Abu Dhabi has announced plans to tear down barriers to foreign investment and expand the role of the private sector within a landmark five-year strategy designed to reduce reliance on volatile oil export earnings.
The Abu Dhabi Department of Planning and Economy (DPE) invited hundreds of local and foreign businessmen to an outline of the 2008-2012 strategy, which it said would involve 100 per cent foreign ownership in projects, massive incentives for industrial ventures and a greater role for the private sector to spearhead growth.
Its officials declared that the target is to diversify the oil-reliant economy and turn Abu Dhabi into what they described as a leading regional business hub.
The strategy covers 12 economic priorities, 37 objectives and more than 100 initiatives, including extensive foreign drives to promote the emirate as a business centre, the establishment of an economic forecasting unit, the creation of a government statistics centre and the formation of a committee that will oversee the issue of licences to foreign investors.
"It is an ambitious and aggressive strategy… it includes numerous objectives, priorities and targets… its main features include achieving an open and diversified economy, developing the infrastructure, supporting small and medium enterprises, attracting foreign direct investment through simplifying laws and legislations that regulate business and trade, and facilitating procedures for commercial licences in the emirate," Nasser Ahmed Al Suwaidi, the department's President, told the more than 300 officials and businessmen.
"We want to achieve these objectives with a high degree of transparency, fairness and efficiency… we will work on the development of a suitable environment for investments on an annual basis in order to provide an attractive, competitive environment and to enhance the competitiveness of Abu Dhabi in a model environment governed by modern laws and regulations."
Suwaidi did not elaborate on the new investment laws but said they would ensure "full" ownership for foreigners in industrial ventures.
He said it would be a federal law and the department is co-ordinating with the Ministry of Economy to "hasten" the issuance of the law.
He was asked later why attracting FDI is a priority when Abu Dhabi and other UAE emirates are awash with liquidity because of the surge in oil prices. He said: "Well, the reason is that we are not targeting foreign investment for the sake of financing but for technology transfer… Abu Dhabi differs from many other countries in its massive financial resources but what we are seeking is technology and economic experience from the others not funding."
Outlining the strategy, he said it would focus on increasing the non-oil sector's contribution to the gross domestic product through expanding the manufacturing sector, adding this would not be possible without foreign investment. "Regarding economic diversification, the energy sector will provide the necessary motive for expansion in the industrial base… we hope the private sector and the foreign investors will push these sectors forward," he said. "I want to stress again that attracting direct local and foreign investment is essential for economic growth. Some members of the business community have expressed their concern about the increase in construction costs in the UAE as they are adversely affecting their investments… we tell them that we will be monitoring the costs of private investments for local and foreign companies."
In his address, DPE's Undersecretary Mohammed Omar Abdullah detailed the main aspects of the five-year strategy, saying it is part of the Abu Dhabi Government's vision to "find an ideal economic environment, which guarantees constant growth and provides promising business opportunities."
The main aspects cover economic planning through the development of plans and policies related to economic and social growth, conducting research and statistics, launching marketing and promotion campaigns, enhancing the emirate's commercial status, ensuring consumer and investor protection, facilitating trade and business licensing, updating economic policies, laws and regulations regularly, and supporting local institutions.
"All these will be accomplished through 12 economic priorities, 37 objectives and 129 initiatives. The strategy's first priority will focus on comprehensive plans and policies for economic growth, employment of funds in various economic projects and preparation of five-year development plans for the emirate."
Key points in five-year strategy
- Formation of an economic forecasting unit n Establishment of the Abu Dhabi Business Centre as the sole licensing authority for projects
- Creation of a dedicated government statistics department n Launch of promotion campaigns for foreign capital, including the setting up of "invest in Abu Dhabi" website
- Intensifying measures to protect investors and consumers
- Setting a timetable and deadline to achieve the strategy's goals
- Handling complaints from all businessmen and traders
- Adopting international licensing procedures n Expanding facilities and incentives for all investors and businessmen
- Promoting Abu Dhabi for international investors at the geographic and sector levels n Monitoring prices to ensure feasibility of projects for investors
- Preparing an annual report on Abu Dhabi economic and social development