Thursday, December 03, 2009

UAE's 38th National Day and the great achievements

Yesterday, 2 Dec was the 38th Natiodal day of the United Arab Emirates. A country that I have been living since 2000 and indebted for the income as well as experience.

I love the UAE esp the life. There are good and bad things everywhere in the world. We just focus on the good things as life is now shorter. With my family, we have good life together, good education for my kids. My beloved wife is also enjoying her life here. Alhamdulillah, and thanks to the UAE for the opportunities and accepting us as guests to this great nation of friendly people, safe and outstanding achievements even within our 10 years span as residents.

We have made new friends over the years, some have become part of life, strangers who have blossomed to be very close like our own relatives. We have good friends not only from Malaysia or amongst the Emiratis but other nationalities who have made the UAE as their first home.

Mabruk to the leaders, citizens and residents of this great nation!

Ghader Ali Gabeer al Mansoory watches the fireworks with a flag draped over his shoulders along Abu Dhabi’s Corniche. Andrew Henderson / The National

UAE second largest Arab economy, second richest and top banking centre

Nadim Kawach

Rapid growth triggered by massive public and private investment has catapulted the UAE to the second-largest economy in the Arab World while it has maintained its position as the second wealthiest in terms of gross domestic product per capita.

The UAE, which has completed 38 years of its creation, has become the largest banking centre in the Arab World after overtaking Saudi Arabia in 2007.

Although its people account for only about 1.5 per cent of the total Arab population, the UAE controls nearly 15 per cent of the combined Arab GDP and is projected to retain this percentage in 2009 despite an expected decline in its real GDP because of a steep cut in its oil output.

But its non-oil economy will still grow this year and sharply recover in 2010, aided by heavy public expenditure and a spate of government financial and economic measures sparked by the global financial crisis.

While its real GDP could dip by about 1.5 per cent in 2009, it will rebound by nearly 3.4 per cent in 2010, according to the Institute of International Finance (IIF), which also projected a three per cent growth in the UAE's oil sector in 2010 and 3.5 per cent in its non-hydrocarbon sector.

The country's fiscal balance will also record a surplus of about eight per cent of the GDP in 2009 and nearly 11 per cent in 2010. Its current account surplus will drop by only about three per cent this year from a record 35 per cent in 2008, but is projected to jump to 16 per cent in 2010, according to IIF.

In nominal terms, the UAE's GDP peaked at about Dh934 billion in 2008 to emerge as the second largest economy after Saudi Arabia. The GDP raced by more than 23 per cent in 2008 and the surge was in both the oil and non-oil sectors, official estimates showed.

Abu Dhabi and Dubai remained the dominant economies within the UAE, accounting for nearly 87 per cent of the total GDP of the seven emirates.

Revising earlier figures for the GDP, which was estimated at Dh927bn in mid-2009, the Ministry of Economy put the 2008 nominal GDP at Dh934.2bn, an increase of 23.2 per cent over the 2007 GDP of about Dh758bn.

It was one of the highest nominal GDP growth rates in the UAE's 38-year history and was a result of a sharp rise in oil prices and heavy public investment.

The report showed the oil sector rocketed by about 35.6 per cent last year while growth in the non-hydrocarbon sector was put at 17 per cent.

In real terms, the GDP grew by about 7.4 per cent to Dh535.3bn in 2008 from about Dh498.3bn in 2007. Growth was estimated at about 6.8 per cent in 2007 and an average six per cent over the previous five years. Nominal GDP growth was far higher, averaging at more than 15 per cent between 2000 and 2008 because of strong crude prices, which also sharply boosted public and private investments.

Official data showed the gross capital formation, which covers, public and private investment, leaped by a whopping 35 per cent to a record Dh200.4bn last year from about Dh148.5bn in 2007.

A breakdown showed the oil sector remained the dominant component of the GDP, accounting for about Dh345.8bn in 2008. It was followed by the construction sector, which was valued at nearly Dh148.4bn, and the manufacturing sector at about Dh113.2bn.

In terms of growth, the oil sector recorded the highest rate of 35.6 per cent because of an increase of about 35 per cent in crude prices.

The construction sector, which was in a state of boom in 2007 and 2008, galloped by about 26.1 per cent while growth was put at 18.7 per cent in the trade and repairing services sector, 17.4 per cent in electricity and water, 17.2 per cent in the manufacturing sector, 15.1 per cent in hotels and restaurants, 14.9 per cent in social services, and 14.3 per cent in real estate.

The Ministry of Economy put the UAE's population at about 4.765 million at the end of 2008, with the per capita GDP income climbing to a record Dh196,000 from nearly Dh169,000 in 2007, the second highest in the Arab World after Qatar.

Analysts expect the per capita income to decline this year because of a projected contraction in the economy and an increase in the population, which is forecast to surpass five million for the first time since the country's foundation in 1971.

Last year's per capita was the highest ever achieved in the UAE in current prices and second only to Qatar's GDP per capita in the Arab World.

In 2008, the UAE's per capita was more than double that of Saudi Arabia although the kingdom is the world's largest oil exporter. However, its population is nearly five times that of the UAE.

In 2007, the country also overtook Saudi Arabia as having the largest banking system in the Arab World, with the combined assets of the country's 52 banks climbing to an all time high of Dh1,536bn at the end of October 2009.

At that level, the UAE controlled more than a fifth of the total Arab bank assets while it was also ahead of Saudi Arabia in terms of shareholders equity, which gained a staggering Dh65bn this year to peak at Dh211bn at the end of October.

The increase was in line with Central Bank directives to banks to expand their capital base to face financial crises.

Loans provided by UAE banks were also the largest in the Arab World, peaking at Dh1,020bn by the end of October.

Deposits with the banks totalled about Dh982bn, nearly 15 per cent of the total Arab bank deposits.

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