Lacking the huge natural resources of Abu Dhabi or the world class infrastructure of Dubai, the smaller members of the United Arab Emirates do have developmental advantages of their own in terms of geographic location and tourist potential.
Ras al Khaimah (population 205,000), the northernmost of the emirates, close by the Omani enclave, reported investment of Dh 100bn in 2006 (approximately $25bn) with the tourism and real estate sectors being particularly active. However, the emirate’s economic plans place industrial development in the key position.
Fujairah (pop. 127,000) has the advantage of being the only UAE port outside the Persian Gulf. Strategic facilities are being constructed to take advantage of this, anticipating any military or naval action that could close the Straits of Hormuz at the mouth of the gulf. These include an oil pipeline from Abu Dhabi and a liquefied natural gas (LNG) storage hub.
The latter is a project being undertaken by Dubai Multi Commodities Centre in conjunction with LNG Impel, part of Galveston LNG of Canada. The go-ahead for this important project, representing a capital outlay of Dh 8bn, is contingent on arrangements for Qatar to use the facility. The Fujairah authorities have plans to reclaim two square km from the Arabian Sea for the project.
One of the key considerations is the extent to which the smaller emirates are prepared to open up the ownership of business and real estate to preponderant or total foreign ownership. After Dubai, Ras al Khaimah was the second of the United Arab Emirates to permit 100% foreign ownership of property in specified areas such as Al Hamra Village, The Cove and Saraya Islands. Developments allowing for foreign ownership are all under the control of RAK Properties. Future projects include Julfra Towers, Mina al Arab, Mangrove Island and Khor Qurm.
The emirate of Ajman (pop. 258,000*) is also allowing foreign freehold ownership; the first project to do will be Al Ameera village, a Dh 1.2bn development by Tameer,scheduled for completion in the middle of next year.
Fujairah has a law to allow foreign property ownership (following the example of Dubai) under consideration. The Fujairah Free Zone, as in other free zones in other emirates, offers the opportunity for 100% foreign owned businesses. So far the only property offering freehold investments for foreigners is the 270 apartment Al Jabar Tower. Leasehold real estate investment opportunities have been open to expatriates for a couple of years.
For visitors, Fujairah offers impressive fortresses, excellent beaches (and diving) and rugged mountains (www.fujairah-tourism.ae/ ). Parts of the emirate (Wadi Ham and Wadi Zikt) are relatively well watered owing to the mountains in the interior. The hot springs of Ain al Zhamour are visited for their curative powers. The emirate has plans for a tripling of the current 1500 tourist bedrooms by 2012. Tourist visits from abroad and other parts of the UAE are expected to rise 20% in 2007 to 300,000. Access will be easier following the completion of the new Dubai-Fujairah road in 2008.
Prospects for investors will depend in part on the attitude of the two biggest emirates, Abu Dhabi and Dubai, towards their smaller and poorer neighbours. As with the UAE government’s attitude to its enormous population of guest workers, policy statements on such sensitive matters are not generally available. Although the UAE has relatively high inflation owing to the oil and gas revenues, the country as a whole is seeking to make the most of its development opportunities and the smaller emirates are bound to reap some of the benefits. We would love to have comments from actual UAE residents.
* Population figures are 2004 estimates and are for the whole of each emirate rather than just main cities.