New Silk Road has global significance for dynamic economies, says Ba'alawy

When economies such as Dubai become world-class players they need to adapt to world-class rules especially in terms of corporate governance and regulatory framework, according to Soud Ba'alawy, Executive Chairman of Dubai Group, the leading diversified financial company of Dubai Holding.

Elaborating on the factors that drive sustainable productivity and growth in the world's most dynamic economies, Ba'alawy said visionary leadership is an essential pre-requisite.

He said: "The contribution of the government sector, however, comes in three forms - the development of a meritocracy mechanism that distinguishes between ownership and management; encouraging the development of human talent through attractive incentive systems, and promoting entrepreneurship."

Ba'alawy stated that adopting economic clusters has proven conducive to creating a growth environment. Clusters such as Dubai's TECOM free zones, Dubai International Financial Centre (DIFC), Dubai Healthcare City, and Jebel Ali Free Zone have become engines of growth for their industries, succeeding in attracting the best global talent. "That is how Dubai succeeded in becoming the commercial hub of our region."

Citing Dubai as a model for dynamic economic development, Ba'alawy said that sound corporate governance and implementation of legal and regulatory framework in accordance with best global practices is essential.

He added: "When Dubai aspired to become a financial hub, we took the bold decision to create a world-class regulatory environment. We also established an independent regulator (DFSA) and an independent arbitration and court system, in addition to the actual cluster, DIFC, which managed to attract 462 financial institutions in two to three years."

He said the new "Silk Road" between Asia and the Middle East is an example of sustainable growth in emerging markets, validating the strategic economic partnerships with China and India. Trade in the China-Middle East region (CHIME) has been rising steadily, with the UAE as China's 5th largest trade partner, registering a surplus of US$ 7.6 billion in the first half of 2007.