“We’re well on our way to making sure that price fluctuations, whether they’re big or small, do not affect the overall economic livelihood of the UAE,” Ambassador Yousef Al Otaiba said on Thursday in a Bloomberg News interview in New York.

Some 65 per cent of the UAE’s gross domestic product comes from industries other than oil and gas, a figure they hope to increase,  Al Otaiba said.

The UAE has budgeted for an average oil price this year of between $40 and $45 a barrel.

“They are very conservative estimates, and anything above that is considered a windfall,” Al Otaiba said.

Gulf states, which had boomed on the back of record oil prices, are now struggling after prices tumbled.

The Gulf Cooperation Council, which groups Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain, pumps almost 20 per cent of the world’s oil. Saudi Arabia’s King Abdullah bin Abdulaziz said in November that $75 a barrel was a fair price for oil.

The UAE’s economy, which has enjoyed seven consecutive years of growth in excess of 2.5 per cent, will grow by 3 per cent in 2009, Al Otaiba said.

The UAE comprises seven emirates including Abu Dhabi and Dubai. Its economy is the second-largest in the Arab world after Saudi Arabia’s.

Real Estate

The global financial crisis will mean some real estate projects, such as Dubailand, a plan to make a 3-billion square-foot (279 million square-metre) leisure and tourism destination, will be “re-evaluated based on the financial situation in Dubai,” Al Otaiba said.

Other infrastructure projects should not be affected.

“All infrastructure programmes are going to continue on track,” including cultural, educational and health programmes, the Dubai metro, highways and energy, he said.

In real estate, there may be a “rational, logical downturn,” as the markets “correct themselves,” he said.

“Prices were shooting very high, both in Dubai and Abu Dhabi, and what we’ve seen is a correction in how fast the prices increase,” Al Otaiba concluded.