Sultan bin Saeed Al Mansouri, Minister of Economy, revealed that the UAE economy had achieved several developmental milestones in 2018, which have contributed to stimulating its growth, enhancing its competitiveness and ensuring the sustainable development of the economy.
ABU DHABI, (Pakistan Point News - 12th Dec, 2018) Sultan bin Saeed Al Mansouri, Minister of Economy, revealed that the UAE economy had achieved several developmental milestones in 2018, which have contributed to stimulating its growth, enhancing its competitiveness and ensuring the sustainable development of the economy.
The Minister added that the country has reinforced its regional and global reputation as an economic hub, thanks to the balanced and positive performance of the economy, as well as the concerted efforts made to deal with challenges and envision a comprehensive growth strategy based on diversification, sustainability, openness, active engagement with global markets, forging partnerships and adopting prudent approaches to emerging socio-economic development trends.
In 2018, Al Mansouri noted, the UAE focused on consolidating its economic development and finalising strategic plans and initiatives to fast-track its national growth objectives, guided by the country's leadership.
"Economic policies and plans are based on important elements such as stimulating the environment of innovation, technology, scientific research and intellectual property as engines of development and transformation into a globally competitive digital economy; developing business-friendly systems and legislation; attracting value-added sectors; enhancing the role of the private sector; promoting entrepreneurship through supporting SME and startups; and developing national human resources," he added.
The Minister noted that the UAE continues to march ahead in its development path, based on integrated strategies for continuous development and modernisation, most notably the National Agenda 2021, the UAE Centennial 2071, and the post-oil economy plan, among others.
The country's gross domestic product, GDP, at current prices for 2017, according to the Federal Competitiveness and Statistics Authority, reached approximately AED1405 billion, achieving a growth rate of 7.2 percent over 2016, while the non-oil GDP at current prices for 2017 amounted to about AED1092 billion with an increase of 3.2 percent over 2016, which makes the contribution of non-oil sectors in the GDP of the state achieved a rate of 77.7 percent, according to current prices.
The real GDP of 2017 at constant prices (2010 is a base year) amounted to more than AED1422 billion with an increase of 0.8 percent compared to 2016, while the real non-oil GDP for the same year was about AED1 trillion, achieving 2.5 per cent growth over 2016. Thus, the contribution of non-oil sectors to real GDP reached 70.5 percent, which reflects a positive trend in fast-tracking the economic diversification agenda of the State.
The International Monetary Fund, IMF, affirmed that the UAE economy has displayed flexibility and adaptability in the face of low and volatile oil price challenges over the past years and that the country has adopted effective fiscal and economic policies that have had the most significant impact on maintaining the strength of the economy. The country's current account surplus is expected to exceed seven percent of GDP this year as the momentum of non-oil economic activity increases, raising the real GDP growth estimate for the country in 2018 to 2.9 percent, with a further rise expected during the coming year, at a rate of 3.7 percent.
Concerning economic diversification, the IMF has predicted that the contribution of non-oil GDP will increase to 2.9 percent by the end of 2018 and that it will continue to grow next year to about four percent.
Al Mansouri said that the prospects for economic growth in the country include many positive indicators in the coming years, given the growth of its non-oil sectors, the continued investment spending on development projects, strategic initiatives and incentives to increase investment attractiveness, and accelerated investments associated with the hosting of Expo 2020 Dubai.
The Minister of Economy added that the structure of real GDP for 2017 reflects the increase in economic diversification and the development of non-oil sectors, where a group of vital and value-added industries have witnessed good growth rates, notably the manufacturing industry, which grew by 3.4 percent, and the ITC sector by 3.4 percent, agriculture and fisheries by three percent, transport and storage sector by 2.7 percent, real estate sector by 2.8 percent, health sector by 4.4 percent and areas related to tourism, such as arts, entertainment and service promotion, by 3.9 percent.
He went on to note that non-oil sectors witnessed significant progress over the past years, and continued its support and growth during 2018 mainly in the domains of physical and electronic infrastructure, space sector, logistics and transportation services, financial services including the merger of banks to form giant global business entities, renewable, nuclear and clean energy sector, foreign trade and wholesale and retail trade including e-commerce, SME’s and start-ups sectors including development of support, financing and training systems, technology and ITC sector, manufacturing such as petrochemicals, building materials, metal industries, food and pharmaceutical industries, as well as tourism, which includes the development of facilities, resorts and strategic tourism-related projects.
Commenting on the UAE's foreign direct investments, FDI, Al Mansouri said that the year 2018 witnessed a surge in efforts to develop the investment environment in the country, through the promulgation of Federal Law No. 19 of 2018 on Foreign Direct Investment, which represents a qualitative leap in enhancing the incentives and advantages offered by the state to foreign investors and developing a safe and attractive investment environment.
The most important aspect of this law is the granting of 100 percent ownership of projects in specific sectors, facilitating investment protection guarantees, financial transfer options and the possibility of amending the partnership, mergers, acquisitions and transfer of ownership consistent with the investor interest, according to a set of controls and standards, the Minister noted.
He explained that the law is a new and fresh start towards strengthening the globality of the national economy in line with future development trends, where it aims to enhance the confidence of foreign investors and motivate major international companies to invest in the country's markets, especially in the fields of innovation, technology, space, renewable energy and AI.
The UAE has a wide range of foreign investment incentives for doing business and signed 78 agreements to protect and encourage investment and 115 agreements to avoid double taxation of income with certain countries until 2017. It is also a member of the ‘Great Arab Free Trade Agreement’, GAFTA, signed within the framework of the Free Trade Agreement, FTA, with Singapore.
FDI flowing into the UAE in 2017 were recorded at around US$10.4 billion, up 7.8 percent from 2016. In that year, the state accounted for 40 percent of the total investments received in Arab and West Asian countries, and 23.3 percent in the middle East and North Africa, MENA, region in the same year as well.
The UAE ranked the first in the Arab world and 30 on the list of the best countries in the world in attracting FDI, advanced five ranks for the classification of 2016 according to the World Investment Report 2018 of the United Nations Conference on Trade and Development, UNCTAD. However, the UAE’s cumulative balance of FDI inflows until 2017 was about US$130 billion, with a nine percent growth over 2016.
Also, the UAE ranked 1st in the Arab region and 21st globally concerning FDI outflows to the world, estimated at US$14 billion during 2017, with a growth of 7.7 percent over 2016.
Al Mansouri said that with the implementation of the law, it is expected that there would be a 15-20 percent growth in the volume of FDI inflows to the UAE during 2019-2020 and that the state aims to increase the share of the contribution of FDI in current prices to five percent by 2021, as compared to three percent currently.
The UAE Minister of Economy said that the country continues its distinguished trade policy based on establishing an extensive network of commercial partnerships and developing world-class infrastructure to support business activities while maintaining its trade liberalisation policies and facilitating the movement of goods and services across borders.
He added that the UAE is one of the leading countries in the world today regarding the facilitation of international trade reaching advanced rankings in trade exchange. The state is currently ranked first in the Arab and regional markets in the import and export of goods and services, while it is ranked 15th globally in commodity exports, 18th globally in commodity imports, 21st globally in services exports, 17th globally in services exports according to the World Trade Organisation, WTO, statistics for 2017 and ranked third in the world in terms of re-export, accounting for about 13 percent of the world's total re-exports in 2017.
Average export growth in the country is equivalent to eight percent, and imports registered seven percent growth, as compared to the two percent average growth in both exports and imports.
As for Trade Balance Deficit Decline, Trade Balance Deficit Decline, in the first half of 2018, the UAE's non-oil foreign trade reached AED784 billion, including direct trade, free zones, of which about AED463 billion were imports, AED232 billion were re-exports, and nearly AED90 billion were exports. Total exports and re-exports in the first half of 2018 grew by four percent compared to the same period in 2017, while the trade balance deficit declined by 23 percent during the same period of comparison.
In 2017, the value of non-oil foreign trade, including free zone trade, amounted to AED1.612 trillion, of which AED979 billion were imports, and AED443 billion were re-exports. In 2017, the country witnessed exports in more than 100 regional and global markets.
Today, the UAE is the largest Arab trading partner for Asia, Europe, Africa and the Americas. It accounts for 44 percent of total non-oil trade between Arab and Asian countries, 27 percent from total trade with Europe and 37 percent with North and South America.
A recent report by the World Economic Forum predicted that by 2020, the UAE’s e-commerce market will reach about US$27 billion (AED100 billion), a 100 percent growth over 2016, as compared with about US$69 billion in the total e-commerce market for Arab countries in the same year, which brings UAE to the top spot in the region, dominated by 39 percent of the total value of electronic commerce cash to the Middle East.
Al Mansouri stressed that the support and regulation of the e-commerce sector is one of the main priorities of the federal government, and that efforts are underway in cooperation with the various government and private partners within the framework of the annual meetings of the UAE Government for 2018, to launch new initiatives that organize and support the growth of the sector.
He noted that the SMEs and entrepreneurship sector form a crucial part of the economic vision adopted by the UAE - serving as a cornerstone of modern economies and a vital engine for its further diversification while strengthening the foundations of being a knowledge economy. He added that the ministry continues its extensive efforts to support and encourage the model of SMEs and start-up companies and increase their contribution to the country's GDP.
The Minister of Economy pointed out that the development of the Intellectual Property (IP) framework is another pillar of the country’s efforts to foster a culture of innovation, build a knowledge economy and enhance the competitiveness of the business sector. He added that the Ministry is making concerted efforts to create a nurturing environment for innovators and creative minds while working on initiatives to bolster economic growth and progress.
The Intellectual Property sector of the Ministry of Economy implemented several steps until the end of the third quarter of 2018, including initiatives to develop a comprehensive physical and electronic structure, as well as institutional and regulatory frameworks related to the application of IP.
A total number of 1,309 of applications were received by the International Centre for Patent Registration at the Ministry of Economy during the period as mentioned earlier, 635 of which were submitted for examination until the end of September 2018, in cooperation with the Korean Intellectual Property Centre.
Over 13,550 trademark registration applications were received by the Ministry until the end of October 2018, while 16,170 trademarks were registered, the registration of 6,741 marks renewed, 1391 trademark transfer applications processed, and 53 licenses issued for the use of a trademark. The number of applications for registration of intellectual works received by the Ministry during the same period reached 791,414 of which were for government agencies and 377 for individuals.
The Commercial Affairs Sector of the Ministry of Economy continues its role in overseeing the implementation of legislation regulating local and foreign companies, development of corporate governance policies, consumer protection, ensuring the flow of goods to markets, reducing inflation, combating commercial fraud, regulating competition to enhance the capabilities of the business sector and minimize cost to the economy, Al Mansouri explained.
This year witnessed continuous efforts in the field of consumer protection and competition, he added. As of October 2018, 95 percent of the complaints received by the Ministry, amounting to a total of 11,802 claims related to Consumer Protection Law, were resolved during this period. The Department of Competition and Consumer Protection implemented about 240,795 cases of recall of goods, including cars, bicycles and other vehicles.
According to Al Mansouri, the ministry is always keen to enhance commercial activity by increasing its efficiency and protecting consumers. It continued its efforts at activating commercial compliance legislation by conducting inspection visits and levying fines according to this legislation until the end of the third quarter of this year. During this period, a total of 22,186 surveillance rounds in the different markets of the country resulted in the levying of 1,354 fines.
As for commercial registrations, the Ministry has worked using the framework of ‘Federal Law No. 02 of 2015 On Commercial Companies', following up on the performance of private joint-stock companies, which amounted to 175 companies in various emirates of the UAE, including 15 companies registered during the first 10 months of 2018 with registered capital of AED147.3 billion and fully paid-up capital of AED140 billion.
The total number of branches of foreign companies registered in the UAE by the end of October of this year was 2,928 registered and licensed offices of more than 50 nationalities, of which 1,490 offices were in Abu Dhabi and 1,225 branches in Dubai. British companies took first place, followed by US, Chinese, and EU companies.
Sultan Al Mansouri emphasised that the Ministry is keen to develop commercial treatment systems and issue certificates of origin according to best practices, enhancing the export procedures of national products to foreign markets, in addition, to protect the UAE products and national industries, and strengthening the competitiveness of UAE exports in line within the framework of WTO agreements.
In 2018, the Ministry continued its efforts to activate mechanisms of protection for national products, whereby the end of the third quarter this year, it approved an anti-dumping duty, followed-up with two cases of anti-dumping complaints, began investigation procedures into one example, and terminated the investigation in one case as well.
The Prevention of Harmful Practices of International Trade Department in the Ministry has also moved against fees and open investigations in 2018, including three anti-dumping investigations, five preventive measures, two charges in the United States under the National Security clause and the completion of three investigations this year. The ministry also raised for the first time since the country’s accession to the WTO, a dispute against the dumping duty imposed on State exports from polyethylene in Pakistan.
The Sector of Trade Remedies at the Ministry of Economy also supervised the implementation of a number of initiatives and activities aimed at supporting the business environment in the country, while enhancing the systems of innovation and increasing export capacity, most notably the launch of the national program to encourage young innovative companies and issuing 52 membership certificates as one of the initiatives of the Ministry of Economy in the third phase of government accelerators, to boost the innovation environment and improve the country’s ranking on the Global Innovation Index.
Al Mansouri said that the tourism sector is gaining significance as a vital part of the country’s growth plans and has been accorded top priority by the wise leadership for developing long-term strategies, enhancing its contribution to the national economy, fast-tracking economic diversification and helping in the smooth transition to a post-oil economy.
The tourism and travel sector accounts for 11.3 percent of the UAE’s GDP for 2017, which is equivalent to more than AED154 billion, according to the results of a report from the World Travel and Tourism Council 2018. The report also shows that the percentage is expected to increase up to 4.9 percent by the end of 2018, accompanied by a compounded annual growth rate (CAGR) of 3.9 percent until 2028.
The report also pointed out that the sector accounts for 9.5 percent of the country’s labour market in 2017, with expectations of a 3.2 per cent increase this year or up to 604,500 jobs. Meanwhile, the expected spend of visitors for this year is forecasted to increase by 5.3 percent this year, surpassing the AED123.5 billion posted in 2017. Tourism investments in the country reached AED25.4 billion in 2017 or the equivalent of eight percent of the total investments in the country.
In 2018, the Ministry implemented many initiatives and activities that were aimed at promoting tourism development at the national level. These initiatives and activities, which were performed in collaboration with various partners, included organising roadshows in India, Russia and Scandinavia to introduce the UAE leading tourism destinations and raise its share in the world tourism markets.
In addition, the Ministry has launched the third edition of its Leaders Program in the Tourism Sector, a project organised in partnership with the World Tourism Organisation. The 2018 version focused on supporting the concepts of innovative approaches to tourism destinations.
