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Pool of talent not just oil income fuels UAE economy, says Sheikha Lubna
Source: BI-ME , Author: Trevor Lloyd-Jones
Posted: Fri June 1, 2007 12:00 am

UAE. The rise in oil income has afforded the UAE an opportunity to create a balanced growth spanning across all economic sectors, Sheikha Lubna Al Qasimi, UAE Minister of Economy has said.

The UAE economy, she added, rests on strong fundamentals that are not merely oil-driven. Sectors like tourism, education, media, health, industry and finance have evolved as ideal platforms for enhanced investment.

Speaking at the 37th St Gallen Symposium which is currently underway in Switzerland, Sheikha Lubna said the economy has performed admirably over the past few years, and is poised to forge ahead with assertiveness and confidence.

All-round development is perceptible in every emirate offering more opportunities for investors and making rapid strides in developmental initiatives, she said.

"By judicious use of our oil wealth we have developed an excellent physical infrastructure, a competent administration and an educated population.

In 2006 the UAE recorded the highest level of transparency among Arab countries according to the Berlin-based Transparency International's 2006 Corruption Perceptions Index (CPI). The UAE ranked 31st out of the 163 countries surveyed", she told the meeting.

Sheikha Lubna explained that the UAE has adopted liberal economic policies which are tampered by a legal, financial and business-friendly environment and world-class infrastructure.

In 2006, the UAE recorded a nominal GDP growth rate of 23.4%, with an overall nominal GDP figure of AED 599 billion, or around US$163 billion.

The non-hydrocarbon sector contribution has been increasing steadily over the past few years, even with soaring international oil prices up from 46% of total GDP in 1990 to 62.5% of total GDP in 2006. This is indicative of the successful economic diversification policy of the UAE government.

The International Monitory Fund (IMF) estimates that net FDI inflows reached more than US$11 billion in 2005.

The UAE's total foreign trade (which includes goods and services) was approximately 142% of GDP in 2006.

"Yet, our priority is to cement our relations with the other Gulf Cooperation Council members. Once we become a fully integrated economic region, our global economic position will be greatly enhanced," she said.

At the 2005 GCC summit , the GCC countries agreed to conduct all FTA negotiations on a multilateral basis and as an economic bloc. The UAE economic growth rate, she said, was almost 9% in 2006, well ahead of the global average.

A report by AT Kearney suggests that the UAE's GDP can increase by 60% by 2010, through continued economic diversification based on three key drivers: direct investment, internationalisation and development of new industries.

The Minister noted that the UAE was spearheading an aggressive privatisation campaign, which will open the door for local, regional and international business to become partners.

The free zones of the UAE too have played a major role in boosting the UAE's identity as a fertile environment for entrepreneurs. Apart from offering near-total economic freedom to the investors, the free zones offer a tax-free package and world-class infrastructural facilities.

Today, the UAE has demonstrated excellent growth in the services sector and lately in the industrial sector. The healthy business climate has, over the years, attracted overseas investors some of whom have even shifted entire operations to the country. The real estate investment boom is another factor that reflects diversification policy and the UAE's tourism drive has made the UAE a major player in the global economy.

Dubai meanwhile has taken the bold step of establishing a financial centre that competes on the global stage, along with London, New York, Singapore, Tokyo and even Shanghai. The Dubai International Financial Centre (DIFC) slots perfectly into the time zone between East and West and is host to financial institutions from all over the world. To date, DIFC has 107 regulated firms, from the UK, US, most of Western Europe, Singapore and Hong Kong. UBS, Credit Suisse and Julius Baer already well established there.

The UAE local stock markets - Abu Dhabi Securities Market, Dubai Financial Market, in addition to Dubai Gold and Commodities Exchange - play a significant role in attracting foreign investment. They are supervised by the Securities & Commodities Authority (SCA), which protects investors and ensures fair and sound transactions through integrated rules and regulations.

The UAE offers an extremely liberal and multicultural experience, with a population representing more than 150 countries and where 79% of the population is non-local. This is indicative of the tolerance portrayed by the country in attracting a great pool of talent, Sheikha Lubna said.

 

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