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UAE economy projected to grow at 23% in 2006: Lubna
posted on 04/12/2006
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The UAE economy is growing rapidly at a rate projected to be 23% for 2006 and a GDP is expected to be Dh597 billion, according to Sheikha Lubna Al
Qasimi, Minister of Economy.
'This is another record year for the UAE. Oil prices have been reaching record levels and are likely to remain there or even rise further with predictions of over USD 100 per barrel being made. These are good times for the UAE, said Sheikha Lubna while addressing last night the Korea-UAE business forum in Dubai.
'We have a low interest rate, expansionary fiscal policies and a very confident private sector. The Gulf region, where average GDP growth has been running at in excess of 12 per cent, will maintain their double-digit trend this year, supported by the firm oil and natural gas prices. Non-oil economy in the federation grew 18.6 percent in 2005. Nonetheless, the majority of this growth is being fuelled by the construction sector,' Sheikha Lubna told the gathering in the presence of Joon-jae
Liee, Ambassador of Korea.
UAE businesses, Sheikha Lubna added, had recognized the viability of investing in overseas business opportunities and were moving quickly into thriving sectors such as real estate, tourism, hospitality, logistics and transport in offshore locations.
'I feel confident that 2007 will bring a further wave of UAE investment activity in many overseas enterprises. A large proportion of this will be in countries where the UAE has a significant history, a high level of cultural understanding, a mutual level of respect and a level of comfort and trust that turns the investment process into a relatively easy transaction, Sheikha
Lubna, said adding that:'To this effect, I am happy to observe that UAE investments in Korea are increasing. The Abu Investment Authority currently owns more than 50 per cent in Hyundai Oil Bank. Dubai Ports World has invested what is equivalent to US$1.15 billion in Busan Port. These are examples of the growing UAE investments in Korea.
These investments, and others, she noted, had only been possible because of many years of cooperation and commitment on both sides. This is already starting to happen with Korea with the most significant construction project in the UAE, the Burj Dubai being constructed with the help of one of Korea's major construction companies, Samsung. Burj Dubai, when completed will be the world's tallest building by far with a projected height of in excess of 710
metres.
'It stands to reason that whilst many Korean companies are already here, many other major Korean businesses should establish a foothold in the Middle East by first establishing themselves in the UAE. In support of this, profit projections of most of the UAE's major listed companies should provide investors with great confidence, with many of these companies most likely posting double-digit profit growth in the fourth quarter, as they did in the third quarter, if early projections are accurate.
Elaborating on key factors of growth, Sheikha Lubna said 'some of the reasons for the impressive growth rates in the economy are the successful diversification policy away from oil and into non-traditional sectors. In other words, the adoption of free market policies and regulations, have led to impressive growth rates and a trend towards sustainable and diversified development.
The three non-oil sectors that led the way, in 2005, were: manufacturing (22% growth over 2004), restaurants and hotels (22% over 2004) and construction (21 % over 2004).
In addition, the increase in the price of oil, which resulted in an increased in the crude oil and natural gas sector from Dh92 billion in 2003 to almost double that figure (Dhl73 billion) in 2005.The return of GCC and UAE capital to the region in the aftermath of Sept. 11th and investment in the UAE economy, had returns that are still being reaped today.
According to Sheikha Lubna, the President of South Korea, Rob Moo Hyun, has recognized the potential strengths of an even stronger relationship and for that reason visited the UAE recently.
During that visit, bilateral relations between the UAE and South Korea were discussed and an agreement on cooperation in economy, trade and technology, as well as various MoUs in the areas of energy and natural resources, construction and IT were signed.
The pact calls for collaboration in areas such as trade, industry, transport and logistics services, infrastructure development, oil and gas services, education and tourism, and investment.
'His stated view was that given the scale and volume of the economy of each country, bilateral investment cooperation should be expanded drastically. In addition, he was of the opinion that given the likely growth scenario and overall economic cooperation, entering into a Free Trade Agreement with Gulf Cooperation Council nations, which include the UAE, may be considered. However, before such an FTA is finalized, it was desirable that the two countries initially continue to expand collaboration in government procurement, energy and plant construction, Sheikha Lubna indicated.
As a result, she pledged, the Ministry of Economy will work as a facilitator to open opportunities and business doors for both government and private sectors within the UAE for Korean businesses. The UAE government will suggest a joint Business Council between UAE and Korea to further boost economic and political cooperation and to develop this cooperation by increasing business volumes in all trade sectors, i.e. investment, economy, culture, tourism, and other forms of cooperation that best serve the economies of the two countries.
To that end there will be an Investment Forum and Exhibition in Seoul in June 2007 coinciding with a Joint Ministerial Meeting.
'There is an increasing tradition of trade between Korea and the U AE, and a dynamism relating to new market opportunities to be explored in a range of vertical sectors.
Korea, she stressed, should consider the UAE not only a source of significant doses of Vitamin D for its populace, but also as a location from which to expand its manufacturing base into significant markets other than just the Middle East, realizing advantages from our tax-free business environment and conducive infrastructure. (Emirates News Agency,
WAM) |
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Courtesy UAE Ministry of Information and Culture
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