Economy

The economy of Abu Dhabi is the second largest in the Middle East (after Saudi Arabia), with a gross domestic product (GDP) of USD 414 billion (AED 1.52 trillion) in 2018. The Emirates have been successfully diversifying their economy.Although the UAE has the most diversified economy in the GCC, its economy remains extremely reliant on petroleum (oil). With the exception of Dubai, most of the UAE is dependent on oil revenues. Petroleum and natural gas continue to play a central role in the economy, especially in Abu Dhabi. More than 85% of the UAE's economy was based on the oil exports in 2009.While Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to diversification, Dubai, which has far smaller oil reserves, was bolder in its diversification policy.In 2011, oil exports accounted for 77% of the UAE's state budget.

Tourism is one of the bigger non-oil sources of revenue in the UAE, with some of the world's most luxurious hotels being based in the UAE. A massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the UAE diversify its economy. Nationwide, there is currently $350 billion worth of active construction projects.

The UAE is a member of the World Trade Organization and OPEC.Prior to independence from the UK and unification in 1971, each emirate was responsible for its own economy. At the time, pearl diving, seafaring and fishing were together the mainstay of the economy, until the development of Japanese cultured pearls and the discovery of commercial quantities of oil.Previous UAE President Zayed Bin Sultan Al Nahyan is credited with bringing the country forward into the 20th century and using the revenue from oil exports to fund all the necessary development. Likewise, former UAE vice-president Rashid Bin Saeed Al Maktoum had a bold vision for the Emirate of Dubai and foresaw the future in not petroleum alone, but also other industries.

In the 1980s Dubai's diversification centred around trade and the creation of shipping and logistics centres, notably Port Rashid and the port and Free Zone of Jebel Ali as well as Dubai International Airport, leading to a number of major global plays in shipping, transportation and logistics (DP World, Emirates, DNATA). The emergence of Dubai's lively real estate market was briefly checked by the global financial crisis of 2007-8, when Dubai was bailed out by Abu Dhabi.The recovery from the overheated market led to tighter regulation and oversight and a more realistic market for real estate throughout the UAE with many 'on hold' projects restarting. Although the market continues to expand, current market conditions for developers have been characterised as 'tough'.

The following table shows the main economic indicators in 1980–2017. Inflation below 2% is in green.

In 2006, His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince

Seeking to ensure the continued success of the Emirate’s development, the Government of Abu Dhabi has set guidelines and priorities for the Emirate’s socio-economic progress in its Policy Agenda. Taking these guidelines as its parameters, the Abu Dhabi Economic Vision 2030 has been developed by the Government, in consultation with the private sector, as a 22-year strategy to achieve these aims, and to ensure that all stakeholders in the economy are moving in concert, with a clear view of the long-term goals.

The Abu Dhabi Policy Agenda 2007/2008 defines the priorities for public policy in the Emirate. These priorities have been set to achieve what the Government of Abu Dhabi sees as its primary goals: a safe and secure society and a dynamic, open economy.

The Government has identified nine pillars that will form the architecture of the Emirate’s social, political and economic future:

• A large empowered private sector

• A sustainable knowledge-based economy

• An optimal, transparent regulatory environment

• A continuation of strong and diverse international relationships

• The optimisation of the Emirate’s resources

• Premium education, healthcare and

infrastructure assets

• Complete international and domestic security

• Maintaining Abu Dhabi’s values, culture and heritage

• A significant and ongoing contribution to the federation of the UAE

Having established these pillars, the Government has committed itself to direct public policy to strengthen and develop them. This involves focusing on four key priority areas:

• Economic development

• Social and human resources development

• Infrastructure development and environmental sustainability

• Optimisation of Government operations. Economic Development

Economic diversification is common and fundamental to the Government’s other stated priority areas and the policy agenda as a whole. The Government wishes to see the creation of higher-value employment opportunities, especially for Nationals, and maximising participation of women in the workforce. To encourage investment and entrepreneurial activity, the Government

plans to contribute to enhancing the business environment through further legislative reform and by ensuring that all economic policy is formulated with reference to rigorous data sources and statistical information. Enhancing the economy and business climate will also help to integrate Abu Dhabi further into the global economy by attracting foreign as well as local investment, and by facilitating export of capital through targeted investments with international partners.According to the Policy Agenda, social and human development represents the pre-eminent objective and driving motivation behind all policies and initiatives. Ensuring that high quality education and health services are available to residents is therefore of the highest priority. When it comes to developing the workforce, the Government aims to ensure the availability of a stable supply of high quality labour to staff the economy, and especially to encourage full employment among Nationals. At the same time, Abu Dhabi wishes to maintain ethical and safe management of its labour resources, through the thorough implementation of Federal labour laws

and the meeting of commitments made through the UAE’s signature of international labour arrangements.

Infrastructure Development and Environmental Sustainability

Developing appropriate infrastructure, while preserving the environment, forms the third priority area. The Government will ensure the development of a professionally designed and well-managed urban environment in the Emirate’s towns and cities, complete with world-class

traffic and transport systems. The simultaneous development of the Regions to keep pace with that of the Capital is also an important policy priority

in order to achieve an Emirate-wide distribution

of economic activity and associated benefits.

For its part, the Government will also ensure that Abu Dhabi’s security is maintained and that its towns and cities remain a safe place in which to live and work. In order to ensure that the urban infrastructure is able to cope with the envisioned

THE ABU DHABI ECONOMIC VISION 2030

7

growth without stresses, the Emirate has already developed and published a comprehensive 2030 urban structure framework plan for the Capital. The initiative will be expanded to cover all the regions of the Emirate.

Optimisation of Government Operations

Finally, the Policy Agenda sets out guidelines

for optimising the Government’s own role in the future of the Emirate, by improving the efficiency and accountability of government departments. The Government has already embarked on an extensive review of its processes and structures. Many services are being delivered electronically through e-government initiatives, and departments are being streamlined and non-core services outsourced to the private sector. These initiatives will be continued and enhanced. At the same time, the Government will review and enhance

the legislative framework and the law-making processes themselves to ensure maximum efficiency.

Economic Vision Imperatives

The Abu Dhabi Policy Agenda has a heavy emphasis on the economy and on ensuring the economic wellbeing of all of Abu Dhabi’s citizens and residents. This Agenda came in response to a number of opportunities and challenges facing Abu Dhabi.

The Emirate’s drive for a more sustainable and diversified economy is intended to reduce the relatively high dependence on oil and the cyclical swings which accompany it. Moreover, the young National population presents the opportunity, as well as the challenge, to create attractive, high value-added employment opportunities for the emerging generation. The drive for diversification as well as the challenge of a burgeoning population delivers a greater need for Abu Dhabi to upgrade the quality of its education system, and to increase the educational attainment rates of Nationals and the overall workforce to move

the economy up the value chain. Moreover, a better educated workforce will be a key enabler to address the relatively low productivity rates found in much of the Emirate’s enterprise base.

Faced with the prospects of a more globalised economy, the Emirate can rely on its established network of international relationships and friendships to respond to the many challenges of increasing globalisation. Moreover Abu Dhabi’s geo-political status can help the

Emirate to respond to the pace of technological change and harness the capabilities of research and development for future competitiveness. However, in order to unlock the potential of these relationships, Abu Dhabi needs to achieve higher global rankings in terms of global competitiveness and ease of doing business. Moreover, the Emirate’s business environment needs to become better equipped to understand and benefit

from new business models and to participate in the global growth of trade in services and the servicisation of many manufactured products. This should be coupled with an effective programme to stimulate research and development, and local innovation, and to facilitate the integration with global innovation centres.

The Abu Dhabi Economic Vision 2030 Taskforce

This Abu Dhabi Economic Vision 2030 is the result of a concerted effort between a number of public sector and joint public-private sector entities. In particular, three entities have played an important role in the development of this Vision:

• The Department of Planning and Economy • The Abu Dhabi Council for Economic

Development (ADCED)

• The General Secretariat of the Executive Council

The Department of Planning and Economy:

The Department is charged with providing for a dynamic, open and successful economy. In what is an evolving and new role, the Department is