The four-year old Qatar Financial Centre is catching up fast with the Dubai International Financial Centre which celebrated its fifth anniversary last week. The Doha-based QFC has more than 900 people working under its umbrella compared with the 1,400 now employed by firms registered at the DIFC.
But Dubai does rather better in terms of the number of registered financial institutions under its domain, with more than 300 compared with 116 at the QFC of which 10 are dormant licenses.
DIFC firms downsize
The DIFC is understood to have cancelled a number of licenses this year, and its firms have been downsizing in the wake of the global financial crisis. However, the majority of people working in the DIFC are employed by just a handful of institutions, leaving many licensees as little more than a nameplate.
The QFC has long been pictured as the minnow compared with the giant DIFC. But these latest figures show that the younger Doha-based centre for financial institutions is not so far behind Dubai.
CEO Stuart Pearce says the financial crisis impacted local banks rather than the international institutions regulated by the QFC. They are also allowed to do business in Qatar in local currency unlike firms residing in the DIFC. Law firms were the exception, he concedes, but their business has now rebounded from the credit crunch.
Growing attraction
Doha has also witnessed a steep fall in rents just like Dubai and a fall in general inflation. Pearce claims this is adding to the attractions of following the money to Doha, while Dubai’s high debt levels leave the outlook for business there more open to question.
This is a biased view of course. But the latest data on the two centres does give substance to the contention that Dubai’s status as a regional financial hub has been exaggerated and is still an ambition rather than a reality. For that matter Bahrain might still have a claim to this crown.
But against the background of an economy set for GDP growth of anything from 16 to 24 per cent next year, it is hard to argue that the outlook for the QFC is anything other than bright, while heavily indebted Dubai has a great deal to prove.END
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