Emirati Minister of Economy Sultan Bin Saeed al-Mansouri
Abu Dhabi Department of Economic Development and Dubai Department of Economic Development organised yesterday at the Emirates Palace Hotel, in Abu Dhabi the "UAE Economic Prospects Forum 2014" which reviewed the future
prospects for the UAE in the light of the economic indicators and the economic progress achieved by the national economy under the developments of the global economy.
The forum was opened by Sultan Bin Saeed Al Mansouri, the Minister of Economy, in the presence of Nasser Ahmed Alsowaidi, the Chairman of Abu Dhabi Department of Economic Development, Sami Al Qamzi, the Director General of Dubai Department of Economic Development, Mohammed Omar Abdullah, the Undersecretary of Abu Dhabi Department of Economic Development, a number of senior officials in the State and the ambassadors of sisterly and friendly countries to UAE.
The minister of economy in his opening speech of the forum, expressed his thanks to the Departments of Economic Development in Abu Dhabi and Dubai, for their initiative and the preparation and organisation of this important forum, which reflects the positive image of constructive cooperation between local government departments.
He said that this event also shows the keenness of the two departments, to lay solid cooperation and coordination for the benefit of the national economy, and to consider together in an affirmative way the international experiences in economic diversification policies and approaches, which are adopted and practically applied in the country, and to review future prospects for attracting direct investment and further and promote development.
The minister pointed out that the forum comes at a time when the UAE is experiencing many developments, and moving ahead at a steady pace, which enabled it to assume a prominent place amongst the countries of the world, excelling in various economic and social areas and fields, the latest of which was gaining the confidence of the world, by hosting Expo 2020 in Dubai. This in itself is an international recognition of the of UAE's civilised and prominent status on the world map.
He said that due to peace, security, economic and social stability and sophisticated infrastructure enjoyed by the United Arab Emirates, the country was able to realise great achievements in all fields and at all levels, despite the difficulties which the world economy recently experienced, and the repercussions which reflected negatively on most countries at varying degrees.
The minister said that the UAE economy has achieved remarkable progress in 2013, where GDP rose to more than Dh4.1 trillion growing at 4% according to the IMF data, which was a relatively good rate of growth in view of the unstable global economic conditions. However, the non-oil sectors contribution to growth was considerably high, reaching 7% in some sectors 7%, while sectors of tourism, industry and finance came on top of the sectors.
The minister of economy said that the activities of the Emirates securities market increased, and that Dubai Financial Market was ranked first topping all international exchange markets by a growth rate which exceeded 106%. Abu Dhabi Securities Exchange also grew by 63%.
The minister added that the economic analysis and expectations indicated that the UAE economy will continue to achieve positive growth rates in 2014, driven by results which were achieved in previous years, while oil prices are projected to remain high, with anticipated recovery of the world economy.
Al Mansouri said that non-oil sectors are expected to achieve higher growth rates compared to last year, and this could be evidenced from the indicators of these sectors. For the manufacturing sector for example, is expected to become in the coming years the largest aluminium producer in the world, while the specialised industrial cities and the specialised industries quality industries, such as shipping and aircrafts will greatly raise the contribution of the sector to GDP and will boost diversification of the sources of income.
He expected that the tourism and travel sector will also continue to grow considerably, in view of the transformation of the UAE into an international touristic destination, and the hosting of Expo 2020 in Dubai, pointing out that the number of passengers across the airports of UAE reached about 90 million 2013.
The minister of economy expected that the general budget would achieve a surplus of 9% of GDP, which is twice the level achieved in 2012.
He added that the foreign trade sector, in which UAE enjoys a great competitive advantage, will expectedly grow in 2014, as commodity exports are anticipated to increase, as well as oil exports by 5.8 % to Dh1.4 trillion in the current year, compared to Dh1.3 trillion in 2013.
The minister said that due to the expected economic recovery, and the predicted increase in re-exports, imports are also anticipated to rise tremendously this year to nearly Dh885 billion compared to Dh797 billion last year.
The minister of economy explained that in spite of the positive growth rates and the accompanying increase in domestic demand, it is expected that inflation rate will not exceed 2% in 2014, due to the flexibility of the national economy, and the ability to take appropriate measures to control prices and curb inflation. Accordingly the minister expected that the markets of the State will be attractive to foreign investments, as well as various non-oil sectors, especially the tourism, real estate, construction and financial sectors, in view of the growth of foreign direct investments by 20% in 2013, which is expected to increase to Dh44 billion in 2014.
The minister noted that according to the report issued by the World Bank in the last Quarter of 2013; it is expected that the national economy will grow by 5% in 2014, to form one of the propellers of the world economy with the rest of GCC economies.
In this context, the minister expected that the national economy would continue its positive performance in the coming years and post high rates of growth in the range of 4.5% and 5% during the period between 2015 and 2018, expecting that the GDP would reach Dh1.7 trillion which will enable the UAE to maintain its position as second largest economy in the Arab world.
"We were able in a short period of time to achieve advanced ranks in international indicators, which shows the huge capabilities of our economy, especially with regards to the global competitiveness index, in which UAE ranked 19th among 148 countries, and acquired the 23rd rank in the Ease of Doing Business Index. UAE came ranked first in the index of confidence in government and economy issued by the American company "Edelman", the minister said.
He also added that those achievements were attained through restless efforts and persistence, noting that among the most important reasons for this marvellous performance, are the sound infrastructure, the low custom fees, the availability of free and specialised free zones, the free economy and the openness towards the world.
The minister stressed the determination of the United Arab Emirates to continue boosting and enhancing the investment climate to expedite achieving it set goals. He pointed out that the Ministry of Economy, in the past few years prepared a package of legislation which is expected to contribute to stimulate the economy and to protect and develop the business environment.
The Ministry of Economy embarked recently on the preparation of the Investment Law in collaboration with partners and strategic stakeholders, and the Completion Law which was issued lately, in addition to the Arbitration Law, the SMEs draft law, and a number of other legislations.
The minister said that the adoption and entrenchment of the concept of knowledge was focused on as one of the critical means for improving and enhancing competitiveness, raising productivity and benefiting from latest scientific and technological developments rapidly, as knowledge today plays a key role in all activities related to Each production of commodities and services, operations, management, administration, services, transport, marketing, financial transactions and human resource management; thus enabling efficient use of resources and achieving goals and objectives.
He said that in order to realise and achieve qualitative excellence, localise knowledge and deepen the use of knowledge in production operations, we need to strengthen partnership between private and public sectors and re-direct and encourage the private sector to investment in elements of knowledge and productivity, and the development of human resources academically and professionally.
The minister stressed that 'We pay great attention to the human element as an axis in the knowledge economy, and to supporting SMEs, developing legal frameworks for the knowledge economy, utilising international expertise and best Practices, increasing private and public spending for scientific research programs, establishing research centres at the federal and local levels and direct investment opportunities towards knowledge fields of economic and social development.
Al Mansouri noted that the National Agenda for the UAE Vision 2021 that was launched recently, stands as an ambitious plan for achieving economic and social goals, and reaching the set expectations in all areas, as it aims at achieving annual 5% real growth in non-oil sectors.
The minister added that the agenda aims at raising the contribution of SMEs to reach 70% of GDP, doubling the rate of employed nationals in the private sector and the rate of Emiratisation in the private sector, achieving advanced positions in the index of business leadership, the index of innovation, the index of the knowledge and doubling the rate of spending on scientific research, as well as the indices of transport, communication, water and Electricity to advanced global rankings and paying great attention to the social dimension through advancing health, and services to the highest standards and levels.
The minister of economy concluded his speech by saying, "Our future ambitions have no borders and will not be deterred by obstacles, as we draw inspiration from our leaders and their persistence and dedication. We aim at leadership, and being the first, taking the number "1" as the target which prompts all of us to cooperate , and be armed with knowledge, and diligent.
For his part, Alsowaidi delivered a speech during the opening session of the forum in which he said; "through this forum, which is the first of its kind, we will highlight the economic prospects for the United Arab Emirates in 2014, which runs and enjoys at the moment one of the most dynamic and strong economies not in the Middle East alone, but also in the world as whole".
Alsowaidi said that this forum comes as a result of joint cooperation and culmination of the efforts, which crown the continuous coordination between local government entities, and enhances the harmony of the Union march of our beloved Emirates in the various fields of development and giving laid by the Late Sheikh Zayed bin Sultan Al Nahyan, and built and raised by the restless efforts of President His Highness Sheikh Khalifa bin Zayed Al Nahyan, and the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum Vice President and Prime Minister of the UAE and Ruler of Dubai, and his brother, His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the Armed Forces, Chairman of the Executive Council of the Emirate of Abu Dhabi.
According to Alsowaidi, the economic growth and rapid development of UAE's economy for more than four decades resulted in the improvement of the UAE position on the map of the global economy, as the United Arab Emirates, in a comparatively short span of time, was able to achieve quality great leaps in the field of economic progress and prosperity, through the developments and achievements in various spheres of life, and its citizens assumed leading positions and advanced ranking among nations in terms of wealth and prosperity, as the State has fulfilled the ambitions of its people of further development and well-being, which emphasises its international status and places them on top as the most happy people of the world.
Alsowaidi added that the State has achieved advanced positions in various global indicators, such as competitiveness index, the ease of doing business, economic freedom and, trade across the borders, in equal footing with and sometimes outweighing in many cases the major western economies, noting that the State confidently set its unique development model over the years, and is forward looking to a bright future and the thriving economic prospects.
Alsowaidi explained that the emirate of Abu Dhabi is witnessing a new phase of expansion and economic development, based on the vision of the leadership of the emirate, embodied in the economic vision of the Emirate of Abu Dhabi 2030, which aims primarily at moving the economy into a new phase of development entitled the "knowledge-based economy." He said that by tracing the economy of the emirate of Abu Dhabi, one finds that every day the economy continues to achieve quantity and quality breakthrough of excellence in various fields, in order to realise economic diversification, in the light of the numerous achievements on the path of economic development and remarkable growth rates, especially the huge development projects which were directed mostly toward non-oil activities.
Alsowaidi noted in this context the ambitious policy adopted by the government of Abu Dhabi over the past few years to diversify the economy, exploiting the available resources and the competitive advantages, that contributed to creating many investment opportunities in the Emirate of Abu Dhabi, which coincided with the orientations of the Government of Abu Dhabi, to stimulate and encourage the private sector to create real and effective partnership, support the development process of the emirate, create an inviting, efficient and attractive environment for the business, and to integrate into the global economy.
Sami Al Qamzi, Director General of Dubai Department of Economic Development in Dubai, said that the economy of the emirate of Dubai has witnessed a renewed vitality in the recent period, as Dubai GDP grew in accelerated pace during the period 2012-2013. Average growth reached nearly 7.4 per cent per annum, which is considered as a good performance in view of the international economic climate, and crisis in the European Union and the slowing growth in a number of emerging countries.
Al Qamzi added, "the sectors of tourism, trade, transport, communications, logistics, achieved the highest levels of growth in the past two years, with the gradual recovery of both the construction and the real estate sector. Dubai boosted its position as a regional centre for services and goods and as an ideal destination for foreign visitors, which led to high growth in value added at an average rate of 15% for the hospitality sector for the second year in a row" Al Qamzi predicted that this steady growth will continue in Dubai at 7.4 % in 2014, and to accelerate In the coming years , with the hosting of Expo 2020 and the anticipated improvement in the global economy.
"Dubai's economy has proved its resilience and shown remarkable growth appetite in the last two years. GDP growth indeed accelerated in the years 2012-2013, averaging nearly 4.7 per cent per year, which was a good performance in view of persistent recovery problems in the EU and the slowdown in emerging countries," he said.
Al Qamzi added: "The key sectors leading growth in Dubai have been tourism, trade, transportation, logistics and communication, with construction and real estate lagging behind until recently. In the last two years, Dubai has consolidated its position as a regional hub for services and goods and a major destination for international visitors, leading to double-digit growth in the hospitality sector for the second consecutive year.
'We expect growth to remain steady, at about 4.7 per cent in 2014, with likely acceleration in the following years, as Dubai gears up for Expo 2020 and the global economic environment improves".
Under the title "A shining view of the economic development journey of the Emirate of Abu Dhabi and its future prospects for 2014-2017", Ms Shorooq Abdullah Al Zaabi, Head of the Development Indicators and Future Studies, at the Planning and Statistics Division of Abu Dhabi Department of Economic Development in, gave a presentation on the most important economic forecasts for the emirate during the period 2014-2017.
Shorooq Alzaabi in her presentation stressed that the UAE economy, to which the Emirate of Abu Dhabi contributes about two-thirds of the UAE GDP, has become the focus, and gained respect and attention of the international community, as confirmed by many global economic indicators, such as the competitiveness index, the ease of doing business, the financial development and other indicators, which were the fruits of the efforts exerted by the leadership of the State, which always aims at raising the standard of living of citizens and residents in the UAE, where the people of the State sit on top of the happiest people in the world and its sisterly Arab countries.
Shorooq reported that these developments are reflected in the various economic indicators, such as gross domestic product, and economic diversification, and the development of infrastructure and other; all of which emphasise the proven fact that the welfare of the citizens of the UAE is the goal and the purpose sought by the wise government and sagacious leadership of His Highness Sheikh Khalifa bin Zayed Al Nahyan, the President of State.
Shorooq Al Zaabi shed light on the entering of the economy of the Emirate of Abu Dhabi, into a new phase of development and progress, along the successful path towards shifting to a sustainable economy based on knowledge according to the determinants of the of Abu Dhabi economic Vision 2030.
Shorooq highlighted the results of the economic forecasts for the Emirate of Abu Dhabi for the period Future 2013-2017, and initiated a review of the most important developments in the world oil market, which stresses the importance of the extractive activities contribution by about 50% to the GDP of the emirate.
Shorooq pointed out to concrete increase witnessed by the crude oil production in the emirate in 2013, in order to fill the gap in the global supply of oil, expecting to see oil production in the emirate returning again to its natural growth rates by 5.3% in the period 2014-2017, taking into account the increase in global oil supplies in North America, especially from non-conventional sources of oil such as oil and shale gas.
As for oil prices, Shorooq Alzaabi stated that projections indicate a decline in oil prices during the year 2014 to around US$103 a barrel, compared to about US$109 a barrel in 2013, with the expectation that this downward trend in oil prices will continue until 2017 to reach about US$95 a barrel.
She said that the economic forecasts for the Emirate of Abu Dhabi indicate that the growth rate of GDP at current prices will yield 6.6% in 2013 versus 7.7% in 2012, and the slowdown is due mainly to the decline in oil prices in 2013 compared to 2012, noting that this the rate remains within the level of expectations targeted by Abu Dhabi Economic Vision 2030.
Shorooq added that economic forecasts indicate that it is expected to achieve a GDP growth rate at current prices at an average of 6.7% during the period 2013-2017. Shorooq said that the Economic forecasting of the Emirate of Abu Dhabi shows the escalation of the growth of GDP at constant prices, as it achieved 4.7% in 2013 versus 6.5% in 2012, with increased amounts of production of crude oil in 2013, to slow down to reach to about 7.6% in 2014 with the expectation of slower growth in the volume of daily production of crude oil, to grow at the rate of 3.7% on average during the period 2013-2017.
On the non-oil sector side, economic forecasts indicate that of Abu Dhabi non-oil GDP will grow at current prices to reach 3.10% in 2013 versus 6.9% in 2012, and to continue to reach 2.11% in 2014, and then to achieve 3.12% on average during the period 2013-2017.
As for non-oil GDP growth in real terms, forecasts indicate that growth will reach 9.8% in 2013 versus 7.7% in 2012, and to continue grow to around 0.10% in 2014, driven by announced government investments. Accordingly, it is expected to achieve an average growth rate of 4.10% during the period 2013-2017.