Abu Dhabi is one of the seven emirates that form the United Arab Emirates, and is the home of the Federal Government and the country’s capital.
Endowed with rich natural resources, the UAE’s economy is underpinned by oil exports although a growing diversification in the country’s economy has been evident in recent years. The country has about 8 percent, or 98 billion barrels, of the world’s proven oil reserves and hosts the fifth largest natural gas reserves in the world.
While Al Salami Investment Group manages assets globally, the company is deeply rooted in Abu Dhabi’s economy. The company is aligned with the Government’s strategy for economic diversification, investing in key areas of growth and encouraging private sector development. The Emirate’s vision puts a great focus on building knowledge-based industries, such as petrochemicals, aerospace, and pharmaceuticals, as well as developing social infrastructure, particularly education and healthcare.
By 2030, the Government envisages 64 percent of Abu Dhabi’s GDP will come from non-oil sources, versus around 32 percent currently.Around $400 billion worth of projects have either been announced or are under development in the Emirate in various areas, such as oil and gas, manufacturing, real estate and infrastructure. They include development of Saadiyat Island to place Abu Dhabi firmly on the map for high-end tourism, bringing in two of the world’s most recognized cultural institutions, the Louvre and the Guggenheim.
The Abu Dhabi Economic Vision 2030 establishes a common framework for aligning all policies and plans that contribute to the on-going development of the Emirate’s economy. It seeks to create opportunities for the local and international private sector in the Emirate of Abu Dhabi, and new employment opportunities for UAE nationals, particularly in highly skilled, export-oriented sectors.
Healthy Economic Outlook
The UAE has recovered well since being shaken by the aftershocks of the 2008-2009 global economic crisis, with real GDP growth estimated at 3.1 percent in 2013 and 3.6 percent in 2014, according to the International Monetary Fund.
The rebound has been driven by growing tourism, logistics and trade revenues, as well as strong public spending. Robust global oil prices – due to demand from emerging markets offsetting stagnant demand for hydrocarbons from advanced economies – has given ample leeway for prudent fiscal stimulus in areas such as infrastructure development.
The real estate sector, which was hit hard by the crisis, is showing signs of recovery, while the banking system has held steady during the downturn. Lenders have taken prudent provisioning measures, putting them in a strong capital position relative to their international peers. As a result, loan growth is expected to accelerate in 2013.
The IMF forecasts that the UAE’s economy will grow at a compound annual growth rate of 4 percent in the five years to 2016. The decision to include the UAE in the MSCI emerging market index from 2014 has elevated the country’s status among global investors. This development should lead to greater capital inflows in coming years, with institutional investors now more likely to commit to larger, long-term positions in the market.