Stock Abu Dhabi skyline
Abu Dhabi city skyline. This year’s UAE National Day is particularly significant because of the many momentous decisions taken during the year, especially those related to ensuring a full-scale economic revival. Image Credit: Ahmed Ramzan/Gulf News

This year’s UAE National Day is particularly significant because of the many momentous decisions taken during the year, especially those related to ensuring a full-scale economic revival. This gives the country flexibility to effectively and dynamically respond to economic, regional and global changes.

Although it is difficult to highlight all the decisions and their likely impact, we can certainly highlight the amendment of the companies’ law and allow foreign investors to establish and own companies without the need to require a partner from a specific nationality.

Drastic change

This reveals a new approach adopted by the UAE to attract more foreign investments, besides the expertise and technology needed to get them off the ground. This will help the local economy and its citizens access these technologies.

Such a major transformation, which comes after five decades of requiring an Emirati sponsor or partner would cause some controversy. For more than half a century, the business sector have relied on this prerequisite, which had become an obstacle to development in light of the new economic realities. Mind you, a paradigm shift always requires such sweeping - and courageous - decisions.

Realities have altered

Thus, the conditions requiring foreign companies to have an Emirati sponsor have been cancelled. The legislation was appropriate to the early stages of the UAE’s economic and corporate landscape, where the absence of experience, lack of capital and the modest level of educational credentials provided unequal opportunities for its citizens.

The economic environment too was restricted with legislations that limit the movement of investments. Despite its positive aspects at that time, these polices generated a kind of dependency.

Enough of chasing crumbs

It is because all that the sponsor or local agent gets is some of the profit crumbs, while he does not enter into the world of work and management.

This brings to my mind the early stages of developing the Economic Research Department at the Industrial Bank in the mid-1980s. We made more than 50 visits to a number of industrial establishments from Abu Dhabi to Fujairah and interviewed those in charge to compile a study that came up with several conclusions.

It turned out that the most successful institutions are those managed by their owners, while the faltering ones were managed by others.

Talent finds its own footing

The UAE now has a sizeable cache of highly qualified citizen entrepreneurs and professionals who can benefit from qualified foreign expertise to assist in business development. This means Emirati businessmen can seek equal co-operation with foreign investors through a real - and not “sleeping” - partnership.

The changes to the global economy have led to intense economic and trade competition and greater opportunities for the transfer of investment flows. Make no mistake, these transformations make it difficult to work with legislation enacted half a century ago,.

This highlights the dynamism of the UAE government and the speed of its actions to respond to change, which reflects one of the most important reasons for its continuous development.

The newly amended law is just an example of the non-stop efforts made seeking to be better at everything. Other key decisions will definitely result in positives for economic and social growth, raising living standards, and protecting the UAE’s vital interests. It gives added significance to marking all that has been achieved by the UAE over the last 49 years... and throws down a marker for the future as well.

- Mohammed Al Asoomi is a specialist in energy and Gulf economic affairs.