Introduction
The United Arab Emirates, one of the most prominent countries in the MENA region, is a federation of 6 states namely Abu Dhabi (Capital), Dubai, Sharjah, Ajman, Fujairah, and Umm Al-Quwain. This country also shares borders with Oman and Saudi Arabia. While the nation became rich due to its extensive oil and gas reserves, the government is planning to transform their focus towards major economic advancements and reduce their dependencies on oil revenues. However, the question remains, is that remotely possible? How will it impact the future of the country?
Infographics by GO-Globe UAE
Future of the Emirates Economy
The future of the Emirates aims to shift the economic balance towards technology, geopolitics, geoeconomics and globalization, and decrease reliance on oil reserves. This is being termed as “Vision 2030”. So the question arises…What exactly does Vision 2030 aim to achieve?
Economic 7-Point Policy
UAE’s Economic Policy includes to:
- Creating an environment for business that is open, effective, efficient, and internationally linked
- Adopting a strict budgetary plan that responds to economic cycles
- Creating a stable monetary and financial market environment with manageable inflation
- Improving the efficiency of the labor market significantly
- Building an adequate and durable infrastructure that can support anticipated economic growth
- Creating a highly skilled and productive workforce - Allowing financial markets to play a major role in financing various economic sectors and projects.
Economic Target-Setting Framework
The Economic Target-Setting Framework includes improvement in the following areas:
- Economic Stability: Fiscal and Monetary Stability, Trade Relations
- Economic Development: Economic growth, Wealth and Living Standards
- Human Capital: Workforce and Skill development
- Productivity and Competitiveness: Labour and Capital Productivity
- Physical and Financial Capital: Domestic and International Investments, current account and aggregate public and private savings
Vision 2030 Objective
The primitive objective of the Vision 2030 includes developing a highly skilled and productive workforce. Since expatriates comprise most of the workforce, the new vision aims to facilitate the Nationals with the required skills, qualifications, and work ethics to thrive in the market and facilitate its working class to meet international benchmarks. This aims to build more education centers, enhance the quality of educational institutions, promote effective industry training, create a diverse environment to encourage entrepreneurship, invest highly on research, innovation, and technology, which could help to instigate a unique paradigm and foster a culture of growth and innovation.
Labor and Productivity
The development of skilled labor and increased productivity involves to:
- Increase participation of Nationals, specifically targeting the youth and women, to make the workforce.
- Reduce employment in public sector and promote more jobs in private sector
- Increase productivity of employees to meet international benchmarks
Financial Stability
Another principal agenda as part of Vision 2030 is efficient management of financial resources and proper due diligence of the financial capital expenditure in the required areas of development. This plan aims to expand the debt securities i.e. bonds and sukuks, undertake major contributions in IPO procedures and promote future fundings from worldwide investors. Moreover, markets must operate to improve the safety of money and capital expenditures, and take initiatives to minimize inflation and market instability.
Infrastructure and Development Policy
This infrastructure and development policy includes to:
- Diversify energy resources and encourage renewable energy projects
- Ensure an efficient and robust transportation system
- Promote Tourism and increase numbers to more than 8mn in the next five years
- Encourage spending on technology and increase reliance on ICT
Diversification of Energy Resources and Efficient Infrastructure
Diversification of energy resources include preservation of natural resources, promote renewable energy resources, biodegradable and recyclable products, and introduce sustainable urban planning measures like environmental-friendly housing to build a sustainable future, Furthermore, a world-class economy like the United Arab Emirates needs a resilient, robust and stellar infrastructure which has the capability to support future growth and development. Enhancement of the transportation networks, utilities, and social infrastructure emphasizes to elevate the quality of the road and railway system, upgrade all major Abu Dhabi, Dubai, and Sharjah Airports through technological and data-based advancements, and expand the Abu Dhabi community Seaports.
Promotion of Tourism
Promotion of tourism includes plans to build theme parks, new shopping malls focused towards recreational activities for children and women, enhance technological factors such as 4G and 5G services at greater locations, and provide adequate security and safety at tourist destinations. There are also plans for the capital city to embrace technological advancements and make drastic innovations in Big Data, Artificial Intelligence, Robotics, Nanotechnology, and smart products.
Social Development Plan
United Arab Emirate’s future vision also includes a fundamental social development plan, which aims to improve the lives of the citizens and expatriates through the following measures:
- Enhance the healthcare and medical facilities, at affordable costs
- Instill the concept of social welfare programs and non-profit organizations
- Ensure equal opportunities for all residents i.e. citizens and expatriates from all countries
Developmental Projects
The transportation and construction projects play a huge part in elevating the per capita GDP of the economy. Some of the major developmental projects include:
- The Mohammed bin Rashid Al Maktoum Solar Park, which will generate 1,000 MegaWatts (MW) by 2020 and 5,000 MW by 2030
- Emirates Lunar Mission, in which the UAE aims to develop a lunar rover in the UAE and send it to the moon by 2024
- Dubai Autonomous Transportation Strategy, which aims to transform the transportation strategy and bring AED 22 billion in annual economic revenues
- Dubai Industrial Strategy 2030, which has identified the development in six priority sub-sectors: aerospace, maritime, aluminum and fabricated metals, pharmaceuticals and medical equipment, food and beverages and machinery and equipment
- Dubai 3D Printing Strategy, focusing on construction, medical products, and consumer products and exploitation of technology and proper usage in these sectors
- Abu Dhabi Industrial City, spanning over an area of 40 square kilometers
- Al-Maryah Island, a 114-hectare natural island, currently being developed to be one of the largest city centers
- Strata, an Aviation company, which will build aircraft bodies in partnership with Airbus
- Saadiyat Island, a natural island and a project to promote tourism, costing up to $500 billion, expanding on a total area of 2.43 square kilometers
- Yas Island, a man-made island to promote cultural tourism, a developmental project worth up to $500 billion, expanding more than 15 kilometers
- Emirati Housing Project, which will provide up to 12,000 houses to UAE Nationals
- The Abu Dhabi Union Railway, to be laid out over an area of 1,200 kilometers
Facts and Figures about Abu Dhabi
With primitive growth and sustainability plans laid out in the Vision 2030 agenda, there are some interesting facts and figures regarding the country's capital, Abu Dhabi:
- According to estimates, Abu Dhabi has a population of 2.9 million, around 28% of the country’s population lives in the capital
- As of 2023, 89% of the working class comprises of Expatriates, and only 11% consists of their Nationals
- In 2022, the capital city was the fastest growing economy in the MENA region, with a whopping GDP of 9.3%
Infographics
- There were 9.38 million internet users in the United Arab Emirates at the start of 2023, when internet penetration stood at 99%
- UAE’s population increase by 76% from 2022 to 2023
- There were 9.38 million internet users in the UAE in January 2023.
- Facebook had 7.30 million users in the UAE in January 2023
- UAE’s real GDP is projected to grow by 3.6% in 2023
- The capital city, Abu Dhabi, is the largest of the seven emirates, representing 87% of the total land mass of UAE
- Dubai Autonomous Transportation Strategy aims to transform 25% of the total transportation in Dubai to autonomous mode by 2030.
- As of 2023, 89% of the working class comprises of Expatriates, and only 11% consists of their Nationals
- In terms of women economic participation, 14.5% of the overall workforce and 18.5% of the National workforce is female.
- The economy of United Arab Emirates is the 5th largest in the Middle East (after Saudi Arabia, Iran, Turkey and Israel) with a gross domestic product (GDP) of US$503 billion in 2022
- A total of 6.02 million people visited Dubai between January and April 2023.
- Dubai’s total international visitors for Q1 2023 is 4.67 million
- Dubai saw an increase of 7.08 million visitors in 2022, which is a 97% increase from 2021.
- In 2022, the capital city, Abu Dhabi, was the fastest growing economy in the MENA region, with a whopping GDP of 9.3%
- Assuming that oil GDP would continue growing at its sustained historic rates, achieving non-oil sector targeted real growth rates would ensure an oil/non-oil GDP split of respectively 36% and 64% by 2030
- Abu Dhabi plans to reduce unemployment in the national population to 5% by 2028
- The capital city, Abu Dhabi ranks 30th on the UNDP’s Human Development Index (HDI), which measures quality of life (according to life expectancy, education and literacy, and purchasing power) in 178 countries
- In the Urban Structure Framework, the population of the capital city is expected to grow up to 3.1 million residents, and 686,000 residential units
- Outside of free zones, limits in Abu Dhabi are similar to those of its GCC partners. Foreign ownership of companies in the UAE is capped at 49%, with few exceptions
- Companies in the UAE raised $699 million in the first half of 2022, ranking the Emirates as the leading country for venture capital financing in the MENA region
- It is predicted that by 2030, electricity consumption in UAE will be reduced by 22% and water consumption by 32%
- The Emirate’s capital is targeting 24 million tourist visitors by the end of 2023, expecting a surge of 33.3% from the statistics of 2022
Conclusion
Vision 2030, launched in August 2007, has proven to be one of the most successful and innovative development plans. The continued progress is a testament to leadership’s strategic vision, ongoing economic diversification and increased confidence of the global investors, entrepreneurs, and professionals from across the globe. We hope this comes to fruition and the country’s economy continues to flourish.
