WHAT IT TAKES TO TACKLE MENA ACCOUNTABILITY BARRIERS

 

Progress on data and sustainability has become essential to effective government efforts in the country.

In their area, Dubai and Abu Dhabi have become leading lights for cities and countries looking to strengthen efforts to improve transparency.

Global Real Estate Transparency Ranking, Abu Dhabi was the most improved town this year (GRETI). Dubai Developers has remained the most open market in the Middle East region of North Africa (MENA).

The rest of the country, however, has struggled to make up ground, the key stumbling block being political instability. All of Lebanon, Iraq and Libya dropped down the rankings, with Libya coming in as the least open nation in the world.

"The initiatives of Abu Dhabi and Dubai will need to be replicated by countries across the MENA region if they are to attract greater investment," says Dana Salbak, JLL Head of MENA Study.

Initiatives introduced over the past two years across the region range from sustainable finance to simple market data.

With COVID-19 influencing the economy and the amount of capital in real estate, in order to remain attractive, many countries in the region need to boost their transparency. Progress on sustainability and on both corporate and government data is required for changes to be made. This can be supported by technology platforms and tools.

Data from the market

More coordination between the public and private sectors of the region should help to boost transparency as data is exchanged more widely, JLL's report states. Egypt is taking such measures, with the government of the country seeking to promote business and attract more foreign direct investment. Similar to Europe's GDPR law, the country also passed legislation on personal data security legislation this year.

Data connectivity is getting better in both Dubai and Saudi Arabia. The Dubai Land Department launched a single house price index, Mo'asher, last year.

"In the drive to increase market transparency, the availability of data from government agencies has played a major role, adding that the Saudi government has renamed its publicly accessible central database, the General Statistics Authority.

Also promising is the shift towards more frequent monthly or quarterly reporting of economic indicators,

Through partnership with other global investors, the deeper pockets of the Abu Dhabi Investment Authority, the Dubai Investment Corporation and the Emirates Investment Authority have also contributed to growth.

"We've seen regional sovereign wealth funds team up with large, global institutional investors who, when entering joint ventures and partnerships, expect a certain level of corporate transparency.”Some of those techniques of accounting and reporting are rubbing off. But this sort of scenario is less prevalent for smaller nations across the country.

Green Thought

At home, Abu Dhabi has placed government policies in place to boost the competitiveness of both corporate and Real Estate Developers in Dubai. The Ministry of Climate Change and Environment of the United Arab Emirates is collaborating with the financial free-zone of the Abu Dhabi Global Market to introduce sustainable finance policies. Similarly, the first UAE Green REIT was also launched earlier this year by the energy company Masdar, owned by the sovereign wealth fund Mubadala, within the ADGM free-zone.

The AED50 billion (US$13.6 billion) Ghadan 21 economic program, introduced last year to boost living standards and infrastructure, also helped increase transparency in Abu Dhabi.

"Investment initiatives that are large-scale and transparent can help attract international investors, especially infrastructure developers," she says. "Without significant financial commitment, such plans, which are more often than not long-term, are not achievable."

Lower-ranking countries' recent political experience remains an impediment.

"Countries with less influential or less stable state-owned investment authorities will find progress more difficult. In several countries around the country, it is not even a decade after a significant political and social upheaval.

"And because of the impact that COVID-19 has had on all economies, transparency initiatives can now be seen to be fast-tracked in an effort to further improve investment prospects."