The United Arab Emirates government has told some of its biggest business families that it intends to remove their monopolies on the sale of imported goods as the Gulf state deepens economic reforms in an effort to attract more investment.
For decades, multinationals have had to appoint local partners to distribute their goods. The government has proposed legislation ending the automatic renewal of existing commercial agency agreements, giving foreign firms the flexibility to distribute their own goods or change their local agent on contract expiry.
“It no longer makes sense for individual families to have such power and preferential access to easy wealth,” said an Emirati official. “We have to modernise our economy.” Officials have indicated that the new law is expected to be approved by Emirati leadership but the timing remains uncertain. The UAE government did not provide comment.
The proposed reform would tear up the longstanding social contract between the government and influential merchant families, including storied names such as Al Futtaim, Al Rostamani and Juma Al Majid, replacing decades of protection for local interests in favour of foreign entities. “This is one of the taboos most difficult to touch due to its impact on family-owned local businesses, one of the largest sectors of the UAE economy,” said Habib Al Mulla, executive chair of law firm Baker McKenzie’s Middle Eastern branch.
No comments:
Post a Comment