Abu Dhabi announces results of Economic Horizons of Abu Dhabi 2012 - 2016 report

Abu Dhabi, Sept 25, 2012 (WAM) - Economic Development Department of Abu Dhabi launched the results of Economic Horizons of Abu Dhabi 2012 - 2016 report, in attendance of Mohammed Omar Abdullah, Undersecretary of the Department, as well as a number of high officials and businessmen in the emirate. Mohammad Omar Abdullah, after declaring the results in a press conference, asserted that the emirate's economy is undergoing a new phase of progress and improvement, and transformation towards diversification on the route of achieving the strategic purposes of Abu Dhabi economic vision 2030, inspired by the wise vision of President His Highness Sheikh Khalifa bin Zayed Al Nahyan in delineating the path for Abu Dhabi to be one of the leading advanced economies in the world. He commended His Highness General Sheikh Mohammed bin Zayed Al Nahyan, Abu Dhabi Crown Prince, Deputy Supreme Commander of the Armed Forces, and Chairman of the Executive council, for moving forward in developing the economy and realising the transformation towards sustainable economic development, culminating in realising the ambitions of the citizens for a decent and prosperous life. Abdullah highlighted the spiralling economic and political developments globally and regionally. Such developments were not far in their influence upon the economies in the Arabian Gulf region including that of UAE in general and that of Abu Dhabi in particular. These developments proved the solidity of the underlying base of the economy of Abu Dhabi and its ability to surpass all challenges and difficulties. He asserted that the past period is considered a strong evidence for the success of Abu Dhabi economy in surpassing the consequences of the global financial crisis that hit, in different ways, different parts of the world in 2009. At the time when some countries have achieved slow or negative growth rates, the emirate of Abu Dhabi could achieve real positive growth rates, making it among the least influenced areas by that crisis. He added: "Oil revenues availed Abu Dhabi the opportunity to implement economic development plans and programmes as well as investment projects. These revenues also consolidated the common belief within the realm of global investments in the strength of the emirate as a secure heaven for investment. That has created clear development horizons and steady economic growth. He added that one can feel proud of what had been achieved in Abu Dhabi throughout the recent few years, despite all economic foreign shocks. All that would happen by the virtue of our wise leadership and its profound awareness for pursuing such progress and insisting on realising the standards of luxury in the emirate. Abdullah asserted that the department has prepared a number of plans for different strategic sectors, including the industrial plan that aims at achieving the economic vision 2030 on Abu Dhabi. Such a plan is to define the available opportunities and detect the challenges and turn them into positive opportunities He said that the strategic plan for developing and encouraging exports, as prepared by the department to be part of other development plans as prepared by other concerned entities in sectors like tourism, transport, energy and infrastructure pertaining to medium and small size enterprises and direct foreign and local investments. He lauded that qualitative leap that Abu Dhabi witnessed in its economic structure in that short period of time due to the wise leadership that is insistent on achieving diversified economy that helps in sustainable economic development and secures luxury for all residents; expats or locals. He assured that economy diversification is an important pivot among the known priorities for the government of Abu Dhabi, and lies ahead of the political agenda of the emirate. The press conference was incepted by Rashid Ali Al Za'abi, acting executive director for planning and statistics sector, with a speech in which he said that launching the report results aims at highlighting the economic forecasts in the emirate, which in turn reflects the economic trends of the government via development plans and enterprises that are under planning or implementation. He added that the report is based on currently scheduled and applied policies which aim at achieving the economic purposes and ambitions of Abu Dhabi as mentioned in 2030 vision. The report is also based on the reality of global, regional and local economic developments that might witness further improvements in the future. He added that the importance of the report is that it is the first of its kind in the emirate. It provides data and information about the future of the economic development in Abu Dhabi in the light of current economic situations. It is also important because the data it mentions are well established on the best analytical techniques, based on events and future trends. It also consolidates the confidence in the economy of Abu Dhabi and helps the businessmen to take their decisions, and clearly envisage and plan for their businesses. Al Za'abi said that Studies Division in the department prepared this report based on many dialogues and discussions with a number of government authorities that are concerned with the economy of the emirate, through economic forecasts committee presided by the department. That committee was established specially for such a purpose. Its members include Statistics Centre of Abu Dhabi, Department of Finance, General Secretariat of the Executive Council, Abu Dhabi Economic Development council and Abu Dhabi Urban Planning Council. Such forecasts were prepared having in mind the views of businessmen and the consumers in the emirate according to the economic surveys done on businessmen, consumers, locals families, representative of industry sectors, labour market, and financial sector etc. such surveys are done on a regular basis by the department several times along the year, in order to reach a realistic report in relation to the mid and short term economic development forecasts in Abu Dhabi. The results of Economic Horizons of Abu Dhabi report 2012 -2016 are based on implementing a number of big projects within the general economic strategies including industrial development strategy and other sectors strategies such as tourism, financial services, transport, energy, free trade and industrial zones, export encouragement, and direct foreign investment encouragement. Those results are based also on a package of various projects that are under implementation since the beginning of this year which will endear the private sector and energise local demand, create a qualitative change in the investment attitudes in realising economic vision 2030 of Abu-Dhabi. Forecasts indicate a growth of GDP of Abu Dhabi with 3.9% during 2012. Such a gradual growth is expected to continue along the coming years to reach a rate of 5.7% during 2013 - 2016. The report expects increase in the real development rate of the non-oil GDP during 2012 to reach 5.5% as supported by implementing big productive projects in the private sector. Such growth rate is going to reach 6.5% average during 2013 - 2016, as private sector investments will continue to grow after fulfilling the infrastructure in the free zones and other areas in the emirate. In this context, the report expects a growth in family consumption with 9.6% (real prices) during 2012 and general growth continuation with 8.1% during 2013 - 2016 on the average, due to increase in economic activities and per capita income. Those forecasts go along with consumer's trust indicator during the second quarter of 2012. Such indicator witnessed 130 points increase compared to 121 points during the same period last year. Individuals trust indicator regarding the current situations showed increase during the second quarter of 2012 reaching 111 points reflecting optimism in the emirate, compared to pessimism levels during the same period of 2011. Regarding private sector investment, the projects that Abu Dhabi declared will give a great push in investments in the emirate. Forecast, in this respect, indicate increase in investment rate during 2012 (real prices) with 11.3% which will go on to reach 8.7% on the average during 2013 - 2016 along with the investor's confidence in the emirate economy endeared by the government efforts to strengthen business competitive atmosphere in order to create an open, interactive and globally integrated business environment according to 2030 vision. Regarding government finance, government subsidies for the economy and the ability of that economy to face challenges, the report lauded the efficiency of Abu Dhabi government in handling the consequences of the global financial crisis, especially in 2009. The government motivated the overall demand in the emirate by means of government investment expenditure, making use of oil revenues surplus that resulted from oil price hike. The report expected the continuation of that attitude from the government during 2012-2016 and redirecting the expenditure in line with the economic vision 2030, in the favour of fortifying the interest of socially motivated projects such as education, environment, infrastructure etc. that boost luxury for all residents either expats or locals. The report said that that reflects the insistence of the government to provide luxury and splendid life for the people, as lauded by great international institutions, leaving UAE in the forefront in the international human development report 2011among Arab countries for the second consecutive years, and 30th globally. As for exports, forecasts indicate that overall exports witnessed 30% increase (real prices) during 2012. Such a growth will increase in line with the improvement of world economic situations and increase of oil demand as shown in the following figure. Exports growth rate will raise up to 7.9% during 2013-2016 on average. According to the report, the general index of business atmosphere during the second quarter of 2012 (June) witnessed an increase compared to the first quarter (March 2012) with (1) point to jump from 55 to 56 points which reflects optimism of the economic establishments in their look at Abu Dhabi as a secure heaven for investment, as the country enjoys security and stability. The report referred to the incessant efforts exerted by the Department of Economic Development to boost foreign trade and promote for Abu Dhabi economy in the world great circles. As for imports, the forecasts predict a 6.1% hike during 2012 in line with the increase of family consumption levels and growth of private and government investment, and continuing rise of growth rates reaching up to 6.3% during 2013-2016 The reports asserted the ability of Abu Dhabi government to fortify the attitude towards knowledge economy, diversification by means of encouraging converting industry private investment. In this respect, the report mentioned that the Executive Council approved the set up of two new industrial cities, one in Ruwais, the other in Madinat Zayed, reflecting the keenness of the government for achieving balanced development by encouraging the investment in the Western region in order to qualify that region to adopt other industries rather than oil. Forecasts refer to the leading sectors as continuing to play their role in motivating the emirate's economy during 2012-2016. Construction sector is the leading sector especially in light of that huge package of development projects that the government declared last February. The report expects that converting industries sector will have a wider role in GDP, in line with the inception of implementing the industrial plan that will focus on technological and export industries in which Abu Dhabi enjoys promising advantage, resulting in impressive increase in non-oil exports. Add to that the inauguration of new industrial zones in 2012. The report also asserted that converting industries sector is a point of interest as an important leading sector for the leadership. That sector is considered a main corner in achieving economic diversification and turning into knowledge economy, as stated in Abu Dhabi economic vision 2030 that comprised a number of strategic sectors as main engine for the development and economic diversification in the emirate such as petrochemicals, aerospace, defence, pharmaceuticals, biotechnology and biology. The report predicts that converting industries sector will witness tangible growth during 2012-2016, following the completion of the first industrial strategy for the emirate of Abu Dhabi, which took in consideration all various strategies for the upsurge of this sector and how to surpass the challenges. The report referred to the recent directives from the Executive Council for approving setting off for building and improving the industrial cities. Such cities include vehicle park as a very important economic development project in the Western region. The report also referred to the council's support for Khalifa Fund for Projects Development in order to develop mid and small size project for the citizens. The report also spoke about setting up two new industrial cities, the first in Ruwais to motivate chemicals, petrochemicals, plastics, oil and gas services, cement and building materials industries. The second in Madinat Zayed that mainly targets oil and gas services, food stuff and logistics industries. Setting those cities is expected to start during 2012. The report expects that such a sector will see 5.2% growth rate during 2012 and 7.1% during 2013-2016, in the light of government policies for attracting more investors on one side and giving subsidies on the other. The report said that construction sector is a leading one for the economy of Abu Dhabi during the past years. This sector achieved real growth rates from 2005 to 2010 mounted to 20.4% average. The report sees that this sector will continue boosting the economy with 11% growth and during 2012 it may reach 12% average. The report said that such expected growth comes in line with a package of development projects such as housing projects and community facilities by means of re-qualifying the infrastructure for a number of housing areas. There is another package of infrastructure projects of roads, sanitary drainage, marine and air transport, education and healthcare to support development plans in the emirate. As for tourism in Abu Dhabi, the report said it has achieved annual record results during 2011. Such progress is expected to reach 7.5% during 2012-2016. Such sector is important in achieving economic diversification according to 2030 economic vision. As for personal and social services sector, the report said that such sector received the highest interest of the government in order to properly provide the community with the services needed. Healthcare sector is a leading one in economic development according to 2030 vision. This sector includes pharmaceuticals, and medical equipment that help in economic development. The Executive Council, within that vision, approved recently a number of healthcare projects for setting up 14 facilities in order to secure high level of services. Education took a special priority according to 2030 vision, as education is a corner stone of achieving more human development in line with transformation into knowledge economy. The report also said, in this context, that the Executive Council approved all projects offered by Abu Dhabi Educational Council in order to boost such a sector that is expected to grow with 7% during 2012-2016. The report is divided into three main chapters. The first is about the global future economic horizons; showing analytical view for the global economy depending on international recent periodicals and publications. The second chapter is about the most important forecasts for the UAE economy as reflected in international reports. The third chapter is about the horizons of Abu Dhabi economy 2012 - 2016 comprising the most important hypotheses that shape the economic forecasts of the emirate; either globally, regionally or locally. The report also considered the opinion polls results on development indicators, as done by the Department. Then it offered the most important economic forecasts for the emirate of Abu Dhabi including economic (oil and non-oil) real growth rates, as well as GDP components such as family consumption, private investment, and foreign trade. It also displayed inflation and growth rates in the various economic sectors and activities as expected in the emirate. – Emirates News Agency, WAM