Abu Dhabi Economy
Abu Dhabi economy defies crisis and reports a 3.9% growth. Although significantly smaller than estimated (a 5% economic growth was reported for 2012), this ascendant trend keeps Abu Dhabi on top of the strong and stable economies of the world. Dominated by the oil extraction industry, the Abu Dhabi economy is thriving, and if only taking into consideration the oil and gas reserves, the future looks bright for Abu Dhabi. Furthermore, featuring a dynamic leadership, Abu Dhabi started to develop new branches meant to boost the local economy and ensure its independence in case of problems in the oil exploitation sector. With a multifaceted approach, the wealthy emirate has started developing its interest in different domains which may bring them foreign funds on the short and medium term.
According to Mohamed Omar Abdulla, undersecretary at the Department of Economic Development, the non-oil industries are more likely to boost the economic growth and accelerate the economic growth starting with 2012. Furthermore, it is estimated that the actual investments in non-oil sectors will generate an overall profit that will overcome the profits coming from oil exploitation.
Oil Exploitation –Main Source of Revenue for Abu Dhabi Economy
Oil exploitation has laid the basis for a strong and economically competitive Abu Dhabi. Since the discovery of petroleum resources in the area, in the ‘50s and its large scale exploitation, starting with the ‘70s, this sector has provides the main source of financing for most projects, offering work for a large portion of the local population.
The actual estimations show that Abu Dhabi would still benefit from the benefits brought by oil and gas resources for another 90 years, preserving the same extraction pace. While enough to construct a future for their children, these resources cannot grant a stabile future for the next generations, unless doubled by other types of industries and economic sectors. This is why further intentions regarding economic development include a $US500 billion investment in tourism and non-oil industry, according to a plan detailing Abu Dhabi’s economic vision for the upcoming period until 2030.
Upmarket Tourism – The New Economical Direction for Abu Dhabi
Tourism is one of the key sectors in Abu Dhabi’s development. The two branches which are more invested in are the cultural and business tourism. Potential investors as well as businessmen looking for collaboration with the local investors are growing significantly each year, providing a great niche for service providers in this area. Leisure facilities, however, do not fall short of investments either, with the authorities and the private investors seeking to please the visitors with relaxing and exciting attractions.
With a total of over 1.5 million visitors crossing the Abu Dhabi borders annually and top recommendations from Lonely Planet and Fromer, the city seems to have catch people’s attention.
The authorities are constantly investing to create more accommodation facilities, targeting 75,000 hotel rooms by 2030. Four and five star hotels prevail in a city where tourists are promised a one of kind experience. An increase in tourist affluence is expected starting with 2015, when over 3 million people are estimated to benefit from the Arab services, with the increase continuing steadily along the years.
This increase should be mostly due to the opening of various touristic objectives on the island, especially the inauguration of major landmarks on Saadiyat Island, the future cultural hub of Abu Dhabi. Formula 1 Grand Prix, the Golf Championship and grandiose cultural events are further sources of interest for tourists. Each year, they bring Abu Dhabi serious incomes which encourage the local authorities to continue investing in the sector.
Industry –A New Beginning for Abu Dhabi Economy
In points of industry, Abu Dhabi was rather underdeveloped. With an economy based solely on oil extraction and export, the type of jobs available was rather limited and less diversified. In attempt to create more jobs, diversify them and move the Abu Dhabi economy away from the oil monopoly the authorities have given free hand to high tech heavy industry, with the Mubadala Development Corporation creating several subsidiaries in the area. Other parastatals have also opened or planning to open subsidiaries in the area, attracted by low taxes and top infrastructure.
Building Infrastructure for Expanding Abu Dhabi Economy
A solid economy can only be founded on diversified infrastructure. Apart from massive investments in roads, Abu Dhabi has also great plans for air and water transportation. The local airlines company, Ehtiad, has placed a $43 billion order for 200 new aircrafts in their attempt to take over the Arab market, win the battle with their neighboring rivals (Emirates Airlines) and expand their services globally. Furthermore, a $6.8 billion investment in the Abu Dhabi International Airport will increase the visitor capacity from 7 million to 20 million passengers. A private jet airport is also on the list of priorities for the locals meant to increase traffic and thus bring further money to the Abu Dhabi economy. In points of water transportation, a modern port will be inaugurated. Khalifa Port is built to the latest international standards and, while it is mainly built for internal needs, it will be prepared compete with the large ports in the region (Dubai and Oman ports).
Abu Dhabi economy is thriving due to good organization. Unlike other states in the area which have implemented plans and
strategies after the chaos was installed, Abu Dhabi operates after a well-established multilateral strategy meant to grant development while keeping all the economic sectors balanced. Investments in the oil sector are still at their high peak and most of the international oil giants are present on the local market, making good profits out of the 2.7 million barrels extracted annually from the Abu Dhabi oil extraction sites. Infrastructure is benefiting from large sums of money for different plans, tourism consolidates its great start, while the non-oil industry seems to become more and more prepared to take over a large share of Abu Dhabi economy.