UAE at a Glance - UAE Interact

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UAE AT A GL ANCE 2008 @ www.uaeinteract.com/economy
Other policies outlined in the document state that Abu Dhabi will 'strategically expand the
industrial sector as a tool to achieve diversification and increase the contribution of the
manufacturing sector to GDP'. Other key initiatives recognise the importance of 'asset clustering',
particularly in the fields of real estate and tourism, basic industries and petrochemicals, aviation
and logistics. The document underpins the role of ZonesCorp (The Higher Corporation for
Specialised Economic Zones) in promoting and managing specialised economic and industrial
zones in the emirate. (ZonesCorp is responsible for establishment and management of the
Industrial City of Abu Dhabi, ICAD).
A central core of Abu Dhabi's economic policy is to leverage the emirate's strong hydrocarbon
sector to stimulate and support broader economic diversification by strengthening downstream
production capabilities and expanding the proportion of value-added exports, as well as
diversifying into new industries on the back of ongoing performance in the hydrocarbon sector.
Dubai’s strategy contains a number of important new elements and, unlike that of Abu Dhabi,
recognises the minor importance of oil and gas production to its economic performance. The
strategy has as its objective the sustaining of real economic growth at a rate of 11 per cent per
annum to reach a GDP of US$108 billion in 2015, and to increase GDP per capita to
US$44,000. In order to achieve this Dubai will focus on economic sectors where it holds a strong
competitive advantage and ones that are expected to grow globally. The emirate's key strengths
are tourism, transport, trade, construction and financial services. At the same time, growth
enablers such as human capital, productivity, innovation, cost of doing business and living, quality
of life, policy and institutional frameworks, and laws and regulations will not be ignored.
Diversification
Diversification of the economy has been a key plank of UAE policy since the founding of the state
in 1971. Funded from oil and gas revenues, new investments were made initially in hydrocarbon
and energy-related industries such as aluminium and petrochemicals. However, the UAE’s
dependence on oil and gas has fallen significantly in recent years. So much so that today Dubai's
vibrant economy only receives a 3 per cent input from hydrocarbons.
Abu Dhabi, which has over 90 per cent of the UAE's oil and gas reserves, refers to diversifying
into 'a raft of new areas' in its new policy agenda. In addition to exporting raw materials in the
form of oil and gas, it intends to add more value to these by increasing production of refined and
semi-refined products. One aspect of this involves a US$3 billion investment to expand the
capacity of Borouge's petrochemical facility to 2 million tonnes of polyethylene and polyolefin per
year. On the broader economic front, the strategy document states that: ‘it is important to stress
that the Abu Dhabi Government's strategy of economic diversification is not misunderstood as
simply “moving away from oil and gas”. On the contrary, the continued significance of
hydrocarbons to the economy is the means by which a broader diversification will be achieved
and supported, and not the reason it is necessary.’ It is the Abu Dhabi government's stated