Interview: Sheikh Mansour bin Zayed Al Nahyan
How do you view the role of foreign direct investment (FDI) in achieving the objectives of the UAE’s industry sector strategy, Operation 300bn?
SHEIKH MANSOUR BIN ZAYED AL NAHYAN: FDI is a fundamental component of the country’s economic strategy, and we expect the sector to make a substantial contribution to GDP. Further, we aim to enhance our position in the UN Industrial Development Organisation’s Competitive Industrial Performance Index from 31st in the 2020 edition to 25th by 2031. To achieve these goals, federal and local authorities are collaborating to encourage partnerships between domestic companies and foreign investors to develop new, innovative and smart industries related to the knowledge and digital economies, as well as advanced technologies and artificial intelligence.
To foster an ecosystem that supports these initiatives, the country plans to increase spending on research and development in the sector from Dh21bn ($5.7bn) in 2023 to Dh57bn ($15.5bn) by 2031 – a figure that is equivalent to 2% of GDP. Moreover, the UAE seeks to improve its regulatory environment, exemplified by the amendments made in November 2020 to the Commercial Companies Law, allowing 100% foreign ownership. This framework aims to stimulate investment and support production chains that focus on high-value industries.
Where do you see opportunities to support the UAE’s Net Zero 2050 ambitions while balancing sustainability and industrialisation objectives?
SHEIKH MANSOUR: The founder of the UAE left behind a legacy that includes preserving the environment and ensuring its sustainability. Therefore, environmental, social and governance principles are fundamental to the planning and implementation of all economic projects, especially those of an industrial nature. Throughout its history, our country has taken concrete steps to protect living organisms, combat air and water pollution, and rationalise the consumption of natural resources. These efforts complement our participation in global initiatives to reduce the effects of climate change.
The UAE was the first country in the MENA region to announce its goal to achieve net-zero emissions by 2050. It views its ambitions to reaching carbon neutrality as an economic opportunity and a solid commitment towards sustainability, declaring 2023 the Year of Sustainability. In February of that same year the Cabinet approved the National Framework for Environmental Sustainability, which seeks to preserve the country’s ecosystems and safeguard its natural resources for future generations.
The UAE has been sponsoring clean energy projects since 1998, and as of 2023 it had invested more than $40bn in such initiatives. The Ministry of Climate Change and Environment is an entity dedicated to this field. Additionally, we plan to raise clean energy production capacity, including solar and nuclear energy, from the 2023 level of approximately 9.2 GW to 14 GW by 2030. Lastly, the country has provided financing for renewable energy projects in more than 40 countries and intends to increase its renewable energy project portfolio from a cumulative 15 GW in 2021 to 100 GW by 2030.
Abu Dhabi is moving in the same direction through its circular economy initiative, which aims to raise the level of responsibility in production and consumption, while developing a regulatory framework, adopting sustainable policies, encouraging the government purchase of environmentally friendly products and granting incentives to improve sustainability. For example, in February 2023 the Environment Agency – Abu Dhabi issued a sustainability policy on marine water quality. By promoting energy efficiency; achieving operational excellence across the value chain; and expanding the use of carbon capture, utilisation and storage on a large scale, the goal of reaching net zero by 2050 is achievable, with benefits for the broader economy.
To what extent are the emirate and the UAE ensuring sustainable agriculture through local product enhancement and farm efficiency?
SHEIKH MANSOUR: In July 2022 the emirate launched the Abu Dhabi Agriculture and Food Safety Authority’s Strategic Plan 2022-25. This new strategy is a roadmap for the future and aims to address the challenges facing the sector such as establishing sustainable food systems by increasing the agricultural sustainability rate to 66% from its current 46%, promoting food security and reducing the amount of groundwater used in agriculture by some 500m cu metres between 2022 and 2025.
This approach enables the modernisation of farming systems and increases productivity, it also encourages farmers and animal breeders to adopt best practices in line with sustainable agricultural development. The contribution of Abu Dhabi’s agriculture sector to GDP surpassed AED8bn ($2.2bn) by the end of 2021 at constant prices, achieving a real growth rate that exceeded 23%. This figure represents the highest growth rate for all economic activities at the emirate level during 2021. This is a result of changing farming methods and providing exceptional services to farmers.
The UAE has signed memoranda of understanding (MoUs) with countries such as South Korea to cooperate in the fields of smart agriculture research, especially in arid environments. Some of the initiatives include developing a process for growing rice in the desert and implementing smart cooling systems. The emirate also signed an MoU with New Zealand to promote knowledge exchange, with a focus on employing modern technologies and artificial intelligence in agriculture and food production. These efforts are in addition to partnerships between local and international companies, such as the agreement between Abu Dhabi agri-tech company Silal and AeroFarms, a US-based vertical farming company, that is designed to promote sustainable agricultural practices and technology transfer.
By what means can human capital development be enhanced to prepare the labour force for the expansion in the non-oil economy?
SHEIKH MANSOUR: We believe that the strength of a country is dependent on the strength of its human resources. Therefore, empowering and developing national competencies is one of our country’s top priorities. To realise this objective, we have embarked on a mission to develop and implement an integrated legislative system to manage Emirati human capital in both the public and private sectors. We have launched initiatives and programmes aimed at improving knowledge and capabilities, enhancing skills, creating an attractive work environment, and establishing a culture of innovation, guided by international best practices.
Abu Dhabi’s industrial strategy includes a talent development initiative that focuses on assessing the efficiency of the labour force in the sector, and providing programmes to hone skills and enhance competencies. It does so in a way that enables the industrial sector to bridge current gaps and meet future requirements, in addition to developing meaningful career paths in priority segments.
We expect that new industrial projects in Abu Dhabi will provide some 13,600 skilled job opportunities by 2031 for Emirati technical cadres. In parallel, we are working to attract and retain global talent capable of supporting our country’s ongoing efforts to enhance its presence in high-value economic sectors and specialised scientific fields. We are confident that our local workforce and foreign talent are among the country’s strongest assets.