Beyond oil: Quest for sustainability drives UAE growth

The UAE has recently invested in renewable energy, particularly solar. Masdar City, a commercially driven enterprise operating across the full spectrum of the renewable-energy and sustainable-technology industries, was launched in 2006.
Masdar’s director of sustainability, Dr Nawal Al Hosani, said Masdar City, one of the world’s first low-carbon urban developments powered by renewable sources, was designed to use 54 per cent less potable water and 51 per cent less electricity, while 50 per cent of the buildings were powered by rooftop photovoltaic cells.
The UAE through Masdar has been an agent of change in the energy industry and has played a leading role in discussions about renewable energy and sustainability, she said during a group interview with 65 journalists from 26 countries invited to witness the 41st National Day celebrations on December 2.
The UAE has scored huge achievements. According to Mohammed Omar Abdullah, undersecretary of the Abu Dhabi Economic Development Department, the UAE is now the second-strongest Arab economy after Saudi Arabia.
He expects the Abu Dhabi non-oil sector’s contribution to the economy to rise by 64 per cent by 2030, thanks to the development of productive sectors, especially industry, tourism, telecommunications and transport. He also stressed the key role of the Khalifa Fund for Enterprise Development in creating a new generation of Emirati entrepreneurs.
The country is also focusing on expanding trade by its non-oil sector with various countries, said Foreign Trade Minister Sheikha Lubna Al Qasimi.
The UAE is expected to post growth of foreign trade by 10-15 per cent this year, compared with growth in 2011 of 23 per cent and 14 per cent in 2010. India was its top trade partner last year with US$53 billion (Bt1.6 trillion) worth of two-way trade, followed by China at $14 billion. Fifty per cent of the UAE’s exports last year were gold.
Backing up the new path is the strong financial sector. Sultan bin Nasser Al Suwaidi, governor of the Central Bank of the UAE, said the nation’s economy was strong and registered the highest growth rates in all the economic and social sectors in line with the state’s policy of economic diversification.
Saying the UAE banking system is stable and with a high solvency record in accordance with Basel III criteria, he noted there were 23 national banks with 807 branches and 28 electronic units, while there were 22 foreign banks with 83 branches and 52 electronic units, in addition to six Gulf banks with one branch.
There are also 113 representative offices of foreign banks, 25 financial firms, 23 investment firms, 120 exchange companies and 4,346 automated teller machines in the UAE.
The governor said the volume of banks’ assets in the UAE reached $476 billion at the end of October, with deposits of $316 billion and the volume of lending $296 billion. Year-to-date profits of the banks reached 24.689 trillion dirhams (Bt205.9 trillion) at the end of October.
According to Minister of State for Foreign Affairs Dr Anwar Gargash, the UAE needs balanced growth, as it is situated in a region that is experiencing rapid transformation.
He acknowledged that Iran’s nuclear policy would affect the UAE in one way or another. The worst-case scenario would be an Israeli attack on Iran, which would be a disaster.
Other concerns include al-Qaeda's “jihadism”, which has led to instability in Pakistan, Iraq and elsewhere; the Gaza issue, which needs to be addressed in a fundamental way along the lines of the two-state solution; and human-rights issues, especially regarding labour, which he said the UAE was sincere about tackling.
The UAE is on the Strait of Hormuz, which could be affected by Iranian tensions. Since July, the UAE has exported crude oil through the new 400-kilometre pipeline from Abu Dhabi to the Fujairah oil terminal while boosting the emirate’s related capacities.
“What we are trying to do is have a progressive outlook for society in a region that is completely consumed by politics,” he said.
“We’re trying to deal with the region and, at the same time, to create a society with job opportunities, real development, women’s empowerment and greater participation – to try to raise the image of a Middle Eastern country with a modern outlook.”