Sheikh Saud urges governments to be role models

Delivering the opening keynote address at the Ras Al Khaimah Conference 2008, organised joinly by Ras Al Khaimah Investment Authority (RAKIA) and Middle East Business Intelligence (MEED) at Hotel Al Hamra Fort here, Sheikh Saud said that Ras Al Khaimah during the last four years was trying to implement a new vision of governance where the government acts and performs as a business unit.

He said that governments should generate revenue through legitimate, sensible investments, like any other business, to support developmental spending. "In terms of increasing revenues, governments can always be lured by taxation which ultimately makes the rest of the population poorer but does not necessarily ensure that the government is richer as it can all easily go to waste," he added.

"The government should invest and be rewarded by profits and these profits can then be spent on the people and the country. In this way the image of the government is changed from being a burden on the lives of the people to an asset for the people, a source of revenue," Sheikh Saud said

Outlining his vision of governance, Sheikh Saud noted," I subscribe to the view that government must act and perform like a business unit as it is in many ways the most important company in the country and one that we cannot afford to fail. It is important therefore to create a financial structure in the government whereby the government becomes a model for the private sector."

Sheikh Saud said that RAK Government has during the last four years successfully implemented this new model of governance which has transformed the emirate, which five years ago was indebted, into a smooth running enterprise.

"We have run a government that now has no external debt and has been running consistent budget surpluses over the past 5 years and in doing so we have been able to invest in other sectors of the economy such as education, health and physical infrastructure."

He also noted that RAK GDP has been growing on average at 12 % in the past four years with last year alone saw GDP growth at 18 %.

Sheikh Saud announced that the Emirte and Government of Ras Al Khaimah has received an `A- rating' from both Fitch and Standard and Poor. "This rating is vindication that the way we have been doing things for the past 5 years is indeed the right way and that a government run like a business can only succeed," he noted.

The emirate, rapidly emerging as a new hotspot for investments in the region, has strived to understand the mindset of the investor and has taken steps to boost infrastructure, created a one stop- shop licensing system and a legal infrastructure that protects investors, Sheikh Saud said.

"As part of upgrading the infrastructural facilites, we have aimed to make Mina Saqr Port the most efficient port in the Gulf for bulk materials handling. The amount of bulk handled At Mina Saqr has increased from 3 million tonnes to 27 million tonnes per annum and the past four years have also seen the quadrupling of cement production in the emirate," he said.

Replying to a question on current high inflation levels negatively impacting the competitive advantages for the manufacturing sector in the country, Sheikh Saud said that the Government hoped to retain competitiveness by increasing productivity and being more efficient.

"RAK with its huge cement, aggregate and building material capacities and with a number of factories in the glass, ceramic and other building materials has an advantage in containing inflation. By hosting more and more industries we are fighting inflation by securing ready availability of goods," he said.

Sheikh Saud said that a study is currently underway to have a railway system through the emirates to boost the logistics infrastructure. He also noted that RAK Government is looking at connecting the emirate to cheaper forms of energy. "We have a gas agreement with Umm Al Quwain which will be due in March or April and another gas agreement with Oman which will be due in August or September," he said

More than 35 high profile international speakers and scores of entrepreneurs and business leaders are attending the two-day conference and its specialized sessions on real estate, aviation, logistics, free zones, manufacturing, energy, investment finance and other growth sectors. The conference will end on January 28.