Business | Economy
Uneven economy fuels job crunch
Unemployment among UAE nationals in Abu Dhabi is the result of the imbalanced geographic distribution of economic development, an official at the emirate's Department of Planning and Economy said yesterday.
- By Ahmed A. Elewa, Senior Reporter
- Published: 23:43 August 26, 2008
Abu Dhabi: Unemployment among UAE nationals in Abu Dhabi is the result of the imbalanced geographic distribution of economic development, an official at the emirate's Department of Planning and Economy said yesterday.
"The UAE is creating 300,000 jobs every year, yet it cannot deliver 10,000 jobs for its nationals to address an unemployment rate as high as 12 per cent because of these imbalances," Dr Ahmed Zain Al Manawi, economic expert at the department, said.
"In places such as Beda' Zayed, for instance, there are only three branches of banks employing 10 people, which reflects the limited investments there," he explained.
More than 55 per cent of 300,000 companies and establishments registered in the UAE belong to foreigners, while 45 per cent of the managers in the private sector are Indians, according to the expert.
The gross domestic product (GDP) of Abu Dhabi is growing at 21.8 per cent, in terms of current prices. In real terms, the economy expanded by more than 11 per cent, in both oil and non-oil sectors.
"Abu Dhabi has achieved a remarkable success, where we find the per capita's share of the GDP amounting to $71,230, the second highest in the world, and this will continue for years to come," Al Manawi said.
The emirate contributed 59 per cent to the country's total GDP in 2007, a figure that is expected to exceed 60 per cent this year, and go as high as 75 per cent before 2015, according to the statistics department.
"The oil sector provides for 60 per cent of the GDP, and there are plans to increase production by 40 per cent to four million barrels per day in 20 years. But there are also plans to lift the contribution of the non-oil sectors to 60 per cent within the same period," Al Manawi said.
Challenges
Outlining the challenges facing the economic growth in Abu Dhabi, Al Manawi singled out inflation to be among the most serious threats, as well as the challenge of carrying out a balanced economic development in terms of geographic distribution, sectors, gender, and so forth.
"There are also the challenges related to the Abu Dhabi Securities Exchange, which does not reflect the economic performance of Abu Dhabi, recording one of the worst declines in the world to retreat by 45 per cent in less than two years," Al Manawi said.
The department is seeking to enhance the emirate's statistical records, especially after the establishment of the statistical centre, as a necessary requirement for tracking and planning economic development.
High growth: Economy to double
Abu Dhabi's economy could grow to $179.1 billion by 2010, more than double its level in 2005 as the non-oil sector expands, although inflation poses a risk to growth, the emirate's planning council said yesterday.
The economy of the capital - the world's fifth largest oil exporter - should expand 54.4 per cent in real terms over the five-year period, and could almost double again between 2010 to 2020, the Abu Dhabi Department of Planning and Economy said in a report.
Abu Dhabi is investing windfall oil revenue from an almost six-fold increase in oil prices since 2002 into diversifying its economy away from a reliance on oil exports, funnelling money into real estate and heavy industry.
"The growth is enormous but we have a slight fear about inflation; it is diminishing growth," said Ahmad Al Manawi, an economist at the department and report author.
"Up to 5 per cent inflation is reasonable for any economy, and more than 5 per cent causes so many problems," Manawi said.
Inflation in Abu Dhabi hit 11.9 per cent in the first quarter - almost on par with its level in 2007. UAE inflation of 11.1 per cent in 2007 was the highest in at least 20 years.
- Reuters
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