The Report: Abu Dhabi 2019
Abu Dhabi is the largest of the seven emirates that comprise the UAE, in terms of both its land mass and economy, and home to the majority of the country’s energy production and reserves. While the emirate is home to the world’s sixth-largest proven oil reserves, financial buffers have helped it diversify and yield steady non-oil revenues.
Profile
Having declared its independence from Britain in 1971 as part of the federation of the UAE, the emirate of Abu Dhabi has significantly raised its economic and political profile in the intervening years, both regionally and internationally. While the emirate is home to the world’s sixth-largest proven oil reserves, financial buffers have helped it diversify and yield steady non-oil revenues. This has largely taken the form of expanding domestic industries, from aviation to renewable energy, enabling the emirate to weather a prolonged period of reduced oil prices and fiscal austerity that have put pressure on growth. This chapter contains interviews with Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs; and Mugheer Khamis Al Khaili, Chairman, Department of Community Development; and a viewpoint from Emmanuel Macron, President of France.
Explore chapterEconomy
Abu Dhabi is the largest of the emirates that comprise the UAE, in terms of both its land mass and economy, and home to the majority of the country’s energy production and reserves. According to Statistics Centre - Abu Dhabi (SCAD), its economy expanded at a rate of 31.7% in 2005 and 32.3% in 2011 in nominal terms. Given the current environment, in which oil prices remain below the $100 mark seen at the beginning of the decade, the emirate has embarked on a strategy focused on economic diversification and more efficient government spending. The drive features an examination of public spending and fiscal management; phased reductions and elimination of subsidies; and the gradual consolidation of duplicative commercial entities controlled by government bodies. This chapter contains interviews with Sheikh Hamdan bin Zayed Al Nahyan, Ruler’s Representative in the Al Dhafra Region; Khaldoon Khalifa Al Mubarak, Group CEO and Managing Director, Mubadala Investment Company; and Saif Mohamed Al Hajeri, Chairman, Abu Dhabi Department of Economic Development.
Explore chapterTrade & Investment
In both Abu Dhabi and the wider UAE, diversification away from the hydrocarbons sector is a key component of economic planning, and the emirate is moving to increase the role of non-oil exports in its trading profile. This will largely be supported by continued investment in the emirate’s port infrastructure, industrial and free zones, and the connectivity between the two. Agreements with Chinese authorities are expected to both boost port capacity in the emirate and help to build a foreign direct investment pipeline from China. This chapter contains interviews with Mohamed Thani Murshed Al Rumaithi, Chairperson, Abu Dhabi Chamber of Commerce; and Ahmed Ali Al Sayegh, Chairman, Abu Dhabi Global Market.
Explore chapterBanking
Banks in Abu Dhabi are well funded and have demonstrated resilience. They also exist in a competitive environment that is widely seen as overbanked. After a major merger created the region’s second-largest lender in 2017, further moves towards consolidation are expected. For now, the banking system has ample liquidity and would benefit from more opportunities to deploy it. The government has been effecting structural reforms since the 2007-08 economic crisis, to boost the efficiency of government spending and encourage greater self-reliance on the part of both the private corporate and government-linked businesses. This is part of a wider effort to prepare for a long-term future in which Abu Dhabi can thrive even when oil prices drop. This chapter contains an interview with Abdulhamid Mohammed Saeed, Group CEO, First Abu Dhabi Bank.
Explore chapterCapital Markets
Abu Dhabi’s capital markets have witnessed rapid expansion since the establishment of the Abu Dhabi Securities Exchange (ADX) in 2000. Prior to the ADX, the sector played a much more limited role in the emirate’s financial services landscape. Historically the region has had a significant amount of capital owing to its oil wealth and, coupled with a relatively robust and liquid banking system, this created little domestic demand for capital markets as means for finance. Nevertheless, the region has long utilised international securities as an investment option, with sovereign wealth funds emerging as major buyers of stocks and bonds. The emirate has successfully worked to expand its securities offering in recent years, demonstrating a commitment to increasing liquidity and overall activity in its capital markets.
Explore chapterIslamic Financial Services
Abu Dhabi is a prominent player in Islamic finance and is active in markets for sharia-compliant debt; deposit, lending and investment schemes; and risk-management through takaful (Islamic insurance). Acting through the Abu Dhabi Global Market, the emirate’s financial free zone, the sector has access to domestic as well as offshore service providers. Together with the six other emirates of the UAE, Abu Dhabi participates in a national level market, which is the world’s fourth-largest in terms of Islamic finance assets, at $203.2bn. The emirate holds just over 9% of the $2.2trn total global sharia-compliant assets, 72% of which is held by banks. This chapter contains an interview with Khamis Mohamed Buharoon, Acting CEO and Vice-Chairman, Abu Dhabi Islamic Bank.
Explore chapterInsurance
In 2017 the UAE was home to the largest and fastest-growing insurance sector in the GCC. The industry has recorded strong compound annual growth rates in both non-life and life segments during the last decade, while takaful (Islamic insurance) products have developed considerably since 2012. This growth has come on the heels of an influx of expatriates, increase in the population of working-age nationals, investment in construction in the run up to Expo 2020 and several legal reforms. The UAE Insurance Authority has recently taken steps to both boost public awareness about the benefits of coverage and to propose reforms that would professionalise industry standards to meet those of more mature, foreign markets.
Explore chapterEnergy
Abu Dhabi has one of the world’s largest and most developed hydrocarbons industries, benefitting from its substantial resources and openness to international investment. Building on decades of steady growth and development, the sector is undertaking a shift. The drive to diversify has resulted in higher levels of investment in both non-conventional hydrocarbons and downstream capacity, and increased participation from a widening range of global partners. This chapter contains interviews with Sultan Al Jaber, UAE Minister of State; and Group CEO, Abu Dhabi National Oil Company; and Awaidha Murshed Al Marar, Chairman, Department of Energy.
Explore chapterUtilities
With strong private sector and foreign investor engagement, the utilities sector in Abu Dhabi is one of the most enduringly attractive to a wide range of businesses. Despite the economic slowdown of recent years, vital big-ticket projects in areas including nuclear energy, solar energy and desalination are continuing to progress at pace. The power and water sector is overseen by several bodies, reflecting the UAE’s federal nature and the relevance of these industries to the public interest. As home to the capital and the vast majority of the UAE’s hydrocarbons resources, Abu Dhabi is central to federal decision-making. Power and water are closely related in the UAE, since most desalination units from which potable water is derived are linked to power plants. This chapter contains an interview with Mohamed Jameel Al Ramahi, CEO, Masdar.
Explore chapterSecurity, Aerospace & Defence
The UAE continues to spend heavily on its military capabilities, while at the same time pushing to expand its domestic defence-related manufacturing industries, as a means both to better protect its own national security and to contribute to diversifying its economy away from oil and gas. Significant agreements point to the long-term success of the goal of developing a domestic industry, even as deals continue to be signed with international arms manufacturers for military equipment for the UAE’s armed forces. In recent years a core focus in Abu Dhabi has been on the commercial development of the emirate’s own security, aerospace, defence industries, with the sector constituting a key pillar of the Abu Dhabi Economic Vision 2030 long-term strategy. This chapter contains an interview with Maktoum Ali Al Sharifi, Director-General, Abu Dhabi Police.
Explore chapterTransport
With major port, airport, road network and railway projects under way, Abu Dhabi’s transportation sector has become a major focus of investment in recent years. International investors and developers are playing a central role in infrastructure planning, construction and management, which is seen as a strategic priority driving the emirate’s economic growth and diversification initiatives. Home of the country’s capital, Abu Dhabi City, and comprising nearly 90% of its land area, 30% of its population and around 60% of the national GDP, Abu Dhabi remains an important player in the administration and development of both local and national transport systems. This chapter contains an interview with Mohamed Juma Al Shamisi, CEO, Abu Dhabi Ports.
Explore chapterConstruction & Real Estate
Although it has become a strong contributor to economic diversification, Abu Dhabi’s real estate sector is being put under pressure by slower growth, brought on by low global oil prices that started in 2014. Spending cuts since 2015 have been reflected in capital value, with rental rates declining to their lowest levels since 2013. However, the slowdown has masked encouraging developments in the sector, with a series of Abu Dhabi government reforms unveiled in 2015 with a view on protecting against the emergence of another property bubble. Private developers are becoming more responsive to market demand with regard to product offering, and have begun exploring alternative projects, such as real estate investment trusts and joint ventures. This chapter contains interviews with Talal Al Dhiyebi, CEO, Aldar; and Falah Al Ahbabi, Chairman, Department of Urban Planning and Municipalities.
Explore chapterIndustry
Sixty years after Abu Dhabi’s first oil discovery at the Murban Bab oilfield, industry is proving to be an engine of growth and economic diversification in 2019, as Emirati entrepreneurs explore and nurture new opportunities to reduce reliance on the volatile energy sector. Their efforts to diversify include vertical development into downstream industries such as petrochemicals, plastics and by-products like sulphur; horizontal moves into energy-intensive manufacturing of steel and aluminium that in turn feeds production clusters; and lateral shifts into the technologies of the future that are expected to shape the Fourth Industrial Revolution. This chapter contains interviews with Jamal Salem Al Dhaheri, CEO, Senaat; and Abdulla Jassem Kalban, Managing Director and CEO, Emirates Global Aluminium.
Explore chapterEducation
Billions of dirhams are being spent each year on education in Abu Dhabi by the emirate’s leaders, investors and families, with the aim of equipping new generations with the skills necessary to lead the transformation of the public and private sectors, and drive the development of a knowledge-based economy. Standards in schools and universities are closely monitored to ensure a quality learning environment for young citizens and residents, and efforts have been made to attract well-known international institutions in the tertiary and private school segments to open campuses in Abu Dhabi. The Abu Dhabi authorities have also focused on improving public schools, colleges and universities. This chapter contains an interview with Jameela Salem Al Muhairi, Minister of State for General Education.
Explore chapterHealth
A regional pioneer in the provision of both health care and medical insurance, Abu Dhabi continued to lay the foundations in 2018 for a more robust model of primary care and achieved new milestones in transplant surgery. Driven by the construction of new hospitals, clinics and specialised facilities, there is a strong pipeline of public and private sector investment in new facilities, especially regarding specialised care. The health system’s administrators have worked hard over the last decade to fill capacity shortages and attract qualified human resources, acknowledging that more can be done to ensure the achievement of the level of health care services envisaged in Abu Dhabi Economic Vision 2030. This chapter contains interviews with Sheikh Abdulla bin Mohammed Al Hamed, Chairman, Department of Health; and Dr Gareth Goodier, Group CEO, Abu Dhabi Health Services Company.
Explore chapterTourism & Culture
The last 10 years have seen Abu Dhabi’s visitor appeal grow rapidly thanks to the government’s prioritisation of tourism and culture as part of the emirate’s long-term strategy for economic diversification. With an array of high-end accommodation already in place and Louvre Abu Dhabi shining as the emirate’s latest addition to a growing number of attractions, sector authorities are looking to further expand offerings by developing new segments such as cruise tourism, medical tourism and ecotourism, as well as by continuing to develop and promote Abu Dhabi’s identity as a destination for authentic cultural and historical experiences. This chapter contains interviews with Mohamed Khalifa Al Mubarak, Chairman, Department of Culture and Tourism – Abu Dhabi; and Saif Saeed Ghobash, Undersecretary, Department of Culture and Tourism – Abu Dhabi.
Explore chapterEnvironment
Climate change and global warming, coupled with population growth and increasing urbanisation, are just some of the environmental factors depleting the natural resources of countries across the world and affecting the earth’s natural balance. In Abu Dhabi, where average temperatures run from 22.9°C to 35°C, reaching as high as 50°C in summer months, and where average rainfall is just 81.4 mm per year, environmental protection and sustainability are particularly vital to future growth, and have become key pillars in the authorities’ development agenda. Population growth is expected to put additional strain on food and water supplies in the future as well as increase demand for jobs and housing. This chapter contains an interview with Razan Khalifa Al Mubarak, Secretary-General, Environment Agency - Abu Dhabi.
Explore chapterICT
The UAE is at the forefront of developments in the regional telecoms market, boasting one of the highest smart phone penetration rates in the world, a reputation as a testing ground for emergent capabilities, and rapidly developing infrastructures for wireless broadband and fibre-optic services. At the emirate level, the Abu Dhabi Economic Vision 2030 established targets for investment in and adoption of new ICT infrastructure, such as increases in ICT spending and internet penetration to match the levels of international industry leaders Singapore and New Zealand. Similarly, the Abu Dhabi Plan, published in June 2016, outlines 25 goals where success will depend on making advances in ICT infrastructure. This chapter contains interviews with Rauda Al Saadi, Director-General, Abu Dhabi Smart Solutions and Services Authority; and Saleh Abdullah Al Abdooli, CEO, Etisalat Group.
Explore chapterMedia
Abu Dhabi’s media sector has enjoyed rapid growth in recent years as a result of sustained emirate and federal government support as well as the increase in local content being created in its dedicated media free zone twofour54. The presence of major international media corporations in the free zone has underlined the quality of the facilities on offer, while efforts to cultivate the emergence of a skilled local workforce for the sector are paying dividends thanks to the various training and outreach programmes on offer. Strategic partnerships with regional and international media players alike should cement the emirate’s reputation as a leading media centre in the years ahead. This chapter contains an interview with Maryam Eid AlMheiri, CEO, Media Zone Authority – Abu Dhabi and twofour54.
Explore chapterRetail
With a strong pipeline of retail space under construction, including major regional destination malls and shopping developments to serve untapped communities, Abu Dhabi’s consumers can look forward to new experiences, fresh brands and greater choice. Existing operators are re-thinking mall management to give more prominence to food and beverage outlets, such as fine dining and the latest fast-food concepts, to reflect the changing tastes of a cosmopolitan population. Retail has a key role to play in the business environment as part of the emirate’s strategic shift towards a more diversified economy as described in the Abu Dhabi Economic Vision 2030. Entrepreneurial Emiratis are currently behind many of the enterprises that form the bedrock of the sector. This chapter contains an interview with Tariq Ahmed Saeed Al Wahedi, CEO, Agthia Group.
Explore chapterAgriculture & Food Security
The local authorities are continually looking at ways to improve domestic food production, efforts which can in turn support and work alongside the various strategies in place to ensure Abu Dhabi’s food security as well as that of the wider UAE. Despite a desert climate and significant barriers to large-scale agricultural production, a strong focus has been placed in recent years on the management of key resources such as water, with an increased push into areas like greenhouses, hydroponics and the overall modernisation of the agriculture sector. This comes at a time when Abu Dhabi’s population, and therefore its food requirements, continue to grow. This chapter contains an interview with Mariam bint Mohammed Almheiri, Minister of State for Food Security.
Explore chapterTax
The UAE currently has no system of federal income taxation. Instead, most of the emirates – including Abu Dhabi – enacted their own corporate tax decrees in the late 1960s. These emirate-level corporate tax decrees are of general application and remain in force. These decrees are similar in nature and text, and deal in broad terms with the identities of taxable persons, rates, administration, computation of taxable profits and loss relief. The decrees limit the scope of taxation to “bodies corporate” carrying out a trade or business in the respective emirates. This chapter contains a viewpoint from Mark Schofield, Partner, PwC Middle East Tax & Legal Services Leader.
Explore chapterLegal Framework
Founded in December 1971 as a federation between six of its seven constituent entities, the UAE includes the emirates of Abu Dhabi (the capital city), Dubai, Sharjah, Ajman, Fujairah and Umm Al Quwain. The emirate of Ras Al Khaimah joined the federation the following year. The UAE is governed by the UAE Constitution, which permits each emirate to have its own legislative body and judicial authority. Accordingly, there are both federal courts and local courts in each individual emirate that uphold the constitution. Abu Dhabi courts apply UAE federal law, as well as the emirate’s unique legal framework.
Explore chapterThe Guide
The guide contains listings of some of the leading hotels and resorts in Abu Dhabi and 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
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