Since the oil prices took a plunge globally in 2014 and reached the $30 markup, the government of the UAE has increased its efforts of diversifying the economy. Working towards expanding its non-oil economy, the UAE has set a target of the economic growth rate of about 4% in 2017, according to the undersecretary of the Ministry of Economy.
Sultan Bin Saeed Al Mansouri, Minister of Economy said, that the UAE’s economy increased by 3.8% in 2015. At the UAE Economic Planning Forum, held in Umm Al Quwain, Abdullah Al Saleh said,“Our aim is to maintain the same level of growth [in 2017]and that it will be around 4 per cent”.
The non-oil sectors which include industrial, construction, hospitality, education, healthcare and transportation are expected to boost the economic growth of the country.
Non-oil sector contribution
The UAE government aspires to increase the non-oil sector’s contribution to 80% of the nation’s gross domestic product (GDP) in the next 10 to 15 years, currently 70% of the UAE’s GDP is contributed by non-oil sector.
Al Mansouri mentioned that the country’s economy grew by 4.6% last year, while the GDP amounted to $1.47 trillion.
“The country attracted foreign direct investment to the tune of $100 billion in the past 10 years. We have become a favoured destination and ranked number one in the Middle East and Arab region in attracting FDI by World Economic Forum. It has a positive effect on the economy,” Al Mansouri said while speaking at the Beirut Institute Summit in Abu Dhabi.
In the last ten years, the UAE successfully attracted foreign investment of more than $100 billion and is recognised as the number one destination in the Middle East and Arab region for attracting FDI by World Economic Forum.
The Arab region is confronted with lower oil prices and slow world economic growth, which is why their economy has been affected directly as the oil prices touched their lowest.
“We have to be active, proactive in the political and economic situation. There must be robust infrastructure and logistical environment to achieve growth.”
“Our economy succeeded in maintaining high growth rate based on clear progressive vision and a clear goal”, Al Mansouri concluded.
Oil companies join forces
Major oil companies, including Shell and Saudi’s Aramco, have joined forces to create an investment fund, which will be used to develop latest technologies to promote renewable energy and combat against global warming.
Furthermore, the investment fund will focus on modes to reduce the costs incurred in carbon capture and storage (CSS) technology.
In 2014, Oil and Gas Climate Initiative (OCGI) was created with the support of the United Nations as the sector has been under pressure to participate in the fight against global warming actively. Representing 20% of the global oil and gas production, 11 companies became a part of the OCGI group.
CEOs of the top oil companies are anticipated to announce how they will reduce emissions of the oil sector, the reduction depends primarily on, reducing flaring of excess gas at the fields, increasing the use of CSS and limiting the release of methane gas.
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