UAE Firms See Global Fiscal Crises As Biggest Risk To Business- Survey

The majority of executives (21.4 per cent) in the UAE reported that global fiscal crises pose the biggest risks for doing business in their home market, a new survey has found.

According to the World Economic Forum’s executive opinion survey, supported by Zurich Insurance Group, executives in the UAE were concerned that failures in other major economies could impact the UAE’s business environment.

Fiscal crises also ranked as the top concern among the 13,000 business executives who were polled globally for the survey.

The second highest ranked risk by UAE executives was the falling oil prices with 11.2 per cent seeing it as an impediment in operating in the local market.

Meanwhile, around 10.5 per cent of respondents in the UAE said that they feared a ‘liquidity crisis’ while 9.4 of those polled saw the failure of a major financial mechanism as a potential risk.

Violent interstate conflict was also seen as a threat by regional businesses, the survey said.

UAE businesses also ranked the country low in sections such as ‘prolonged neglect of critical infrastructure’ and ‘mismanaged urbanisation’.

“Businesses in the UAE face a plethora of global risks,” said Brian Reilly, CEO of Zurich Insurance Middle East.

“Given the UAE’s position as a global business hub, and the severe impact that the previous global financial crisis had on the economy, I am not surprised to see the risk of fiscal crises ranked as the biggest threat to doing business in the UAE.

“Global risks do not respect national boundaries so it is imperative that executives are aware of the biggest risks to their business in the UAE.”

Gulf markets, especially Dubai, were hard hit during the global financial crisis in 2009.

But regional markets rebounded steadily over the last two years, and many investors also turned towards the Middle East due to a slowdown in the Eurozone.

However, the economic recovery has been slightly offset by low crude prices, dampening growth outlook for many oil-producing countries.

In January, the International Monetary Fund lowered the growth forecast of the Middle East region to 3.4 per cent in 2015, down from 3.9 per cent from its October 2014 estimation.