The UAE’s economy would benefit from more regulation despite the fact that short- and medium-term economic outlook is strong, said a member of the board of the Sharjah Chamber of Commerce and Industry.
Mohammed Salem Al Mosharrekh told Emirates Business he was concerned about governing issues ranging from national demographics to free trade.
“To guarantee success in the medium- and long-term, one needs policies and strategies capable of adapting to change and this is the role of the cabinet, which has taken this into consideration through several strategies, which, if actively and effectively applied, would save us the loss of our national identity,” he said.
“The population of nationals is falling year after year. The growth in the size and volume of the economic activity [in the UAE] requires foreign manpower to keep pace with this activity. So the size of the expatriate population is increasing.
“It is predicted that nationals will make up just one per cent of the population two decades from now.”
He said infrastructure is already showing strains of having to accommodate the growing population.
Al Mosharrekh recommended the government reprioritise developments to counter this weakness.
“We seek balance and rational economic growth based on projects, provided that priority should be given to infrastructure projects of interest to population. And then you can move from one project to another and so on. The infrastructure can no longer bear so many people.”
Regulation and strong government oversight, he added, are not at odds with the free market.
Economic freedom, in other words, does not equal loose markets. Openness, he said, should not allow traders to monopolise sectors and increase prices.
“I support a free economy that is managed and planned by the government to monitor practices in the market and to take steps against practices that harm consumers or the general objectives of the economy. In the United State, for instance, you can not buy a warplane.”
Inflation is an example of a national problem that requires stronger government intervention in Al Mosharrekh’s opinion.
“Current attempts to reduce prices are weak and will not yield tangible results. What is needed is strong and effective government intervention,” he said.
He called on the Central Bank to raise and fix the rate of interest so that credit levels would go down and consequently the volume of liquidity in the country, the main reason for the rise in living costs, would fall.
Rather than encouraging additional investment in the real estate sector, Al Mosharrekh suggested more attention should be paid to industry and foodstuffs, which he argued, were likely to offer high returns.
Infrastructure needs to keep pace with growth