A note on the State of the UAEs economy byMohammad Bin Rashid Al Maktoum

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Dubai: His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Saturdayreleased a note on the UAE economy. The note follows in full:

I wanted in this brief note to highlight the current status of the United ArabEmirates economy and to outline the course we are steering in the period tocome. It is my aim that this note, released ahead of the annual statisticalreports, will increase transparency and accessibility for those interested in ournational economy and will also give guidance regarding the most importanteconomic indicators and trends in the UAE.

Before reviewing the most important economic indicators and variables I wish torefer to several key points:

Firstly, the UAE has anticipated many global economic scenarios, and built arange of economic policies in order to be better prepared and equipped tomanage a range of variables; it has diversified its economy to reduce itsdependence on oil, built more balanced management of global economicforces, and established a clear policy of openness and cooperation in order toalign with the interests of other global players.

Secondly, 2014 was the strongest year economically for the UAE, and thecountry is set to continue to perform strongly in 2015. Today we have a robustand diversified economic base, great confidence in the environment and thestability of our country, sureness and expertise to deal with a range ofscenarios, and great optimism about the future and the projects we havelaunched.

Thirdly, there is a regional need for a real economic and developmentalmovement, and serious steps must be taken to achieve economic integration inthe Gulf to ensure the stability of the whole region. I am confident that the futureof the Arab World is dependent upon realising a great developmental andeconomic revival, led by the Gulf States working in cooperation and achieved incooperation with our brothers and friends.

Fourthly, the major challenges facing the region make it a necessity toimplement a clear and executable Arab economic vision, launch significant

economic projects, and utilise the human and natural resources of the ArabWorld more effectively. We must address the imbalances of the region in acomprehensive manner, covering economics, politics and security. We mustunderstand that real and sustainable development is the only guarantee forfuture stability in the Arab world.

Gross Domestic Product

I move with you now to review the most important indicators of our stateseconomy, where the new numbers from the National Bureau of Statistics, whichwill be announced in the few days to come, indicate that 2014 was the strongestyear economically for the UAE since its foundation, with a growth in Real GrossDomestic Product of 4.6 per cent, and with Nominal Gross Domestic Productreaching Dh1.47 trillion.

We expect to continue to achieve strong growth in 2015 as work continues on alarge number of infrastructure projects, such as the expansion of nationalairports totalling Dh100 billion and building the Union Rail Network, a projectworth Dh40 billion, in addition to roads and transport projects, new andimproved tourist facilities, electronic infrastructure, real estate, and financialservices.

The non-oil sector has experienced positive growth during the first quarter of2015. The continuing rise in government spending and investment and theincrease in government and private capital, which amounted to Dh353 billion in2014, also indicate continued strong growth in 2015.

The UAE will also adhere to its long-term strategy to diversify its nationaleconomy, as the non-oil sector has achieved strong growth rates in GDP (atcurrent prices) of 8.1 per cent in 2014. The contribution of the non-oil sector tothe national economy has reached 68.6 per cent of the constant-price GDP.

We have put in place all the necessary plans to take that contribution to as highas 80 per cent in 2021 through intensive investment in the industrial andtourism sectors, air and maritime transport, import and re-export, as well assupporting a range of projects and initiatives based on the knowledge economy.

By developing new sectors, such as the Islamic Economy, and investing ininnovation, content development and other such activities, our aim is to buildtowards economic diversity in 2021 in order to strengthen the economic andfinancial stability of the UAE and fortify ourselves against the inherentfluctuations and instabilities of world markets.

Trade

The UAE in 2014 also continued to capitalise on its strategic location and stronginfrastructure in enhancing its import and export systems, as our exports inclusive of re-exports reached Dh376 billion, while our imports reachedsome Dh700 billion. The UAE continues to lead the Middle Eastern countries asthe regions largest trading partner with the worlds top 10 global economies.

The strategic plans I have launched since I assumed the role of Prime Ministerin 2006 have achieved many of their goals and objectives, as nationalproduction has risen from Dh1.3 trillion in 2006 to Dh2.5 trillion in 2014.

The total manpower in the national labour market in 2014 reached 275,000citizens, and we are aiming to take that number to 460,000 citizens by 2021.

Production reached some Dh450 billion in the manufacturing industries in 2014,up from Dh230 billion in 2006, and production in the construction sectorreached Dh295 billion in 2014, up from Dh155 billion in 2006.

The UAE in 2014 continued to attract great talent, leading the world as apreferred destination for talent and skills according to reports, with totalcompensation paid to employees in 2014 reaching Dh410 billion in all sectors,including Dh82 billion in the government sector.

The UAE will continue implementing a long-term plan facilitating our transitionto a knowledge economy an area where the UAE is currently leading theArab World as we aim to triple national spending on research anddevelopment before 2021, increase the number of workers in that sector fromthe current 22 per cent to 40 per cent of the workforce over the next six years,and take the UAE from being the top among Arab countries in the GlobalInnovation index to be within the top ten countries in the world in 2021 in thatsame index.

Various sectors

The decrease in the oil prices has had a positive impact on the growth of manyeconomic sectors in the UAE in 2014, as current-price growth rates for thetransport and storage sector amounted to 10 per cent, up from 7.9 per cent inthe previous year; the wholesale and retail sector was at 8 per cent, up from 6.8per cent in the previous year, and the construction sector 6.1 per cent, asubstantial rise from 3.4 per cent. This shows clearly the UAEs economy isdistinguished by its resilience.

The financial sector has seen double-digit growth in 2014 of some 15 per cent,with contributions to gross domestic product reaching Dh122 billion. Ourbanking sector also continued its positive growth and expansion as the total

number of banks active in the country reached 57 banks in addition to thepresence of 122 representative offices of foreign banks and total assets ofabout Dh2.38 trillion at the beginning of 2015.

In the tourism sector, the UAE has continued to launch a wide range of tourismprojects and entertainment destinations with some 20 million tourists visiting theseven emirates according to statistics issued by the local tourist authorities. Thesector continues to consolidate the countrys status as one of the worlds mostimportant travel destinations with the support of the transportation, aviation,marketing and exhibitions industries and bolstered by the UAEs stronginternational relations and many international friendships.

I would like to end my note by emphasising that we are continuing to work toachieve better standards of living for our people, providing the best environmentfor our investors, and creating the best destination for our visitors. The UAEcontinues to approach the world with open arms, providing a safe, productiveand stable environment, supportive of regional and global initiatives that aim toachieve good for the people and stability for the nations of the world.

Mohammad Bin Rashid Al Maktoum

Vice-President, Prime Minister of the UAE, Ruler of Dubai

A note on the State of the UAEs economy by Mohammad Bin Rashid Al Maktoum