UAE recovery sluggish but certain

A combination of higher oil prices, a larger non-oil sector and greater foreign direct investment (FDI) could help the United Arab Emirates (UAE) overcome woes from the global economic recession and the Dubai debt crisis. The country is making a slow but certain recovery with the International Monetary Fund forecasting growth of 0.6 percent this year against a contraction of 0.7 percent in 2009. Abu Dhabi, whose non-oil sector grew by 6.3 percent compared to a contraction of 1.3 percent in the corresponding sector in Dubai, is best placed to spearhead the economic push. Overall, the UAE's non-oil growth was just 1 percent in 2009. There are no grounds for a gloomy outlook for the UAE as the country has strong fundamentals to withstand shocks and move forward. Abu Dhabi, one of the leading oil producers in the country, is sound and expected to develop radically in the next few years, taking the lead over other emirates. The emirate has declared it will give priority to infrastructure in government spending as part of its long-term development blueprint intended to achieve sustained growth. Infrastructure is a main driver for development and building. It has gained more importance now in view of the realisation that the emirate will not achieve this year its planned annual seven per cent growth of its Vision 2030. Focus on the non-oil sector Abu Dhabi has been attending to the non-oil sector with what some would say vengeance to make up for the inadequate attention it paid in the past. There have been investments in the aluminium and cables sectors; industrial zones are being expanded with a focus on metals and petrochemicals, and a new manufacturing free trade zone is likely to be set up before long. The tourism and hotel sector is expanding as well. The UAE, in general, will increase public spending to ensure growth in the economy, Saudi bank Samba stated. Increasing oil revenues on the back of a projected average crude price of $75 will enable the UAE authorities to comfortably increase spending and investment in infrastructure aimed at diversifying the economy, the report said. The UAE is keen to spread the word that it is still good for business. However, government authorities will be more prudent on borrowings. Federal ministers are campaigning for investments and partnerships with the Minister of Foreign Trade Sheikha Lubna Al Qasimi particularly energetic in that regard Climate of openness Despite the economic slowdown worldwide, the climate of openness has allied with resolve to boost strategic partnerships and economic diversification in order to unfold more investment opportunities and mitigate investment risk. This makes UAE an ideal investment haven, Sheikha Lubna told CEOs of major French companies. They could look into the huge investment potential and opportunities in renewable energy, technology and medium-scale enterprises, she advised. The UAE has become a main venue for major world companies and is attracting hundreds of multi-national firms every year by offering an integrated package of investment incentives and infrastructure, she said. On the back of construction boom UAE witnessed the unparalleled development and revolution in the past few years, mainly due to its high oil wealth. The rapid economic development of the country has been resulting in extraordinary growth in construction and infrastructure industry, which has attracted investors from all around the world. According to Research and Markets latest report, "UAE Steel Industry Analysis," steel demand in the country has expanded rapidly over past few years, on the back of construction boom, cheap and reliable gas and energy supply, growing investment in real estate sector, economic growth and rising income level. Steel consumption in the country is expected to reach 15 million tonnes by the end of 2012. The research firm founAir Jordan 1