The Report: Abu Dhabi 2014
As the largest and most populous of the seven emirates that make up the UAE, Abu Dhabi plays a central role in the federation. Although the exploitation of its considerable hydrocarbons resources remains the backbone of the economy, the emirate has also made admirable progress diversifying into new sectors, such as manufacturing, tourism, aerospace, defence, finance and logistics, among others, in line with its long-term plan for economic development, the Abu Dhabi Economic Vision 2030. The emirate has also made major investments in social welfare – education and health – as well as infrastructure, which have been identified as the bedrock for future growth.
Country Profile
The UAE celebrated the 42nd anniversary of its establishment in 2013. Over this relatively short period of time, the country’s capital, Abu Dhabi City, has developed rapidly to become a thriving metropolis. Although the emirate’s economy remains largely based around the exploitation of its considerable hydrocarbons resources, it has also made admirable progress diversifying into new sectors, such as manufacturing, tourism, aerospace, defence, finance and logistics, among others. In addition to its economic investments, Abu Dhabi has also made major contributions to social welfare – education and health – as well as infrastructure, which have been identified as the bedrock for future growth. This chapter contains interviews with Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs; Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs; and Khalifa Mohammed Al Kindi, Chairman, Invest AD; along with a viewpoint from Boris Johnson, Mayor of London.
Explore chapterEconomy
As the largest and most populous of the seven emirates that make up the UAE, Abu Dhabi plays a central role in the federation’s economy. Following the roadmap laid out in the Abu Dhabi Economic Vision 2030, its long-term economic development plan, the emirate has succeeded in nurturing new economic sectors and seems to be on track to meet its goals. The oil and gas sector accounted for 56.5% of Abu Dhabi’s GDP at current prices in 2012, followed by construction (9.6%), manufacturing (5.9%) and real estate (4.4%). According to the IMF, Abu Dhabi’s efforts to broaden its economic base will help drive annual growth of 4% in the non-oil economy over the coming years. This chapter contains interviews with Nasser Alsowaidi, Chairman, Abu Dhabi Department of Economic Development; Khaldoon Khalifa Al Mubarak, CEO, Mubadala; Butti Ahmed Mohammed bin Butti Al Qubaisi, Director-General, Statistics Centre – Abu Dhabi; Mahmood Ebraheem Al Mahmood, CEO and Chairman, ADS Holding; and Mohamed Thani Murshed Al Rumaithi, Chairman, ADCCI.
Explore chapterBanking
The UAE’s banking sector has continued to grow in both depth and complexity to become the largest in the region, accounting for 31% of the total volume of the GCC banking sector and about 20% of the gross volume of the Arab banking sector at the close of 2012. The sector’s profitable trend continued into the first half of 2013: aggregate net profit for the period ending June 30, 2013 reached $2.3bn, a 13.4% rise on $2bn in the first half of 2012. Regulatory reform continues to pose a challenge moving into 2014, but the opportunities that are arising from the emirate’s economic expansion are expected to underwrite the ongoing growth of Abu Dhabi’s lenders. This chapter contains interviews with Sultan bin Nasser Al Suwaidi, Governor, Central Bank of the UAE; and Younis Al Khoori, Vice-Chairman, Al Etihad Credit Bureau (AECB), and Undersecretary, Ministry of Finance.
Explore chapterCapital Markets
In 2012 the GDP of Abu Dhabi expanded by 5.6% y-o-y, and the government has forecast annual expansion of 5.7% in the 2013-16 period. With a sustained return to positive territory for its main index and a crucial upgrade to “emerging market” status by Morgan Stanley Capital International (MSCI), Abu Dhabi’s exchange has had a good year. Both developments have generated new optimism regarding the exchange’s ability to attract liquidity, a goal which local and federal authorities have made a strategic priority. Efforts are under way to improve investor relations, with the Securities and Commodities Authority teaming up with both of the UAE’s exchanges, HSBC and the Middle East Investor Relations Society to introduce systemic improvements. This chapter contains an interview with Rashed Al Baloushi, CEO, Abu Dhabi Securities Exchange.
Explore chapterIslamic Financial Services
Home to some of the UAE’s most prominent Islamic banks and takaful operators, Abu Dhabi has long been a regional centre for Islamic financial services. Global Islamic banking assets are forecast to surpass the $2trn mark by the end of 2014, and Abu Dhabi’s sharia-compliant financers are well positioned to capitalise on this expansion, although a competitive market and the lingering effects of the 2008-09 global economic crisis remain challenges. Potential for takaful growth in Abu Dhabi and the wider UAE is strong, underwritten by high levels of disposable income and the low insurance penetration. This chapter contains an interview with Tirad M Mahmoud, CEO, Abu Dhabi Islamic Bank.
Explore chapterInsurance
In 2012 Abu Dhabi’s insurance sector posted continued growth on the back of increased spending from consumers, corporations and the government. The UAE market overall remains underpenetrated, though total premiums as a percentage of GDP did see a slight increase from 1.9% in 2011 to 2% in 2012. GDP growth and planned government spending on large-scale infrastructure projects will increase the emirate’s stock of insurable assets in the coming year and provide investment opportunities for national and foreign insurers, while improved technical underwriting, increasingly diverse assets and new regulations also signal maturation in the sector.
Explore chapterEnergy
As a close-out agreement was signed for long-held concessions in early 2014 and the government is looking for potential new partners for the development of its oil and gas fields, 2014 is expected to see a shake-up of Abu Dhabi’s hydrocarbons industry. The government is keen to boost gas production, requiring investment in the emirate’s challenging sour gas reservoirs. This means opportunities in the upstream sector for everyone from oil majors to engineering, procurement and construction (EPC) contractors. There are also likely to be opportunities for independents and smaller players as Abu Dhabi National Oil Company (ADNOC) looks to diversify and broaden the potential of the sector to maximise the emirate’s vast hydrocarbons wealth. This chapter contains interviews with Abdulla Nasser Al Suwaidi, Director-General, ADNOC; and Khadem Al Qubaisi, Managing Director, International Petroleum Investment Company; as well as a viewpoint from Sultan Ahmed Al Jaber, UAE Minister of State, and CEO, Masdar.
Explore chapterUtilities
Following partial privatisation at the end of the last century, the provision of utilities in the emirate has improved significantly, while disruptions and inefficiencies in both networks have also been greatly reduced under the new model. With the growth in demand for services increasing and showing no signs of diminishing any time in the near future, ensuring an adequate supply of water and power will remain a challenge in the coming decade. Investment will be required in the short and medium terms, creating more opportunities for foreign capital and ownership in both the power and water supply systems. This chapter contains interviews with Faris Obaid Al Dhaheri, Director-General, Abu Dhabi Water & Electricity Authority (ADWEA); and Nicholas Carter, Director-General, Regulation and Supervision Bureau (RSB).
Explore chapterSecurity, Aerospace & Defence
The government has played a key role in the expansion of the security, aerospace and defence industry over the past decade in an effort to strengthen the UAE’s defence capabilities and as a means of boosting economic diversification. The UAE has traditionally purchased the majority of its military hardware and equipment from the world’s largest suppliers; however, this is changing as more local companies enter the industry. By most counts demand for defence-related equipment and services is on the rise, both within the UAE and throughout the broader region, meaning that there is potential for continued growth in the sector in Abu Dhabi. Despite challenges such as high level of regional competition, most local defence and aviation firms expect to see continued expansion going forward. This chapter contains an interview with Staff Major General Obaid Al Ketbi, Member, Executive Council and Deputy Commander General, Abu Dhabi Police (ADP).
Explore chapterTransport
Developing Abu Dhabi’s domestic transport infrastructure and broader transport industry has been one of the government’s priorities over the past decade. At the same time, the rapid expansion of the local aviation and maritime shipping industries has contributed to the emirate’s growing reputation as a transit and logistics hub. Further expansion is under way to meet the need of anticipated population growth, with the population set to reach 2.6m by 2030, up from just 0.9m in 2008. The emirate’s ongoing transport projects are creating significant opportunities for local and international investment, while developments in the air transport segment are set to considerably boost Abu Dhabi’s international connections. This chapter contains an interview with Tony Douglas, CEO, Abu Dhabi Airports.
Explore chapterConstruction & Real Estate
The UAE overtook Saudi Arabia as the Gulf’s largest construction market in terms of contracts awarded in 2012. In 2013, the UAE construction market continued to post growth, led by Abu Dhabi’s capital investments in infrastructure, housing and health care facilities. The value of the UAE’s construction sector was forecast to grow by 4.5% in 2013, reaching $41bn, and is expected to continue to expand going forward, topping $50bn and 10% of GDP by 2016. The emirate’s current investments are intended to lay the foundation for the development of an increasingly diverse economy in the years ahead, and the municipality’s regulations should go a long way towards realising its ambition of making the capital a leading international city.
Explore chapterIndustry & Retail
In a bid to develop a sustainable and diversified economy, non-hydrocarbons industry is becoming increasingly important, and the government of Abu Dhabi has set ambitious growth targets for the sector over the coming two decades. The emirate is developing the infrastructure to achieve these aims, with the objective of creating an attractive environment for industrial investment across a range of sectors. Rising wages are supporting growth in the retail market, with workers paid a total of $44.67bn in 2012. Consumer lending is also on the rise, increasing by $4.16bn across the UAE in the first six months of 2013. Domestic demand drives the market, though the tourism sector also offers opportunities for retailers. Additional retail supply over the coming year is expected to shake up the sector. Mall operators and retailers recognise that this may cause some short-term turbulence, but that the sector’s longer-term prospects are more than encouraging. This chapter contains interviews with Mohammed Al Qemzi, CEO, ZonesCorp; Khaled Salmeen, CEO and Managing Director, Khalifa Industrial Zone Abu Dhabi; and Saeed Abdul Jalil Al Fahim, Chairman, Al Fahim Group. It also contains viewpoints from Suhail Mubarak bin Athaeeth, CEO, Senaat; and Saeed G Al Romaithi, CEO, Emirates Steel.
Explore chapterAl Gharbia
Accounting for the majority of the emirate’s oil and gas reserves, Al Gharbia generates more than 44% of Abu Dhabi’s GDP, with economic output exceeding $31bn per year. In the coming years, it is set for substantial investment as the government looks to rejuvenate the region and ensure that local talent is retained and plays an integral role in development. As such, over the next two decades, a host of opportunities are expected to materialise for savvy investors, and the Western Region Development Council is on the lookout to attract the best of these to the region. Some $65bn in investment projects are anticipated for the coming years, covering oil and gas, power generation, infrastructure and transport, and tourism. This chapter contains an interview with Sheikh Hamdan bin Zayed Al Nahyan, Ruler’s Representative in the Western Region.
Explore chapterAl Ain
The government has overseen Al Ain’s development in line with the policies laid out by the current ruling family of Abu Dhabi, which is committed to maintaining the traditional character of their ancestral home. Al Ain’s heritage and the area’s many natural attractions have made it a popular tourist destination for Emiratis and foreigners alike. Under Plan Al Ain, Jebel Hafeet and the surrounding Hajjar Mountains will be given national park status, with the goal of protecting the area from development and making it more accessible to visitors. The region is expected to attract considerable and sustained investment from both domestic and foreign investors, and a wide variety of industries will likely benefit from the anticipated increase in economic activity.
Explore chapterEducation
Building a skilled workforce capable of driving a knowledge-based economy is Abu Dhabi’s main goal when it comes to education. In pursuit of this aim, the emirate’s government is making major investments in its schools and universities that are geared towards enhancing the quality and quantity of education for the growing local population. Thanks to government incentives and increased local demand, the private sector is playing a greater role in both K-12 schools and higher education. An emphasis on vocational and technical training is also helping to provide students with the skills needed in the workplace, while efforts to attract international universities are further enhancing the range of post-secondary options on offer, meaning Abu Dhabi appears to be on track with its plans to build up the skills of the local workforce. This chapter contains interviews with Mugheer Khamis Al Khaili, Director-General, Abu Dhabi Education Council (ADEC); and Hussain Ibrahim Al Hammadi, Director-General, Abu Dhabi Centre for Technical and Vocational Education and Training (ACTVET).
Explore chapterHealth
Fuelled by higher incomes; the growing, ageing population; a rise in the prevalence of lifestyle diseases; and the introduction of mandatory health insurance, Abu Dhabi’s health sector has expanded rapidly in the past five years. Given demographic trends, in 2011 the Health Authority - Abu Dhabi (HAAD) estimated that by 2021, Abu Dhabi will need up to an additional 1900 doctors, 5300 nurses and 1700 hospital beds. The government is building new facilities, hiring doctors and training nationals to keep pace with demand. Meanwhile, private providers are taking up the numerous opportunities presented by this growing market. The private sector will likely expand by investing in high-volume needs such as reproductive health or communicable diseases, while areas such as acute and tertiary care are expected to remain the purview of government hospitals. This chapter contains interviews with Mohammed Sultan Al Hameli, Chairman, Health Authority - Abu Dhabi; and Saif Al Qubaisi, Chairman, Abu Dhabi Health Services Company (SEHA).
Explore chapterAgriculture
Efforts to enhance food security and reduce the impact of imported inflation have made the sector a greater priority. Further to this, the government is committed to developing the sector on the grounds that agriculture has played an important role in the emirate’s history, and is considered to be a pillar of its heritage and culture. As in much of the rest of the Gulf, fresh water is in short supply in the emirate, and agricultural planning is therefore shifting in favour of more water-efficient crops, such as replacing grain production with potatoes. This chapter contains an interview with Rashed Mohamed Al Shariqi, Director-General, Abu Dhabi Food Control Authority (ADFCA).
Explore chapterICT
Ranked as the Middle East and North Africa’s most high-tech city alongside Dubai and Doha, according to a study by Swedish telecoms equipment company Ericsson, Abu Dhabi’s sophisticated ICT infrastructure and strong fibre network reaffirm its position as a regional business centre and play a critical role in the emirate’s diversification efforts and transition towards a knowledge-based economy. Expenditure in the UAE, the GCC’s second-largest ICT market, is projected to increase almost threefold between 2013 and 2015 to $40bn. As the local economy expands and diversifies, attracting a greater mix of corporates, there is growing demand for a wider range of IT products and services to supplement the government sector, which remains a reliable source of business. This chapter contains an interview with Rashed Al Mansoori, Director-General, Abu Dhabi Systems and Information Centre (ADSIC).
Explore chapterTourism & Culture
Figures from Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi) show a 13% rise in 2012 over the previous year in terms of hotel guests staying in the emirate. This trend is expected to continue as a pipeline of new facilities to capture the corporate and conference markets, as well as fresh attractions to increase the capital’s appeal as a leisure destination, come on-stream. A shift in demand towards mid-tier accommodation is also a reflection of the changing composition of the emirate’s main source markets, with increases in visitors from India, China and Russia, showing much higher y-o-y volume increases than the steadier, single-digit growth from the more traditional European and North American source markets. This chapter contains interviews with Sheikh Sultan bin Zayed Al Nahyan, Representative of the President of the UAE, and Chairman, Culture and Media Centre (CMC); and Sheikh Sultan bin Tahnoon Al Nahyan, Chairman, TCA Abu Dhabi.
Explore chapterMedia & Advertising
Abu Dhabi is home to a dynamic media market with a broad range of players catering to a variety of interests and tastes. Efforts to become a leading producer and exporter of creative content and media services are driving growth, as the sector’s development has been identified as a key part of fulfilling broader ambitions of diversification under the Abu Dhabi Economic Vision 2030. The emirate is aiming to become a regional centre for generating Arabic content across a variety of segments, particularly gaming, animation and e-learning. Advertising is also an important market, as the UAE is the MENA region’s largest advertising market, with total spending estimated at $1.2bn in the first nine months of 2013.
Explore chapterEnvironment
The emirate is striving to protect the environment while making the most of its natural resources. Abu Dhabi faces a confluence of environmental pressures that it is looking to address. This presents opportunities for investment and foreign partnerships in resource monitoring and management systems, green technology solutions, and best practice outreach and awareness campaigns. The EAD, established in 1996, is the main government entity tasked with regulating, promoting and setting policy for environmental protection and resource conservation. A number of government-linked organisations have launched environmental initiatives, including the Abu Dhabi National Oil Company, the Abu Dhabi Water and Electric Company, and the Centre of Waste Management. This chapter contains an interview with Razan Khalifa Al Mubarak, Secretary-General, Environment Agency – Abu Dhabi (EAD).
Explore chapterTax
This chapter features an overview of Abu Dhabi’s straightforward tax regime and a viewpoint from Mahmud Merali, Managing Partner, MERALI’S.
Explore chapterLegal Framework
This chapter contains important legal information for foreign investors looking to enter Abu Dhabi. It includes an overview of the judiciary and courts system and the various options for establishing businesses, as well as a review of important laws relating to areas such as labour and intellectual property.
Explore chapterThe Guide
The Guide features hotel listings for business and leisure travellers, along with numbers for ministries, embassies and useful points of contact. It also has helpful information and tips for first-time visitors.
Explore chapterTable of Contents
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