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UAE marks 35 years of prosperity

posted on 02/12/2006: 1662 views

The UAE is marking its 35th National Day on Dec. 2 on an upbeat note as it braces itself for a nation-wide parliamentary elections, which will be held from mid-December this year. Throughout 35 years of federation, the UAE may rightfully boast that it is the epitome of Arab unity.

In a speech on Dec.1 2005, President His Highness Sheikh Khalifa Bin Zayed Al Nahyan paid homage to the founder of the UAE, late Sheikh Zayed Bin Sultan Al Nahyan and other Federation builders who had passed away.

He said cementing the federation and national tenacity requires enhancement of creative co-operation as currently exists between the federal and local authorities.

He pledged that the upcoming FNC's elections would be the beginning of more reformation that would ensure participation of citizens in the public national task.

"We shall present to the Federal National Council in its forthcoming round a proposal for revision of the UAE Constitution with the objective of reinvigorating its role and consolidating its jurisdictions to allow it cope with the requirements of the next phase..," the President noted.

Government strategies

Formed on Feb. 9, 2006 under the premiership of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Ruler of Dubai, the new cabinet has ratified an overall strategy for the next phase in a bid to upgrade the governmental performance to international standards.

The strategy is designed to cover selective topics within key sectors, which enjoy priority at the federal level, including social development in such fields as health care, education, human resources, demographic structure and social welfare.

The economic development sector will endeavour to develop policies that should strengthen the national economy's competitive capabilities, while a federal policy will be developed to modify the infrastructure sector and bolster policies relating to environment, natural resources and water.

Council for Services

A ministerial council for services was set up under the chairmanship of Sheikh Mansour Bin Zayed Al Nahyan, Minister of Presidential Affairs. The 11-minister Council is tasked to effect the government's master policy, issue binding instructions, review progress reports by ministries and government institutions to ensure their compatibility with the policy.

The council is also assigned to follow up the enactment of laws and regulations and give instructions on issues referred to it by the President of the state, cabinet or prime minister, in addition to other tasks.

National Security

On June 13th, 2006, the President issued a law establishing the Supreme Council for National Security with the aim of maintaining the Federation's security and integrity.

With the President as its chair and Vice President its deputy chairman, the Council's membership comprises the Deputy Supreme Commander of the Armed Forces and Defence, Foreign, Interior and Presidential Affairs Ministers, Chief of the State Security Organ, Chief of the Armed Forces' Staff and the National Security Advisor. Another Presidential decree was issued in October 2006 appointing Sheikh Hazza Bin Zayed Al Nahyan as National Security Advisor reporting directly to the Chairman of the Supreme Council for National Security.

Economic development

The UAE has made remarkable progress in most of the social development indices. The UAE ranked forty first in the Human Development Index (HDI), according to UN Human Development Report for 2005, compared to its forty sixth position in 2004.

This progress was reflected in many aspects of development in the country, including rising per capita income, an increase in the government expenditure on education and health services, higher percentage of women's participation in the work force, lowest infant mortality rates and the elimination of dangerous diseases.

In the full conviction that the human being is the real wealth of the country, the leadership in the UAE has attached great importance to the development of human resources and providing social welfare to all categories of the society, especially the youth, vulnerable persons including handicapped and the elderly.

In addition, the UAE has been following a largely successful, stringent diversification economic strategy away from oil dependency in order to define itself as a regional and international trading hub.

Record oil revenues have lifted the UAE's Gross Domestic Product (GDP) to Dh 485 billion in 2005, up by 26.4 per cent over 2004, impacting positively on the balance of trade and creating a surplus in government's finances for the first time in 20 years, according to the Economic Performance Report 2005.

The report, released by UAE Ministry of economy in June 2006, mentioned that the share of the non-oil sector reached 64.3 per cent of the total GDP last year. It highlighted the significant role of foreign trade as it contributed 149 per cent to the UAE's GDP, which reflects an outward-oriented economy.

The report also anticipated commodity exports to increase by 21 per cent to hit Dh 514 billion, commodity imports to rise by 3 per cent to reach Dh 306 billion and UAE's GDP to hike to Dh 597 billion in 2006.

As for exports and imports, the state's volume of foreign trade in 2005 reached about Dh 720 billion compared with Dh 530 billion in 2004. The exports volume recorded about Dh 424 billion in 2005 after it was about Dh 304 billion in the previous year. Meanwhile the imports grew from Dh 226 billion in 2004 to Dh 297 billion in 2005.

It worthwhile to mention that the participation of Crude oil and petroleum exports constituted 47.7% of the total exports for the year 2005. Investment The UAE has become a centre of attraction to investors and businessmen from all over the world. The UNCTAD World Investment Report 2005 ranked the UAE in the 22nd position among the best economies in regard to attracting direct foreign investments (DFI).

Meanwhile, the Economic Performance Report 2005 of the Ministry of Economy showed that the UAE carried out investment projects worth Dh 93.7 billion last year. Investment ratio to GDP was 19.3 percent -- a percentage which reflects the country's due care and support for investment with the aim of maintaining the development driving force.

The private sector maintained its premier role in the investment sector achieving 50.9 percent of the total investment in 2005, against 34.7 percent for the public sector. Government investment accounted for 14.4 per cent.

The productive services sector carried out investment worth Dh 40.7 billion. Leader of the sector - transportation, storage and communications- emerged as the largest investor, pumping Dh 17.7 billion in 2005. The ultra-modern infrastructure of this sector has given the UAE a leading position in introduction of advanced technology.

The World Economic Forum (WEF) ranked the UAE in the first slot in the Arab World and 28th position worldwide in terms of preparedness for technology applications.

Investment ploughed by the real estate was in the tune of Dh 10.4 billion, reflecting the boom in this sector at the levels of the federal and local governments and the private sector.

With 7.9 percent of total investment, the government, social and private services pumped in Dh 7.4 billion. Most of the funds were allocated to complete basic services infrastructure in the educational, health, social and security sectors.

The federal budget for 2007 stood at 28.4 billion and maintained a zero deficit for the third running year. The budget lists both revenues and expenditure at Dh 28.425 billion, compared with Dh 27.878 billion in 2006.

The budget for 2007 focuses mainly on education which makes up Dh 7.1 billion or 33 per cent of the total budget. It is followed by security and justice, constituting 15.7 per cent at Dh 3.3 billion. Dh 1.5 billion has been allocated for health, representing 7.1 percent, while almost similar amounts are earmarked for social affairs, infrastructure (Dh 1.497 billion) and projects (Dh 1.1 billion or 5.2 percent).

In its last report issued in May 2006, The IMF praised the economic performance of the United Arab Emirates and its economic policy, especially, in exploiting the petroleum resources for promoting other economic sectors as well as developing human resources. The report described the financial policy in the state as a wise policy. It also commended the monetary policy with respect to the Supervisory control method over the monetary sector and the strength of banking sector and monetary authority method in the state regarding combating money laundering and finance of terrorism.

It also lauded the state's supporting the private sector, and activating its role in the national economy and relative legislations, by adopting the open economy policy and encouraging private investments which resulted into the national economic growth in high frequencies.

Foreign trade

The UAE is intensifying its efforts to strike economic and trade partnerships and free trade agreements with its strategic partners and major economic blocs around the world.

At the top of the UAE's list of strategic partnership priorities come Germany, France, South Korea and other European and Asian countries. Negotiations are currently underway with the US to conclude a free trade agreement with the world's economic giant.

The UAE is also engaged in collective talks between the Gulf Co-operation Council (GCC) on the one hand and each of the European Union (EU), the European Free Trade Association (comprising Iceland, Lichtenstein, Norway and Switzerland), China, Pakistan, India and Turkey on the other.

Such a policy is in harmony with a global trend towards forging strategic partnerships, liberalisation of trade and open markets since the volume of foreign trade is deemed an influential factor for the country's economy and an indicative of the economic strength.

The UAE's foreign trade with the outside world has made great stride in recent years. Figures indicate that foreign trade represents 149 per cent of the Gross Domestic Product (GDP) and, with the country getting more engaged in the global economy, this is expected to gather more speed during the current year. Commodity exports are anticipated to top Dh 514 billion, growing by 21 per cent from 2005 with oil's share forming 40 per cent of these exports.

The commodity imports this year are set to surge by 3 per cent from last year to reach Dh306 billion.

Statistics further show that the trade balance surplus in 2005 has jumped to Dh 127 billion from around Dh 69 billion in 2004.

The Economy Ministry's data reveal that India is UAE's No.1 trade partner with non-oil exports to the South Asian country in 2004 reaching Dh 2.33 billion, that was 21.5 per cent of UAE's total exports that year. Imports from India in the same year touched Dh 26.70 billion, or 15.7 per cent of the total imports.

Iran ranked second in terms of UAE's exports totalling Dh 1.26 billion, followed by Saudi Arabia with Dh 693 million and China Dh 667 million.

China, however, is the UAE's second major trade partner in terms of imports which amounted to around Dh 20 billion, or 11.7 per cent, followed by Japan with Dh16 billion (9.8%) and US with Dh 14 billion (8.3%).

At the forefront of all trade talks emerge that with the USA, with whom the UAE seeks to reach a free trade agreement, which, if struck, will enable the UAE's economy to sustain its steady growth as the second largest in the Arab world, striving to become the largest of all economies in the region. (Emirates News Agency, WAM)


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