Abu Dhabi: A top government official spoke on Wednesday of the importance of diversifying the economy into non-oil sectors to effectively balance public finances as oil revenues dwindle in the wake of fall in prices.

Addressing a key meeting of the Organisation for Economic Cooperation and Development (OECD) in Abu Dhabi on Wednesday, Hamad Al Hurr Suwaidi, Chairman of Department of Finance, Abu Dhabi said diversification into non-oil sectors to reduce reliance on hydrocarbon related revenues is a key priority of governments.

“Investments in infrastructure projects are critical to fuel expansions in vital sectors of non-oil economy like tourism, transport, manufacturing, finance, services and trade,” he said.

From $115 per barrel in June oil prices have come down to $66.05 on Wednesday. Analysts have said the trend will continue even next year as global economies slow down and oil production increases

Al Suwaidi said addressing social challenges of all forms like the need to generate employment, meet rising housing demand and dealing with food inflation is a key priority.

“Governments have to strike a fine balance between spending for economic growth, social considerations and environmental concerns,” Al Suwaidi said.

“We need to have the best processes, methodologies, systems and models in place to achieve this. I don’t think a ‘one size fits all’ model for the transformation of budgetary policy is available. The specific measures depend on the political, social, economic and administrative complexities of each country.”

A Moody’s report determined that most Gcc countries will be able to maintain spending despite lower revenues. The report stated that, excluding Bahrain and Oman, other sovereign wealth funds can cover government expenditures for multiple years.

Al Suwaidi added that good public financial management system helps to underpin sound economic growth, sustainable social progress, good governance and higher living standards for people. “The development of a good public financial system is one of the key imperatives for any government. Abu Dhabi has been implementing the best technological solutions for the management of public finances at the lowest possible cost.”

Sultan Bin Saeed Al Mansouri, the UAE Minister of Economy recently said non-oil sectors now account for 69 per cent of the UAE’s GDP with oil accounting for the remaining third as the government continues its efforts to diversify away from oil and rely more on non-oil income.

OECD meeting is being held to discuss financial policies, best practices in the preparation and implementation of the general budget and to share experience of member countries.

The first day of the event was attended by over 70 representatives from fifteen member countries of OECD in addition to a number of experts and representatives from the World Bank and International Monitory Fund. The group strives to promote policies that will improve the economic and social well-being of people around the world. It has 34 countries as members including both developed and developing countries.