The Report: Abu Dhabi 2016
Thanks to business-friendly government policies implemented over the past 10 years Abu Dhabi is now home to a rapidly diversifying economy that is among the largest in the region, with GDP reaching a total of Dh952.68bn ($259.32bn) at current prices in 2014.
Profile
Located off the mainland on a number of islands, the city of Abu Dhabi is both the capital of the emirate and of the UAE. Under the constitution of 1971 the UAE operates as a federation of seven emirates and each of its constituent emirates has a high level of political and economic autonomy. Abu Dhabi’s ruler customarily serves as president of the UAE, while the ruler of Dubai serves as the country’s prime minister and vice-president. Of the emirate’s total population of 2.66m, Abu Dhabi City was home to the majority, with around 1.63m, or 62%, in 2014. Al Gharbia, Abu Dhabi’s Western Region, covers 71% of the emirate’s total land area and possesses 90% of its hydrocarbons reserves, which in turn account for around 90% of the UAE’s total reserves. Meanwhile, the emirate’s eastern region, Al Ain, was home to 704,100 people as of 2014, of which around 473,000 live in Al Ain City, the emirate’s second-largest city. This chapter contains an interview with Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs; and viewpoints from UK Prime Minister David Cameron and Chinese President Xi Jinping.
Explore chapterEconomy
The emirate of Abu Dhabi has put its significant hydrocarbons resources to strategic use in recent years, using the wealth derived from oil to underpin the UAE’s diversified economic growth targets. Meanwhile, the emirate’s Economic Vision 2030 has identified sectors through which Abu Dhabi can boost non-oil GDP, with areas such as tourism, manufacturing, ICT and health care now driving the emirate’s non-oil based growth. The fall in oil prices has led to a push for tariff restructuring, and for the first time residents have been asked to contribute towards the provision of utilities, while options for introducing VAT, corporate tax and a remittances tax are also now being explored to further hedge against oil price fluctuations. This chapter contains interviews with Ali Majed Al Mansoori, Chairman, Abu Dhabi Department of Economic Development (ADDED); Khaldoon Khalifa Al Mubarak, Group CEO and Managing Director, Mubadala Development Company; Mahmood Ebraheem Al Mahmood, CEO and Chairman, ADS Holding; and a viewpoint from Jim Yong Kim, President, World Bank Group.
Explore chapterTrade & Investment
Recent decades have seen the GCC become increasingly connected to the wider global economy through trade and investment links. Over the years capital flows between the Gulf and the rest of the world have deepened significantly, with both the historically important blocs of Europe and North America, and emerging market economies such as India, China and Brazil. The total stock of FDI in Abu Dhabi has seen steady growth, rising from $16.6bn in 2012 to $22.1bn in 2014, while the largest contributor to non-oil exports in 2014 was the manufactured goods category, which accounted for 51.2% of the total. Meanwhile, a new investment law currently being worked on promises to re-shape the patterns of FDI into the country with social infrastructure sectors such as health and education set to benefit as a result. This chapter contains interviews with Mohammad Helal Al Muhairi, Director-General, Abu Dhabi Chamber of Commerce and Industry (ADCCI); and Ahmed Al Sayegh, Chairman, Abu Dhabi Global Market (ADGM).
Explore chapterBanking
With assets of Dh2.47trn ($672.3bn) as of December 2015, the UAE banking system is the largest in the region. These assets are deployed within the federation as well as across the GCC, the traditional destinations of Europe and the US, and the world’s emerging markets. While local lenders remained profitable in 2015, the effects of a sustained drop in oil prices were seen in both balance sheets and income statements. The most significant change was the slowdown in deposit growth as a result of the government drawing down reserves to meet its spending commitments. Meanwhile on July 1, 2015 the central bank introduced a liquid assets ratio as a first step towards its ultimate objective of implementing the liquidity standards of Basel III, with approved banks starting the transition to Basel’s liquidity coverage ratio in January 2016. This chapter contains interviews with Mubarak Rashed Al Mansoori, Governor, Central Bank of the UAE; and Andre Sayegh, CEO, FGB.
Explore chapterCapital Markets
The Abu Dhabi Securities Exchange (ADX) has quickly developed from a fledging investment platform to an institution of global significance. At the end of 2015 a total of 66 public companies were listed on the exchange, with insurance, banking and industry making up the largest subsectors in terms of listings. The government has made moves to expand its debt and bond offerings in recent times, with the emirate’s most recent sovereign issuance, consisting of a five-year $3bn bond in 2009, following on from two similar five-year offerings, which together formed the beginnings of a yield curve by which subsequent corporate offerings might be made. Meanwhile, the development of a new financial centre promises to significantly add to Abu Dhabi’s inward and outward investment activity. Al Maryah Island has been chosen as the location for a new financial free zone in the emirate. This chapter contains an interview with Rashed Al Balooshi, CEO, Abu Dhabi Securities Exchange (ADX).
Explore chapterIslamic Financial Services
After a robust performance in 2015, the sector has entered 2016 ready to weather the economic challenges presented by a subdued oil price and is well positioned to pursue growth where opportunities arise in the coming years. With total assets estimated at $127bn in 2014, the UAE has one of the largest sharia-compliant banking sectors in the world – the third largest after Saudi Arabia and Malaysia. Beyond the dedicated Islamic banks, the majority of the UAE’s 23 licensed lenders and many of the 26 foreign banks in the country operate sharia windows. Moving forward, Islamic lenders can expect to benefit from domestic economic activity, including the projects attached to Dubai Expo 2020 and the opening up of Iran to increased trade and investment activity. This chapter contains an interview with Tirad Al Mahmoud, CEO, Abu Dhabi Islamic Bank.
Explore chapterInsurance
With a total of 60 insurers in the UAE, including 34 locally incorporated companies and 26 foreign branches, federal authorities have increasingly sought to promote consolidation in the nation’s growing insurance market. According to the Statistics Centre – Abu Dhabi, financial and insurance activities were a significant contributor to the emirate’s economic growth in 2014, expanding by 27.1%. Takaful represented a particular growth driver not just in the UAE but across the region, with gross written premiums in the GCC’s takaful market growing at an 11.8% compound annual growth rate between 2010 and 2014 to reach $8.9bn. Meanwhile, there were 3.3m active health insurance members in Abu Dhabi in 2013 according to Health Authority - Abu Dhabi, more than the entire population, meaning that the emirate has achieved its goal of universal coverage.
Explore chapterEnergy
According to figures from the Statistics Centre – Abu Dhabi, in 2014 the mining and quarrying sector, including oil and gas, contributed Dh485.7bn ($132.2m) to Abu Dhabi’s GDP when measured at current prices. The emirate holds 94% of the UAE’s oil reserves and as of the end of 2014 the UAE had proven oil reserves of 97.8bn barrels, equivalent to 5.8% of the world total, placing the UAE eighth globally in terms of oil wealth. Alongside these reserves, the UAE is also home to the world’s seventh-largest reserves of natural gas, estimated at 215trn standard cu feet, with Abu Dhabi again holding the majority of resources. Although the delivery horizon for some new projects has been extended in light of the falling oil price, Abu Dhabi authorities remain committed to a long-term investment strategy that will see production reach a plateau of 3.5m bpd within the next two years. This chapter contains interviews with Sultan Al Jaber, CEO, Abu Dhabi National Oil Company (ADNOC); and Mohamed Jameel Al Ramahi, CEO, Masdar.
Explore chapterUtilities
With the decline in oil prices placing the federal budget under pressure, and demand for power and water increasing at a rapid rate, the authorities have turned their attention toward more effective consumer pricing and demand management. Diversification away from reliance on combined-cycle gas independent water and power producers will have a transformative effect on the supply side of the sector in the coming years. Renewable energy is expected to play an increasingly important role in Abu Dhabi’s power generation in the near future, with the emirate working towards a 7% renewable target by 2020. The biggest shake-up to Abu Dhabi’s power sector, however, will arrive with the launch of the Barakah Nuclear Power Plant, which is due to begin producing power in 2017 and will eventually have an output of 5600 MW – representing more than a third of current generation capacity.
Explore chapterSecurity, Aerospace & Defence
Abu Dhabi’s security, aerospace and defence industries have become a critical component of the emirate’s ongoing push to both protect critical national infrastructure and its interests abroad, as well as transform itself into a knowledge-based, diversified economy. Total military spending in the UAE stood at 5.1% of GDP in 2012 before rising to 6.1% in 2013 and then moderating to 5.7% in 2014. The UAE is the regional leader in defence manufacturing companies, with more than 80 firms focusing on shipbuilding, unmanned systems, and aviation and land systems. Meanwhile, the UAE’s space plans formally began in July 2014 with the announcement that the country would launch a scientific mission to Mars in 2021. This chapter contains an interview with Major General Mohammed Khalfan Matar Al Rumaithi, Commander-in-Chief, Abu Dhabi Police.
Explore chapterTransport
Abu Dhabi’s transport and logistics industry has been growing rapidly in recent years, with 2014 being an encouraging year in this respect. The transport and storage sector’s total GDP contribution stood at Dh40.5bn ($11.02bn) for 2014, equivalent to 4.3% of the emirate’s GDP, up from 3.7% in 2013 and 3.3% in 2010. The emirate has seen air traffic grow rapidly from 169,931 aircraft movements to 213,200 in 2014, of which 186,207 took place in the Abu Dhabi region and 26,993 in Al Ain. The government is now working to encourage more people to use public transport, with new infrastructure such as a 44.5-km metro line now in the pipeline, while initiatives such as the construction of dedicated cycle paths and shaded walkways have been designed to encourage more walking and cycling in the emirate. This chapter contains an interview with Mohamed Juma Al Shamisi, CEO, Abu Dhabi Ports.
Explore chapterReal Estate & Construction
Real estate development in Abu Dhabi is dominated by large, mostly local government-backed companies, several of which are responsible for the master development of various emerging areas of the city including Yas Island, Al Maryah Island and Zayed Sports City. Meanwhile, the value of construction sector activity in Abu Dhabi increased to $24.9bn in 2014 from $23.3bn a year earlier. Sector activity also grew 3.3% in 2014 at constant prices over the previous year, up from growth of 0.6% in 2013. Transport infrastructure in particular is helping to drive activity in the sector, with a number of projects planned or under way for rail and urban transport infrastructure as well as the airport segment. This chapter contains an interview Mohamed Al Mubarak, CEO, Aldar.
Explore chapterIndustry
With proven crude oil reserves of 98bn barrels and an established downstream infrastructure, which has positioned the UAE as the sixth-largest petroleum producer in the world, the country’s industrial landscape is dominated by hydrocarbons activity. In 2014 the Investment Development Bureau identified several targets for future development, including building materials, petrochemicals, metals engineering, iron and steel, plastic, aluminium and food industries. Meanwhile, aerospace, aviation and defence, for which Abu Dhabi already has core infrastructure in place, will also be the focus of much investment over the coming years. Elsewhere specialised economic zones covering an area of 50 sq km have been developed, which taken together are the source of nearly 50% of manufacturing GDP. This chapter contains interviews with Jamal Salem Al Dhaheri, Acting CEO, Senaat; and Badr Al Olama, CEO, Strata.
Explore chapterRetail
Strong expansion in Abu Dhabi’s high-quality retail stock with a focus on added entertainment and food and beverage components has helped to draw crowds, with the emphasis on malls as destinations in themselves increasingly reflected in the proportion of space given over to food and beverage outlets, and the greater variety among concessions. Wholesale and retail trade in the emirate totalled $11.5bn in 2014 when measured at current prices. This represented annual growth of 18.3%, or 8.7% at constant prices, beating average 2.2% growth for the economy overall. Rents are expected to remain stable in the short term; however, the new malls entering in 2018 are likely to have a more marked effect on the sector, with polarisation anticipated. In particular, lower-quality malls are expected to see rents decline. This chapter contains an interview with Yousef Mohammed Rasool Khoory, CEO, Mohammed Rasool Khoory & Sons.
Explore chapterAl Gharbia
Al Gharbia encompasses the western part of the emirate of Abu Dhabi and, at 35,250 sq km (59% of Abu Dhabi emirate), is also larger than any other emirate in the UAE. The government’s strategy for the development of the region is laid out in Plan Al Gharbia 2030. Priority sectors for development include energy, desalination, petrochemicals, tourism and food production, with major infrastructure now under way in the form of a new motorway from Al Mafraq, near Abu Dhabi City, through Al Gharbia via Ruwais, Mirfa, Barakah and Sila, to Al Ghweifat on the Saudi border. Tourism is seen as key for the region, with various events drawing visitors including a water sports festival in Mirfa and the Liwa Date Festival, the 11th edition of which took place in July 2015. The latter attracts 70,000 people annually. This chapter contains an interview Sheikh Hamdan bin Zayed Al Nahyan, Ruler’s Representative in the Western Region.
Explore chapterEducation
The education sector in Abu Dhabi is benefitting from targeted investments in career-relevant post-secondary programmes, as well as strong partnerships between schools and industry. Furthermore, recent K-12 curriculum reforms are aimed at building a strong base of science, technology, engineering and mathematics (STEM) undergraduates. With the Abu Dhabi Economic Vision 2030 development plan emphasising diversification and the transition to a knowledge-based economy, education will remain at the forefront of the agenda and continues to offer significant investment opportunities to private players from pre-K through to the PhD level. This chapter Hussain Al Hammadi, Minister of Education.
Explore chapterHealth
The health authority in Abu Dhabi continues to implement sector reforms, with a new seven-point health strategy that is aimed at addressing the most critical issues faced by patients and medical professionals in the emirate. An increasing emphasis on preventative care, emergency preparedness and further expansion of specialty care are expected to bolster health indicators moving forward. Indeed, since 2013 specialty gaps have reduced markedly, with the number of emergency physicians growing by 20%, a 41% rise in neonatologists and 21% more paediatric and orthopaedic doctors. Numbers of critical care doctors have jumped by 14%. Meanwhile, the Health Authority - Abu Dhabi is currently working to increase the number of Emirati health care workers, while ongoing partnerships with the private sector are bolstering professional training for existing staff. This chapter contains an interview with Dr Maha Barakat, Director-General, Health Authority - Abu Dhabi (HAAD).
Explore chapterTourism, Culture & Sports
Abu Dhabi has become increasingly competitive as a regional and international destination in recent years. Guest numbers for 2015 were in line with growth targets, a trend that has continued over from 2014. In 2015 arrivals surpassed 4.1m, equalling an 18% increase over 2014, when 3.5m people visited. Indeed there is a growing recognition that the emirate is home to a “visitor economy” – one where master planned development is approached considering the overall quality of experience from the visitor’s point of view. Of particular interest is the emirate’s expanding museum offering with five major museums due to open in the coming years, while Abu Dhabi’s numerous sporting mega-events, such as the Formula 1 (F1) Etihad Airways Abu Dhabi Grand Prix and Abu Dhabi HSBC Golf Championship, are bringing significant economic benefits to the emirate. This chapter contains an interview with Ali Bin Harmal Al Dhaheri, Managing Director, ADNEC Group.
Explore chapterICT
Abu Dhabi’s smart government initiative is a driving force behind growth in infrastructure and technology and, not insignificantly, on public take-up of smart technology for engaging with governance and other civic activities. Underscoring the advancements in Abu Dhabi’s ICT evolution, the country is on course to become the world’s first with nationwide 5G coverage, the roll-out of which should take place ahead of the Expo 2020 in Dubai. Meanwhile, revenues for the telecoms sector at the national level reached $8.9bn in 2014, a 12% rise over the $7.9bn in 2013. From the total, mobile services accounted for $6.9bn. Competition between the two state-backed operators, Etisalat and du, is strong and frequently leads to rigorous marketing campaigns, infrastructure development, bundle offerings and technological innovation. This chapter contains interviews with Rashed Al Mansoori, Director-General, Abu Dhabi Systems and Information Centre (ADSIC); and Saeed Al Ghafli, Director-General, Emirates Identity Authority (EIDA).
Explore chapterEnvironment
The federal government’s recent efforts to reduce the nation’s environmental impact have started to bear fruit. A three-year plan was announced in late 2014 for reusing 100% of recycled water. Currently Abu Dhabi treats all 800,000 cu metres of the wastewater generated daily, of which 60% is reused while 40% returns to sea. Meanwhile in early 2015 legal moves were made to endorse the expansion of the emirate’s protected areas, oversight of which falls under the Environment Agency – Abu Dhabi. Elsewhere a 25-year recycling plan will break Abu Dhabi into zones, with recycling centres being developed according to the types of waste generated in those particular areas. This chapter includes an interview with Razan Khalifa Al Mubarak, Secretary-General, Environment Agency – Abu Dhabi (EAD).
Explore chapterAgriculture & Food
The authorities in Abu Dhabi are seeking to develop the local agriculture and food-processing sector as part of wider efforts to improve food security and diversify the economy, with the emirate now emerging as an important regional food-processing center. Dates are Abu Dhabi’s most important crop and largest agricultural export by value, while there were 31 commercial livestock farms operating in Abu Dhabi in 2014, up from 26 a year before. Meanwhile, consumption of local produce grew at a compound annual growth rate of 28.4% between 2010 and 2013 in terms of volume, compared to 7.9% for the market as a whole.
Explore chapterMedia & Advertising
The media industry in Abu Dhabi has witnessed a surge in investment recently as sector infrastructure is developed to support the expansion of local production and content creation. By early 2015 direct spending on television and film production was expected to contribute $108.9m to the UAE’s economy over the next five years while the Media Zone Authority is looking to expand the breadth of services and networks it offers, including costume design, hair stylists, makeup artists, camera operators and post-production facilities. Meanwhile, e-commerce presents a significant range of new opportunities, with the segment expected to see growth of 40% by 2020 in GCC states, and with sales likely to reach $41.5bn. This chapter contains an interview with Noura Al Kaabi, Chairwoman, Media Zone, Authority–Abu Dhabi and twofour54.
Explore chapterTax
This chapter contains an overview of the tax framework in which local and foreign investors operate including an outline of the business and tax incentives offered by the free zones and a rundown of the Wages Protection System. This chapter contains a viewpoint from Dean Kern, Middle East Tax and Legal Services Leader, PwC.
Explore chapterLegal Framework
This chapter contains an overview of the legal framework in which local and foreign investors operate including guidance for firms doing business in the emirate, advice for the establishment of a joint stock company and a rundown of the incentives provided by the emirate’s free zones.
Explore chapterThe Guide
The Guide contains listings of some of the leading hotels and resorts in Abu Dhabi as well as contacts for important government offices and services. It also contains useful tips and information for first-time or regular and business and leisure visitors alike.
Explore chapterTable of Contents
There are no articles in this chapter. To view the table of contents, please open click the "View in online reader" link above.
