Abu Dhabi's 'sustained growth' plans

Abu Dhabi: Ever growing

What do you do if you are trying to wean your country off a oil-reliant economy? If you're the emirate of Abu Dhabi, you give priority to infrastructure construction from government spending over the next few years to achieve sustained growth.

With its neighbour's, Dubai, credit crisis fresh in its memory, not to mention the financial crisis, Abu Dhabi has set out to rearrange its priorities to make sure that it is not similarly caught short, not to mention achieving a seven percent growth over the next two decades.

Speaking at the Abu Dhabi Economic Forum yesterday, Mohammed Omar Abdullah, Undersecretary of the Abu Dhabi Department of Economic Development said that the emirate would go ahead with its Vision 2030 infrastructure stimulus plans maintaining that public spending would not be dictated by oil price fluctuations.

"I can tell you that government expenditure would continue unabated but I don't think there will be 30 per cent growth in spending this year as some reports say. It will grow this year but not as much as 30 per cent," he said.

"Regarding priorities, of course, they change by time... Our priority in public spending now is the infrastructure which we need to continuously develop and update because it is the main driver of economic sectors. Other priority sectors will be health and education, which are vital for a strong economy."

Vision 2030

Abu Dhabi has implemented a host of projects in the city and outlying region for its 2030 Vision project. The emirate has invested over US$1 trillion into works, with US$5 billion being spent on projects in the city itself and another $6 billion on major roadworks.

Currently, Abu Dhabi's biggest projects include Saadiyat Island, another major offshore development costing US$28 billion, the US$22 billion Masdar City project, billed as the first zero-carbon, zero-waste city and the Khalifa City project. This is the single biggest project in the capital and has a budget of US$40 billion.

All of these projects were designed to give the emirate viable growth rather than continue to be reliant on oil sales.

"When we talk about our economic vision, we are talking about a long journey stretching for 20 years from now," Abdullah said.

"It is normal that this period will see some unexpected developments, which we should handle seriously to correct the path... now we have set a growth target of 6-7 per cent but that does not mean this level will continue through the next 20 years," he said.

"This march towards 2030 could face some unexpected developments and, therefore, we have to be prepared to deal with them. I think the ultimate goal is to maintain growth in the economy and ensure that this growth remains stable, effective and sustained based on a stronger private sector and expansion in the non-oil sector's contribution to gross domestic product."

He did however stress that while growth is desirable and weaning the country off its oil sales is important, it is not the main aim of the investment.

"The main aim is to create a stable and viable economy in the emirate of Abu Dhabi. Growth could be below five or six per cent but it has to be stable and sustainable... As I said, we are dealing with a long-term economic vision not a short term plan."

Abu Dhabi has the largest economy in the UAE, accounting for around 52.7 per cent of the country's GDP in 2008.

Relevant articles:

Abu Dhabi - top GCC infrastructure spender | Abu Dhabi's $2bn power need | Abu Dhabi puts $1tn into infrastructure

Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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