Economy on Track to Hit Dh3 Trillion Mark

The Ministry of Economy has been playing an active role to develop effective policies and legislation to aid the development of the new economic model and stimulate investment in critical sectors, its top official says.

Abdulla bin Touq Al Marri, Minister of Economy, said the UAE government remains committed to developing and strengthening policies and launching initiatives aimed at fostering investor confidence, including legal frameworks, financial incentives, and measures to protect intellectual property.

“The UAE has achieved robust economic growth and is moving steadily to raise the gross domestic product to Dh3 trillion by 2031,” Al Marri said during an interview.

The UAE achieved exceptional GDP growth despite global and regional uncertainty and further fortified its position among the top 10 countries in the world in various GDP-related global competitiveness indicators. The country ranked fifth worldwide in the Real Economic Growth Rate Index and sixth in GDP per capita in the IMD World Competitiveness Yearbook 2023.

Excerpts from the interview:

The UAE economy has maintained a robust growth momentum in the post-Covid era. How do you see the economic outlook for the next three years?

The UAE today has an open economic climate characterised by a pioneering and competitive economic legislative structure. With a clear vision for the future, the country adopted numerous forward-looking economic strategies and flexible policies and plans to diversify the national economy over the past few years, and these reforms gained further momentum after Covid hit. For instance, over the past three years, the UAE amended and updated more than 13 laws in many economic sectors, particularly the new economy. This is coupled with significant expansion of non-oil activities and sectors, particularly new, sustainable, innovative and knowledge-based sectors. As a result, more than 788,000 companies operate in the country's markets as of the end of 2023, and the number of SMEs reached about 557,000 by the end of 2022.

In 2023, the economy grew by 3.6 per cent in real prices. Although this appears to be somewhat modest compared to the 7.9 per cent growth rate for 2022, it is a robust growth against the backdrop of global and regional uncertainty and is higher than the rates registered by the global economy and the rest of the GCC countries. These results confirm that we are moving steadily towards achieving the national goal of the ‘We the UAE 2031’ vision to raise the gross domestic product (GDP) to reach Dh3 trillion.

Non-oil economy is a major contributor to the UAE’s GDP. How do you see the country’s economic diversification drive in the next five years?

Currently, 74 per cent of the UAE’s national economy is non-oil-based, a historic first for the country. The non-oil GDP grew by a staggering 6.2 per cent last year. Over the past decades, we have significantly expanded non-oil activities and sectors, particularly new, sustainable, innovative and knowledge-based sectors. We are working diligently to position these sectors at the forefront of the next phase of growth, which will consolidate the UAE’s status as a hub for the new economy.

Moreover, in the next phase, we will focus on accelerating the green transition and developing economic clusters for various sectors — including agritech, food processing — spread across different emirates and regions within the country.

How do you see the role of the private sector in promoting the economy, especially in the wake of public-private partnerships in healthcare, education, and infrastructure development projects?

The private sector has always been an important partner in the country’s economic growth and employment creation and continues to be a key pillar in the new economic and investment landscape. It is at the heart of global changes and challenges and has an edge when it comes to harnessing technology and pioneering innovation.

The sector has the potential to find solutions to today’s most pressing challenges and therefore, we are keen to support them and benefit from their expertise, especially in the development of new economy sectors. The UAE government remains committed to developing and strengthening policies and launching initiatives aimed at fostering investor confidence, including legal frameworks, financial incentives, and measures to protect intellectual property.

What steps or policies on cards to facilitate small investors and SMEs?

Under the guidance of the wise leadership, the UAE has placed significant emphasis on advancing the SMEs sector, considering it as a key driver of national economic growth. Today, SMEs account for 95 per cent of all companies in the country and employ 86 per cent of the private sector’s workforce. Therefore, the UAE government ensures ample opportunities and resources for nurturing this vital sector, which now has a direct and effective impact on the UAE’s economic development. SMEs in the local market currently operate in all key economic sectors that support the country's shift towards a new knowledge-based economic model.

In the past three years, the Ministry of Economy has worked diligently to support Emirati entrepreneurs across different economic sectors. The Ministry introduced various initiatives to boost the growth of Emirati SMEs, aid their expansion into international markets, and facilitate their access to financing and investments, equipping them with necessary resources and tools for success and continuity. For example, "Future100" is a collaborative initiative between the Ministry of Economy and the Government Development & the Future Office aimed at supporting top 100 startups that play a vital role in bolstering the competitiveness of the UAE’s future economy sectors.

Moreover, we continue our efforts to facilitate the expansion of Emirati SMEs to various international markets, large UAE delegations from the private sector have participated in leading global entrepreneurship events such as ComeUp Korea and VivaTech 2024 held in France.

Thanks to these concerted efforts, the UAE was ranked number one globally for the third consecutive year by the Global Entrepreneurship Monitor (GEM) report for the year 2023-24, surpassing many advanced economies in this regard.

What measures Ministry of Economy will suggest increasing the industrial sector’s contribution to GDP to Dh300 billion by 2031 from Dh133 billion in 2021?

The Ministry of Economy is committed to promoting innovation and creativity and attracting investments in all key economic sectors and fields including the industrial sector. The new industrial property law is one of the most important initiatives that the Ministry of Economy and its partners have developed in order to drive growth based on knowledge and innovation and support entrepreneurship. These efforts fall in line with the vision, principles and projects launched by the UAE government to drive a new phase of growth, both domestically and globally.

The new law's amendments focus on achieving speed, flexibility and effectiveness in the formal and objective examination processes, registration procedures and services and grants for all industrial property applications, which include patents, utility certificates, industrial designs, and integrated circuits.

Through the procedures introduced by the new law, we worked to shorten the turnaround time needed to issue the result of the examination of patents to six months starting from receiving the application from 42 months in the past. The Ministry of Economy also provides integrated services regarding various industrial property applications according to highest international standards, through its website.

— muzaffarrizvi@khaleejtimes.com

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