INTERVIEW: DIFC boss in drive toward China’s ‘belt and road’

Arif Amiri, chief executive of the Dubai International Financial Center (DIFC) speaks to Arab News. (Illustration: AN)
Updated 29 July 2018
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INTERVIEW: DIFC boss in drive toward China’s ‘belt and road’

DUBAI: As the world’s tallest building, the Burj Khalifa in Dubai, slowly took on the colors and symbols of the flag of the People’s Republic of China earlier this month in honor of the visit of President Xi Jinping to the UAE, there was some real business being done away from the fanfare of top-level diplomacy.
Among the president’s entourage were a large contingent of financial and economic policymakers, accompanying their leader to put some concrete business deals in place to add substance to the new “strategic partnership” between China and the UAE.
Prominent in the Emirati delegation was Arif Amiri, chief executive of the Dubai International Financial Center (DIFC). He inked an agreement with officials from the China Everbright Group, a financially focused, Beijing-based conglomerate. The deal could prove to be one of the most significant transactions done under Amiri’s three-year leadership of the Dubai financial hub. It is a straw in the wind of global financial transformation.
“We are witnessing continuous change in the global financial landscape, with emerging markets becoming some of the most dynamic and rewarding destinations for investment and growth,” Amiri told Arab News.
“In particular, the Middle East, Africa and South Asia (MEASA) region is developing into an international powerhouse for expansion, with Dubai at its heart, and offers huge opportunities for global partnerships that promote economic growth alongside social impact,” he added.
It is no coincidence that the eastward tilt of DIFC has accelerated since Amiri was appointed to the top job in 2015. He is symbolic of a new generation of Emirati financial executives, comfortable in the corridors of corporate power anywhere in the world, from San Francisco to Shanghai.
Educated in the US, he worked in banking with HSBC in the UAE before becoming chief operating officer at Emaar, the Dubai property developer. With banking and real estate experience under his belt, he ticked the two essential boxes required for senior executive involvement with DIFC.
His arrival at the top job also marked the launch of the DIFC’s ambitious 10-year strategy, with the aim of tripling in size — in terms of workforce, number of member firms and assets under management — by 2025.
The center is well on the way to achieve that goal. In the half-year ended last month, the number of registered companies in the DIFC jurisdiction grew 8 percent, the latest in a series of high-growth results that have been maintained even in the face of challenges like the global financial crisis of 2009 and others since then.
That growth has reflected greater interest from financial companies to the east of the Arabian Gulf. While in its early days the DIFC was largely a westward-oriented operation, looking to the US and Europe for new members, since the convulsions of the crisis the focus has been on the booming economies of China, India and Southeast Asia.
China, of course, is the biggest of those, and targeted by DIFC for long-term expansion early on. DIFC saw a confluence between its ambitions as a regional financial connector and the “Belt and Road Initiative” (BRI) of Chinese policymakers.
“Through the BRI, China is bringing the world together, and its infrastructural investments throughout the Middle East, Africa and South Asia (MEASA) are already contributing to our region’s development and economic transformation.
The region is a key element of BRI, with a population of over 3 billion people and combined gross domestic product (GDP) of $7.4 trillion. “At the region’s core lies the Dubai International Financial Center — a platform that is uniquely positioned, poised and willing to become a key partner of the BRI,” Amiri said.
The UAE and China are already well-established trading partners, with the value of bilateral trade reaching $60 billion last year. Oil and gas have traditionally been the mainstay of exports from the region, with manufactured goods and infrastructure services coming the other way.
But, as Amiri points out, that is changing. “China is now Dubai’s No. 1 non-oil trading partner and as wealth traverses the Silk Road Economic Belt and the 21st-century Maritime Silk Road, we expect to witness growing synergies in the financial services industry,” he said.
The Chinese recognize the importance of Dubai in the new world financial order, Amiri said. “Over 4,000 Chinese companies now call Dubai home and some of China’s most recognizable names have chosen DIFC as a base for their regional operations.
“To begin with, China’s four largest banks in terms of total assets — Bank of China, Agricultural Bank of China (ABC), Industrial and Commercial Bank of China and China Construction Bank Corporation — have successfully upgraded their banking licenses from being subsidiaries to becoming fully fledged branches in the DIFC. And last year, ABC was designated a yuan clearing bank in Dubai — one of the few destinations selected worldwide,” he added.
Chinese banks have been managing their interests in the Middle East and Africa, one of the BRI’s most significant regions, from the DIFC. More recently, they have been expanding into Eastern European markets making further use of DIFC’s international regulatory and legal framework.
“The opportunities for Chinese construction, energy, education, health care, hospitality and fintech firms to become involved in the economic development of the MEASA region are simply endless. The countries comprising this region are among the fastest growing in the world and need large-scale infrastructure development and investment, backed by a rapidly growing, stable and regulated financial services sector,” he said.
“This is where DIFC comes in, with our internationally recognized legal and regulatory framework and dynamic cluster of financial and non-financial businesses we are ideally placed to promote trade and investment between China and the emerging markets of MEASA, helping the country look beyond its borders and secure fresh economic opportunities.”
The deal with Everbright is just one example of these opportunities. The Chinese firm will be based in DIFC and use it as its beachhead for business in the rest of the region and in Africa, which China sees as an increasingly important area for investment and expansion. The commodities and minerals owned by African countries are essential for China’s booming economy.
But it is not just eastwards that Amiri is looking for growth. The DIFC’s ambition has always been to become the financial hub of the region, acting as a gateway for investment into the economic transformation going on in the UAE and elsewhere.
“As one of the world’s top 10 financial centers, and the leading financial hub for MEASA, the DIFC is uniquely positioned to support regional and global financial institutions looking to access fast-growing emerging markets,” he said.
“With government initiatives such as Dubai Plan 2021 in the UAE and Vision 2030 in Saudi Arabia, the region is attracting increasing investor interest and economic development. The center’s internationally recognized legal and regulatory infrastructure, as well as its wide range of structure of substance, has made it the jurisdiction of choice for many businesses looking to tap into the opportunities created by these regional reforms.”
DIFC, of course, faces competition in this regard. Other regional financial centers, such as Abu Dhabi, Riyadh and Manama, are also looking to act as a magnet for foreign investment into the region. But DIFC believes it has a head start in the race.
“Since the establishment of DIFC in 2004, our focus has been on continuously enhancing our world-class ecosystem of leading financial and professional services companies, and providing them with a platform to service the wider MEASA region,” Amiri said.

BIO
Education - Degree in aviation management from Embry-Riddle Aeronautical University in Florida.

Career
•Corporate banking executive, HSBC.
•Chief operating officer, Emaar Properties.
•Chief executive, Dubai International Financial Center.

 


Saudi Arabia launches company to transform Asir into global tourism hub

Updated 14 November 2024
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Saudi Arabia launches company to transform Asir into global tourism hub

RIYADH: Saudi Arabia’s Asir region has launched a new tourism venture through a partnership with the aim of creating a holding company to transform the area into a global tourist destination.

The collaboration between Aseer Investment Co., a subsidiary of the Public Investment Fund, and Rikaz Real Estate, aligns with the goal of transforming Asir into a world-class tourist destination that combines authentic heritage with sustainable development, according to the Saudi Press Agency.

The holding company seeks to contribute to enhancing a tourism environment that enriches guests’ experiences with unique offerings, connecting visitors to local culture and community traditions, SPA reported.

It is also committed to promoting sustainable tourism by protecting the environment, developing local communities, and collaborating with artisans and local businesses to preserve the authenticity of Asir’s heritage.

In October, the Kingdom’s Abha city secured a new investment partnership to boost tourism by developing culturally rich dining and retail experiences. 

PIF firm Aseer Investment Co. signed the deal with Nimr Real Estate and the National Co. for Tourism, or Syahya, to propel the project, the Saudi Press Agency reported. 

This aligns with the objectives of developing Abha, which will offer a range of benefits, including retail stores that reflect the cultural heritage of the Asir region.

The partnership also seeks to be a model for multiple collaborations with private sector investors and create more regional job opportunities.

Investments in the region are expected to create between 14,000 and 18,000 job prospects and contribute to up to 6 percent of the non-oil gross domestic product within 10 years, as outlined by AIC Chief Executive Osama Al-Othman in February.

Saudi Arabia emerged as a leader in tourism growth among G20 nations, experiencing a 73 percent increase in international visitors in the first seven months of 2024 compared to 2019.

According to the UN World Tourism Barometer report in September, the Kingdom welcomed 17.5 million international tourists during this timeframe, showcasing its growing allure as a global travel destination.

This surge is part of the nation’s Vision 2030 initiative, which aims to diversify the economy and reduce dependence on oil revenues.

“Saudi Arabia cements its global leadership and takes the first spot among G20 countries in international tourist arrivals growth, with a 73 percent increase in the first seven months of 2024 compared to the same period in 2019,” stated the Saudi Tourism Ministry on X.

Under the National Tourism Strategy, the Kingdom aims to attract 150 million visitors by 2030 and increase the sector’s contribution to the nation’s gross domestic product from 6 percent to 10 percent.

These goals reflect the country’s commitment to strengthening its tourism sector and enhancing its global appeal.


IMF, Saudi Arabia announce new annual conference tackling global economic challenges

Updated 14 November 2024
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IMF, Saudi Arabia announce new annual conference tackling global economic challenges

RIYADH: The International Monetary Fund and Saudi Arabia will jointly organize a high-level annual conference in AlUla to discuss global economic challenges, it has been announced.

The AlUla Conference for Emerging Market Economies will bring together a select group of finance ministers, central bank governors, and policymakers, along with leaders from the public and private sectors, representatives from international institutions, and members of academia.

According to a joint statement by Kristalina Georgieva, managing director of IMF and the Minister of Finance Mohammed Al-Jadaan, the first edition of this series will be held from Feb. 16-17, 2025.

“The world is confronting deeper and more frequent shocks, including from conflicts, geoeconomic fragmentation, pandemics, climate change, food insecurity, and the digital divide,” according to the statement.

They continued: “If not addressed adequately, these shocks put at risk emerging market economies’ hard-won improvements in living standards. Such setbacks would affect large segments of the world population and put at risk global growth and macro-financial stability.”

The gathering will offer a platform to exchange views on domestic, regional, and global economic developments and discuss policies and reforms to spur inclusive prosperity and build resilience supported by international cooperation.

Recent economic issues affecting the global landscape include rising inflation rates, driven by supply chain disruptions and increased demand for goods post-pandemic.

Supply chain delays continue to impact the availability of essential products, causing bottlenecks in manufacturing and increasing costs.

Additionally, geopolitical conflicts, such as the war in Gaza, have disrupted energy supplies and food exports, leading to global food insecurity and fuel price volatility.

Concerns over the using the Red Sea shipping lane increased dramatically at the end of 2023, when Houthi militants stepped up attacks on vessels in the wake of the escalation of the Israel-Hamas conflict.

The effects of these challenges pose significant risks to economic stability, especially for emerging markets that are more vulnerable to such global shocks.

The AlUla conference is the latest example of the growing relationship between Saudi Arabia and the IMF, with the organization in April establishing its first office in the Middle East and North Africa region in Riyadh.

The facility was launched during the Joint Regional Conference on Industrial Policy for Diversification, jointly organized by the IMF and the Ministry of Finance, on April 24.

The new office aims to strengthen capacity building, regional surveillance, and outreach to foster stability, growth, and integration, thereby promoting partnerships in the Middle East and beyond, according to the Saudi Press Agency.

The work hub will promote closer collaboration between the IMF and regional institutions, governments, and other stakeholders, according to the SPA report.

The IMF also expressed its gratitude to the Kingdom for its financial contribution aimed at supporting capacity development in member countries, including fragile states.


Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn

Updated 14 November 2024
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Closing Bell: Saudi Arabia’s TASI ends in the red, trading volume hits $2.95bn

RIYADH: The Tadawul All Share Index concluded the last session of the week at 11,791.18 points, down by 139.27 points or 1.17 percent.

The MSCI Tadawul 30 Index also saw a decline, dropping 19.18 points to close at 1,481.36, reflecting a 1.28 percent loss. In contrast, the parallel market Nomu finished Thursday’s trading at 29,467.71 points, up 262.18 points or 0.90 percent.

TASI reported a trading volume of SR11.10 billion ($2.95 billion), with 51 stocks advancing and 182 declining. The top performer of the day was Saudi Cable Co., which saw its share price surge by 5.10 percent to SR92.70.

Other strong performers included Shatirah House Restaurant Co., which gained 3.75 percent to reach SR21, and Arabian Mills for Food Products Co., which rose by 3.08 percent to SR53.60. Naseej International Trading Co. and Saudi Real Estate Co. also posted notable gains.

The worst performer was Saudi Real Estate Co., which dropped 4.94 percent to close at SR10. Alkhaleej Training and Education Co. and Red Sea International Co. also suffered significant losses, with their share prices falling by 4.90 percent to SR29.10 and 4.84 percent to SR68.80, respectively. Astra Industrial Group and Al-Omran Industrial Trading Co. were also among the day’s largest decliners.

On the parallel market, Nomu, Alqemam for Computer Systems Co. was the top gainer, rising by 9.57 percent to SR103. Other gainers included Dar Almarkabah for Renting Cars Co., which climbed 9.10 percent to SR42.55, and Horizon Educational Co., which rose by 7.58 percent to SR79.50. Mulkia Investment Co. and Knowledge Tower Trading Co. also saw significant increases.

On the losing side of Nomu, WSM for Information Technology Co. recorded the largest drop, with its share price falling by 6.18 percent to SR44. Osool and Bakheet Investment Co. and Natural Gas Distribution Co. also experienced notable declines, with their shares dropping by 5.37 percent to SR37.85 and 5 percent to SR57, respectively.

 


Leaders stress urgent need for climate finance at COP29 ministerial dialogue

Updated 14 November 2024
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Leaders stress urgent need for climate finance at COP29 ministerial dialogue

RIYADH: Global climate finance continues to fall short of expectations, as leaders gathered at the COP29 Ministerial Dialogue on Climate Finance to address ongoing challenges and map out next steps.

The meeting, held in Baku, Azerbaijan, underscored the urgent need for increased and more effective funding mechanisms. COP29 President Mukhtar Babayev emphasized that climate finance plays a central role in the broader negotiations.

“The urgency of the situation is evident,” Babayev remarked, pointing to the severe impacts of climate change observed over the past year. “Recently, we witnessed catastrophic flooding in Spain, and in the Pacific region, island communities are faced with the possibility of being wiped out entirely. We must act now; failure to do so will have grave human and economic costs.”

The president stressed the importance of fulfilling the $100 billion-per-year commitment made in Copenhagen and reiterated in Paris, urging leaders to reflect on lessons learned and consider the quality and allocation of financial resources.

Developing countries once again voiced the need for tangible action, with Fiji’s Deputy Prime Minister Biman Prasad highlighting the importance of aligning climate finance with the goals of the Paris Agreement.

“This is a ‘put your money where your mouth is’ moment,” Prasad said. “The 1.5°C temperature goal and the Paris Agreement itself will not be deliverable from both an economic and scientific perspective if we do not invest right. The New Collective Quantified Goal is critical for aligning our priorities and addressing major inconsistencies,” he added.

The EU reaffirmed its commitment to climate finance, noting that the $100 billion goal was first collectively met in 2022, with contributions reaching $115.9 billion.

“The EU and its member states contributed €28.5 billion, or around $30 billion, in climate finance from public sources,” a representative said. “Almost half of the public funding came in the form of grants, with a significant portion provided on concessional terms. We need to make further efforts to facilitate the mobilization of private funding, as it remains a key source of climate finance,” the representative added.

Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, emphasized the critical juncture at which the global community now finds itself.

“The huge opportunities we have and the terrible risks we face are real,” Stiell said. “It’s time to take action to bridge gaps, solve problems, and come together to ensure climate finance and climate action benefit everyone.”

Sweden also announced a significant new contribution, with Ministerial representatives unveiling an $8 billion Swedish krona ($723.6 million) pledge to the second replenishment of the Green Climate Fund.

“This makes Sweden the largest per capita donor to the GCF among the larger donors,” the Swedish representative noted.

As discussions progressed, leaders acknowledged the widening gap between current financial commitments and the funds required to meet the 1.5°C target. There were calls for more robust mobilization of both public and private finance.

The COP29 president concluded: “Delivering the climate fairness that developing countries need is one of the main metrics of shared success. We can learn from past efforts to inform the road ahead, but significant determination and leadership from all parties are required to bridge these critical gaps.”


IsDB, multilateral banks aim for $120bn in annual climate finance by 2030

Updated 14 November 2024
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IsDB, multilateral banks aim for $120bn in annual climate finance by 2030

RIYADH: Multilateral development banks are aiming to mobilize $120 billion annually by 2030 for climate financing in low- and middle-income countries, according to recent projections.

This ambitious funding goal includes $42 billion dedicated to climate adaptation efforts, with an additional $65 billion expected to come from private sector investments.

The target was unveiled in a joint statement issued during COP29 in Baku, Azerbaijan, by several prominent MDBs, including the Islamic Development Bank, African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Development Bank of the Council of Europe, the European Bank for Reconstruction and Development, and the European Investment Bank. Additionally, the Inter-American Development Bank, the New Development Bank, and the World Bank Group are part of the initiative.

The statement emphasized that setting a strong, collective climate finance target is crucial to meeting the goals of the Paris Agreement.

“A new collective quantitative target on climate finance that is both strong and ambitious is essential to achieving the Paris Agreement’s objectives,” the statement read. “We urge parties to reach a robust conclusion on this target.”

For high-income countries, the MDBs have set a target of $50 billion in annual climate finance, including $7 billion specifically for adaptation, with private sector mobilization expected to generate an additional $65 billion. This new target builds on the success of previous climate finance goals, with MDBs already surpassing their climate financing projections for 2025. Since 2019, the MDBs have increased direct climate finance by 25 percent and doubled climate mobilization efforts over the past year.

In response to the urgent need for enhanced climate action, the MDBs also emphasized the importance of establishing a new collective quantitative target for climate finance at COP29. The institutions highlighted their commitment to ensuring that the finance provided leads to meaningful, measurable impacts on both climate mitigation and adaptation.

To further enhance the effectiveness of climate finance, the MDBs released the “Common Approach to Measuring Climate Outcomes,” a framework that provides standardized indicators for tracking global progress on climate mitigation and adaptation. This framework aims to better align MDB activities with global climate goals and improve transparency in measuring outcomes.

Additionally, the MDBs published their “Country Climate Action Platforms,” reaffirming their commitment to strengthening collaboration between host countries, MDBs, donors, and the private sector. These platforms are designed to ensure that climate finance is targeted effectively and that developing countries have the support they need to implement robust climate policies.

COP29 has emerged as a critical moment in global climate negotiations, especially for the Global South, where developing nations are pushing for significant climate financing, stronger adaptation measures, and equitable policy outcomes. These countries continue to advocate for a climate finance framework based on the principle of common but differentiated responsibilities, recognizing that nations’ contributions should reflect their respective capabilities and historical responsibilities.