Economy
From The Report: Abu Dhabi 2016
View in Online Reader

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.

Articles from this Chapter

Overview

Holding firm: The emirate is in a strong position from which to withstand the slump in oil prices
OBG
plus

As the Middle East’s second-biggest oil producer, the UAE has seen much attention directed to it over the past year regarding the effect of subdued oil prices on the economy. The emirate of Abu Dhabi is a key player in the response to this challenge. As home to the nation’s capital it hosts many institutions that oversee the UAE’s social and economic development. The country has put the bounty of its hydrocarbons resources to good use, using the sizeable revenues to underpin a bold strategy…

Interview

Long-term goals: OBG talks to Ali Majed Al Mansoori, Chairman, Abu Dhabi Department of Economic Development (ADDED)
OBG
plus

Interview: Ali Majed Al Mansoori How do you see the balance of sectors in the economy changing as Abu Dhabi diversifies? ALI MAJED AL MANSOORI: In order to deliver our long-term objective of boosting the non-oil contribution to overall GDP to more than 60% by 2030, our government is adhering to a forward-looking road map that will transform, diversify and strengthen our economy through investments in capital-intensive and export-oriented sectors in which we have, or can build, a competitive edge.…

Analysis

Playing percentages: The introduction of new taxes will require careful management
OBG
plus

The tax system is one of the key pillars to have supported the UAE’s economic growth over recent decades. The federal government applies no corporate, personal, capital gains, value-added or withholding taxes, while emirate-level tax legislation introduced in the 1960s has never been implemented. In practice, only a narrow band of business activity contributes to the nation’s revenues: the relatively small number of private oil, gas and petrochemical companies which operate in the state-dominated…

Interview

Global reach: OBG talks to Khaldoon Khalifa Al Mubarak, Group CEO and Managing Director, Mubadala Development Company
OBG
plus

Interview:Khaldoon Khalifa Al Mubarak How is the current era of lower oil prices framing Mubadala’s strategic direction, and how has it impacted investment strategy? KHALDOON KHALIFA AL MUBARAK: Like any active global investor, we must prudently manage our portfolio through challenging conditions. There is no doubt that 2015 was a difficult year from a macro-economic perspective. While the oil and gas sector represents less than 20% of our portfolio, there were pressures on equities and…

Interview

Trading up: OBG talks to Mahmood Ebraheem Al Mahmood, CEO and Chairman, ADS Holding
OBG
plus

Interview:Mahmood Ebraheem Al Mahmood How does Abu Dhabi’s position between the financial hubs of Europe and Asia affect the allocation of funds, capital and credit across regions? MAHMOOD EBRAHEEM AL MAHMOOD: Abu Dhabi sits between the major markets of the east and the west, acting as a business bridge between Asia and Europe, but the advantage of its physical location has now been surpassed by the financial opportunity which the UAE offers to both of these regions. Abu Dhabi is becoming…

Analysis

A wealth of options: The national investment fund is making some changes
OBG
plus

One of the principal pillars of Abu Dhabi’s much-envied economic stability – and an important factor in the IMF’s reassuring statement, made in 2015, that the UAE has financial assets that are capable of sustaining it for more than 20 years – is its principal sovereign wealth fund (SWF). Abu Dhabi began its national hedging exercise – by which it has diverted fiscal surpluses over the years in order to future-proof itself in any significant alteration of its economic circumstances –…

Viewpoint

Investing in people: Jim Yong Kim, President, World Bank Group, on inclusive governance in the MENA region
OBG
plus

In 2015, for the first time, the rate of extreme poverty was projected to fall below 10%. Our research and experience tells us that three things have been critical to reducing poverty and boosting prosperity: inclusive economic growth, investments in people’s health and education, and insuring against risks that can plunge the vulnerable into poverty. Shaping future governments so they deliver on these responsibilities is our shared responsibility and essential to achieving our twin goals of ending…

Analysis

Filling the gaps: A new development bank is a timely arrival
OBG
plus

Given the stubbornly low oil prices of 2015, with no sign of a significant recovery in the short term, the run-up to the publication of the UAE’s current federal budget saw much speculation as to how the government might pare back state spending. For some, the reduction of subsidies earlier in 2015 set a new tone with regard to budgetary rationalisation: the dropping of the government’s support of fuel was a bold unilateral step in a region accustomed to multilateral moves in sensitive areas…