A note on the state of the UAE’s Economy by Mohammed bin Rashid al-Maktoum

I wanted in this brief note to highlight the current status of the United Arab Emirates' economy and to outline the course we are steering in the period to come. It is my aim this note, released ahead of the annual statistical reports, will increase transparency and accessibility for those interested in our national economy and will also give guidance regarding the most important economic indicators and trends in the UAE.

Before reviewing the most important economic indicators and variables I wish to refer to several key points: Firstly, the UAE has anticipated many global economic scenarios, and built a range of economic policies in order to be better prepared and equipped to manage a range of variables; it has diversified its economy to reduce its dependence on oil, built more balanced management of global economic forces, and established a clear policy of openness and cooperation in order to align with the interests of other global players.

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

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

Fourthly, the major challenges facing the region make it a necessity to implement a clear and executable Arab economic vision, launch significant economic projects, and utilise the human and natural resources of the Arab World more effectively. We must address the imbalances of the region in a comprehensive manner, covering economics, politics and security. We must understand that real and sustainable development is the only guarantee for future stability in the Arab world.

I move with you now to review the most important indicators of our state's economy, where the new numbers from the National Bureau of Statistics, which will be announced in the few days to come, indicate that 2014 was the strongest year economically for the UAE since its foundation, with a growth in Real Gross Domestic Product of 4.6%, and with Nominal Gross Domestic Product reaching Dh 1.47 trillion.

We expect to continue to achieve strong growth in 2015 as work continues on a large number of infrastructure projects, such as the expansion of national airports totalling Dh 100 billion and building the Union Rail Network, a project worth Dh 40 billion, in addition to roads and transport projects, new and improved tourist facilities, electronic infrastructure, real estate, and financial services.

The non-oil sector has experienced positive growth during the first quarter of 2015. The continuing rise in government spending and investment and the increase in government and private capital, which amounted to Dh 353 billion in 2014, also indicate continued strong growth in 2015.

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

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

By developing new sectors, such as the Islamic Economy, and investing in innovation, content development and other such activities, our aim is to build towards economic diversity in 2021 in order to strengthen the economic and financial stability of the UAE and fortify ourselves against the inherent fluctuations and instabilities of world markets.

The UAE in 2014 also continued to capitalise on its strategic location and strong infrastructure in enhancing its import and export systems, as our exports – inclusive of re-exports – reached Dh 376 billion, while our imports reached some Dh 700 billion. The UAE continues to lead the Middle Eastern countries as the region's largest trading partner with the world's top 10 global economies.

The strategic plans I have launched since I assumed the role of Prime Minister in 2006 have achieved many of their goals and objectives, as national production has risen from Dh 1.3 trillion in 2006 to Dh 2.5 trillion in 2014.

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

Production reached some Dh 450 billion in the manufacturing industries in 2014, up from Dh 230 billion in 2006, and production in the construction sector reached Dh 295 billion in 2014, up from Dh 155 billion in 2006.

The UAE in 2014 continued to attract great talent, leading the world as a preferred destination for talent and skills according to reports, with total compensation paid to employees in 2014 reaching Dh 410 billion in all sectors, including Dh 82 billion in the government sector.

The UAE will continue implementing a long-term plan facilitating our transition to a knowledge economy – an area where the UAE is currently leading the Arab World – as we aim to triple national spending on research and development before 2021, increase the number of workers in that sector from the current 22% to 40% of the workforce over the next six years, and take the UAE from being the top of Arab countries in the Global Innovation index to be within the top ten countries in the world in 2021 in that same index.

The decrease in the oil prices has had a positive impact on the growth of many economic sectors in the UAE in 2014, as current-price growth rates for the transport and storage sector amounted to 10%, up from 7.9% in the previous year; the wholesale and retail sector was at 8%, up from 6.8% in the previous year, and the construction sector 6.1%, a substantial rise from 3.4%. This shows clearly the UAE's economy is distinguished by its resilience.

The financial sector has seen double-digit growth in 2014 of some 15%, with contributions to gross domestic product reaching Dh 122 billion. Our banking sector also continued its positive growth and expansion as the total number of banks active in the country reached 57 banks in addition to the presence of 122 representative offices of foreign banks and total assets of about Dh 2.38 trillion at the beginning of 2015.

In the tourism sector, the UAE has continued to launch a wide range of tourism projects and entertainment destinations with some 20 million tourists visiting the seven emirates according to statistics issued by the local tourist authorities. The sector continues to consolidate the country's status as one of the world's most important travel destinations with the support of the transportation, aviation, marketing and exhibitions industries and bolstered by the UAE's strong international relations and many international friendships.

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

Mohammed bin Rashid Al Maktoum Vice President, Prime Minister of the UAE, Ruler of Dubai 20th of June, 2015.