With steady growth of non oil sector, Abu Dhabi GDP will hit US$300 billion by 2025. Non oil sector is predicted to touch 60 per cent of Abu Dhabi GDP, while oil sector is projected to reach 40 per cent of GDP, according to the weekly report released by Department of Planning and Economy (DPE).
"The Abu Dhabi emirate is faring steadily and forcefully into future under master strategic plans and guidelines aiming at a radical transformation in the local economic structure", it added.
The report noted that during the last five years Abu Dhabi economy witnessed the strongest, broadest and highly diversified-ever development as a result of high oil prices at international markets, adding that the expectations are based on the huge projects currently underway and government restructuring schemes, which begin to yield fruits.
"In 2015, Abu Dhabi GDP will rise to US$170 billion, of which oil sector will constitute 50 per cent and non oil sector 50 per cent. But non oil sector will overtake oil sector percentage in Abu Dhabi GDP, which will surge to US$230 billion, by 2020 as oil sector is projected to be only 45 per cent of Abu Dhabi GDP, while non oil sector will surge to 55 per cent of GDP. By 2025 Abu Dhabi GDP will jump to US$300 billion, of which non oil sector will be 60 per cent of GDP, while oil sector will be 40 per cent", it revealed.
Full text of the report: under unequivocal political commitment to economic development and success at all levels, and wise economic policies- thanks to the business environment, cash surplus, highly developed infrastructure, political stability and security, Abu Dhabi economy has become one of the leading and fast-growing economies in the Gulf.
This was only possible under the strategic transformations and reforms made recently, from restructuring local government and minimizing its role in the national economy, to economic policies designed to diversify sources of income.
The Emirate is faring steadily and forcefully into the future under master strategic plans and guidelines aiming at a radical transformation in the local economic structure.
Abu Dhabi economy enjoys multiple strength opportunities as basic elements of growth are available, abundant cash surplus and political leadership commitment to reforms. With oil prices soaring, more than half trillion dirhams-worth projects underway, open-door policy, liberal economy and reform programmes, privatisation, series of bilateral partnerships with foreign countries, Abu Dhabi's economy is forecasted to grow steadily.
But challenges remain on how to increase projects and diversify economic base, invigoration of the private sector, provision of world-class business environment and counter- inflation plans to adopt.
During the last five years Abu Dhabi economy witnessed the strongest, broadest and highly diversified-ever development as a result of high oil prices at international markets. This has a positive response on various economic sectors, which maintained an average annual growth rate of 18%. During the same period many giant development projects were announced. They helped create a highly competitive economic environment in the Emirate.
Abu Dhabi economy is currently taking huge steps towards a balanced diversification of local production base and sources of income in order to build a strong, self-reliant economy away from negative aspects of volatile oil revenues and fluctuations of share and real estate markets.
A steady economic growth is expected in the forthcoming years, especially after the ambitious initiatives toward restructuring the government sector and expanding the role of the private sector. These steps pave the way for further genuine economic, administrative and legislative reforms based on the requirements of development stages.
Moreover, an expected high demand for oil in the long run coupled with receding supply encouraged the emirate to increase oil production, since oil is still the main driving force of rapid economic development, not only in Abu Dhabi, but also throughout the UAE.
Oil and gas revenues represent about 35% of GDP, 80% of government revenues and 90% of total exports. Abu Dhabi has ambitious plans to develop non-oil sectors, which are set to expand the economic base, and hence lasting and more results are secured.
Structural reforms, a process initiated three years ago, boosted steady expansion of non-oil sectors. Analysts unanimously expect Abu Dhabi to score a steady growth rate higher than the present one p\over the next few years. The expectation is based on the giant projects currently underway and government restructuring schemes which begin to yield fruits.
Based on high growth rates attained during the past five years, especially in non-oil sectors, supported by a big increase in oil revenues and investors' confidence in Abu Dhabi economy, analysts expect the Emirate to maintain this outstanding economic performance in the forthcoming years. Catalysts include a comfortable financial position supported by steadily increasing oil prices, a highly developed business environment, and good results of macroeconomic management, which paved the way for a solid socio-economic development during the past years. Abu Dhabi real GDP is expected to triple to about US$ 300 billion in 2025, based on the following estimates: Abu Dhabi real GDP estimate in 2008 is expected to be US$105 billion, of which oil sector will represent 58 per cent and non oil sector 42 per cent, while Abu Dhabi GDP in 2010, will surge US$120 billion, of which oil sector will represent 55 per cent and non oil sector 45 per cent. In 2015, Abu Dhabi GDP will rise to US$170 billion, of which oil sector will constitute 50 per cent and non oil sector 50 per cent. But non oil sector will overtake oil sector in Abu Dhabi GDP in 2020, which will surge to US$230 billion, as oil sector is projected to be 45 per cent of GDP, while non oil sector will be 55 per cent of GDP. By 2025 Abu Dhabi GDP will jump to US$300 billion, of which non oil sector will be 60 per cent of GDP, while oil sector will be only 40 per cent.
This is based on the giant projects currently undertaken in almost all sectors, economic reform plans and government restructuring programmes. These are supported by a strong, resourceful political leadership guided by a clear, far-sighted vision. There are strong indications for a "brand new Abu Dhabi" and a strong, lasting and stable economy. Average per-capita GDP share- the second highest in the world with US$ 74000 in 2006, is also expected to grow The government economic development initiative during the forthcoming stage revolves around five main pivots: privatization of government-owned projects, consolidation of Abu Dhabi Stock Market, diversification of the industrial base by focusing on petrochemicals, iron and aluminum, allocation of specialized economic zones, and development of tourist sector, which are cornerstones for Abu Dhabi economic vision.
The recent successive events showed that economic reform programmes have become top priority in the emirate's strategies. Now the economic policy is more open, following market and free economy mechanisms, whereby a bigger role is reserved for the private sector to contribute to building local economy by carrying out production and service-oriented projects without any restriction.
It was also clear that this steady, multi-faceted development was only the beginning of a bigger leap. The Public Policy Agenda (2007-2008) set clear-cut priorities and comprehensive future plans for local departments and agencies.
The main goal is to build a secure society and production-oriented economy with the following basic fundamentals:
* High-quality educational and health services
* Highly developed infrastructure
* Active public sector
* Sustainable knowledge-based economy
* Transparent legislative environment
* Security and stability
* Maintain good relations with all world countries
* Develop local resources
* Observe Emirate's values, culture and heritage
* Cement federal bonds with other UAE emirates.
Abu Dhabi Vision is an enormous transformation based on a number of daring initiatives. The (DPE) plays a leading role in executing necessary policies to materialize this vision. On top of the General Policy Agenda comes the diversification of the economic base and allowing the private sector to play a bigger role. But the Agenda took energy into consideration as well. Ambitions are high to raise productive capacity of oil, gas and alternative sources of energy to strengthen Abu Dhabi's status as a leading player in the world energy market. There are plans to make optimal use of the outstanding performance of the hydro carbonate sector to give a stronger push to economic diversification plans. Ideas include raising the productive capacity of refining, transportation, marketing and distribution, and increasing high added-value exports.
Abu Dhabi plans to establish high-tech capital-loaded industries in collaboration with advanced industrial countries are top priority in Abu Dhabi economic policy. Over the past few years a number of advanced industries were created, and Abu Dhabi was successful in laying a solid foundation for industrial production amidst a serious desire to encourage this sector by enacting supportive, encouraging laws and raising the quality of industrial products.
Relative Importance of Conversion and Extraction Industries To Abu Dhabi GDP (1970-2007) Extraction Ind. Conversion Ind. Period 72% 0.04% (1971-1975) 70% 2% (1976-1980) 54% 9% (1981-1985) 43% 10% (1986-1990) 50% 9% (1991-1995) 42% 11% (1996-2000) 55% 11% (2001-2007) Source: DPE Statistics Division, 2008 The forthcoming stage is expected to see an accelerated rate of growth in the industrial sector, in maximizing sector's contribution to GDP and bolstering the competitiveness of local industries in the world markets. There are serious plans for improving business environment, upgrade quality of the local products, encourage "clean industry" concept, support small and medium-size businesses, encourage partnerships and technological development, focus on giant industrial projects where creativity, research and development are encouraged, use up-to-date technology, create an accurate inclusive data base of industrial variables, upgrade the performance of industrial establishments and rehabilitate manpower.
Citing the rapid changes in international commercial relations. It was inevitable to restructure many industrial sectors, especially conversion industries throughout the world. Conversion industries in Abu Dhabi centered on crude oil and gas sectors as an industrial base. Necessary plans were sketched to create new oil and petrochemical industries and boosting the present ones to boost exports.
Similar to the structural change in ready-made clothes industry that gave China and Asian countries the upper hand- thanks to cheap labor, Abu Dhabi maintained a similar status in petrochemicals and oil and energy-based products, thanks to cheap raw materials and huge investments made available to develop this important sector.
Abu Dhabi also has tremendous production and marketing assets in other industries related to construction, tourism, pharmaceuticals, fish and seafood, and installation, repair and maintenance services.
The industrial sector in Abu Dhabi is expected to benefit from the crucial changes which are expected to take place on the international arena during the few coming years. So, there is a big chance that Abu Dhabi will used these changes to develop and diversify conversion industries' sector, and hence diversify sources of national income.
Generally speaking, industrial expansion/diversification in Abu Dhabi should be based on industries with the following assets: * Relative advantage in raw material, energy or demand.
* Meet regional and world demand rather than local demand.
* Minimum labour (especially the unskilled).
* Easy access to technology and human skills.
* Train UAE national cadres for gradual contribution to this industry.
Technology transfer should be a top priority for parties concerned with Emirate economic development issues during the forthcoming stage. Foreign investments' main role in the UAE in general and Abu Dhabi in particular, should be the transfer of advanced technology, a process that usually take various forms such as transfer of equipment and machinery, preparing designs and technical studies, and transfer of expertise through training courses.
The transfer of technology was usually faced with two main obstacles: monopoly and confidentiality on the part of advanced countries, but this could be overcome by entering into genuine partnerships with foreign companies monopolizing this technology. Another obstacle is the lack of technicians capable of accommodating, using, developing and localizing technology. Citing the experience of technology-interested developing countries it is noted that they saw it enough to purchase modern equipment, which rendered them unable to develop their industrial sectors in such a way to compete in local let alone international- markets. Technology can be controlled only by knowledge, research and development rather than by superficial access to technology.
But hopes pinned to conversion industries may just vanish unless continuity is secured, a prerequisite that can only be met by boosting UAE nationals' role in this technology at all levels. This strategic dimension should be accounted for as early as possible, especially in training and rehabilitation. The industrial sector, though strategically important, is no longer the focus of attention on the part of either the citizens or official parties concerned with emiratisation plans.
Ministry of Finance and Industry statistics show that nationals working in the industrial sector represent only 2% of total manpower in a sector we heavily depend on in building modern economy. Industrial sector GDP share stands at 13% and expatriate workers in this sector come to 260.000 UAE-wide. This means that the national element is still a missing link in this sector, whereby practical steps are required to solve this problem.
Conversion to constant, efficient and self-developed economy requires clear-cut plans, programs and strategies in various areas of development. It should be noted that the human qualified resources are the most crucial element, taking into consideration world competition to raise human productivity for best results. It is unfortunate that this aspect is still off the screen of official and research institutions.
If Abu Dhabi is faring into the future under general guidelines to diversify national economy by strengthening non-oil sectors (especially conversion industries) the forthcoming stage requires an elaborate, comprehensive strategy with genuine reform plans and carefully studied programs for diversifying sources of income and expanding the economic base.
The target should be boosting local economy competitiveness by upgrading the private sector and focusing on foreign-oriented strategic sectors and expanding and inflating production base to cope with globalized economy.
This strategy should follow sartorial selectivity in order to re-arrange the economic house from within and secure a diversified production base -- a fixed economic development target through the past years. The strategy should focus on the industrial sector and genuine productive sectors that can cope with restructuring plans of local economy.
The Department of Planning and Economy will use the following five pivots to secure a rapid, sustainable growth in Abu Dhabi: *Diversify the economic base and sources of income by concentrating on sectors/industries which give Abu Dhabi certain advantages.
*Expansion of industrial, project and institution base, activate the role of the private sector and encourage small and medium-sized businesses.
*Create a successful, transparent, world-class business environment.
*Use trade and investment as a vehicle to maximize Abu Dhabi opportunities of merger into world economy.
*Increasing productivity and competitiveness of economic sectors.
"The Abu Dhabi emirate is faring steadily and forcefully into future under master strategic plans and guidelines aiming at a radical transformation in the local economic structure", it added.
The report noted that during the last five years Abu Dhabi economy witnessed the strongest, broadest and highly diversified-ever development as a result of high oil prices at international markets, adding that the expectations are based on the huge projects currently underway and government restructuring schemes, which begin to yield fruits.
"In 2015, Abu Dhabi GDP will rise to US$170 billion, of which oil sector will constitute 50 per cent and non oil sector 50 per cent. But non oil sector will overtake oil sector percentage in Abu Dhabi GDP, which will surge to US$230 billion, by 2020 as oil sector is projected to be only 45 per cent of Abu Dhabi GDP, while non oil sector will surge to 55 per cent of GDP. By 2025 Abu Dhabi GDP will jump to US$300 billion, of which non oil sector will be 60 per cent of GDP, while oil sector will be 40 per cent", it revealed.
Full text of the report: under unequivocal political commitment to economic development and success at all levels, and wise economic policies- thanks to the business environment, cash surplus, highly developed infrastructure, political stability and security, Abu Dhabi economy has become one of the leading and fast-growing economies in the Gulf.
This was only possible under the strategic transformations and reforms made recently, from restructuring local government and minimizing its role in the national economy, to economic policies designed to diversify sources of income.
The Emirate is faring steadily and forcefully into the future under master strategic plans and guidelines aiming at a radical transformation in the local economic structure.
Abu Dhabi economy enjoys multiple strength opportunities as basic elements of growth are available, abundant cash surplus and political leadership commitment to reforms. With oil prices soaring, more than half trillion dirhams-worth projects underway, open-door policy, liberal economy and reform programmes, privatisation, series of bilateral partnerships with foreign countries, Abu Dhabi's economy is forecasted to grow steadily.
But challenges remain on how to increase projects and diversify economic base, invigoration of the private sector, provision of world-class business environment and counter- inflation plans to adopt.
During the last five years Abu Dhabi economy witnessed the strongest, broadest and highly diversified-ever development as a result of high oil prices at international markets. This has a positive response on various economic sectors, which maintained an average annual growth rate of 18%. During the same period many giant development projects were announced. They helped create a highly competitive economic environment in the Emirate.
Abu Dhabi economy is currently taking huge steps towards a balanced diversification of local production base and sources of income in order to build a strong, self-reliant economy away from negative aspects of volatile oil revenues and fluctuations of share and real estate markets.
A steady economic growth is expected in the forthcoming years, especially after the ambitious initiatives toward restructuring the government sector and expanding the role of the private sector. These steps pave the way for further genuine economic, administrative and legislative reforms based on the requirements of development stages.
Moreover, an expected high demand for oil in the long run coupled with receding supply encouraged the emirate to increase oil production, since oil is still the main driving force of rapid economic development, not only in Abu Dhabi, but also throughout the UAE.
Oil and gas revenues represent about 35% of GDP, 80% of government revenues and 90% of total exports. Abu Dhabi has ambitious plans to develop non-oil sectors, which are set to expand the economic base, and hence lasting and more results are secured.
Structural reforms, a process initiated three years ago, boosted steady expansion of non-oil sectors. Analysts unanimously expect Abu Dhabi to score a steady growth rate higher than the present one p\over the next few years. The expectation is based on the giant projects currently underway and government restructuring schemes which begin to yield fruits.
Based on high growth rates attained during the past five years, especially in non-oil sectors, supported by a big increase in oil revenues and investors' confidence in Abu Dhabi economy, analysts expect the Emirate to maintain this outstanding economic performance in the forthcoming years. Catalysts include a comfortable financial position supported by steadily increasing oil prices, a highly developed business environment, and good results of macroeconomic management, which paved the way for a solid socio-economic development during the past years. Abu Dhabi real GDP is expected to triple to about US$ 300 billion in 2025, based on the following estimates: Abu Dhabi real GDP estimate in 2008 is expected to be US$105 billion, of which oil sector will represent 58 per cent and non oil sector 42 per cent, while Abu Dhabi GDP in 2010, will surge US$120 billion, of which oil sector will represent 55 per cent and non oil sector 45 per cent. In 2015, Abu Dhabi GDP will rise to US$170 billion, of which oil sector will constitute 50 per cent and non oil sector 50 per cent. But non oil sector will overtake oil sector in Abu Dhabi GDP in 2020, which will surge to US$230 billion, as oil sector is projected to be 45 per cent of GDP, while non oil sector will be 55 per cent of GDP. By 2025 Abu Dhabi GDP will jump to US$300 billion, of which non oil sector will be 60 per cent of GDP, while oil sector will be only 40 per cent.
This is based on the giant projects currently undertaken in almost all sectors, economic reform plans and government restructuring programmes. These are supported by a strong, resourceful political leadership guided by a clear, far-sighted vision. There are strong indications for a "brand new Abu Dhabi" and a strong, lasting and stable economy. Average per-capita GDP share- the second highest in the world with US$ 74000 in 2006, is also expected to grow The government economic development initiative during the forthcoming stage revolves around five main pivots: privatization of government-owned projects, consolidation of Abu Dhabi Stock Market, diversification of the industrial base by focusing on petrochemicals, iron and aluminum, allocation of specialized economic zones, and development of tourist sector, which are cornerstones for Abu Dhabi economic vision.
The recent successive events showed that economic reform programmes have become top priority in the emirate's strategies. Now the economic policy is more open, following market and free economy mechanisms, whereby a bigger role is reserved for the private sector to contribute to building local economy by carrying out production and service-oriented projects without any restriction.
It was also clear that this steady, multi-faceted development was only the beginning of a bigger leap. The Public Policy Agenda (2007-2008) set clear-cut priorities and comprehensive future plans for local departments and agencies.
The main goal is to build a secure society and production-oriented economy with the following basic fundamentals:
* High-quality educational and health services
* Highly developed infrastructure
* Active public sector
* Sustainable knowledge-based economy
* Transparent legislative environment
* Security and stability
* Maintain good relations with all world countries
* Develop local resources
* Observe Emirate's values, culture and heritage
* Cement federal bonds with other UAE emirates.
Abu Dhabi Vision is an enormous transformation based on a number of daring initiatives. The (DPE) plays a leading role in executing necessary policies to materialize this vision. On top of the General Policy Agenda comes the diversification of the economic base and allowing the private sector to play a bigger role. But the Agenda took energy into consideration as well. Ambitions are high to raise productive capacity of oil, gas and alternative sources of energy to strengthen Abu Dhabi's status as a leading player in the world energy market. There are plans to make optimal use of the outstanding performance of the hydro carbonate sector to give a stronger push to economic diversification plans. Ideas include raising the productive capacity of refining, transportation, marketing and distribution, and increasing high added-value exports.
Abu Dhabi plans to establish high-tech capital-loaded industries in collaboration with advanced industrial countries are top priority in Abu Dhabi economic policy. Over the past few years a number of advanced industries were created, and Abu Dhabi was successful in laying a solid foundation for industrial production amidst a serious desire to encourage this sector by enacting supportive, encouraging laws and raising the quality of industrial products.
Relative Importance of Conversion and Extraction Industries To Abu Dhabi GDP (1970-2007) Extraction Ind. Conversion Ind. Period 72% 0.04% (1971-1975) 70% 2% (1976-1980) 54% 9% (1981-1985) 43% 10% (1986-1990) 50% 9% (1991-1995) 42% 11% (1996-2000) 55% 11% (2001-2007) Source: DPE Statistics Division, 2008 The forthcoming stage is expected to see an accelerated rate of growth in the industrial sector, in maximizing sector's contribution to GDP and bolstering the competitiveness of local industries in the world markets. There are serious plans for improving business environment, upgrade quality of the local products, encourage "clean industry" concept, support small and medium-size businesses, encourage partnerships and technological development, focus on giant industrial projects where creativity, research and development are encouraged, use up-to-date technology, create an accurate inclusive data base of industrial variables, upgrade the performance of industrial establishments and rehabilitate manpower.
Citing the rapid changes in international commercial relations. It was inevitable to restructure many industrial sectors, especially conversion industries throughout the world. Conversion industries in Abu Dhabi centered on crude oil and gas sectors as an industrial base. Necessary plans were sketched to create new oil and petrochemical industries and boosting the present ones to boost exports.
Similar to the structural change in ready-made clothes industry that gave China and Asian countries the upper hand- thanks to cheap labor, Abu Dhabi maintained a similar status in petrochemicals and oil and energy-based products, thanks to cheap raw materials and huge investments made available to develop this important sector.
Abu Dhabi also has tremendous production and marketing assets in other industries related to construction, tourism, pharmaceuticals, fish and seafood, and installation, repair and maintenance services.
The industrial sector in Abu Dhabi is expected to benefit from the crucial changes which are expected to take place on the international arena during the few coming years. So, there is a big chance that Abu Dhabi will used these changes to develop and diversify conversion industries' sector, and hence diversify sources of national income.
Generally speaking, industrial expansion/diversification in Abu Dhabi should be based on industries with the following assets: * Relative advantage in raw material, energy or demand.
* Meet regional and world demand rather than local demand.
* Minimum labour (especially the unskilled).
* Easy access to technology and human skills.
* Train UAE national cadres for gradual contribution to this industry.
Technology transfer should be a top priority for parties concerned with Emirate economic development issues during the forthcoming stage. Foreign investments' main role in the UAE in general and Abu Dhabi in particular, should be the transfer of advanced technology, a process that usually take various forms such as transfer of equipment and machinery, preparing designs and technical studies, and transfer of expertise through training courses.
The transfer of technology was usually faced with two main obstacles: monopoly and confidentiality on the part of advanced countries, but this could be overcome by entering into genuine partnerships with foreign companies monopolizing this technology. Another obstacle is the lack of technicians capable of accommodating, using, developing and localizing technology. Citing the experience of technology-interested developing countries it is noted that they saw it enough to purchase modern equipment, which rendered them unable to develop their industrial sectors in such a way to compete in local let alone international- markets. Technology can be controlled only by knowledge, research and development rather than by superficial access to technology.
But hopes pinned to conversion industries may just vanish unless continuity is secured, a prerequisite that can only be met by boosting UAE nationals' role in this technology at all levels. This strategic dimension should be accounted for as early as possible, especially in training and rehabilitation. The industrial sector, though strategically important, is no longer the focus of attention on the part of either the citizens or official parties concerned with emiratisation plans.
Ministry of Finance and Industry statistics show that nationals working in the industrial sector represent only 2% of total manpower in a sector we heavily depend on in building modern economy. Industrial sector GDP share stands at 13% and expatriate workers in this sector come to 260.000 UAE-wide. This means that the national element is still a missing link in this sector, whereby practical steps are required to solve this problem.
Conversion to constant, efficient and self-developed economy requires clear-cut plans, programs and strategies in various areas of development. It should be noted that the human qualified resources are the most crucial element, taking into consideration world competition to raise human productivity for best results. It is unfortunate that this aspect is still off the screen of official and research institutions.
If Abu Dhabi is faring into the future under general guidelines to diversify national economy by strengthening non-oil sectors (especially conversion industries) the forthcoming stage requires an elaborate, comprehensive strategy with genuine reform plans and carefully studied programs for diversifying sources of income and expanding the economic base.
The target should be boosting local economy competitiveness by upgrading the private sector and focusing on foreign-oriented strategic sectors and expanding and inflating production base to cope with globalized economy.
This strategy should follow sartorial selectivity in order to re-arrange the economic house from within and secure a diversified production base -- a fixed economic development target through the past years. The strategy should focus on the industrial sector and genuine productive sectors that can cope with restructuring plans of local economy.
The Department of Planning and Economy will use the following five pivots to secure a rapid, sustainable growth in Abu Dhabi: *Diversify the economic base and sources of income by concentrating on sectors/industries which give Abu Dhabi certain advantages.
*Expansion of industrial, project and institution base, activate the role of the private sector and encourage small and medium-sized businesses.
*Create a successful, transparent, world-class business environment.
*Use trade and investment as a vehicle to maximize Abu Dhabi opportunities of merger into world economy.
*Increasing productivity and competitiveness of economic sectors.
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