UAE on track to achieve high growth, Minister of Economy asserts

The UAE Minister of Economy says number of new initiatives to spur the economy

26 October 2015

Abu Dhabi: The UAE is set on a path to maintain high growth despite the economic uncertainties in the world, weakening oil prices and regional instability, the UAE Minister of Economy said on the second day of the Global Agenda Summit in Abu Dhabi on Monday.

“We have drafted a vision for many sectors to be developed by 2021. We plan to ensure that 5 per cent of the total GDP is generated from innovation and will be completing 30 new initiatives as part of our strategy in the next three years,” said Sultan Bin Saeed Al Mansouri. He was speaking at the opening plenary of the summit.

Image credit: WAM

High profile dignitaries including Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister of the UAE and Minister of Presidential Affairs, Shaikh Hamed Bin Zayed Al Nahyan, Managing Director of Abu Dhabi Investment Authority, also attended the opening plenary.

Al Mansouri said on-oil sector contribution will increase to 80 per cent of the UAE’s Gross Domestic Product by year 2021.

“We are well on our way with non-oil sector contributing almost 69.6 per cent of the GDP in 2014.”

The comments gather significance as the UAE focuses on diversification of the economy due to plunging oil prices. From $115 in June last year, oil prices dropped to less than $50 per barrel in recent times.

As part of the diversification strategy, Abu Dhabi Global Market started receiving applications to start the business last week.

ADGM is expected to play an important role in attracting financial institutions to Abu Dhabi whose economy is mostly dependent on oil revenues.

Speaking on the industrial sector, he said it is the second largest contributor to the UAE’s economy after oil and gas accounting for nearly 14 per cent of the national economic output at the end of 2014.

“We believe that the industrial sector has immense potential to achieve sustained growth. Masdar leads the renewable energy development in the region with a financial commitment of $1.7 billion and is responsible for generating 1 gigawatt of green power worldwide. It has delivered 14 projects in five countries and has 13 ongoing projects in nine countries.”

“Strata started in 2010, is the anchor of the UAE’s aerospace sector. It has delivered its first products for the airbus industry A330 and A340.”

He added that Expo 2020 to be held in Dubai will further give boost to the country’s efforts to diversify its economy.

“The economic impact generated by Expo 2020 will be nearly $19.6 billion in the region. This is the first expo to be held in the Arab world.”

Small and Medium Enterprises sector, he said contributes to 60 per cent of the total GDP and generates 86 per cent of all private sector jobs.

The GDP is expected to grow to 3 to 3.5 per cent amounting to 1.5 trillion dirhams this year, he said.

“The country is set itself to a path of high growth despite slowdown in the global economy. We want to encourage innovation and entrepreneurship locally, regionally and internationally.”

Ali Majid Al Mansouri, Chairman, Abu Dhabi Department of Economic Development, said there are number of ongoing projects which are on way to completion that will contribute to diversification of the economy.

“Horizontal economic diversification is at the heart of the long-term strategic plan of Abu Dhabi. We have a plan and targets to make non-oil sector play an important role and reduce dependance on oil for sustainable growth.”

The government has taken various measures for diversification of the economy and the opening of Abu Dhabi Global Market recently is an example, he said.

“The cultural district on Saadiyat Island is rapidly taking shape with the Louver museum slated to open late next year followed by Zayed Museum and Guggenheim.”

“The nuclear energy project has achieved all milestones and is on track to deliver power by 2017. By 2020, 25 per cent of UAE electricity demand will be met by nuclear energy.”