UAE tops in socio-economic development

The UAE has emerged as one of the top countries in terms of socio-economic development and related indicators thanks to its sound government policies and fiscal discipline, a well-known Gulf economist has said.

Over the past few years, the UAE and other Gulf hydrocarbon producers have shown significant economic resilience, surpassing many Asian and Western economies, said Mohammed Al Asumi, a former economist at the Ministry of Planning an ex-adviser at the Dubai Executive Office.

Asumi, author of several books on regional economies, cited a recent report by the International Institute of Management Development in Switzerland showing the UAE ranks first globally in terms of efficiency in fiscal policy.

The UAE has outperformed countries such as Britain, France, Japan and China in fiscal efficiency, according to the report.

The UAE also features high in global ranking on trust in government procedures, posting 78 percent level, according to the Edelman’s Trust Barometer.

The same report ranks the UAE second in terms of credibility of government officials, Asumi said, adding that the UAE has been ranked 27th out of 142 countries in the Global Competitiveness Report 2011-12.

“These indicators suggest the UAE to be in an advanced stage of economic development, attained by an economy based on innovation (among the group of 35 advanced economies in the world),” he said in an article published by the Abu Dhabi-based Emirates Centre for Strategic Studies and Research.

“These indicators are highly significant as they point to the extent of socio-economic development achieved by the UAE in various fields, in a relatively short time. These reports are highly credible as they have been released by specialized organizations with distinguished academic and scientific credentials.”

Asumi said some of the major implications of the eminent rank achieved by the UAE in fiscal policy efficiency can be summarized in the following ways:

--First, the effectiveness of the government policy in general and fiscal policy in particular shows that a balance has been struck between the needs of development and raising the standards of living of both citizens and residents. -----Second, it points to the efficiency of the social safety net and pensions and the non-imposition of taxes that would have constituted a heavy burden on individuals, companies and the business sector. The UAE enjoys a leading position in the World Bank’s Doing Business Report, 2012. It was ranked 33 out of 183 countries included in the report.

--Third, the effectiveness of fiscal policy shows the efficiency of government budget and effective allocation of resources. Emphasis is placed on useful expenditure and on reduction of wasteful spending. Emphasis has also been laid on structural changes in government budgets over the past three years that has led to balanced budgets for the years 2011-2013, with a focus on maintaining public funds. This has placed the UAE in the seventh position among countries with least wasteful spending globally --Fourth, fiscal discipline has led to efficient management of financial surpluses and their use in the service of development. This has led to international recognition of effective financial management of the UAE and increased revenues from local and foreign investment with a commitment to international standards in the efficiency of spending in general.

“These foundations are the bedrock of high rate of growth and for attracting capital and investment to diversify sources of national income.”

Asumi said this has allowed the GDP to grow at a rapid pace over the past decades. He expected GDP to grow by around five percent in 2012 to reach Dh 1,315 billion, making it the second largest Arab economy after Saudi Arabia.

The UAE also enjoys high global ranking in terms of per capita GDP, which stood at about $44,000 last year, his figures showed.

The country has also taken major strides in areas of education, health, housing, foreign trade, transportation and communications, he said.

“Economic indicators suggest the UAE’s superiority in many areas highlight certain aspects of its leadership in terms of development vis-a-vis other countries. In addition to the rise of GDP and high per capita share, the expected growth in the value of commodity exports this year is estimated at 30 percent.”

Asumi projected exports to exceed the one-trillion-dirham threshold for the first time, reaching Dh1,047 billion compared to Dh808 billion in 2011.

At the same time, foreign exchange reserves are expected to increase by 41 percent this year to Dh203 billion from Dh143.6 billion in 2011.

“As further evidence of the proper environment for the business sector and the high capacity to compete, the Bureaucracy Index (BI) is expected to rise to 5.69 points in the current year, compared to the 4.21 points last year,” he said.

“These developments and rapid growth have transformed the UAE into a modern and developed country that is capable of competing in various areas and in attracting qualified manpower,” he said.

“The UAE is currently considered one of the top destinations among talented people around the world, thanks to its competitiveness and the high standard of living it provides to its citizens and residents. This transformation corresponds to the progress happening in international economic and strategic relations at the levels of globalization, competition and open markets. This qualifies the UAE to occupy a leading position in international relations as a developed country that has the ability to compete and to further its growth besides improving the standard of living in the coming years.”

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