The crown jewel of Luxembourg’s service industry
The crown jewel of Luxembourg’s service industry
© SIP, Luc Deflorenne
“Credibility, transparency, responsibility and personal commitment are the trade marks of the Luxembourg business community”. These were the words of Crown Prince Guillaume during his opening speech in front of 150 experts at a financial seminar in Abu Dhabi organised by Luxembourg for Finance. Both the Crown Prince and Minister of Finance Luc Frieden underlined the excellent relations between the United Arab Emirates and Luxembourg. In this context, Minister Frieden spoke about sending a strong signal to the Gulf Region.
The Luxembourg government decided to open its first and, so far, only embassy in the Gulf Region in Abu Dhabi, which is one of seven emirates of the United Arab Emirates (UAE). Minister of Finance Luc Frieden is convinced that this will further develop the political and economic relations between the Grand Duchy and the countries from the Middle East. “We have a lot to share with the countries of the Gulf Region. The world is global and nobody will survive if he is only looking at his national interests.”
The Middle East is an extremely important region for the Luxembourg financial community. The UAE for instance is an ideal region for investments due to its strategic and accessible location for major regional markets, its reliable infrastructure and the minimal financial risk for investors.
“It is nice to be back in Abu Dhabi”, Luc Frieden states. “Since our last visit here a lot has changed in the world, and also a lot in the European Union. The last two years have been difficult, challenging times for investors and for finance ministers.” The consequence of the banking and financial crisis is more transparency, supervision and stronger regulation for banks.
Mr Frieden believes that there is light at the end of the tunnel. Determined action by governments managed to avert a collapse of the European economy and enabled it to get out of a difficult situation. The internationally oriented economies in the euro zone, like Luxembourg and Germany, are doing quite well after a difficult year in 2009.
Having a stable currency and sound finances are two sides of the same coin. “This is what we try to apply in Luxembourg. Unlike the other countries of the European Union, we have always advocated sound public finances. We realised that those international actors and investors who come to Luxembourg are seeking a stable political, economic and social climate”.
Sound public finances allow the government to have a predictable tax policy which is the key element when it comes to developing the industrial and financial sectors.
Today there are some 150 banks in Luxembourg and all the big names globally are represented. Luc Frieden illustrates the current situation with an example. “A month ago, the largest bank of the world in terms of market capitalisation, the Chinese ICBC, established its European headquarters in Luxembourg. This shows the trust international actors put in Luxembourg”.
The Gulf Region is also extremely important for the fund industry. Claude Kremer, chairman of the Luxembourg investment fund association ALFI, stresses that his organisation goes there very often. In 2009 it was even decided to launch ALFI’s first working group outside Luxembourg with actors from the fund industry based in the region. Claude Kremer is very satisfied with the outcome, after two years. “It is a precious help for ALFI to get direct feedback from those who know the region best. It soon appeared that many Luxembourg based players had a local presence in the Middle East”.
Saudi-Arabia will be the next stop of the Luxembourg financial mission. The Kingdom of Saudi-Arabia, possessing 20% of the world’s proven petroleum reserves, has an oil-based economy and a stable banking industry. CW
Photo: (f.l.t.r.) Saif Al Shamsi, Director of the UAE General Bank; HRH Hereditary Grand Duke Guillaume; HE Luc Frieden, Minister of Finance