Ministry of Economy to increase industrial sector contribution in GDP

Dubai: The Ministry of Economy is looking to increase the industrial sector contribution in the overall UAE Gross Domestic Products (GDP) up to 25 per cent in the coming years, Sultan Al Mansouri, UAE Minister of Economy and Foreign Trade, said yesterday.

“The ministry’s strategy is developed to support the industrial sectors by encouraging and enhancing main and big projects in this field to increase this sector’s contribution to the GDP and reduce dependence on oil as the main source of income in the country,” he said.

This was Al Mansouri’s first media briefing, an initiative where ministers and senior government officials can explain policies and comment on current issues related to their institutions to local media organisations.

According to the UAE 2021 strategy, Al Mansouri said that the government is looking to diversify its economy focusing on different sectors.

Transformational industries contribution to the UAE’s GDP in 2011 reached 9.1 per cent and the total number of industrial firms across the reached by 5,201, employing 399,000 people.

Moreover, the ministry recorded Dh72.6 billion of investment in the industry sector in 2007 while it increased by 57 per cent, recording a total of Dh114.5 billion in 2011.

Out of these investments, 3.4 per cent belong to Gulf investors at Dh3.9 billion, while 8.3 per cent go to foreign investors at Dh9.4 billion.

Al Mansouri also highlighted several initiatives by the government to support and promote the industrial sector including tax exemptions, electronic services, database and so on.

Despite the global financial crisis, especially the economic slowdown in the Eurozone, the UAE economy grew by 3 per cent in 2012.

Merging ministries

Al Mansouri said that the Ministry of Economy is in the process of restructuring to allow full integration with the Ministry of Foreign Trade and mange all issues related to foreign trade.

Foreign trade is expected to reach Dh1.08 trillion in 2012, achieving a 17 per cent increase compared to 2011, he said.

While the value of foreign trade in free zones is estimated at Dh420 billion in 2012, increasing by 15 per cent in comparison to 2011.

He also pointed out that the inflation rate is under control and would not go beyond 1.5 per cent at its maximum while it is recorded by the UAE National Bureau of Statistics at 0.66 in 2012.

Revised legislation

Al Mansour highlighted the possibility of releasing new copies of the Companies Law, Competitiveness Law, SMEs Law and Investment Law by the end of this year.

“These revised legislation will significantly change the country’s business landscape,” he said.

“All these are in the final stages of approval and I expect the government to approve them by the end of this year,” Al Mansouri said.

He said that the Companies Law will be discussed by the National Council at the end of this month to discuses all issues related to professional companies.

However, he confirmed that foreign ownership in private companies, especially limited liability companies, has been restricted to 49 per cent — a fact that many foreign investors see as a hindrance to further investment. Debate on lifting the ceiling to up to 80 per cent in favour of foreign investors has been going on for sometime.

When asked, Al Mansouri said the ratio of the partnership between the foreign investor and the Emirati would be modified in the new companies law.

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