“Our vision is to transform our nation into a knowledge economy driven by a culture of innovation and creativity - this is in fact one of the strategic pillars of the UAE Vision 2021.”
In this month’s cover story LEADERS Middle East speaks to HE Sultan bin Saeed Al Mansouri, the UAE Minister of Economy. He took over the ministerial portfolio in February 2008, having previously held the post of Minister of Transport and Minister of Development.
He is also Chairman of several high-profile public and private organizations, including the Federal Civil Aviation Authority, the Securities and Commodities Authority, the Insurance Authority, the Supreme Committee for Consumer Protection, and the Standing Committee for Economic Affairs of the Supreme Committee for National Security, Coordinating and Economic Cooperation Committee and the National Committee for the Follow-up Program of Investment Climate.
Sultan bin Saeed Al Mansouri started his career as Senior Airport Coordinator at the Dubai Civil Aviation Authority, then rose up the ranks to Vice President Operations at Authority during the period of 1988 – 1991. He was Director of the Dubai Cargo Village during the period of 1991 – 1996, then Deputy Director General - Dubai Chamber of Commerce & Industry during the period of 1996 – 1998. He joined Saeed & Mohamed Al Naboodah Group as Group Managing Director from 1998 – 2004. He was appointed Vice President of Dubai Islamic Bank during the period of 1999-2008, and Chairman of Aman (Dubai Islamic Insurance Company) during the period of 2002-2008. He was also member of GCC Consulting Authority for Supreme Council.
He has a degree in Industrial Engineering and Management Systems from Arizona State University and was educated in Computer System Analysis at the Institute of Computer Technology in Los Angeles in the United States..
Sultan bin Saeed Al Mansouri has witnessed some of the most difficult crises of the UAE economy following the 2008-2009 global financial meltdown, but also has been one of the key players in rejuvenating the economy and bringing it back on track for greater growth and prosperity as witnessed by increasing FDI every year, to an expected $14.4 billion in 2014.
Today the UAE is proud of its achievements, as it has some of the fastest growth rates in the world, with GDP rising from $1.8bn in 1971 to an expected $381.2bn in 2014.
Investment in Dubai is expected to increase with the preparations for the Dubai Expo 2020, which is forecast to add $23 billion to the Dubai economy, attracting 25 million visitors and creating over 270,000 jobs.
Furthermore the UAE government announced an unprecedented economic expansion of more than AED 100 billion worth of public and private sector projects to improve the economy.
Islamic finance has also been a key focus of the UAE government which has supported initiatives to access finance currently valued at more than $1.6 trillion globally. The UAE is already one of the biggest markets in the region for Islamic banking and has played a key role in financing corporate expansion, infrastructure projects and residential properties.
HE Sultan bin Saeed Al Mansouri shares his insights on the UAE Vision 2021, which outlines the key socio-economic development goals of the UAE, as he says the country remains committed to its ongoing development and to the diversification of its economy, to reduce to its dependence on oil.
UAE’s economy standing strong
H.E. Eng Sultan Al Mansouri took office at a time when the world economy was starting to show volatility. Moving in as the new Minister of Economy of the United Arab Emirates in February 2008, H.E. Eng. Sultan bin Saeed Al Mansouri was aware of the tremors from the credit crisis in the US which started in 2007. However he could not have imagined the scale of its impact on the UAE economy as it shook under storm of world financial crisis which peaked in September 2008 when stock markets around the globe crashed, continuing to affect the volatile markets in 2009.
In 2009 the UAE’s retail, manufacturing, tourism, financial services, manufacturing and real estate sectors were severely affected by the downturn in global growth, especially in Dubai, where real estate prices fell by as much as 50% and many large-scale projects were stalled.
Minister Sultan bin Saeed Al Mansouri focused on turning the situation around, identifying the right structures and incentives to attract the continued flow of FDI and boost national investment to reverse the recession. An engineer by profession, who started his career in civil aviation, he indeed ‘engineered,’ together with his colleague ministers, the policies needed for the resuscitation of the UAE economy following the deep tremors of the 2008-2009 global economic crisis.
In this process the leaders of the federal government of the UAE also showed solidarity, and Dubai, was aided by Abu Dhabi with a $10 billion bailout, together with the sale of $10 billion in Dubai bonds to the national central bank based in Abu Dhabi as well as a $5 billion loan by two Abu Dhabi-owned commercial banks in 2009.
The memories of economic instability are now firmly in the past. 7 years later Minister Sultan bin Saeed Al Mansouri sits in the same office, with a calm air, having weathered a storm and learnt the secrets of fighting it.
The FDI figures of the past three years are promising. The UAE economy is booming again with FDI flow surging to 21% to $9 billion in 2012, and then rising 9% in 2013, to $10.5 billion, and in 2014 is expected to reach $14.4 billion. The UAE is once again a leading FDI destination, overtaking Saudi Arabia as the top FDI recipient in GCC in 2014.
One major investment drive is the Dubai Expo 2020 project, which is expected to yield AED89 billion ($24.2 billion) in added economic activities. Already in 2014, real estate was boosted as developers launched 42 developments in advance of the Expo, which will house nearly 11,250 units.
Minister Al Mansouri sees other opportunities for strengthening the UAE’s status as trade and tourism hub as a crucial to the economic growth, and in particular promoting the UAE government’s Vision 2021, for UAE to be among the best in the world in ease of doing business, innovation, entrepreneurship and R&D indicators.
Vision 2021 aims to create a Competitive Knowledge Economy for the UAE, which focuses on the UAE becoming the economic, touristic and commercial capital for more than two billion people by transitioning to a knowledge-based economy, promoting innovation and research and development, strengthening the regulatory framework for key sectors, and encouraging high value-adding sectors. These will improve the country’s business environment and increase its attractiveness to foreign investment.
Vision 2021’s National Agenda also aims for the UAE to be among the best in the world in entrepreneurship by unlocking the potential of nationals and enables them to be a driving force of the UAE’s economic development through small and medium enterprises in the private sector. This will be developed through the promotion of an entrepreneurial culture in schools and universities to foster generations endowed with leadership, creativity, responsibility and ambition.
An exclusive interview with HE Eng Sultan Bin Saeed Al Mansouri
The UAE has witnessed very positive growth rates over the last few years, after successfully navigating through the global financial crises of 2008-2009. What are the factors you believe have kept the UAE’s economy so strong?
The importance of diversified and sustainable development was realized early on by the UAE leadership. The UAE Vision 2021 focuses on creating national policies that will help achieve sustainable development. The country’s resurgence following the global financial crisis can be attributed to the directives of our wise leadership and its long-term strategy in devising policies that helped build a competitive, diversified and sustainable economy.
We have embarked on an ambitious economic diversification strategy that has increased the contribution of our non-oil industries to around 70 percent of the GDP. We are diversifying our economy by investing in industries of the future such as healthcare, transport, logistics, hospitality, technology, tourism, and renewable energy that will drive economic development. We are particularly focused on developing value-added knowledge-based industries.
The UAE GDP is poised to grow by 4.5 to 5 percent - a pace faster than previous forecasts. The economy is already on an upward trajectory, stimulated by three critical sectors: huge non-oil sector investments, trade, and the booming tourism industry.
The country’s non-oil trade surged to reach AED1.3 trillion in 2013. This figure includes imports, exports and re-exports. It is worth highlighting that political stability, balanced economic policies and an investment-friendly environment are key incentives for healthy growth.
Your Excellency, the UAE is regarded as a top destination for investment and trade. What has made the UAE so attractive? What are the country’s objectives when it comes to foreign direct investment inflows into the country?
The UAE enjoys many advantages: the country offers a strategic geographical location and leading position as a global re-export hub, a business-friendly environment that encourages investments, as well as open and enabling policies and legislations. The UAE today also provides investors and industries the benefits of its state-of-the-art ports and airports and an advanced logistics infrastructure.
Our economy is expected to attract around US$12 billion in foreign direct investments by the end of 2014, which is a 20 percent increase over 2013, spread across several non-oil sectors.
Dubai’s successful bid to host the World Expo 2020 will have a tremendous positive impact on the future of the emirate and further consolidate Dubai’s reputation among the leading business centers of the world. What will be the impact of hosting Expo 2020 on the UAE? What developments do you envision in the UAE post hosting Expo 2020?
Expo 2020 will be a driving factor for the economy of Dubai and the entire UAE. The Expo will be an additional factor in accelerating the diversification of the economy through increasing the impact of non-oil sectors. Hosting Expo 2020 will provide 270,000 job opportunities and attract more than 25 million visitors, triggering unprecedented growth in the country’s tourism sector. Expo 2020 will also contribute to an increase in FDIs to the UAE and offer a unique opportunity to develop the SME sector in Dubai and the wider UAE.
The UAE following the hosting of Expo 2020 will continue its relentless efforts toward sustainable development and aim to consolidate its status as a regional and international hub for trade and business. While the oil sector will maintain an integral role in driving our economy, we are currently focused on maximizing growth from the non-oil sectors. Our efforts in diversifying the economy have helped the UAE register remarkable growth in the past few years and we hope to stay the course in the future.
What is the role that leadership plays in all spheres of society in this country?
The UAE Vision 2021 is built on several strategic pillars. One of key pillars is to shape the UAE into a competitive and diversified economy that will be driven by a skilled and qualified Emirati workforce.
To achieve this priority we are investing extensively in our young national graduates towards integrating them into the mainstream workforce.
Our leadership has implemented a great model to empower young Emiratis, and I am confident we will see the shaping of a cadre of highly capable national leaders with competencies to drive our development process forward in the 21st century. We also aim to build capacities in our young people through effective collaborations with the public and private sector partners in the UAE and abroad, as well as by adapting global experiences and best practices as required.
Your Excellency, you have identified youth development as a top priority area with the UAE leadership. What are some of the key evidences of the work being done in this domain?
We firmly believe that our youth are the leaders of tomorrow. Our vision is to transform our nation into a knowledge economy driven by a culture of innovation and creativity - this is in fact one of the strategic pillars of the UAE Vision 2021. Towards articulating this vision, significant efforts and the investments have been made to support entrepreneurship and the small and medium enterprise sector.
The government has created forums and platforms for enabling youth endeavors, whether through funding or collaboration with like-minded entities.
The Khalifa Fund, The Dubai SME 100, the Mohammed Bin Rashid Establishment for SME Development and the Hamdan Innovation Incubator - are examples of such initiatives.
In October this year, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, announced the National Innovation Strategy with the ambitious mandate to transform our country into one of the world’s most innovative countries within seven years. The first phase of this strategy includes 30 national initiatives that will cascade across all aspects of the economy.
Also, projects such as the Expo 2020, IRENA and the UAE Space Mission are also spotlighting the nation to a global audience, and bringing us international recognition.
Your Excellency, how optimistic are you for the future of the UAE in 2015?
The UAE is well on its way to reduce its dependence on oil in the short-term future. The impact of the volatility of oil prices on the economy has perceivably decreased over the years, as oil is becoming less crucial to the country’s GDP.
In line with the UAE Vision 2021, the country remains committed to its ongoing development and to the diversification of its economy.
The positive performance of the UAE economy is set to continue in the coming years with a high growth rate between 4.5% and 5% projected for the period between 2015 and 2018. The GDP is expected to reach AED$1.7 trillion in 2018, maintaining its position as the second largest Arab economy.
We will also continue to develop synergies with public and private sector organizations to facilitate businesses and drive economic opportunities.