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Vibrant UAE economy attracts more FDI: Lubna

ABU DHABI — The UAE will continue to be open for international investors, thanks to its economic vibrancy and flexibility in legislation that allows 100 per cent foreign ownership in 15 free trade areas, said Shaikha Lubna Al Qasimi, Minister of Economy and Planning.

In a recent address at the Davos Economic Forum, Shaikha Lubna told the forum that the UAE has created a conducive investment climate that gravitates investors, including privileges such as free taxes in all sectors (excluding banking), free flow and un-restricted repatriation of capital, free movement of labour, negligible barriers to entry and more importantly access to the Arab market with 300 million consumers. Shaikha Lubna revealed that Foreign Direct Investment (FDI) in the UAE rose to an estimated $ 9 billion in 2004.

Underlining the importance of FDI, Shaikha Lubna said: “FDI brings in transfer of knowledge and expertise in areas that are not the country’s core competencies. It also creates employment, partnership with foreign investors and opens new market opportunities due to the creation of new networks.” FDI also sustains investment confidence and indirectly drives reforms, she said. On oil, Shaikha Lubna cited economic figures, saying that oil exporters could haul in $700 billion from selling oil to foreigners this year.

This includes not only Opec but also Russia and Norway, the world’s second- and third-biggest earners. Oil exporters’ current-account surplus could reach $400 billion, more than four times as much as in 2002’, she said quoting figures released by the economist. Shaikha Lubna attributed the rise in oil prices to the increase in demand from growing economies of China and India. Unstable supply with prolonged Iraqi resistance, natural disasters, which affected oil refineries and unfavorable climates, were also among other factors driving soaringprices. The UAE, she said, has the third largest reserve of oil in the world and is at the second place in the Arab world and the fourth place in the world in natural gas. Oil reserves increased from 626 billion cubicmeters in the mid-seventies to more than 6 trillion cubic metres today, noted Shaikha Lubna.

Citing IMF forecasts, she told the forum that average annual current-account surplus of oil producers will reach $470 billion over the next five years ,(assuming an average oil price of $59 a barrel). The international institute of finance reckons that oil-export revenues in the Gulf region will reach $305 billion in 2006, a five fold rise over 1998, said Shaikha Lubna during her presentation titled: ‘History repeating itself? or is the Gulf reinventing itself?’