A rising star: Welcoming investment to its many expanding sectors

Boasting some of the fastest-growing free trade zones in the region, Ras Al Khaimah has witnessed impressive economic expansion and diversification across key industries in recent years. The emirate is on its way to becoming an important investment destination in the region.

Nestled in the northern part of the UAE, RAK lies between the base of the Hajjar Mountains and the Gulf. This location has supported the success of RAK as a destination of choice for investors and tourists alike. Endowed with kilometres of silver, sandy coastline in the west, desert plains bounded by the Hajjar Mountains in the east and a green belt in the south with flourishing date palms and vegetable gardens, RAK has a diverse landscape that is unique in comparison to other emirates.

RAK has strong links with the other emirates via its modern highway network, connections which have been useful as it has pushed ahead with a drive for economic development in recent years.

FOUNDATIONS: Located on historical trade routes running from Europe to East Asia, RAK was a stopover point for merchants from as far away as China. RAK’s history dates back to around 5500 BCE, and in pre-Islamic and Islamic times the area was known as Julfar. RAK is the home of the Qawasim tribe, which built a reputation in commerce, dominating trade in the lower Gulf region in the 18th century. At times the tribe held land on various islands in the Gulf, as well as in Pakistan and other parts of the UAE.

FORMATION: RAK became part of the Trucial States, which were established by the General Maritime Treaty with Britain in 1853. Their formation ushered in a period of stability, which was previously threatened by the Ottomans, Portuguese and Persians, the dominant powers in the region at the time. RAK’s location was used for controlling shipping routes to and from India, which was occupied by the British empire up to the 19th century. Following British withdrawal from the region between 1968 and 1971, six emirates came together to form the modern-day federation of the UAE in 1971. RAK, which was the UAE’s seventh and final emirate, joined the federation soon after, in February 1972.

GEOGRAPHY & CLIMATE: The UAE occupies some 83,600 sq km on the southern and eastern shores of the Gulf. RAK is the fourth-largest emirate in the federation, containing 2478 sq km. Located along the Gulf, near the Strait of Hormuz, RAK is just 65 km away from the Iranian coast, 250 km from the Omani border and in close proximity to a number of other Gulf states. The emirate’s geography is diverse, with 65 km of coastline, fertile plains, as well as the Hajjar Mountains, which reach heights of up to 1900 metres. Temperatures in the summertime often reach the upper 40s with high humidity. In winter the weather is pleasant and remains relatively dry.

POPULATION: According to the latest figures from mid-2011, the total population of the UAE stands at around 8.3m. Population growth is estimated to be 5.9% per year, while nearly half of nationals are under the age of 19. The government estimates the current population at 300,000 and will undertake a full census in 2012. The population is forecast to reach 750,000 by 2020. While UAE nationals officially make up less than 20% of the total in the country, RAK has a higher proportion, at about half.

POLITICS: Sheikh Saud bin Saqr Al Qasimi has been the ruler of RAK since his father, Sheikh Saqr bin Mohammed Al Qasimi, passed away in late October 2010. Sheikh Saqr, who began his reign in 1948, was one of the long-serving leaders in the region and was responsible for the 1972 decision to join the UAE. On a federal level, the Supreme Council, a body that is made up of the rulers of the constituent emirates, runs the UAE, whose president is Sheikh Khalifa bin Zayed Al Nahyan, the ruler of Abu Dhabi.

The Supreme Council ratifies all the laws in the country, while the Council of Ministers, a 20-member cabinet headed by the prime minister, is the executive branch of the government. The Federal National Council, a 40-member consultative body, represents the interests of each emirate when reviewing proposed laws.

In 2005 the government announced a policy of political liberalisation. At the end of 2006 elections were held for half of the seats in the Federal National Council, while the other half are appointed by the government. Elections were held again in late September 2011, and the emirate currently has a total of six representatives in the council.

ECONOMY: GDP growth in RAK was 8% in 2011 and the government expects that growth in 2012 will be roughly the same. According to the RAK Department of Economic Development, in 2010, the latest year for which figures are available, mining, quarrying and manufacturing accounts for about 30% of GDP, followed by financial services at 14.4% and wholesale, retail and repair services at 11.7%. The country benefits from an open economy, high per capita income levels and a large annual trade surplus on the back of its energy exports. Unlike Abu Dhabi, RAK does not have substantial deposits of oil and gas, although it does produce small amounts of liquefied petroleum gas and condensate.

A variety of sectors drive the emirate’s economy, including industry, trade and commerce, tourism and real estate. Several local players have emerged as international success stories over recent years in industries including pharmaceuticals, ceramics and cement. Capitalising on its natural resources, the UAE’s first cement company opened in RAK in early 1970s and is now the country’s largest producer. Local company RAK Ceramics is the world’s largest ceramics producer, exporting to more than 150 countries. The region’s first pharmaceuticals and medical supplies firm, Julphar sells its products on the global market, meeting standards set by bodies like the US Food and Drug Administration.

TRADE ZONES: Established in 2000, the RAK Free Trade Zone is home to more than 5000 active firms from 106 countries. It is 100% tax-free and offers 100% ownership, along with a number of other incentives and value-added services.

The formation of the RAK Investment Authority (RAKIA) in 2005 has helped boost competitiveness in the industry, trade, commerce, tourism and real estate sectors. RAKIA was set up to develop and manage industrial parks, which includes the free zones and industrial zones in Al Hamra and Al Ghail. RAKIA has managed to attract more than $3bn in industrial investments and lured over 700 businesses from around the globe. RAKIA’s industrial parks have businesses from a wide range of industries; currently there are 4170 onshore firms and thousands more registered through RAKIA’s offshore facility.

The emirate has embarked in an ambitious development programme which has achieved total growth of more than 50% over the past four years, with a positive outlook for 2012.

NATURAL RESOURCES: With 9% of the world’s oil reserves and 5% of gas reserves, the UAE has one of the highest per capita GDP levels in the world. The lion’s share of these resources belongs to Abu Dhabi, which has 95% of the oil and 92% of the gas in the UAE. RAK’s total gas reserves amount to around 33.96m cu metres, and its total oil reserves are estimated at some 400m barrels, or around 0.4% of the UAE’s total estimated reserves.

RAK boasts the biggest rock quarry in the Gulf region, and it has been blessed with high-quality limestone and clay deposits, which underpin the emirate’s successful cement and ceramics industries. The fertile plains in the south-east around Digdaga produce fruits and vegetables, as well as milk and poultry for the domestic market.

LANGUAGE: The official language of the UAE is Arabic, though English is widely used in business circles. In addition, a significant portion of the expatriate population speaks languages from the subcontinent, such as Hindi, Urdu, Malayalam and Tamil.