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Tue 31 Aug 2010 05:52 PM

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Dubai's DIFC may help Abu Dhabi set up finance hub

'Our strategy is always to collaborate with Abu Dhabi and the federal authorities' - CEO.

Dubai's DIFC may help Abu Dhabi set up finance hub
DUBAIS DIFC: Dubai set up DIFC in 2004 to attract international banks, asset managers and insurers to help diversify its economy. (Getty Images)

Dubai International Financial Center, the tax-free business park for financial-services companies, will help neighboring Abu Dhabi set up its financial district if needed, its chief executive officer said.

“Our strategy is always to collaborate with Abu Dhabi and the federal authorities,” Abdulla Mohammed Al Awar said in an interview in Dubai on Tuesday.
“One financial center is not sufficient” for the Middle East, North Africa and South Asia region, and DIFC is prepared to share its experience of operating the center in the past six years.

Dubai set up DIFC in 2004 to attract international banks, asset managers and insurers to help diversify its economy. Abu Dhabi, the richest of the seven states that make up the United Arab Emirates and holder of about 8 percent of the world’s oil reserves, is also boosting investments in industry, tourist attractions and infrastructure to diversify away from oil.

International banks such as Goldman Sachs Group Inc., Citigroup Inc. and HSBC Holdings Plc., which have their regional offices in the DIFC, have boosted their presence in the Middle East over the past five years as rising oil wealth has boosted demand for financial advice. Bahrain and Doha in Qatar have also set up financial districts to attract foreign banks.

Abu Dhabi’s plan to develop a financial district is still in the “early stages” and may not clash with Dubai’s ambitions as “there are opportunities for various niches,” Al Awar said. Most companies that have set up offices in the DIFC “have a footprint across the region from Africa to the Middle East, South Asia and some even cover Europe,” while Abu Dhabi’s financial center may be more focused at its own economy, he said.

Abu Dhabi’s state-owned Mubadala Development Co is creating a new business hub on Sowwah Island, a project that could serve as the emirate’s financial hub.

Dubai’s government borrowed $20 billion last year from Abu Dhabi’s government, two of its banks as well as the U.A.E. central bank to help state-owned companies facing problems raising funds through the financial crisis.

“Rivalry is something of the past, given what has happened in the global economic crisis,” Marwan Ahmad Lutfi, deputy CEO and head of business development, said. “The more global companies there are in this region the better it is.” (Bloomberg)

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Hanan 9 years ago

It's funny how all the previous articles and interviews show what a failure the DIFC was/is and how mismanaged and out of focus and never delivered what it promised, etc. and now this article saying that it will teach Abu Dhabi how to start and run a financial hub? Some perspective people!

Dan Kitowts 9 years ago

Thaks Hanan for your comment. I was thinking about just the same. DIFC management has showed what should not be done. Now they are going to TEACH AD? sound very strange indeed. Even the solutions proposed to retain customers is not very clear. I doubt any one willing to leave the place due to inflated cost will look into their offer. Cost of doing business has to do with any aspects and rental is only one of them. If there is no business what ever is the rental cost, companies will leave. There are other costs like Dewa, Empower, Labour cost, admin headeaches with every single dpt in Dubai, etc... Despite this reality, I still wish you good luck

Marion 9 years ago

It appears there are many of us with the same sentiment with regards to this article. Simply hilarious!

Ahmed 9 years ago

Why are so many people negative about the DIFC? Under the inspirational leadership of His Highness Sheikh Mohammed Bin Rashid Al Maktoum DIFC has become THE leading financial center of the region, if not the world. I think that the negative comments must come from people who are jealous of the success of DIFC and its world wide role.

Toufik 9 years ago

"DIFC has become THE leading financial center of the region, if not the world". Ahmed, are you serious? can you give more details please.....? This is the funniest joke so far. AAAAARRRRGGGHHHHHH

hazem 9 years ago

Sir, your comment assures me that you are a government spokesman......You take care and and get ready to pack and move to AD to help them out shape up financially :))))))))

Peter 9 years ago

Could you describe specifically how DIFC has a worldwide role? Can't see it myself. In terms of it being a Gulf 'hub' - there isn't really much real competition for that role, so hardly something to boast about. From my perspective, I think DIFC was hugely damaged by the Damas episode. It showed it has no teeth, no ability to stamp out inappropriate behaviour and that it is unable to regulate to international standards. It's not on par with global financial centres - and investors know it.

Jebel Ali Baba 9 years ago

@Ahmed: Please wake up. You're still living in a dream world of 1001 fairy tales. It is not about being negative, it is about being realistic. If there would be one GCC financial center, it could be successful. But as long as every state is speaking with a different voice and following different interests, as long the stock trading places here are nothing else than playgrounds for some rich boys. Not at all internationally important.