Can the UAE bank on post-Brexit financial business?
Dubai and Abu Dhabi are well positioned to attract London bankers
The UAE has got into the habit of proving the rest of the world wrong, particularly when it comes to its business ambitions.
The world has scoffed at outlandish plans for, among other things, a large drydock port at a small coral beach, international airlines and opulent art galleries. Of course, Jebel Ali Port, Emirates and Etihad Airways, and the Louvre Abu Dhabi are only the tip of the iceberg when it comes to the UAE’s successes in different sectors.
Now, the UAE has been touted as an alternative destination for London’s international bankers, in the wake of last year’s Brexit vote that will see the UK leave the European Union by March 2019.
The suggestion by Miles Celic, the chief executive of financial lobbying group TheCityUK, that the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) may prove attractive destinations for Brexit bankers may raise a few puzzled eyebrows in financial centres like Frankfurt, Dublin and Paris, all of which are hoping to attract London-based financiers.
But the UAE’s hubs have much to recommend them as alternative bases for British bankers; the country’s proximity to both Europe – with flights to Frankfurt taking just over six hours – and to rapidly growing Asian economies such as India and China make it an attractive location for global firms seeking 24-hour global coverage.
Moreover, the common law systems of both the DIFC and ADGM, together with the prevalence of the English language, would provide some familiar comfort for Britain’s bankers, together with the centres’ ambitions in rising areas including fintech and Islamic Finance.
As Mr Celic notes, the UAE’s benefit from Brexit is likely to be piecemeal, with other London bankers likely to be reassigned back to the US or further east to Asia.
In spite of impressive strides in recent years, both the DIFC and ADGM as financial centres remain small in comparison with the likes of New York, Singapore and Hong Kong.
But the UAE’s attraction for international financiers should not be underestimated by its rivals. If ADGM and DIFC can attract even a tiny sliver of London’s financial services sector post-Brexit, it would be yet another success for the UAE, proving the international naysayers wrong once again.
Updated: September 2, 2017 07:52 PM