Major Dubai drive to woo Asia investments

Saturday 28 January 2006

HONG KONG: Dubai's government has started a push to attract direct investment from Asia's manufacturers, as it tries to broaden its economic base.

"We believe manufacturing should play a role in our economy. We don't believe Dubai should depend only on services," said Arif Mubarak, director of the Asia Pacific Region for the Dubai Development and Investment Authority.

The government body has just opened an office in Hong Kong, its first in Asia, and also plans to open offices in London and New York.

"Asia is known for its manufacturing. That's why we want to come to this region," Mubarak said in an interview. His organisation is also looking for investors interested in putting money into Dubai's healthcare, property, tourism and energy sectors.

The first step in its efforts will be to convince Asian companies already using Dubai's port, airport and warehousing facilities to upgrade their presence. Interest is most likely from companies making electronics, consumer products, textiles and plastics, Mubarak said.

"Some Asian companies are using Dubai as a logistics hub or a distribution centre. We would like to see that grow to a full-fledged manufacturing centre," he said.

The share of manufacturing in Dubai's economy has already increased to 17 per cent in 2004 from 12pc in 1994, according to figures from the investment authority, while the share of the oil industry and government services has decreased.

The government has also put its own money to work in the endeavour. Dubai International Capital, the strategic investment arm of the holding company of Shaikh Mohammed bin Rashid Al Maktoum, last year bought a $1 billion stake in DaimlerChrysler AG.

Part of the motivation for the deal was said to be convincing the automaker to set up a parts manufacturing operation in Dubai.

The investment agency's mandate in Asia is slightly different, Mubarak said. "The groups we are targeting now are more low profile," he said.