Diversification of economy is main pillar of UAE economy, says Al Mansouri

UAE Minister of Economy meets European Ambassadors

His Excellency Sultan Al Mansouri said the UAE economy has proven its strength in dealing with the global financial crisis, due to the wise economic policies and the leadership’s emphasis on diversification. He was addressing a special gathering of European Union ambassadors to the UAE.

Mr Al Mansouri said that the strength of the country’s economy has been reiterated by President His Highness Sheikh Khalifa bin Zayed Al Nahyan on several occasions, the latest being his interview with the Kuwait News Agency (KUNA).
In that interview the President had stated that “in respect of the global economic crisis, by virtue of our strong economy, and our prudent management of our public and private institutions, we were able to contain the negative effects of the crisis and overcome many of its results and implications. We have the ability and determination to continue our work in this direction for the completion of the steps we have taken in this area to remove all obstacles that dampen the momentum of the development process,” the minister recalled.

Al Mansouri presented to the EU Ambassadors the achievements and success of the UAE economy. He said that GDP grew 6.2% in 2007 and 7.4 % in 2008 and the estimates growth of 1.3 % in 2009 and 3.2% in 2010. He emphasized that growth rates of 2008 are not considered a basic platform for comparison due to the high inflation rates recorded asserting that the coming period will witness gradual growth, initially, picking up momentum with time.

“The UAE has already taken concerted efforts to meet the challenges arising from the financial crisis. Several practical steps were initiated include guaranteeing bank deposits for three years and injecting liquidity into the banking system whereby AED 120 billion has been earmarked by the UAE Central Bank and the Ministry of Finance,” Al Mansouri  said.

He said that some media exaggerated the UAE’s economic situation adding that if there is any criticism towards the UAE then it should be objective and in the right place. “We accept any kind of criticism but that must be based on facts and reality and not illusions and speculation,”  he added.

He also explained to the EU Ambassadors the development of the non-oil sectors and its contribution to the GDP where it reached 67% in 2008, highlighting the diversification policies that reduced the dependency on the oil sectors. He said the UAE government is giving special care for the development of the industrial sector as a major supporter for the economic development, which already contributes 14.9 % to the GDP. The number of industrial firms increased from 4219 in 2008 to 4644 in 2009 with investments of US$22.1 billion.
“We are looking forward to enhance cooperation with European countries in the fields of industry especially the SMEs, chemical and manufacturing industries,” he added.

Al Mansouri said inflation rates in the UAE have risen from 2.2 % in 2002 to 12.3% in 2008, falling to 2.5% in the first 8 months of 2009. He expected 2% inflation by end -2009 stressing that these figures show that most economic sectors went through correction stages, which is positive for the economic growth.

The Minister reiterated that the success of the UAE’s Federal experience contributed to building an ideal and civilized country that enjoys a privileged position at the regional and global levels and retains the confidence of major global economies.
Al Mansouri said that the Ministry prepared a draft law on foreign investment and  finalised two other strategic laws – the companies’ and industrial laws. Both are in their final stages and will be issued very soon.

He highlighted the UAE’s achievements in intellectual property rights that gained prominence in the UAE in 1971 with the constitution mandating that these rights are honoured. The UAE has signed several international agreements to strengthen global cooperation and uphold copyrights. “We joined the World Intellectual Property Organization in 1975, one of the leading organizations responsible of supporting intellectual property and we are coordinating efforts with the organization.”
He added: “The UAE is reaping the rewards of its commitment to intellectual rights protection as we are regarded as the first nation in the Arab World in fighting piracy as well as in encouraging innovation. The Ministry of Economy is adopting latest technologies to provide a secured environment for intellectual property rights”.
Al Mansouri lauded the rapid growth in non oil trade between the EU and UAE, from US$17.5 billion USD in 2004 to 43.2 billon in 2008 with an annual growth rate of 25.3%. He said that direct foreign direct investment from the EU to the UAE has reached 20% in 2007 from the total direct investment.

The meeting witnessed questions and queries from the EU Ambassadors who thanked Al Mansouri on his clear explanation and they all expressed their pleasure on this transparent attitude of the UAE.

Commenting on the meeting H.E Bruno Beijer, Sweden Ambassador praised the openness of H.E Al Mansouri stating that the meeting demonstrated the commitment of the UAE government and the Ministry of Economy to highlight cooperation with the European countries. He emphasized that his country is keen to strengthen dialogue with the concerned parties in the UAE to enhance bilateral relations between both countries and to unify efforts needed to face the challenges of the global crisis.
The German Ambassador H.E Klaus Peter Brandes, emphasized that the strategic meeting with H.E Al Mansouri and the officials in the Ministry of Economy clarified the economic growth scenario of the UAE. He said the meeting set a new stage of cooperation and unifying efforts to shift into a new era of economic relations characterized by more openness and exchange of experiences across all vital sectors between the UAE and EU.

Poland’s Ambassador H.E Roman Chalaczkiewicz said that the clarity of H.E Al Mansouri creates credibility in these global economic circumstances. “The dialogue that we witnessed with the UAE officials is very important for us because the UAE is the number one trade and economic partner for the EU and such interactive meetings will contribute to strengthen our bilateral relations to its highest levels,” he added.

The Spanish Ambassador H.E Gonzalo De Benito thanked H.E. Al Mansouri for the friendly gathering that reflects the keenness of the UAE leadership to foster dialogue. He said these meetings will enhance trust in the UAE economy, which is a strategic partner for the EU.