UAE's investment outlook is positive despite global challenges, senior official says

The Gulf country's 'open and borderless' economy has made investors feel safe, head of Dubai ’s Department of Economy and Tourism says

The Central Bank of the UAE estimates the economy will grow 4.2 per cent in 2022, higher than a previous forecast of 3.8 per cent. Photo: DMCC

The UAE's investment outlook looks positive as its policies to tackle the pandemic have infused confidence among investors, said Helal Al Marri, director general of Dubai’s Department of Economy and Tourism.

The world looks relatively scary for an investor amid new strains of Covid-19, a war in Europe, recession and inflation but the UAE's actions in the past 50 years have instilled confidence, he said at the inaugural edition of Investopia Summit in Dubai on Monday.

“The UAE’s resilience and [the] positive way in which it handles every challenge bring confidence to the world – not just from investors looking to set up their global headquarters here but also individual investors and talent looking to make the Emirates their home,” Mr Al Marri added.

The role played by the government is important in a transforming landscape, the official said.

“We don’t believe in protectionism and don’t have politics guide our decision making. Our economy is open and borderless, which makes investors feel safe,” he said.

The Central Bank of the UAE estimates the economy will grow 4.2 per cent in 2022, higher than a previous forecast of 3.8 per cent.

The UAE’s economy is expected to grow 4.9 per cent in 2022, according to Japan's Largest lender MUFG, while Dubai's biggest bank by assets Emirates NBD forecasts an expansion of 5.7 per cent and Abu Dhabi Commercial Bank estimates 5 per cent, supported by strong oil sector growth. Emirates NBD estimates the non-oil economy growing 4 per cent, while ADCB forecasts 3.5 per cent growth.

Many traditional sectors such as supply chain and logistics are undergoing tremendous pressure as a result of the health crisis and are changing.

“We’ve managed to make sure businesses are protected. We have partnered with the private sector since they are driving the evolution. We are learning from them on how to make the transition,” according to Mr Al Marri.

The UAE looked at the Covid-19 pandemic as an opportunity and went back to the drawing board to reduce its dependence on hydrocarbons, Mohammed Al Shorafa, chairman of Abu Dhabi Department of Economic Development, said.

Agriculture technology, FinTech, health care, biopharma and tourism are new focus areas for Abu Dhabi, he added.

“We show value-add to businesses in terms of political stability, a progressive government, an excellent monetary system, state-of-the-art digital infrastructure, 100 per cent ownership of businesses and easy access to talent,” Mr Al Shorafa said.

Replying to how the UAE plans to cope with an impending recession, he said: “The UAE is part of a global system. If there is a global recession, there will be a small impact on us, too. We are making the UAE recession-proof by investing in our economy as well as in other countries and technologies.”

Responding to a query about how the UAE is regulating digital assets, Mr Al Marri said “cryptocurrencies are often misunderstood”.

Banks and other multinationals are tiptoeing into the space and choosing the UAE to set up their base.

“As long as there is an enabling ecosystem to protect the vulnerable, the industry will thrive,” Mr Al Marri said.

The government has to be an enabler to create a cryptocurrency ecosystem, according to Mr Al Shorafa.

“Cryptocurrency is coming and we are trying to put it on steroids. We’ve to be dynamic and agile to create the right regulatory framework,” he added.

The UAE is also fully supportive of Saudi Arabia’s Vision 2030, Mr Al Marri said.

“Economies in the region are co-related. Every sector that evolves in the region makes it more relevant to the world.”

“For instance, the evolution of the tourism industry will allow our region to grab a larger share of global long-haul travel. The same applies to other sectors as well.”