Where Is The Best Place To Do Business In The Middle East?
One constant in the sometimes turbulent business environment of the Middle East is the endless competition between fast-growing cities that are desperate to be crowned the region’s commercial capital. In the past the likes of Beirut and Bahrain have staked their claim to the title, but they have long since been superseded by a newer generation of modern cities, crowded with gleaming towers of steel and glass, vast armies of migrant workers and world-class airports.
Dubai has taken the lead in this race over recent years and, based on a new survey of global business hubs, it looks to be secure in its claim to be the most attractive business hub in the Middle East. The UAE's commercial centre has climbed to 15th overall in the latest Global Financial Centres Index, an annual ranking put together by Z/Yen Partners and the China Development Institute.
That puts Dubai four places higher than this time last year and means it has extended its lead over other rivals in the region while also leapfrogging the likes of Chicago, Los Angeles, Melbourne and Vancouver.
Dubai’s position at the forefront of the Middle East business landscape will come as little surprise to anyone who has travelled around the region. Its position as the most well-connected transport hub in the Gulf makes it easier to reach than anywhere else and its clusters of high-rise towers and myriad business zones provide a comfortable, low-tax home for regional and international companies.
The emirate's relative paucity of oil resources means that, unlike most of its neighbours, it has had to look for other opportunities for growth. While its strategy has led to severe financial problems on occasion – such as the 2008/09 debt crisis – it has managed to develop a business-friendly reputation that has proved resilient.
Unsurprisingly, Dubai does particularly well in the index in terms of infrastructure and financial sector development, ranking in the top ten overall on those factors.
General view of skyscrapers and a metro station on September 27, 2017 in Dubai, United Arab Emirates. (Photo: Tom Dulat/Getty Images)
Other Gulf cities trail some way behind. The UAE capital Abu Dhabi slipped down one place to 26th overall, which will be a disappointment to the authorities there given the amount of money and effort they have poured into its financial centre, the Abu Dhabi Global Market, over the past few years in an effort to establish it as a credible rival to Dubai.
These days Abu Dhabi is increasingly being challenged by another nearby rival too. The Qatari capital Doha rose 13 places, from 47 last year to 34 in this year’s rankings. That is despite the efforts of a quartet of countries – Bahrain, Egypt, the UAE and Saudi Arabia – to isolate Qatar both diplomatically and economically. It is yet another sign that their actions appear to be in vain.
Bahrain is another that has slipped further down the index, dropping eight places to 59th overall, while the Saudi capital Riyadh fell back one place to 69th. The Saudi government has been struggling for years to convince companies to move into its expensively-constructed financial centre on the edge of the city, the King Abdullah Financial District, where cynics have suggested there may be more towers than tenants.
The Global Financial Centres Index is compiled using 137 metrics, covering issues such as the structure and stability of the business environment, the strength and depth of the local labour market, the quality of infrastructure and a city’s reputation. All that is augmented by assessments provided via a survey of close to 2,500 people.
Beyond the Gulf, only a couple of Middle East cities make the top 100, with Tel Aviv climbing nine places up the rankings to 25th and Casablanca, Morocco gaining four places to reach 28th. One positive sign for the latter is that it is among the ten cities named by survey respondents as likely to become more significant over the next two to three years.
Other Middle East commercial centres remain outside the index for want of enough assessments, including Kuwait City and Tehran.
This index is kinder to the Middle East than some other indices. Consultancy firm AT Kearney’s Global Cities Report names Istanbul as the best in the wider Middle East, at 26th overall. It is followed by Dubai (28), Tel Aviv (57) and Doha (63). Others including Cairo, Riyadh, Abu Dhabi, Jeddah, Tehran and Tunis are further down the list although still in the top 100.
Editor's Note: This article was originally published in Forbes Middle East on Wednesday September 12th, 2018 http://bit.ly/ForbesDubaiBusiness