Dubai: The UAE continues to gradually restructure its financial system through enhancing financial reserves and developing policies to maintain financial and monetary stability and push sustainable economic growth, as well as policy reforms in removing oil dependency and laying foundations in implementing VAT, said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, in a statement release Saturday by the Ministry of Finance.
Shaikh Hamdan also stressed the country’s pursuit of development and prosperity for its people and residents.
“The diversified financial and economic policies put in place displayed the country’s high ability to cope with the oil exports challenges, debt issue coverage on an external and local level at good cost, as a result of adopting proactive steps in market liberalisation and deregulation, thereby opening up the banking sector to domestic and foreign financial institutions. In fact, this raised the efficiency of the financial system and rates of domestic reserves, and has contributed to the growth of capital markets and the continuous investment for major infrastructure projects,” he said.
He also said the UAE has an important status as an active player in economic diversification.
“Despite being the sixth largest oil exporter, the revenues of this sector amounts to 30% of the total financial resources of the country; where the economic and financial indicators confirm unprecedented growth in other sectors”.
Shaikh Hamdan added that “the decline in oil prices is part of the global economic cycle. The oil-producing countries faced similar cases in the mid-eighties, which the UAE overcame thanks to its lead in setting the right methodology, managing resources and controlling costs. This phase is a continuous part of the economic cycle which I trust the country will overcome due to its proper planning, spending restraints frameworks, financial adaptation and creating sustainable government revenues by depending on alternative oil resources”.
Dr. Hazem Al Beblawi, Executive Director of the International Monetary Fund, praised the comprehensive development methodology adopted by UAE in local economic diversification to be one of the top countries in the region.
“The decrease in oil revenues paved the way to implement VAT on a regional level, and UAE had qualitative steps in this field. Aside from implementing economic diversification policies, decreasing oil dependency and strengthening and supporting innovative projects, the Ministry announced the beginning of VAT implementation in the coming years; to be, as witnessed, a pioneer in implementing and adopting fiscal and monetary reforms in the regional and international level”.
HE Obaid Humaid Al Tayer, Minister of State for Financial Affairs, said: “The decline in oil prices is considered a great opportunity to restructure the economy and stimulate more economic diversification factors, encourage production and industrial sectors to enhance its contribution in the GDP of the UAE. MoF is implementing a long-term strategy with clear objectives to develop a suitable environment for expanding the productive base and industrial sector, enhancing reliance on non-oil sectors, boosting investment in infrastructure and supporting foreign trade. This will in turn support economic integration and the growth of the UAE’s economy”.