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Gulf financial centres slip down global ranking list

New York has held onto the top spot in the Global Financial Centres Index (GFCI 33) Reuters/Bjoern Kils
New York has held onto the top spot in the Global Financial Centres Index (GFCI 33)
  • Middle East centres fall, with US and Asia Pacific dominating top spots 
  • Dubai and Abu Dhabi continue to rank first and second in region 
  • Riyadh climbs 10 places

Financial centres in the UAE, Qatar and Bahrain have fallen in the latest global index as their rivals in the US and Asia Pacific come out on top. 

Dubai and Abu Dhabi continue to take first and second places in the Middle East region, but they have both dropped down the overall league table.

Dubai has slipped five places to 22nd in the 33rd edition of the Global Financial Centres Index (GFCI 33), which ranks 120 financial centres around the world. 

Abu Dhabi has fallen three places over the last six months to 35th

The GCFI is published bi-annually, in September and March. 

Of the remaining Gulf financial centres, Doha fell seven places to 64th, and Bahrain dropped one place to 82nd.

Riyadh and Kuwait bucked the trend – with the former having climbed 10 spots to 88th position and the latter climbing six spots to 102nd

“We shouldn't read too much into a single GFCI edition,” Mike Wardle, CEO of Z/Yen Group, a UK-headquartered commercial think tank that compiles the GFCI, said. 

“However, there has been a slight fall in the survey assessments given to most centres in the Middle East region, and a slight fall in their relative rank in the quantitative measures compared to other centres – and this is true of Dubai and Abu Dhabi.

“The strength and progress of US and Asia Pacific centres, particularly outside China, is showing through.” 

The GFCI provides ratings for financial centres using 153 instrumental factors that are grouped into five broad areas of competitiveness: business environment, human capital, infrastructure, financial sector development, and reputation. 

“The trend is important, rather than a snapshot,” said Wardle. “I wouldn't be surprised if Middle Eastern centres bounce back as the leading centres are strong.

“In the case of Riyadh, Saudi Arabia has been active in promoting financial services, and this is likely to have had an effect on its improved ranking.” 

Along with Riyadh, Mauritius has recorded one of the best improvements in rankings since the GCFI 32 was published in September last year, climbing 11 spots to rank 81st

“Mauritius being taken off the FATF grey list has really helped their reputation,” Wardle said. 

At the end of last year FATF [the Financial Action Task Force], the international watchdog dedicated to fighting financial crime, approved a re-rating upgrade for Mauritius which removed it from the grey list.  

Last month the FATF upheld its decision to keep the UAE on the grey list, a status it had assigned to it in March 2022. 

Wardle said that while he does not have direct evidence of a link between the UAE’s grey listing and the fact that the Dubai and Abu Dhabi financial centres’ rankings have fallen in the GCFI 33, he said: “In general, such listings by international bodies do affect perceptions of financial centres, which in turn may affect the choice of business location.” 

The GFCI 33 also provides evaluations of future competitiveness and it is worth noting that both Dubai and Abu Dhabi feature in its ranking of "the 15 centres likely to become more significant", with Dubai ranked sixth and Abu Dhabi 10th

New York held onto top spot yet again – the city has ranked first in the index since September 2018 when the GFCI 24 was published – while London, Singapore and Hong Kong remain in second, third and fourth position, with San Francisco close behind in fifth. 

US cities accounted for five of the top 10 financial centres.

“The data was sourced before the current banking difficulties in the US so we will have to see if this changes when we revisit the index in the autumn," Wardle said. 

The report also highlighted the increasingly important role of fintech for financial centres. 

“It would appear that fintech is becoming more important in the growth and development of financial centres today – more so than the weight of tradition or the way that capital is being managed,” Michael Mainelli, co-founder of Z/Yen Partners, said.

“Fintech is regularly cited when I speak to financial centres as a key determiner of innovation in financial centres today.” 

Wardle added: “Both Dubai and Abu Dhabi are investing in support for fintech, whether in the DIFC FinTech Hive or the regulatory steps that have been taken by ADGM to support fintech development.” 

GFCI’s latest fintech ranking, included in the GFCI 33, shows Dubai leading the region in 30th place overall. Abu Dhabi follows in 48th, followed by Riyadh (72nd), Doha (78th) and Kuwait (93rd). 

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