Abu Dhabi: The UAE’s economy is resilient to low oil prices, said Sultan Saeed Al Mansouri, Economy Minister, on Tuesday.
“Oil had so far limited impact on the economy and that major infrastructure projects in Abu Dhabi and Dubai will continue,” Al Mansouri told reporters on the sidelines of the Federal National Council’s session.
Al Mansouri said a diversification policy under which the country’s dependence on oil steadily decreases year after year had helped the UAE neutralise the oil price decline.
Oil revenues currently contribute 30 per cent to the UAE’s GDP, a drop from 90 per cent in the 1970s.
The UAE has continued to benefit from its perceived safe haven status and large fiscal and external buffers that have helped limit negative spillovers from lower oil prices, sluggish global growth, and volatility in emerging market economies, the International Monetary Fund (IMF) said in August last year.
In a new update on the UAE’s economy, the IMF noted that the country’s non-oil growth remained robust at 4.8 per cent in 2014, driven by construction, notably owing to capital spending in Abu Dhabi, and services underpinned by Dubai’s transportation and hospitality sectors.
The UAE’s dependency on oil will be just 5 per cent of GDP by 2021, Shaikh Saif Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Interior, told the Government Summit in February last year.
Al Mansouri said the zero-deficit 2016 budget reflected the limited impact of the low oil prices.
“The UAE is the least affected country by low oil prices as non-oil sectors contributed nearly 69 per cent of the GDP,” Al Mansouri said.
He added that the Federal Arbitration Law was expected to be issued this year.
“The arbitration law is expected to come out this year. Draft law is with the Justice Ministry now,” Al Mansouri said.
At present, the UAE federal law that deals with arbitration is limited to a few articles of the UAE Civil Procedure Code. These articles relate to the formalities of an arbitration agreement, the constitution of the arbitral tribunal, the grounds upon which a court could dismiss an arbitrator, and procedural requirements relating to the enforcement of awards and grounds upon which an award can be challenged.
Courts may order temporary or conservative procedures to be taken either prior or during the arbitration (though the arbitration must stop while those orders are being made).
No arbitration can be conducted for matters on which “reconciliation” can be made.
The draft law provides that the parties are free to agree to a requirement that an arbitrator be of a certain nationality, but otherwise there is no nationality requirement.
The law provides that in international arbitrations, none of the arbitrators can be of the same nationality as any of the parties. It is, however, unclear whether this only applies where the parties are unable to agree on the selection of arbitrators.
It indicates that all arbitrations will be conducted in Arabic unless the parties agreed otherwise (or where the tribunal determines another language or languages to be used).
