said, technology just by itself
is not valuable. Its business & real-world applications are what give technology value. Two areas
I believe the country is missing out on are: 1. How to overall provide services (from a technological
standpoint), not just technological but also related to the international economy, and 2. How to
make sure the problems being solved are not just local Pakistani problems (a lot of people in the
US as much as Pakistan), think the problems they see apply to everyone.

One more thing that should be mentioned in this regard is CPEC since it is the new buzzword in
the country. I think CPEC has the potential to make a huge impact on the country. But right now
all the talk I have heard is around helping the Chinese with what they need to get done. Will that
create revenue and improve the economy? Yes. Is it going to be the huge boost that everyone is
talking about? Not necessarily. It is a huge win for China, because it makes China even more
competitive on the international stage. The real question Pakistan needs to look at and think of, is
how can they leverage CPEC in order to propel itself forward (what businesses, deals, trades, etc.
can be done whilst CPEC is in place), rather than just getting a short term revenue inflow, but 99%
of the long term economics accruing to China.

Conclusively, I would want to urge other US businessmen to go to Pakistan and spend real time
for themselves so they can have a real understanding of how to do business in a country booming
with opportunities. Begin by ensuring that you have a good international partner who can help you
on the ground. Pakistan is definitely an untapped market in terms of international investments, yet
a very unique country at the same time.
Stirling Cox is the managing director of the U.S. offices of AlphaSights. The information
services company assists a global client base, including private equity firms, asset managers,
strategy consultancies and corporate executives.