It was only five years ago that the DIFC was the centre of some, well at least I thought, rather good jokes. “I work in Dubai International Food Court,” was a phrase commonly used. In June 2010, Dr Habib Al Mulla – the UAE legal legend who drafted much of the DIFC’s legal structure, told Arabian Business: “The Dubai International Financial Centre is more of a shopping centre and more of a real estate project. They need to get back on track to the initial goals of the DIFC.”
Five years is a long time, and today, I think it is time to salute the DIFC. It has shown itself to be a great shopping centre, a great real estate project, and most importantly of all, a fabulous global financial centre.
Last Wednesday it unveiled plans to triple in size over the next decade by attracting companies from the fast expanding markets of China, India and Africa.
The financial free zone, which was established in 2004, wants to increase the number of domiciled financial firms from 362 in 2014 to 1,000 in 2024. It plans to grow assets under management at DIFC from $10.4bn to $250bn in the next ten years, and firms to triple their cumulative balance sheet from $65bn to $400bn. And it wants to double the amount of leased space at the free zone from 2.5 million sq ft in 2014 to 5.5 million sq ft in 2024. Best of all, it is targeting a trebling of the workforce from 17,860 to 50,000 over that period.
Can it be done? Given that the DIFC saw double-digit growth in 2014, and a workforce rising 14 percent to 18,000, I think now is the best time since 2008 to be optimistic. The strategy to success is twofold: first is to encourage existing occupiers to grow more. This, according to DIFC governor Essa Kazim, could represent a massive 30 percent of future growth.
Just as important, though, is focusing on China and the surrounding Asia-Pacific region. Kazim predicts that this is where 50 percent of future growth will come from.
Such figures would have seemed a pipe dream only five years ago. But to its credit, the DIFC has established itself as a financial free zone with laws written in English and a default to English law where there is ambiguity.
It has, to be honest, been a long hard sell. For many years, financial centres in Doha and Bahrain were positioning themselves as decent alternatives (though for different types of business). However, the figures now speak for themselves. Never mind how good things could be in 2024, the DIFC has already shown itself to be a hugely successful global financial centre.
FIFA itself needs to be shown the red card
Ditching its sponsorship of FIFA turned out to be a very smart move by Emirates Airline. As its president Sir Tim Clark told reporters last week in Miami, “I’m very glad that our name was not associated with it at this stage.”
However, Sir Tim went on to explain that when the current corruption crisis is over, the airline would consider getting back in as a sponsor. He may have to wait a while. FIFA is rotten to the core. It is institutionally corrupt, and its top tier of leadership are either in jail, or about to go to jail. I have doubts that even a completely new and clean president will ever be able to make FIFA a credible, trustworthy organisation again.
The best way forward would be to totally dismantle it, and start from scratch again with a new structure and totally new leadership (not just a new president). The billions of dollars of revenue each year could be placed in a trust fund, while a new body is created. If that takes five years, so be it. Nobody needs FIFA.
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