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The Abu DhabiEconomic Vision 2030


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This document is developed by:


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1T H E A B U D H A B I E C ON OMI C V I S I ON 2 0 3 0

In 2006, His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Princeo Abu Dhabi and Chairman o the Executive Council, mandated the GeneralSecretariat o the Executive Council, the Abu Dhabi Council or EconomicDevelopment and the Department o Planning and Economy to develop a long-termeconomic vision or the Emirate. This mandate was given in order to deliver uponthe vision o His Highness Sheikh Khali a bin Zayed Al Nahyan, President o theUAE, Ruler o Abu Dhabi, or the ongoing economic success o Abu Dhabi.

The expectation was the creation o a long-term roadmap or economic progress orthe Emirate through the establishment o a common ramework aligning all policiesand plans and ully engaging the private sector in their implementation.

The initiative builds upon the oundations set by the Abu Dhabi Policy Agenda

2007/2008 and was produced by a task orce joining stakeholders rom the publicsector and private sector. The task orce received extensive expert support rominternationally renowned institutions. This task orce was mandated with two keytasks:

1. To conduct an exhaustive assessment o the key enablers or economic growth,

2. To create a comprehensive long-term economic vision, with explicit targets, toguide the evolution o the Abu Dhabi economy through to the year 2030.

The year 2030 represents an important milestone or the Emirate o Abu Dhabi.Baseline growth assumptions reveal that Abu Dhabi could achieve tangible levels o economic diversi cation by that time.

This document there ore contains the Abu Dhabi Economic Vision 2030 andassociated targets, prepared by the Economic Vision Task orce and approved by theAbu Dhabi Executive Council.

Summary o Mandate

November 2008


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Summary o MandateTable o Contents

Context and Executive Summary

The VisionRequired Policy Priorities; Areas o Policy Focus and AssociatedObjectives

Section OneAbu Dhabis Economic Policy Priorities

1. Building a Sustainable Economy2. Ensuring a Balanced Social and Regional Economic Development

approach that Brings Bene ts to All

Section Two

Abu Dhabis Seven Areas o Ongoing Economic Policy Focus1. Build an Open, E cient, E ective and Globally Integrated Business

Environment2. Adopting Disciplined Fiscal Policies that are Responsive to Economic

Cycles3. Establish a Resilient Monetary and Financial Market Environment with

Manageable Levels o Infation4. Drive Signi cant Improvement in the E ciency o the Labour Market5. Develop a Su cient and Resilient In rastructure Capable o Supporting

Anticipated Economic Growth6. Developing a Highly Skilled, Highly Productive Work orce7. Enable Financial Markets to Become the Key Financiers o Economic

Sectors and Projects

Section ThreeEngines o Abu Dhabis Future Economic Growth

Section FourMeasures o Success

Section FiveDelivering the Abu Dhabi 2030 Economic Vision

Acknowledgements

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Context andExecutive Summary


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A signi cant and ongoing contribution to theederation o the UAE

Having established these pillars, the Governmenthas committed itsel to direct public policy tostrengthen and develop them. This involves

ocusing on our key priority areas:

Economic development Social and human resources development In rastructure development and environmental

sustainability Optimisation o Government operations.

Economic Development

Economic diversi cation is common andundamental to the Governments other stated

priority areas and the policy agenda as a whole.The Government wishes to see the creation ohigher-value employment opportunities, especially

or Nationals, and maximising participation owomen in the work orce. To encourage investmentand entrepreneurial activity, the Governmentplans to contribute to enhancing the businessenvironment through urther legislative re orm andby ensuring that all economic policy is ormulatedwith re erence to rigorous data sources andstatistical in ormation. Enhancing the economyand business climate will also help to integrateAbu Dhabi urther into the global economy byattracting oreign as well as local investment, andby acilitating export o capital through targeted

investments with international partners.

Seeking to ensure the continued success o theEmirates development, the Government o AbuDhabi has set guidelines and priorities or theEmirates socio-economic progress in its PolicyAgenda. Taking these guidelines as its parameters,the Abu Dhabi Economic Vision 2030 has beendeveloped by the Government, in consultation withthe private sector, as a 22-year strategy to achievethese aims, and to ensure that all stakeholders inthe economy are moving in concert, with a clearview o the long-term goals.

The Abu Dhabi Policy Agenda 2007/2008 de nesthe priorities or public policy in the Emirate.These priorities have been set to achieve whatthe Government o Abu Dhabi sees as its primarygoals: a sa e and secure society and a dynamic,open economy.

The Government has identi ed nine pillars thatwill orm the architecture o the Emirates social,political and economic uture:

A large empowered private sector A sustainable knowledge-based economy An optimal, transparent regulatory environment A continuation o strong and diverse

international relationships The optimisation o the Emirates resources Premium education, healthcare and

in rastructure assets Complete international and domestic security

Maintaining Abu Dhabis values, culture andheritage

Based on the principles laid out in the Governments Policy Agendapublished in August 2007, the Abu Dhabi Economic Vision 2030 is aroadmap or the Emirates economic progress.

Context and Executive Summary


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In rastructure Development andEnvironmental Sustainability

Developing appropriate in rastructure, whilepreserving the environment, orms the thirdpriority area. The Government will ensure the

development o a pro essionally designed andwell-managed urban environment in the Emiratestowns and cities, complete with world-classtra c and transport systems. The simultaneousdevelopment o the Regions to keep pace with thato the Capital is also an important policy priorityin order to achieve an Emirate-wide distributiono economic activity and associated bene ts.For its part, the Government will also ensure thatAbu Dhabis security is maintained and that itstowns and cities remain a sa e place in which to

live and work. In order to ensure that the urbanin rastructure is able to cope with the envisioned

Social and Human Resources Development

According to the Policy Agenda, social and humandevelopment represents the pre-eminent objective

and driving motivation behind all policies andinitiatives. Ensuring that high quality education andhealth services are available to residents is there oreo the highest priority. When it comes to developingthe work orce, the Government aims to ensure theavailability o a stable supply o high quality labourto sta the economy, and especially to encourage

ull employment among Nationals. At the sametime, Abu Dhabi wishes to maintain ethical and sa emanagement o its labour resources, through thethorough implementation o Federal labour laws

and the meeting o commitments made through theUAEs signature o international labour arrangements.

In rastructure Development andEnvironment Sustainability

Economic Development

A signi cant and ongoing contributionto the ederation o the UAE

Miantaining Abu Dhabis values, cultureand heritage

Complete international anddomestic security

Premium education, healthcare andin rastructure assets

Government Operations Optimization

A continuation o strong and diverseinternational relationships

Social & Human ResourcesDevelopment

An optional transparentregulatory environment

The creation o a sustainable knowledgebased on economy

Emirate resource optimization

The vision orAbu Dhabi consistso a secure society

and a dynamicopen economy

A large empowered private sector

Priority Areas

Pillars of the Abu Dhabi Policy Agenda Vision

Source: The Emirateo Abu Dhabi PolicyAgenda 2007-08

Abu Dhabi governments Policy Agenda is built aroundnine pillars that are meant to shape the Emirates uture.


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the economy up the value chain. Moreover, abetter educated work orce will be a key enabler toaddress the relatively low productivity rates oundin much o the Emirates enterprise base.

Faced with the prospects o a more globalisedeconomy, the Emirate can rely on its establishednetwork o international relationships and

riendships to respond to the many challengeso increasing globalisation. Moreover Abu

Dhabis geo-political status can help theEmirate to respond to the pace o technologicalchange and harness the capabilities o researchand development or uture competitiveness.However, in order to unlock the potential o theserelationships, Abu Dhabi needs to achieve higherglobal rankings in terms o global competitivenessand ease o doing business. Moreover, theEmirates business environment needs to becomebetter equipped to understand and bene t

rom new business models and to participate in

the global growth o trade in services and theservicisation o many manu actured products. Thisshould be coupled with an e ective programmeto stimulate research and development, and localinnovation, and to acilitate the integration withglobal innovation centres.

The Abu Dhabi Economic Vision 2030Task orce

This Abu Dhabi Economic Vision 2030 is the resulto a concerted e ort between a number o public

sector and joint public-private sector entities. Inparticular, three entities have played an importantrole in the development o this Vision:

The Department o Planning and Economy The Abu Dhabi Council or Economic

Development (ADCED) The General Secretariat o the Executive Council

The Department o Planning and Economy:The Department is charged with providing or adynamic, open and success ul economy. In whatis an evolving and new role, the Department is

growth without stresses, the Emirate has alreadydeveloped and published a comprehensive 2030urban structure ramework plan or the Capital. Theinitiative will be expanded to cover all the regionso the Emirate.

Optimisation o Government Operations

Finally, the Policy Agenda sets out guidelinesor optimising the Governments own role in theuture o the Emirate, by improving the e ciency

and accountability o government departments.The Government has already embarked on anextensive review o its processes and structures.Many services are being delivered electronicallythrough e-government initiatives, and departmentsare being streamlined and non-core servicesoutsourced to the private sector. These initiativeswill be continued and enhanced. At the sametime, the Government will review and enhancethe legislative ramework and the law-making

processes themselves to ensure maximume ciency.

Economic Vision Imperatives

The Abu Dhabi Policy Agenda has a heavyemphasis on the economy and on ensuring theeconomic wellbeing o all o Abu Dhabis citizensand residents. This Agenda came in response to anumber o opportunities and challenges acing AbuDhabi.

The Emirates drive or a more sustainable anddiversi ed economy is intended to reduce therelatively high dependence on oil and the cyclicalswings which accompany it. Moreover, the youngNational population presents the opportunity, aswell as the challenge, to create attractive, highvalue-added employment opportunities or theemerging generation. The drive or diversi cationas well as the challenge o a burgeoningpopulation delivers a greater need or Abu Dhabito upgrade the quality o its education system,and to increase the educational attainment rateso Nationals and the overall work orce to move


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Economic Vision and the subsequent economicstrategies.

Objectives and Framework

The Abu Dhabi Economic Vision 2030 sets outto establish the current economic environmentand identi y key areas or improvement in order toachieve the goals laid out in the Policy Agenda.

First, the current state o the economy hasbeen ascertained through an analysis o macro-economic data. The Abu Dhabi Economic Vision2030 examines which sectors and which typeso enterprise are contributing most to economicoutput and growth, and in which regions mostgrowth is taking place. Various opportunities areidenti ed within these areas in order to bring aboutthe desired economic diversi cation, sustainabilityand distribution throughout the regions.

Second, the Abu Dhabi Economic Vision 2030examines the current business environment andidenti es key strengths that can be enhancedand areas that might be improved to urtherthe economic and competitive potential o theEmirate against its existing peers and internationalbenchmarks. In particular, the Abu Dhabi EconomicVision 2030 looks at business legislation, labourpolicy, scal policy and monetary policy as keyregulatory and policy levers that can be manipulatedto improve the overall business environment.

Finally, the Abu Dhabi Economic Vision 2030takes into account the Emirates resources andthe steps that need to be taken to ensure thesecan accommodate uture economic growth.In rastructure, including energy, transport and ICT,is a key area that requires continued investmentto provide or a growing population and increasedeconomic activity. The development o humancapital and the work orce is another key area thatis vital to the long-term success o the Emirateseconomy. Ensuring that nancial capital can besa ely and con dently employed is also central todeveloping and expanding the economy.

expected to become more o a policy maker,acilitator and monitor. To that end, it is undergoing

a major trans ormation in order to build therequired capabilities. The setup o a world-classstatistics bureau is one o the key initiatives beingundertaken in order to provide or act-baseddecision making and policy ormulation.

Abu Dhabi Council or Economic Development(ADCED):

The Government established ADCED as ajoint public-private advisory body to supportthe Department o Planning and Economy indeveloping a comprehensive economic strategythat will ul l the Emirates economic needs andwork towards the realisation o the goals laid outin the Governments Policy Agenda. ADCED isuniquely placed to participate in the developmento such a strategy. Its Board consists o memberso both the Government and the private sector,including representatives rom the Department o

Planning and Economy, the Abu Dhabi Chamber oCommerce and Industry (ADCCI) and oreign anddomestic business councils.

This joint public-private structure or economicpolicy advice there ore includes representatives oall the major stakeholders in the economy and, asa result ADCED plays an important role in creatingan open channel or collaboration on economicmatters. ADCED is organised into our Boardcommittees: Economy and Trade Committee,Social Development Committee, Construction

and In rastructure Committee, and BusinessEnvironment Committee.

General Secretariat o the Executive Council:Among its many tasks, the General Secretariatis responsible or coordinating the developmento departmental strategic plans across allGovernment entities and or establishing ane ective per ormance management system. TheGeneral Secretariat will play a key role in thecoming phases to ensure that the Government-wide and departmental strategic plans are

congruent with the targets set in the Abu Dhabi


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alse assumptions. Interviews with key individualswithin both the public and private sectors havebeen vital to ascertaining the expectations andaspirations o stakeholders.

In parallel to the internal assessment, threebenchmark countries were selected or keyeconomic characteristics relevant to Abu Dhabiand or their success in establishing success uleconomic development models.

Norway, which has comparable oil outputs to AbuDhabi, presents a case o interest in channellingoil revenues or local economic development,nurturing a well-diversi ed economy andmaintaining disciplined scal policies

Ireland, the success o which in developinga diversi ed knowledge-based economy andexperience in investment attraction is relevantto Abu Dhabis drive or diversi cation.

Within each o its sections, the Abu DhabiEconomic Vision 2030 sets out long-term targetsand goals and the processes by which the Emiratecan attain them. The nal result is a comprehensiveroadmap or the economic direction o the Emirate,a clear set o goals and the path to attainment, anda set o measures by which the Emirate can judgeits progress.

ApproachThe Abu Dhabi Economic Vision 2030 is the resulto an inclusive and cooperative approach, designedto ensure a strategy that is realistic, based onmeasurable trends and refective o the aspirationso stakeholders in the Emirates economy.

Thorough and rigorous analysis o Abu Dhabiseconomic per ormance to date has been carriedout to ensure that the strategy is not based on

Framework for the Abu Dhabi Economic Vision 2030

Abu DhabiEconomic

Vision 2030

Economic DevelopmentStrategy

Policy & RegulatoryEnablers

Resource Enablers

Business Environment

Fiscal Policy

Monetary Policy

Labour Policy

In rastructure andServices Development

Human ResourceDevelopment

Financial CapitalDevelopment

Enablers

SectorsWhich sectors will be the

engines or uture growth?

EnterprisesWho will drive growth?

Socio-economic DistributionWhat is the regional and/or

social group ocus?

Competitiveness

Source: Abu Dhabi EconomicVision 2030 Team Analysis


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The next phase will be to translate this long-termstrategy into ve-year economic plans to providea more ocused ramework or economic policy inthe medium term, and a more regular assessmentperiod to judge the Emirates progress andenable the necessary adjustments to be made.The economic strategies will be linked to theoverall Government and Departmental strategiescoordinated through the Abu Dhabi ExecutiveCouncil General Secretariat.

Highlights o the Abu Dhabi EconomicVision 2030

The Abu Dhabi Economic Vision 2030 aims toachieve e ective economic trans ormation o theEmirates economic base and bring about global

integration and enduring bene ts to all. Abu Dhabihas a core commitment to build a sustainable anddiversi ed, high value-added economy by 2030.

This will be achieved by broadening the sectorso economic activity, enlarging the enterprisebase, and growing external markets. Furthermore,Abu Dhabi will also continuously enhancecompetitiveness and improve productivity. Deliveringon such commitments will be translated, accordingto base case growth scenarios, into entrenchedsustainable development and signi cant levels oeconomic diversi cation by 2030.

Moreover, to ensure that social and regionaldevelopment equitably reaches the whole osociety, Abu Dhabi will equip its youth to enterthe work orce and maximise the participation owomen, particularly Nationals, rom across theEmirate. Abu Dhabi will also continue to attract askilled work orce rom abroad, and to stimulate

aster economic growth in regional areas.

To achieve the Emirates ambitious economicaspirations, the regulatory and legislative

New Zealand, the success o which indeveloping a relatively large export base is alsoo interest or Abu Dhabi

Advice and opinion have been sought romeconomic development experts in each o thesecountries whose exemplary path o economictrans ormation Abu Dhabi wishes to emulate. Theyinclude representatives o Innovation Norway (IN),International Development Ireland (IDI), and NewZealand Trade and Enterprise (NZTE).

Leading International Status

Abu Dhabi is not just seeking to develop itseconomy. The aim is or the Emirate to take itsplace among the most success ul economies o

the world by 2030. The Abu Dhabi Government willjudge the success o its economic per ormanceagainst the per ormance o the most success uleconomies globally. In particular, it will look tobenchmark against the experiences o fourishingtrans ormation economies, such as Norway,Ireland, New Zealand and Singapore.

Long-term Targets and Five-YearEconomic Development Strategies

The ultimate achievement o the Abu DhabiEconomic Vision 2030 is the identi cation o keypriority areas or economic development and arealistic set o 22-year macroeconomic targets andsocioeconomic goals. The Abu Dhabi EconomicVision 2030 sets targets or the Governmentas well as outlining the intended strategy oreconomic development, identi ying key resourcesto be developed and core policy re orms to beimplemented.

It also sets out the key measures o success bywhich the Emirate can be held to account andhave its per ormance judged in relation to its peers.

The Abu Dhabi Economic Vision 2030 was designedwith advice and opinion rom development expertsin Norway, Ireland and New Zealand.

The Abu Dhabi Economic Vision 2030 wil eventuallybe split up into ve-year programs.


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in rastructure will be urther developed, with aocus on utilities, transport and ICT. Human capital

will be enhanced through the improvement oeducation, training, and other methods to improveboth the employability o Nationals and theproductivity and competitiveness o the work orcein general. Finally, nancial markets will beencouraged and urther developed in such a wayto become the key nanciers o economic sectors,industries, and projects. An enabled economy willlead the way towards sustainable developmentand growth, which will be achieved, in the contexto Abu Dhabi, through the e ective expansion oa number o strategic economic sectors. Thesesectors are expected to orm the Emirates engineso economic growth and diversi cation:

Energy Oil & Gas Petrochemicals Metals

environment must be optimised, importing bestpractices rom around the world and applyingthem within the local context. Various resources,

rom in rastructure to human and nancial capital,must also be provided as a plat orm on whichthe economy can be built. Together, these willconstitute the roots o the uture economy and theclimate in which it can thrive.

Abu Dhabi will there ore build an open, e cient,

e ective and globally integrated businessenvironment, streamlining government processesand acilitating business and investment. It willalso signi cantly improve the e ciency o thelabour market and adopt both a scal policy thatis responsive to economic cycles and a sa emonetary and nancial system with manageablelevels o infation.

When it comes to the Emirates resources,

(*) T, hereina ter, re ers to targeted years that all within the scope o the Abu Dhabi Economic Vision 2030Source: Abu Dhabi Statistical Yearbook 2005; Abu Dhabi Economic Vision 2030 Team Analysis


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On the human capital side, Abu Dhabi will reduceunemployment among the national populationto 5%, e ectively achieving ull employment.Through such stable and realistic growth targets,the Government aims to increase GDP by morethan ve times by the year 2030. Even with theexpected rise in population, this will result in ahealthy growth in income and wealth or all thoseresiding in the Emirate o Abu Dhabi.

Physical and nancial capital would be urtherexpanded. National asset ormation, involving bothexports and investments, should grow more than

ve- old over the target period. This growth will bemirrored by the development o consistently high

national savings levels rom both the public andthe private sectors.

All in all, reaching these ambitious targets willcon rm and urther enhance Abu Dhabis status asa globally relevant destination. With its wealth andnatural resources, Abu Dhabi can already claim astake on such a title, yet this strength can be betterasserted through improving business methodsand economic competitiveness. Productivity ande cient business standards will urther improve thereputation o Abu Dhabi, and in combination withthe other targets being set or the Emirate at large,the Emirate should become a shining example onthe international business stage.

(*) Real GDP growth targets are based on the embedded assumption that oil GDP would continue growing at its sustained historic rates. Thus, i this assumptionholds going orward, achieving non-oil sector targeted real growth rates would ensure an oil/non-oil GDP split o respectively 36% and 64% by 2030Source: Abu Dhabi Economic Vision 2030 Team Analysis


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The VisionRequired Policy Priorities;

Areas o Policy Focus and Associated Objectives


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Policy priority one:Abu Dhabi will build a sustainable economy

Policy priority two:Abu Dhabi will ensure that social and regionaldevelopment is balanced to bring the bene tso economic growth and wellbeing to the entirepopulation o the Emirate.

The task orce has identi ed that therealisation o this stated vision oreconomic success must necessarily bebased on two required economic policypriorities:

The VisionRequired Policy Priorities; Areas o Policy Focus and Associated Objectives

By 2030 Abu Dhabi intends to build a sustainable and diversi ed, highvalue-added economy that is well integrated into the global economyand that provides more accessible and higher-value opportunities or allits citizens and residents.

Abu Dhabis Economic Vision 2030

Economic Vision2030

Abu Dhabi as asustainable, diversi-

ed, high-value-added economythat encourages

enterprises and en-trepreneurship andwell integrated in

the global economyleading to better

opportunities or all

Build a SustainableEconomy

Reduce GDP Volatilitythrough Diversi cation

Equip Youth to Enterthe Labour Force

Further Increase National WomenParticipation in the Labour Force

Stimulate Faster EconomicGrowth in Regions

Attract Skilled Work orce

Enlarge the Enterprise Base

Enhance Competitiveness

Ensure a BalancedSocial and Regional

Economic DevelopmentApproach that Brings

Bene ts to All


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Develop a su cient and resilient in rastructure5.capable o supporting the anticipated economicgrowth

Develop a highly skilled, highly productive work6.orce

Enable nancial markets to become the key7.nanciers o economic sectors and projects

Delivering on these seven areas o policy ocus will

be undamental to the success o the Emiratesgoals in economic and social development.Achieving them will signi cantly contribute to theestablishment o a sustainable economy thattruly makes the bene ts o economic and socialdevelopment available to all. Ultimately, achievingsuccess in each o these areas will ensure thatAbu Dhabis economy is ranked among the mostdynamic, open and success ul economies o theworld within 20 years.

For both o these economic policy priorities anumber o speci c core objectives have beenidenti ed. A sustainable economy will be builtprimarily through diversi cation, which is provento reduce the volatility o economic growth.Diversi cation means not only broadeningthe number o economic sectors taking partin economic activity, but also enlarging theenterprise base, encouraging entrepreneurs, smallbusinesses and Foreign Direct Investment (FDI), aswell as developing National Champion enterprisesto act as economic anchors. Abu Dhabi will alsoenhance competitiveness and improve productivity.

To ensure that social and regional developmentreaches all sections o society, Abu Dhabi willequip its youth to enter the work orce andmaximise the participation o women, particularlyNationals, rom across the Emirate. Abu Dhabi willalso continue to attract a skilled work orce romabroad. Faster economic growth will be stimulated

in regional areas.Whilst these identi ed objectives will be

undamental to the delivery o the Governmentsstated economic policy priorities, in order todeliver on each policy priority, a number o areaso ongoing economic policy ocus have alsobeen identi ed. In total there are seven areas oreconomic policy ocus each one precipitatingadditional speci c objectives that must beachieved in order or the Governments statedeconomic vision to be realised.

Seven areas o ongoing economic policy ocus:

Build an open, e cient, e ective and globally1.integrated business environment

Adopt a disciplined scal policy that is2.responsive to economic cycles

Establish a resilient monetary and nancial3.market environment with manageable levels oinfation

Drive signi cant improvement in the e ciency4.

o the labour market


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Abu Dhabis Economic Vision 2030

Economic Vision2030

Abu Dhabi as asustainable,

diversi ed, high-value-added

economy thatencourages

enterprises andentrepreneurship

and wellintegrated in theglobal economyleading to better

opportunitiesor all

1. Build aSustainable

Economy

2. Ensure a BalancedSocial and Regional

Economic DevelopmentApproach that Brings

Bene ts to All

1. Build an Open,E cient, E ective and

Globally IntegratedBusiness

Environment

2. Adopt a DisciplinedFiscal Policy that is

Responsive toEconomic Cycles

3. Establish a ResilientMonetary and Fiscal

Markets Environmentwith ManageableLevels o Infation

4. Drive Signi cantImprovement in the

E ciency o theLabour Market

6. Develop aHighly Skilled,

Highly ProductiveWork orce

7. Enable FinancialMarkets to Become

the Key Financiers oEconomic Sectors

and Projects

5. Develop a Su cientand Resilient

In rastructure Capableo Supporting the

Anticipated Economic

Growth

Enhance Federal-LocalCooperation

Streamline Government Processes

Facilitate the Investment Process

Diversi y Fiscal Revenue Sources

Optimise Government Spending

Leverage Fiscal Policy Tools toRespond to Economic Cycle

Enhance Transparency and Modernisethe Judicial System and Business

Legislation

Enhance Regulatory and SupervisoryFunctions over Banking and

Insurance Sectors

Leverage Monetary Policy Toolsto Control Infation

Develop E cient and LessSpeculative Financial Markets

Encourage Participation o Nationals inthe Labour Force, Especially in

the Private Sector

Continue Expanding Skilled LabourForce Base and Further Reduce

Dependence on Unskilled Labour

Enhance Abu Dhabis LabourMarket Processes

Enhance Energy Security to MeetFuture Demand

Ensure an E cient and Sa e TransportIn rastructure

Ensure Availability o E cient ICT In ra-structure and Promote ICT Adoption

Ensure Environmental Sustainability

Increase National Work orceParticipation and Employability

Optimise the Allocation o Work orce

Increase Savings and Deptho Deposits

Enhance Financial MarketsPer ormance

Encourage Financing o EconomicSectors and Projects

Enhance Productivity othe Labour Force


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1. Abu Dhabi will build a sustainable economy

2. Abu Dhabi will ensure that social and regional development is balanced tobring the bene ts o economic growth and wellbeing to the entire populationo the Emirate


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o its economy and identi y adjustments andimprovements that can be made. Economic growthis currently coupled too closely with oil prices andthe key to more sustainable development lies instimulating non-oil sectors, diversi ying the rangeand depth o economic activity taking place inthe Emirate, and increasing productivity througha ocused approach on Abu Dhabis competitiveadvantages.

The Drive to Diversi y

Since the 1960s, the oil industry has been the mainengine o Abu Dhabis development. The Emirate

According to major economic indicators, Abu Dhabicurrently enjoys an enviable position: economicgrowth is accelerating; per capita income is one othe highest in the world; and Abu Dhabis citizensare wealthier and healthier than ever be ore.Underpinning all this, the Emirates chie export,crude oil, is enjoying a period o ever-strongerdemand, etching high prices on the internationalmarket and providing the Emirate with the means

or urther development. Such circumstances giveAbu Dhabi the opportunity to ensure its long-termprosperity, leveraging the current wealth to builda more sustainable and stable economy. To thisend, Abu Dhabi needs to assess the structure

1. Building a Sustainable Economy

A ter an unprecedented period o economic growth, Abu Dhabimust build upon the strong legacy o the past in order to develop asustainable and vibrant economy or the uture.

(*) Based on WorldBank Data or 181 Countries Growth o some countries was measured between the years 2002 and 2004 constrained by data availabilitySource:

Abu Dhabi Statistical Yearbook; WDI; O cial Statistics Bureaus o Sampled Economies; The Global CompetitivenessReports (2006-2007), WEF; Abu Dhabi Economic Vision 2030 Team Analysis


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Despite rapid population growth, both throughimmigration and the national birth rate, theEmirates GDP per capita has also increasedsubstantially. Real GDP per capita grew animpressive 20% in just our years, reaching$55,600 in 2005, placing the Emirate among theworlds highest income economies.

As a result, Abu Dhabis citizens and residentsenjoy one o the highest standards o livingin the region. I it were assessed alone, theEmirate would rank 30th on the UNDPs HumanDevelopment Index (HDI), which measures qualityo li e (according to li e expectancy, education andliteracy, and purchasing power) in 178 countries.

Despite such promising trends, economic growthshows signs o high volatility. Volatility is particularlyhigh in Abu Dhabi compared with benchmark G7and trans ormation economies or even compared

is home to the worlds sixth largest proven oilreserves, o around 98bn barrels, and is the worldstenth largest producer, at around 2.5m barrelsper day (bpd), most o which is or export. It isestimated that this provides the Emirate with morethan $90bn a year in revenues at current prices.

Abu Dhabi has invested these revenues to developkey areas o the economy and to provide theservices required o a modern society. Crude oilthere ore plays a primary role in the development o

the local economy, but it also contributes to the vitalrole the Emirate plays in the wider global economy.

As a result o its oil, Abu Dhabi is a signi cantglobal exporter o goods and services, linked to theworlds largest economies through trade. The UAEis also a member o OPEC, and plays an importantrole in sa eguarding the stability o oil supply andprices in world markets.

Over the past decade, Abu Dhabi has become oneo the worlds astest growing economies. RealGDP growth reached 12% in 2006 and was ashigh as 19.4% in 2004.

Abu Dhabi needs to use its current oil wealth tomove towards a more diversi ed economic base.

(*) Based on WorldBank data or 181 CountriesSource: Abu Dhabi Statistical Yearbook; WDI; O cial Statistics Bureaus o Sampled Economies; The Global Competitiveness Reports (2006-2007),WEF; Abu Dhabi Economic Vision 2030 Team Analysis


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Real GDP per capita has grown by 20% over the past our years, and has given the Emirate one o the highestincomes internationally.

(*) Abu Dhabi is not included in the HDI ranking in the 2006 Human Development Report developed by the UNDP but 2004 ranking wasextrapolated rom HDI trendsSource: Human Development Report 2006, UNDP; Abu Dhabi Economic Vision 2030 Team Analysis

Average annual Brent Crude Oil spot price rom 1974 until 2005 was tracked against discrete annual real GDP growth or the GCC,Trans ormation and G7 regionsSource: WDI; Abu Dhabi Statistical Yearbook; Abu Dhabi Economic Vision 2030 Team Analysis


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The economy has necessarily become more oil-dependent as the oil price has risen.

In act, the high share o the oil sector in economic

output means that Abu Dhabi is one o the mostconcentrated economies in the GCC, with onlyQatar appearing less diversi ed. To provide

urther context, Norway, which produces similarquantities o oil as Abu Dhabi, the minerals,mining and energy sectors account or just 24% oGDP. Although the oil sector is the single largestcontributor to economic activity in both Norway andAbu Dhabi, it is ar less dominant in Norway.

Employment in Abu Dhabi is also highlyconcentrated in certain sectors. Construction and

government services account or more than halo all employment. Some 13% o the work orce isemployed in trade, restaurants and hotels. Thesesectors also demonstrate high levels o growth

with the GCC as a whole. Not surprisingly, theprimary role oil plays in the economy meansthat GDP growth tends to be overly sensitive tofuctuations in the oil price.

The economy is less vulnerable today than it wastwenty years ago, when GDP growth volatility wasas high as 31%. Nonetheless, even at 8% volatilityover the last decade, there are not enough toolsor indicators with which economic planners can

shape the optimal policies or the market. AlthoughAbu Dhabi is currently enjoying high growth rates, itis not currently possible to guarantee that one yearwill be as good as the previous, in other words,that volatility will be reduced. It is essential thatAbu Dhabi creates a more sustainable pattern ogrowth, in which it can guarantee healthy economicdevelopment over extended periods o time,capable o so tening the impact o external actorssuch as the oil price and other exogenous shocks.

Mining, quarrying and energy essentially

upstream oil and gas in the Abu Dhabi context have contributed an increasing share o GDP inthe past decade, rising steadily rom 44% in 1995(an era o relatively low oil prices) to 59% in 2005.

Real GDP per capita has grown by 20% over thepast our years, and has given the Emirate one othe highest incomes per capita internationally.

(1) Include: Agriculture, Livestock and Fishing; Transports, Storage and Communication; Trade Restaurants and Hotels; Community, Social and Personal Services;Activities o private households as employers; and undi erentiated activities o private households, as well as extraterritorial organisations and bodies(2) Include: Banking, Real Estate, Finance and Business(3) Utilities re er to: Electricity, Water and Gas

Source: Abu Dhabi Statistical Yearbook; BP Statistical Review o World Energy, 2007; Abu Dhabi Economic Vision 2030 Team Analysis


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Sectoral diversi cation alone, however, is notnecessarily enough. In Abu Dhabi, even the

non-oil sectors demonstrate sensitivity to the oilprice, because they tend to be inward-looking andoriented to the domestic market, and are there orereliant on domestic liquidity. When the oil price ishigh, there is plenty o money to support growthin these sectors; when it is low, and liquidity issqueezed, the non-oil sectors grow at slower rates.This explains Abu Dhabis high volatility comparedwith its peers. Diversi cation must there ore bedirected towards export sectors in order to de-coupleoverall growth rom volatile oil receipts.

Abu Dhabis aim is to stimulate non-oil sectorsrather than to reduce activity in the oil sector. As a

volatility, and the dual concentration o GDP andemployment in certain sectors leaves Abu Dhabi

vulnerable to economic fuctuations. In short, thisorm o employment concentration and economicvolatility across Abu Dhabis economy leaves itvulnerable to shocks that could be ampli ed due tosuch concentrations.

There is a clear and demonstrable link betweeneconomic diversi cation and economicsustainability. The route to sustainability there orestarts with diversi cation. In act, as soon as AbuDhabi urthers its economic diversi cation bystimulating non-oil sectors, and especially into

export-oriented businesses, the volatility in theeconomys growth will in turn start to decrease.

SME Development InitiativesIn order to encourage the development o SMEs, the Abu Dhabi Government established the AED1bn Khali aFund, which provides nancial and pro essional assistance to local entrepreneurs. UAE Nationals may apply

or low-interest loans or venture capital o up to AED3m or new businesses, and up to AED5m or estab-lished businesses that wish to expand. In addition, the Khali a Fund provides a range o other assistanceto entrepreneurs, including training programmes, business consultancy and physical acilities to incubatenew businesses, shared services accounting, HR and administrative support - to reduce costs. The privatesector is also supporting SME development through various training programmes, development initiativesand products and services designed or entrepreneurs, including special banking products and businessassistance. The Abu Dhabi Businesswomen Councils (Mubdiaa) programme also supports home-basedbusinesses or women, providing loans, guarantees or equity investments as well as training, marketing andtechnical assistance.

(1) Historical sectoral volatility is measured by computing the standard deviation o sectoral real act ivity growth rates over the sampled time period(2) Other Services include community, social and personal services, activities o private households as employers, and undi erentiated activities o privatehouseholds, as well as extraterritorial organisations and bodiesSource: Abu Dhabi Statistical Yearbook 2005; Abu Dhabi Census 2005; Abu Dhabi Economic Vision 2030 Team Analysis


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Broadening the Enterprise Base

Analysis o Abu Dhabis emerging private sectorshows a healthy proportion o large and smallbusinesses, and a proportionate employmentdistribution. The proportion o large to smallcompanies in Abu Dhabi di ers little rom that seenin international benchmark economies, in particularIreland and Norway.

Similarly, employment distribution among thevarious-sized enterprises is comparable tobenchmarks, although large companies have gainedan increasing share o human capital since 1995.

There is some imbalance, however, between theeconomic output o large and small enterprises,largely as a result o the dominance o the oilsector. Contribution to GDP is highly concentrated

in large enterprises, suggesting that there is room

major crude oil producer, the Emirate is committed

to supporting the international economy by playingits role in ensuring stable oil prices and supplies.

As a result, the oil sector will continue to growrapidly, and Abu Dhabi will continue to use its oilwealth to drive and underpin domestic economicgrowth.

Assuming that the hydrocarbon sector continues togrow at historic rates, Abu Dhabi aims to achievea 64% contribution to GDP by the non-oil sectors,including petrochemicals, by 2030, which will

reverse the current pattern o sectoral contributionto GDP.

Abu Dhabi there ore has a clear opportunity toincrease GDP growth sustainability and bringgreater stability to the economy by pushing or

aster growth in export-oriented non-oil sectors. AbuDhabi wants to attain similar levels o diversi cationand economic sustainability as other trans ormationeconomies such as Norway, Ireland, New Zealandand Singapore, which have success ully maderadical transitions in their economic structure and

growth cycle over recent decades.

The Emirates emerging private sector is growingquickly, and the proportion o large to small businessin Abu Dhabi is in line with developed internationaleconomies.

(*) Figures or benchmarked countries range rom 2003 to 2005Source: OECD SME and Entrepreneurship Outlook 2005 (OECD); SMEs in Europe 2003 (European Commission); UAE Ministry o Economy;Abu Dhabi Economic Vision 2030 Team Analysis


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and capital, Abu Dhabi ts this pro le. Historically,countries ocused on National Championshave been vulnerable to nancial and economicaggregate shocks such as the collapse o anindustry, recession in key export markets, or moneyand capital market crises.

Diversi ying the enterprise base to include alarger number o economically active SMEsspreads and ragments this risk and reduces theadverse e ects o shocks on the economy asa whole. At the same time, competition amonga larger number o SMEs, or cooperation withinan SME cluster, enables the kind o economicand technological innovation that will maximisegrowth in high value-added economic sectors andcould potentially spawn the next generation oNational Champions. Finally, the SME sector hasbeen shown elsewhere to create more and betterquality jobs, which will become a more pressingconcern as the Emirati population o Abu Dhabiincreases. The development o SMEs will alsoopen new opportunities by o ering entrepreneurs,business owners and venture capitalists a thriving

environment to grow.

or improvement in the productivity o small and

medium-sized enterprises (SMEs). In the majorityo G7 economies, SMEs account or a greaterproportion o GDP than large enterprises.

Developing the SME sector will bring Abu Dhabiin line with its benchmarks, and at the sametime reduce the economys exposure to risks,encourage innovation and create jobs.

Abu Dhabis immediate priorities o sustainableeconomic growth and non-oil ocused sectordiversi cation can be quickly achieved throughthe development o National Champions: largeenterprises that underpin the economy andaround which industrial and service clusters coulddevelop. The building o National Championshas been avoured by countries with a particularcompetitive advantage, such as leadership in acertain technical eld, or an abundance o certainresources, such as a large work orce or availability

o a natural resource. With its abundant energy

There is room or improvement in the productivityo SMEs.

(*) Figures or benchmarked countries range rom 2003 to 2005(**) Abu Dhabi data is only or employees o listed enterprises within Abu Dhabi Department o Planning and Economys statistics. In act, the total number o allemployees is 786,738 in 2005Source: OECD SME and Entrepreneurship Outlook 2005 (OECD); SMEs in Europe 2003 (European Commission); UAE Ministry o Economy;Abu Dhabi Economic Vision 2030 Team Analysis


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In order to broaden its enterprise base, Abu Dhabineeds to develop a hybrid strategy balancing thedevelopment o large National Champions andthe encouragement o SMEs.

This will be achieved by increasing the overalleconomic importance o the non-oil sector, inwhich SMEs play a more proportionate role, and by

urther stimulating SMEs in both the non-oil and oil

(*) Figures or benchmarked countries are averages or 1990-1999Source: OECD SME and Entrepreneurship Outlook 2005 (OECD); SMEs in Europe 2003 (European Commission); Abu Dhabi Statistical Yearbook 2005;Abu Dhabi Economic Vision 2030 Team Analysis

(*) Benchmark country gures are averages or 1990-1999, and Abu Dhabis are adjusted to reconcile ADCCI and DPE data with o cial DPE guresbased on the Abu Dhabi Census 2005Source: SMEs across the Globe: A New Database (Word Bank); OECD SME and Entrepreneurship Outlook 2005; UAE Ministry o Economy;Abu Dhabi Economic Vision 2030 Team Analysis


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sectors. SMEs tend to thrive when they are givenaccess to capital and when avourable businessconditions are created through institutional andlegislative re orm. Some countries have usedSMEs to develop leadership, human capital, andtechnical know-how in ast-growing sectors.

Maximising Competitiveness

Although there has been a substantial increase

(around 40%) in overall GDP per capita over thepast decade, this statistic does not reveal the

ull story. Labour productivity, when calculatedas income generated per employee, grewsubstantially in the oil sector, driven largely byprice hikes, and the manu acturing sector. Butthese gains masked a decline in productivity inother sectors. In act, the decline in the productivityo other non-oil sectors negated some o thegains made by the oil and manu acturing sectors,where their combined productivity increased by anapproximate 60% over the past decade.

Moreover, there is a wide productivity gap betweenSMEs and large enterprises. Again, this is primarilydue to the contribution o the oil sector, which is

dominated by large enterprises, ensuring that labourproductivity in this segment is considerably higherthan that in large enterprises in most other countries.At the same time, however, labour productivityappears to be surprisingly low in the SME sector,suggesting that smaller companies are not ascompetitive in Abu Dhabi as they are elsewhere.

By shi ting employment rom low productivitysectors, such as government and construction, and

directing the work orce to more productive sectors,such as higher value-added industry, overallproductivity will improve. Labour productivity canalso be improved through investment in training,technology and improved production methods.Improving productivity in other sectors o theeconomy would there ore have noticeable bene ts

or the overall competitiveness o the economy,enhance economic well-being and reduceexposure to oil price fuctuations.

Labour productivity has grown in the oil industryover the past decade, but has simultaneouslydeclined in non-oil sectors.

(*) Increases in the oil labour productivity are mainly driven by increasing oil pricesSource: Abu Dhabi Statistical Yearbook 2005 ; Abu Dhabi Census 2005; Abu Dhabi Economic Vision 2030 Team Analysis


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Abu Dhabi Economic Vision 2030 Objectives

Objective 1

Reduce GDPvolatility through

diversi cation

Abu Dhabi will aim toreduce the volatility ooverall economic andGDP growth through

diversi cation. Diversi y-ing away rom oil into

other economic sectorswill minimise the impacto oil price fuctuations

and other shocks, ensur-ing more stable and

predictable economicgrowth. In order to do

this, Abu Dhabi will ocuson capital-intensive,

export-oriented sectorswhere the Emirate can

have or build a competi-tive advantage.

Objective 2

Enlarge theenterprise base

It is important to enlargethe enterprise base, both

through the continuedgrowth and expansion o

large National Champions,attraction o FDI in leading-edge technology sectors,and through the stimula-

tion o a more vibrant SMEsector. This will provide

more meaning ul oppor-tunities or UAE Nationals,encourage innovation inhigher value-added sec-tors, and mitigate the riskto the economy o shocks

to larger enterprises.

Coupled with the traditionalsupport mechanisms nancial or technical that

could be o ered to SMEs,it is expected that the

revision o anti-trust laws,the removal o entry bar-riers into some economicsectors, and encouragingmarket-based competitionmechanisms will encour-age entrepreneurship and

oster the SMEs sectorgrowth.

Objective 3

Enhancecompetitiveness

Abu Dhabi will enhancecompetitiveness and

productivity. Not only willsteps in this regard bolster

the entrepreneurial SMEsector, but it will also gen-erate signi cant economic

growth in an underper-orming segment o the

economy. By ocusing oncapital-intensive industriesand internationally tradedservices and optimisingthe work orce in low-pro-

ductivity areas, companieswill be able to make capitaland labour work more e -ciently, greatly increasing

the overall competitiveness

o the economy.

Abu Dhabi will build a sustainable and stable economy through the diversi ca-tion and broadening o its enterprise base across a range o di erent sectors,and by taking steps to improve the competitiveness o the local private sector.

To achieve this, the Emirate will pursue three primary objectives:


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are well equipped with the skills and knowledge totackle the challenges o the uture.

At the same time, it is important that theGovernment monitor closely the social implicationso development. Abu Dhabi must ensure that thesections o society currently under-represented in

Rapid economic growth has resulted in anunprecedented population boom in Abu Dhabi. In

act, the population o the Emirate has doubledin just two decades, both as a result o high birthrates and improved health among UAE Nationals,and as a consequence o the immigrationo expatriates seeking work in its expandingeconomy. The larger population presents AbuDhabi with a great opportunity, providing themanpower to sta a twenty- rst century economy.It is Abu Dhabis intention to ensure that its citizens

2. Ensuring a Balanced Social and RegionalEconomic Development Approach thatBrings Bene ts to All

Rapid population growth has ollowed economic success, and Abu Dhabimust ensure that the bene ts o social and economic development areshared among all the Emirates residents.

The government is working to ensure that AbuDhabis substantial youth population is eventuallyable to compete in the international economy.

Source: Abu Dhabi Statistical Yearbook 2000, 1995, 1985; Abu Dhabi Census 2005; Abu Dhabi Economic Vision 2030 Team Analysis


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human capital to meet the challenges o the uture.Almost two-thirds o Nationals are aged 24 andyounger, while two- ths are beneath the age o15. This is a signi cantly higher proportion o youththan that seen in other trans ormation economies.

These young Nationals will shape the Emiratesuture and will be the major economic contributors

o tomorrow. Abu Dhabi aims to ensure that,as they enter the work orce over the next twodecades, these young Nationals and theirsuccessors are equipped or the increasingly

competitive global knowledge economy in order

the economy, such as women, are encouraged toparticipate in economic and social progress. Thiswill be achieved through the provision o bettereducation and employment opportunities and as aresult o various development initiatives designedto bring a more equitable development to all acetso the Emirate.

Developing Abu Dhabis GreatestNational Resource

The Emirates young National population is oneo its greatest advantages, ensuring a wealth o

(*) 0.4% o total did not state their age group(**) Population under the age o 24Source: Abu Dhabi Census 2005; Abu Dhabi Economic Vision 2030 Team Analysis


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Encouraging more National women into thework orce will give a boost to the economy, makingbetter use o the Emirates human resources andreducing reliance on expatriate labour as wellas giving women the opportunity to shape thedirection o Abu Dhabis economic development.Encouraging emale employment will also have

the desirable e ect o increasing and diversi yinghousehold incomes.

Currently, the income o National households inAbu Dhabi tends to be in proportion to the sizeo the household. While household incomes arerelatively high among Nationals, with more thanhal o households earning more than AED10,000 amonth, there is also a high level o dependency onjust one breadwinner. The average household sizeamong Nationals is 6.5 people, considerably higherthan in benchmark countries, and due to the highproportion o children and women in the home,

that they can ully take part in and help drive AbuDhabis economic and social development.

Empowering Women in the Economy

A great deal o progress has been made overthe past two decades to bring women into thework orce. The level o employment o emaleNationals in Abu Dhabi is higher than in other GCCstates. The Emirate outper orms the UAE averageand other countries in the region in terms o emaleeconomic participation, with 14.5% o the overallwork orce and 18.5% o the National work orcebeing emale.

This is a great achievement on which Abu Dhabiwill build, both as a result and as a requirement o

urther economic growth. Abu Dhabis benchmarkeconomies have very strong records when itcomes to getting their women into the work orceand the Government would like to achievecomparable gures. Ireland and Singapore boasta work orce which has more than 40% emaleparticipation, while almost hal o Norwayswork orce is composed o women.

The Western Region Development Council will workto attract investment and encourage growth in oneo the Emirates less developed areas.

Source: Abu Dhabi Statistical Yearbook 2005; Abu Dhabi Census 2005; UAE Ministry o Economy; WDI; Abu Dhabi Economic Vision 2030 Team Analysis


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has a highly fexible work orce, which can respondswi tly to meet resh challenges or demands, andthe needs o an economy that is responsive to newdevelopments.

As a result o the strong level o economic growthand the high standards o living in the Emirate, AbuDhabi has attracted a large number o expatriateworkers, who make up the majority o the residentpopulation. Expatriates have brought additionaldiversity and dynamism to the economy and tosociety. As the economy continues to grow and

the average ratio o breadwinners to dependentsis 1:4, whereas in other a fuent countries theproportion is o ten less than 1:2. Abu Dhabi willimprove on this ratio as more women and youngNationals enter work.

Attracting a Skilled Foreign Work orce

One o the Emirates key economic advantagesis its ability to attract skilled and unskilled labour

rom abroad to meet its evolving economic growth

needs. This policy has ensured that Abu Dhabi

Bringing Opportunities to the RegionsThe Western Region will also bene t rom other Government initiatives in land use, tourism, transport and so-cial services. The newly-established Urban Planning Council has developed a land-use planning programme

or Abu Dhabi that will be extended to the other regions. The Western Regions plan should be completed by2009. The Abu Dhabi Education Council launched a project in 2006 in partnership with private operators toupgrade the curriculum, in rastructure and quality o personnel in selected public schools, six in the WesternRegion. To improve transport links, the Tourism Development and Investment Company (TDIC) is to expandthe runway at Sir Bani Yas Island, increasing the airports capacity to 300,000 passengers a year and making itthe major entry point to the Western Region. The road network will also be improved. The Abu Dhabi Munici-pality has identi ed investments worth an estimated $950m to improve motorways in the area. Major tourismprojects have also been announced, including a luxury desert resort in Liwa and a $3bn eight-island resort atJebel Dhanna. There are also residential and entertainment developments in Madinet Zayed in the centre othe Region. The Region already has a well-quali ed teaching base, but the availability o private education isconsiderably more limited compared to Al-Ain and Abu Dhabi. Action is being taken to boost the number oprivate school places in the Western Region to help diversi y and enhance educational services. The Govern-ment is similarly enhancing the Regions healthcare systems.

(1) 10.3% re used to answer this survey and 7.8% did not know the household income(2) Ratio o total National population (350K) and average household size (6.5)Source: PARC Income and Expenditure Survey 2005; Abu Dhabi Economic Vision 2030 Team Analysis


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The Western Region accounts or 40% o GDP,largely due to the concentration o oil and gasresources, but houses just 8% o the Emiratespopulation and is the least developed in termso economy and in rastructure. In the WesternRegion, average household incomes are aroundhal those in Abu Dhabis capital, a wide disparity byinternational standards.

Abu Dhabi has already begun a series o initiatives

to address the development o remote regions inthe Emirate with a ocus on education, healthcare,in rastructure and employment opportunities. Theaim is to ensure that development takes place in abalanced ashion, creating equal opportunities or all.

Education is key to providing opportunities tothose in less developed parts o the Emirate. Whileteachers quali cations are airly equal across theregions, there are ewer private schools and lowerprivate school attendance in the Western Region.The Region also achieves lower than average schoolexit examination results and higher than averageilliteracy and school drop outs. Correcting suchimbalances and bringing bene ts to all Nationalsremains a key priority or the Government.

Access to world-class healthcare must also beenhanced across the Emirate. Currently, the numbero doctors and hospital beds per head are not in-line with international benchmarks and there is adegree o regional disparity which the Governmentis actively working to address.

In rastructure development will also lead to ahigher standard o living in the regions, and greateremployment opportunities. Abu Dhabi will channelinvestment to rural areas to provide better roads andaccess to airports, as well as improve recreational

acilities, such as cinemas, sports acilities,museums and shopping malls.

Finally, and perhaps more importantly, jobopportunities need to be created to ensure thelong-term prosperity and sustainability o regionalcommunities. This will stem the trend o ruraldepopulation as young people move to the main

diversi y, Abu Dhabi will continue to require fexibleexpatriate labour, but the Emirate must take stepsto attract and retain more highly skilled expatriateworkers in order to move up the value chain interms o human capital and to bene t rom theirexpertise.

In addition, a ocus on more highly skilled, high-income expatriate workers will have both economicand demographic bene ts. Currently, average

monthly income among expatriate households islow, at around AED6,000 per month, refecting thehigh number o low-income oreign workers in AbuDhabi. With such a low income, a large proportiono workers are not legally capable o bringing their

amilies to Abu Dhabi, and as a result the expatriatepopulation is strongly slanted towards working-age males, which has caused an overall age andgender imbalance in the Emirates population.As Abu Dhabis economy evolves towards highervalue-added industries and as steps are taken to

attract more high-skilled, high-income workers, anincreasing number will bring their amilies to settlein the Emirate balancing the demographic pro leand increasing the overall purchasing power andconsumption patterns o the population.

Accelerating Regional Development

Abu Dhabis development has been rapid, butit is essential that development and opportunityreach every region o the Emirate so that all thepeople o Abu Dhabi can ul l their economic

potential. The Emirate is divided into three municipalregions Abu Dhabi, Al-Ain and the WesternRegion (Al Gharbia) - which are diverse in terms ogeographical size, population, income distributionand economic activity.

The Abu Dhabi Region houses the Emirateslargest urban centre, and is also the Federal andEmirate capital. It accounts or most o the Emirateseconomic diversi cation and is the richest andmost developed o the regions. The Al-Ain Regionincludes the second-largest city o the Emirate andis a tourism centre as a result o its cultural heritage.


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signi cant incomes o this group eed into greaterspending in the local economy. It also increasesthe attractiveness or skilled pro essionals in othersectors. For example, more senior medics andteachers in the region will increase the perceptiono pro essionalism in the social services. I thesocial services in the region are excellent, and

perceived as such, the Western Region will becomea more obvious destination or other pro essionalsand, more importantly, their amilies.

In short, the Western Regions economy will beadvanced by increased investments in education,healthcare and in rastructure. With continuedeconomic growth, these will create an attractivesocial environment or the high-skilled pro essionalsthat the region will attract to drive its progress.

cities in search o better jobs. It will also providegreater incomes to households, mainly throughmaximised emale participation in the work orcein these regions, which will uel greater economicactivity.

Abu Dhabi and Al-Ain o er an exceptional quality

and range o in rastructure services and amenities.There is no reason why the Western Region shouldnot also have comparable world-class leisure,tourism and retail acilities. These are not onlythe ruits o growth, but can be prerequisites ordevelopment.

With top-class acilities, the region is more likelyto attract and retain high-skilled pro essionals,leading to a positive multiplier e ect as the more

Focusing on the Western RegionThe Government established the Western Region Development Council (WRDC) to stimulate development in parts othe region that have not kept pace with the rest o the Emirate. The WRDC ocuses on people, entrepreneurship andin rastructure. It is working to tackle barriers to employment, enhance the skills and training o the local work orce, andcreate incentives to attract and retain high-skilled employees rom outside the region. At the same time, it is encouragingentrepreneurship and diversi cation through the support o SMEs and new industries, and it is delivering an improved

and more e cient in rastructure to acilitate the regions growth. The WRDC has already developed a strategic agenda,and has identi ed several important projects. These include setting up a campus in Ruwais or the Higher College oTechnology (HCT), the expansion o TAMM (the Government one stop shop service) to all cities o the region, thecreation o a major industrial zone in Shuwaihat, and the instigation o investment promotion campaigns.

(*) In 2005Source: WR Socio-economic Survey 2004; US Census Bureau; Abu Dhabi Economic Vision 2030 Team Analysis


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Abu Dhabi Economic Vision 2030 Objectives

Abu Dhabi will ensure a balanced social and regional economicdevelopment approach that will bring bene ts to all. To this end,

our main objectives will be implemented:

Objective 4

Equip the Emiratesyouth to enter the

work orce

The Emirates youngmust be equipped to

enter the work orce. Thiscan be achieved throughthe revision o curricula,increasing participationand completion rates atall levels o education

(particularly tertiary edu-cation), the encourage-ment o part-time andsummer jobs or youth

in the education systemto introduce them to

the working world, andthrough the enhance-

ment o vocationaleducation.

Objective 5

Maximise theparticipation o

national women inthe work orce

Female participation

in the work orce willbe increased urther,especially in rural areas.Financial support will be

provided or at-homebusiness projects and

work- rom-home will beencouraged. Overall, anethos o emale work-

orce participation willbe advanced.

Objective 6

Attract andretain skilled

workers

The Emirate should

become a prime destina-tion or skilled labourrom across the globe. To

acilitate this, highly at-tractive employment op-

portunities that rival thosethat workers would ndelsewhere must be cre-ated. Moreover, li estyle

and best-in-class educa-tion, healthcare, culturaland leisure services willbe provided and activelypromoted. Additionally,the convenient entry

and settlement o skilledexpatriate workers andtheir amilies must be

acilitated.

Objective 7

Stimulate astereconomic growth

in the regions

Economic growth in the

regions will be boosted.Integrated regionaldevelopment plans willbe implemented. Incen-tives will be o ered to

businesses to set up inthe more remote areas

o the Emirate, and eco-nomic clusters in certainlocations in the Emirate

developed.


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Section TwoAbu Dhabis Seven Areas o OngoingEconomic Policy Focus


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Section TwoAbu Dhabis Seven Areas o OngoingEconomic Policy Focus

1. Build an Open, E cient, E ective and Globally Integrated BusinessEnvironment

2. Adopting Disciplined Fiscal Policies that are Responsive to Economic Cycles

3. Establish a Resilient Monetary and Financial Market Environment withManageable Levels o Infation

4. Drive Signi cant Improvement in the E ciency o the Labour Market

5. Develop a Su cient and Resilient In rastructure Capable o SupportingAnticipated Economic Growth

6. Develop a Highly Skilled, Highly Productive Work orce

7. Enable Financial Markets to Become the Key Financiers o Economic Sectorsand Projects


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Abu Dhabis economic environment is interlinkedwith those o its Federal partners, and theper ormance o the Emirate as a businessdestination will infuence the overall economicper ormance o the entire UAE, and vice versa.

Abu Dhabi aspires to rival rankings enjoyed bybenchmark economies such as Ireland, Norway,New Zealand and Singapore on the global indicesscale or economic reedom and ease o doing

Even on a standalone basis, Abu Dhabi alreadyhas the second-largest economy in the region,but has the potential to urther enhance itsinternational position. In order to reach this goal, itmust be equipped with a legislative environmentthat is both e cient and business- riendly.The Government is committed to the ongoingevaluation o its legislation, legal systems andgovernment processes to ensure the Emirate is anattractive investment destination.

1. Build an Open, E cient, E ective andGlobally Integrated Business Environment

Abu Dhabi will ensure its business climate is open, e cient and e ectiveto enhance its position as a global economic hub.

(*) Since the UAE business environment is highly comparable to that o Abu Dhabi, all data, hereina ter, that actually refects the UAE, is used or Abu Dhabi (AD)Source: Doing Business 2007, World Bank; UAE Government Laws; Abu Dhabi Economic Vision 2030 Team Analysis


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Responsibilities outside the Federal domaincome under the authority o individual Emirates,and so Abu Dhabi enjoys relative autonomy in itsjudicial a airs.

Abu Dhabi will pursue e ective coordinationmechanisms at the Federal level to ensure theharmony o economic policy-making betweenFederal and local jurisdictions. Cooperationbetween the two will allow or aster response

times to emerging trends within the broadereconomy, which will aid in the creation oramendment o legislation to improve businesse ciency and con dence in the law. While thebusiness environment in the Emirate operateswithin the ramework o Federal UAE legislation,aspects o Abu Dhabis legal system will also beenhanced and strengthened to optimise businessopportunities.

A Transparent Judicial System and

Modern Business LegislationAbu Dhabi will become more competitive inattracting both local and oreign investment byupdating business-related legislation to createthe optimum environment or business to fourish.Current legislation regarding tax, ownership,property rights, anti-trust, corporate governanceand competition will be assessed and revised toencourage new investors and to bring the businessclimate in line with Abu Dhabis aspirations. Thejudicial system will also be brought up to speedwith these legislative changes to instil greaterinvestor con dence.

Favourable tax laws are among Abu Dhabiskey competitive advantages when it comes toattracting business. The UAE Government leviesno corporate or income tax and, at 1.7% o GDP,tax payment rates are among the lowest in theworld. Overall, the UAEs tax system is consideredto be straight orward and transparent. For many

oreign investors, low taxation policies are a

major incentive in deciding where to establisha business, and the Government o Abu Dhabi

business. With the help o a recently establishedstatistics bureau project in cooperation withStatistics Sweden, the Emirate is seeking anindividual ranking on such indices in order toassess more e ectively Abu Dhabis businessenvironment in relation to the rest o the world; andto promote itsel as an international business hub.

The Emirate is also engaged with the World Bankand IMD to provide additional support in its drive

to improve transparency in the business operatingenvironment.

Meanwhile, various measures are being adoptedwhich will have the e ect o strengthening co-operation at both the Federal and local levels,to enhance speci cally local business-relatedlegislation and to upgrade judicial processes.The Abu Dhabi Government is also committed tostreamlining its own processes ultimately developinga swi t and transparent process or investors to setup businesses and invest in the Emirate.

Abu Dhabi Economic Vision 2030Objectives

Abu Dhabi will take the necessary steps tooperate as an open, e cient, e ective and globallyintegrated business environment. The Emirate issetting itsel the highest standards and intendsto be ranked alongside other trans ormationeconomies on indices relating to economiccompetitiveness. To achieve this, our objectives

will be pursued:

E cient and E ective Federal-LocalCoordination

At present in the UAE, legislative and judicialresponsibilities are shared between the FederalGovernment and the individual Emirates.

A simple and transparent tax structure is one othe Emirates major advantages when it comes toattracting oreign investment.


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largely to the Governments e orts to trans ormthe National population into key stakeholders inthe economy. Outside o ree zones, limits in AbuDhabi are similar to those o its GCC partners.Foreign ownership o companies in the UAE iscapped at 49%, with ew exceptions.

recognises the importance o maintaining aavourable tax regime to retain its competitive

edge in attracting inward investment. Regulationslimiting oreign investment can act as adisincentive to oreign ownership. Caps on the

oreign ownership o businesses in the UAE relate

(*) The indicator measures the e ectiveness o legislative powers as law-making bodies and oversight institutionsSource: The Global Competitiveness Reports (2004-2005 & 2006-2007), WEF; Abu Dhabi Economic Vision 2030 Team Analysis

Source: KPMG Corporate Tax Rates Survey, 2006; The Global Competitiveness Report (2004-2005), WEF; 2007 EconomicFreedom, The Wall Street Journal and Heritage Foundation; Abu Dhabi Economic Vision 2030 Team Analysis


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practices to the rest o the economy. Abu Dhabiranks alongside Norway in terms o the impact onbusiness o FDI rules and restrictions on capitaltransactions, demonstrating that in this respect ithas managed to match key benchmarks already.

This policy has been relatively success ul, creatinga generation o local shareholders and business-owners. The level o oreign ownership remains lowwithin the Emirate, thus indicating an opportunity toboost FDI and speed-up the roll-out o leading edgetechnologies, business processes and management

Source: The Global Competitiveness Reports (2004-2005 & 2006-2007), WEF; Doing Business in the UAE, 2006, UHY;Abu Dhabi Economic Vision 2030 Team Analysis

Source: The Global Competitiveness Reports (2004-2005), WEF; Economic Freedom o the World 2006, Fraser Institute; 2007 Index o Economic Freedom,The Wall Street Journal and Heritage Foundation; Abu Dhabi Economic Vision 2030 Team Analysis


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The UAE Government has expressed its intentionto review limits on oreign ownership. For now,however, ree zones, which enjoy some exemptionsand fexibility related to oreign ownership rights,are the primary tools to encourage oreign

investment in Abu Dhabi. Such zones help to bringin oreign expertise and technology, and stimulatetrade and investment. Abu Dhabi has beguncreating ree zones, such as the Khali a Port andIndustrial Zone (KPIZ), and is looking or new andinnovative ways to spark the interest o oreigninvestors and companies.

When it comes to property rights, the passing orecent legislation ormalising the right o oreignersto own real estate has shown that Abu Dhabi isactively seeking to protect the property rights o allin the Emirate. Foreign nationals are now permittedto own real estate in the Emirate within speciallydesignated zones. The Government intends toexpand property rights urther or oreign investors

New legislation would lower costs and encouragestart-ups in Abu Dhabi.

to improve the attractiveness o the Emirate as aninvestment destination.

The en orcement o Intellectual Property (IP)rights is also an important consideration or theGovernment, especially as it seeks to play a role ina more globally linked economy. Abu Dhabi ranksin the top quarter o countries internationally, andis considered to be well ahead o other countriesin the region in ensuring the protection o patentsand intellectual in ormation.

A more contemporary corporate governanceramework will also be considered in order to boost

investor con dence in Abu Dhabi. The FederalCommercial Companies Law provides someguidelines or corporate governance provisionsand minority shareholder rights. Legal re ormsin this area will help to bolster higher standardsand investor con dence within the businesscommunity.

Various legislative improvements can also bemade to encourage start-ups in the Emirate, whichare sensitive to relatively high start up costs andcapital requirements. A more developed regulatory

Source:ADCCI; The Global Competitiveness Reports (2004-2005 & 2006-2007), WEF; 2007 Economic Freedom,The Wall Street Journal and Heritage Foundation; Abu Dhabi Economic Vision 2030 Team Analysis


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Source: Doing Business 2006 and 2007, World Bank; Abu Dhabi Economic Vision 2030 Team Analysis

Source: Economic Freedom o the World 2006, Fraser Institute; The Global Competitiveness Report (2004-2005), WEF; IMF;Abu Dhabi Economic Vision 2030 Team Analysis


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ramework will be put in place to enhance therights o both lenders and borrowers. This will easethe provision o capital or business and assist inthe creation o start-ups.

Legislation in this regard should reducebottlenecks in the provision o loans, whilemaintaining the robustness o the nancial system.Streamlining bankruptcy resolution processes will

also help to support healthier members o thebusiness community and improve the li e cycle othe economy as a whole.

Anti-trust provisions will also be taken into accountand modernised. Re orming the laws that coveranti-trust provisions will improve competition,

increase con dence in the business community

The Government will ensure that the judiciary is upto speed with the changing business environment.

and reduce price instability. Abu Dhabi comparesavourably with Norway when it comes to the

intensity o local competition and the extent olocally based competitors.

Hand-in-hand with legislative re orms, Abu Dhabiwill revise judicial processes and ensure thejudicial system keeps pace with the evolvingbusiness environment. A well-trained and

unctioning judiciary helps to attract business andincrease investor con dence as it enables e ectivecontract en orcement and impartial disputeresolution mechanisms.

When it comes to the e ectiveness o the legalsystem, recent surveys show that the UAE

is holding its place in international rankings.

The Government has led initiatives to enhance theinternational investor perception about the localbusiness environment.

Source: Commercial Agents Guide, ADCCI; The Global Competitiveness Reports (2004-2005 & 2006-2007), WEF;Abu Dhabi Economic Vision 2030 Team Analysis


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Note: The indicator measures the e ectiveness o legislative powers as law-making bodies and oversight institutionsSource: The Global Competitiveness Reports (2004-2005 & 2006-2007), WEF; Abu Dhabi Economic Vision 2030 Team Analysis

Source: The Global Competitiveness Reports (2004-2005 & 2006-2007), WEF; Corruption Perceptions Index 2006,Transparency International; Abu Dhabi Economic Vision 2030 Team Analysis


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The Emirate will establish a comprehensive businessacilitation programme in order to ease the process

o setting-up new businesses in Abu Dhabi.

An E cient and E ective InvestmentFacilitation Process

FDI can be bene cial or the economy as a whole,as it brings with it know-how and expertise thatcan trigger urther economic growth. Additionalwork will be done to improve the investment

acilitation process, by developing one-stop shopsand other acilities to enhance the experience orbusiness.

Abu Dhabi is looking to attract more strategicFDI, to encourage export-oriented industries andimprove the know-how and competitiveness o theEmirate. Equally, oreign investors can trans er thecontacts and experience they have had in otheroverseas markets to the local business community,increasing Abu Dhabis export capabilities andintegration into the world economy. FDI in targetedi

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