UAE must continue diversification boost

The UAE has started reaping the fruits of its economic diversification policy, thanks to the successful policies initiated by the leadership to move the economy from its full dependence on oil sector to multiple sectors and resources. Given these sound policies, the national economy has grown steadily over the past few years. The economy today is stronger, resilient and diversified.
The diversification policies aim at ensuring high standards of welfare to the Emirati people and future generations.
Indices demonstrate the strength of the national economy. The UAE is today the second largest Arab economy. The recent report by the International Monetary Fund (IMF) also shows that the national economy is growing at a rate twice faster than that of the Eurozone, an important indicator which not only gives a positive outlook on the mere numbers which are estimated by the IMF at 3% for the UAE’s growth, but also show important sustainable strength of the economy amid the vulnerability and lingering weakness of the global economy.
To revamp the national economy, the UAE government has been planning to increase the contribution of the non-oil sector to 80 per cent of the nation’s gross domestic product (GDP) from the present figure of 70 per cent in the next 10 to 15 years. “Our target is to reduce the contribution of oil sector to just 20 per cent to the overall GDP,” said UAE Ministry of Economy Sultan bin Saeed Al Mansouri.
The lower oil prices and slow world economic growth spurred the UAE to accelerate the economic diversification polices based on solid infrastructure and logistical environment to achieve development. The diversification plans were laid down in 1980s by the late Sheikh Zayed bin Sultan Al Nahyan and sustained by President His Highness Sheikh Khalifa bin Zayed Al Nahyan.
The IMF’s appraisal of the UAE’s wise leadership fiscal policies didn’t come from a vacuum. The country’s absorption of plummeting oil prices reflects resilience of the economy. The diversified financial and economic policies put in place displayed the country’s high ability to cope with the oil exports challenges.
The UAE continues to gradually restructure its financial system through enhancing financial reserves and developing policies to maintain financial and monetary stability and push sustainable economic growth, as well as policy reforms in removing oil dependency and laying foundations in implementing VAT.
Despite being the sixth largest oil exporter, the revenues of this sector amounts to 30 percent of the total financial resources of the country; where the economic and financial indices confirm unprecedented growth in other sectors.
During her visit to the UAE in February, Christine Lagarde, Managing Director of the IMF, highlighted the wise fiscal policies adopted by the country that enhanced its competitiveness and made bank assets, owned by the local banking sectors, the largest of its kind in the region.
His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, summed it up all when he said the diversification of economy would ensure a sound future for generations to come.
“There won’t be any rivers but what is well known is there won’t be any oil or gas. At this current time, when we have a lot of wealth, we need to invest and put all our efforts and resources into education because maybe in 50 years, when we might have the last barrel of oil, the question is: when it is shipped abroad, will we be sad?,” Sheikh Mohamed said in his opening address to the Government Summit.
Development of human resources, education, health, innovation, renewable energies, diversified economy and security are the pillars driving the UAE’s strong economy.