06 Jun 2018
Abu Dhabi has a three-year spending plan of $13.6 billion and is planning to permit freezone based firms to participate in government tenders in a bid to enhance economic stimulation.
Crown Prince Mohammed Bin Zayed Al Nayhan has affirmed the government is taking action to support new industries, facilitate business and promote tourism. He has told officials to “draw up a working plan for allocations within 90 days.”
According to Bloomberg, Gulf Arab nations are increasing their efforts to move away from oil and gas-reliant income by inciting new industries and encouraging overseas investment. With crude moving back up over $70 a barrel, this has allowed more room for spending.
Saudi Arabia – the largest Arab economy - has also unveiled plans to stimulate growth.
Ziad Daoud, the chief Middle East economist for Bloomberg Economics stated: "Higher oil prices are allowing Abu Dhabi to increase spending and boost growth, reversing some of the tightening measures taken in recent years.
"The Emirate does have plenty of space to do this without risking fiscal sustainability or the currency peg."
At present Abu Dhabi holds around 6 per cent of the world’s oil reserves. Since crude prices fell, Abu Dhabi’s non-oil economy slowed down in an attempt to bolster public finances. Official statistics showed non-oil GDP expanded 1.8 per cent last year, in comparison to 2.4 per cent in 2016 and 5.5 per cent in 2015.
Furthermore, the government has amalgamated some of Abu Dhabi’s largest banks, wealth funds and oil companies.
The economic stimulus plan aims to create a minimum of 10,000 jobs in both the public and private sectors for Emirati nationals within five years, who account for approximately 20 per cent of the Emirate’s 2.9 million population.
State-run WAM news agency affirmed that a council for advanced industries is being established “to attract and support value-added investments”.
In addition, Crown Prince Mohammed Bin Zayed Al Nayhan has instructed the issuance of dual licences for firms in freezones to allow them to take part in government tenders.