Other Gulf countries should follow the UAE's example of economic diversification to help keep fiscal pressures under control, according to a senior official from the International Monetary Fund (IMF).
Dr Jihad Azour, director of the Middle East and Central Asia Department at the IMF, told the Arab Strategy Forum 2017 in Dubai that reforms are the key.
"Other economies would do well to take some notes from the UAE that has taken critical steps to help tame fiscal deficit. Moving forward into 2018, we will see these steps paying off," he said.
He told the Forum: “Geopolitical turmoil, dip in oil prices, fiscal challenges and economic stagnation have been the underlying issues dogging the region’s economy over the past 18 months. Despite that, I am positive that 2018 will be the turning point and see transformation, further stability and a maturing outlook as policy frameworks, government reform and stabilising oil prices shore up the overall sentiment.”
He added: “We need to focus on creating growth that is more participatory and inclusive. And to drive this growth, we need to strengthen our SMEs that account for 60 percent of the population’s employment but have access to a paltry five percent of GDP financing.
"We need to concentrate on cross-border trade and knowledge sharing, we need to create opportunities for our youth and empower our women."
He told the Forum that studies have proven that women can increase growth by 2-5 percent in the medium term in those societies where they are given equal right to education and opportunities.
When asked what set the UAE apart from the rest of the region in economic terms, Azour said: “The UAE has the most diversified economy in the Arab world, and it is this diversification that will stand it in good stead moving forward, driven by strong improvement in the non-oil sector.”
He urged governments and societies to change their outlook as much as their policies. He said: “We need to move away from building schools to building skills and creating human capacity, because it is critical that we find a way to create those 16 million jobs needed for our youth, and given the fast pace of the fourth industrial revolution and increasing pressure of AI on traditional jobs, we have a definite challenge on our hands.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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