By Ed Attwood
Minister of economy, Sultan Bin Saeed Al Mansoori, on why the hard facts show the UAE is well on the road to recovery
Much has been written about the re-emergence of the UAE as a practical hub in which to do business, especially given the changing regional dynamic during the first five months of the year, but there has been precious little hard data.
Until, that is, UAE Minister of the Economy Sultan Bin Saeed Al Mansoori gave the keynote speech at the 4th Arabian Business Forum last week. During his talk, Al Mansoori referred to the country as “the most stable and successful example of unity in the Arab world.”
Few would doubt that assessment, and more generally, the frontier Gulf market is being seen by Standard Chartered, among others, as the hub of a region whose GDP is expected to amount to $17 trillion by 2030 — twice as much as Japan’s. But how does the minister see the UAE faring this year?
“At the very outset let me make it clear that the UAE is firmly on the growth track — this year we are set to grow by 3-3.5 percent, with inflation well under control,” Al Mansoori told the audience, adding that he expects inflation to rise by between one and 1.5 percent this year. In the global context, the minister also said that the country was punching well above its weight.
“The UAE was the world’s thirteenth largest exporter with $235bn or two percent of the world’s total merchandise exports in 2010, surpassing major exporting countries such as India, Australia, Brazil and Malaysia, according to the latest World Trade Organisation (WTO) report,” Al Mansoori said. “The UAE was also ranked eighteenth largest importer in the world, having imported $170bn worth of merchandise goods, representing 1.4 percent of the world’s total imports.”
With over 70 percent of its GDP stemming from non-oil activities, the UAE is already heavily diversified, with a far greater reliance and interaction with the private sector than most of its peers within the GCC. But, as Al Mansoori pointed out, the country has no intention of resting on its laurels, and is putting a focus on public private partnerships, which have thus far seen varying degrees of success in the Gulf.
“We want to build stronger links with the world, improve connectivity and facilitate movement of capital and goods to be acknowledged as global hub and gateway to the MENASA region,” the minister said. “The private sector can help us in our efforts to integrate global best practices into our business environment and facilitate transfer of world-class technology and expertise into the UAE.”
In addition, the country is also working on nineteen new pieces of legislation to help the UAE economy. Al Mansoori said that the new laws would clearly define and streamline “trademark, industries, arbitration, competition, investment, companies and small and medium enterprises (SMEs)” and adhere to globally recognised best practices.
But the minister also spoke frankly about the close look the government has paid to the economy after the sagging performances of the real estate and construction industries.
“As the GDP contribution of some major sectors such as real estate and construction began to decline, we were left with the question about the new economic sectors that we need to focus on,” he says. “The government, represented by the Ministry of Economy, thus carefully analysed selected sectors identified such as industries, trade and tourism as the pillars that will form the core of our growth focus for the next five years.”
Diving deeper into the detail, Al Mansoori said that he expects to see stronger performances from the industrial sector, especially from the downstream and chemical industries, plus ship building, pharmaceutical and car parts.
He also outlined ambitious targets for the tourism industry, backed by the strong performance of the UAE’s airlines.
“Taking advantage of the advanced tourism infrastructure and the keen commitments of both the federal and local governments to create an ideal environment to attract tourists to the UAE, we are targeting a figure of fifteen million tourists by 2020 from the current figure which is nine million,” Al Mansoori added. “This objective is not difficult to achieve especially as the UAE does hold the necessary success tools such as networks, modern airports and the best in the region.”
But Al Mansoori also praised his colleagues in the other Gulf countries, who recently made headway in smoothing out restrictions with regard to the intra-GCC movement of goods — a key driver of trade.
“We are confident the UAE and the Gulf region will make substantial progress in terms of unified positions and reforms as we move forward,” Al Mansoori concludes. “The challenges we foresee will further stimulate such closer co-ordination and integration with the global economy.”