Interview: Sultan bin Saeed Al Mansoori
What new strategies are being pursued to further diversify the country’s exports?
SULTAN BIN SAEED AL MANSOORI: The GDP contribution of non-oil economic sectors has risen in the last decade from 61.2% in 2003 to 76.3% in 2013. The country’s concerted efforts have enabled us to introduce a number of policies that focus on diversifying our economy internally and boosting the volume of exports. As part of an ambitious strategy, the UAE is currently working on developing and amending the Industrial Affairs Law of 1979 and aligning it with our development goals to further stimulate different sectors and accelerate export capabilities. Given efforts to introduce the UAE’s products into new markets and to showcase them at international exhibitions, the industrial sector’s contribution to national GDP is expected to reach 25% in 2021, compared to 14% in 2014. Negotiation of trade agreements with other countries and economic blocks also plays an important role in diversifying the economy by pursuing new markets for the country’s products and services and facilitating seamless business transactions. In this sense, the country has been providing companies with extensive information and organising workshops to aid them in entering new markets.
As GDP growth slows down in most parts of the world, what is the main challenge for a small open economy such as the UAE to maintain growth?
AL MANSOORI: The UAE is expected to end 2014 with 4.8% growth in the national economy, and we remain confident that our economy will remain buoyant in both the short and long term. Due to our strategic geographic location and the advanced infrastructure facilities we provide to investors and visitors, the country has evolved into an international tourism destination and a global gateway to trade between the West and East. The country is today a largely consumption-driven market. The main challenge, given the strong growth in the economy, is the proportional surge in inflation. However, inflation has largely been kept in check in the UAE, averaging 2-3% by the end of 2014. The government has put in place a number of initiatives and regulations to control inflation, such as Federal Law No. 24 of 2006 concerning consumer protection.
Which areas within the knowledge economy is the country looking to develop in the upcoming years?
AL MANSOORI: We are prioritising seven sectors: renewable energy, transport, the environment, education, health, aviation and aerospace. In these areas, we regard small and medium-sized enterprises (SME) and entrepreneurs as key stakeholders in diversifying the economy. SMEs contribute up to 60% of the country’s GDP and, in line with the UAE Vision 2021, we seek to bring this up to 70%. The UAE government has issued Federal Decree Law No. 2 of 2014 to encourage more active participation by UAE citizens in entrepreneurship and enlist their involvement in the SME sector.
We are also prioritising industry, especially advanced technology and knowledge-based sectors. Industry’s share of GDP is estimated at 14% and is expected to increase over the next few years, especially due to the launch of the UAE space and aerospace programmes. Notably, the UAE’s national agenda seeks to triple research and development spending by 2021.
What risks do long-term political unrest in the Middle East represent for the UAE’s economy?
AL MANSOORI: The UAE is currently not directly affected by the turbulence in the region. Our leadership realises the need to address any issues before any consequences can result. The government works proactively on many levels to guarantee stability. The UAE takes stern economic measures to dry up the financial sources for terrorism by closely monitoring financial markets and organisations to guarantee that institutions are not being used in any way that would affect the stability of the region or the world at large. Security and safety are major attractions when it comes to investments, making them a high priority for the UAE government.
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