Abu Dhabi's new five-year plan expands on successes of previous years

The emirate’s latest five-year plan, the Abu Dhabi Plan, was revealed in June 2016. Of key interest to the business community was how the new strategy would differ from the Strategic Plan 2011-15. Variations from one five-year plan to another are bound to be relatively minor, as each strategic phase works towards the objectives already established by the Abu Dhabi Economic Vision 2030, published in 2008.

However, changes in emphasis are of great interest, as they indicate which areas of social and commercial life will lead the development agenda over the coming half decade. It was also significant that the detailed plans underpinning the strategy were assembled in 2015, the first full year of a prolonged period of subdued oil prices. Abu Dhabi’s latest plan, therefore, is being embarked upon with a clear-eyed view of an altered economic landscape.

Broad Reach

The Abu Dhabi Plan represents a comprehensive update of the Abu Dhabi Policy Agenda 2007-08, first launched in 2007, which aimed to achieve Abu Dhabi’s vision of “maintaining a safe and secure society, and building a sustainable, diversified and globally open economy”. The plan lays out 25 key objectives and 83 programmes that fall under a total of five sectors: social development; economic development; infrastructure and environment; security, justice and safety; and government affairs. Its targets are broad and ambitious. According to its stated objectives, Abu Dhabi intends to cut unemployment rates in half (albeit, from already manageable figures), increase the ratio of citizens to foreigners working in both public and semi-public entities, reduce childhood obesity and ensure that every child in the emirate is literate by the year 2020.

Recent political events in the MENA region have clearly elicited a response from government planners. As a result, food security has emerged as a key theme in the Abu Dhabi Plan, with measures proposed to increase the number of farms participating in the emirate’s pest control programme, raise the capacity of sustainable waste treatment operations and increase the quantity of the emirate’s produce marketed throughout the country. Reporting on the Abu Dhabi Executive Council’s announcement in June 2016, Abu Dhabi–based daily The National quoted Mohammed Khalfan Al Romaithi, major general, commander-in-chief of the Abu Dhabi Police and a member of the Abu Dhabi Executive Council, as saying, “It comes as no surprise to anyone that there are certain challenges that the food security sector faces globally, and perhaps the changes that we encounter today, especially given the current economic and political conditions in the region, require us to work hard towards implementing the best solutions that would guarantee our food security.”

New Focus

Quality of life is also a top priority in the current development phase, which in practical terms means paying particular attention to both ends of the age spectrum. A comprehensive retirement system has been proposed by which the number of pensioners participating in community programmes will be increased, while students are to receive more comprehensive health care coverage in the form of vaccinations against communicable diseases. Students should also benefit from investment in sports and entertainment, as the government has a long-term ambition of establishing Abu Dhabi as a regional centre for both. Other significant benchmarks include ensuring that residents in the UAE can enjoy a safe environment by strengthening the criminal justice system, and reducing the number of major crimes and deaths due to traffic accidents.

The plan also reflects Abu Dhabi’s desire to ensure that social and economic development is enjoyed across the territory of the emirate, and not just in its rapidly developing capital. To this end, the plan sets a target of doubling the number of job opportunities in Al Ain, the second-largest city in the emirate and the fourth-largest city in the UAE, as well as increasing the availability of community facilities in both Al Ain and the emirate’s less-populated Western Region.

Lastly, a new emphasis on the tourism industry is one of the more interesting aspects of the plan. The government intends to promote and develop tourist areas by concentrating on marine tourism, increasing hotel guest numbers and hotel revenues in Abu Dhabi, and growing the number of travellers transiting trough Abu Dhabi International Airport (AUH). The focus on tourism includes security as a major component, with plans to enhance collaboration at the national level.

Building A Foundation

The 83 programmes delineated under the Abu Dhabi Plan are frequently interconnected, simultaneously satisfying the goals set out in two or more of the five targeted sector strategies. Some of them are in social areas, such as the commitment to enhance cooperation among national security entities; boost the capacities of emergency services; improve crisis and disaster management, including the important issue of business continuity; and increase the force and efficiency of the legal system. Others refer to infrastructure, on which much future business expansion will rely. This includes the sustainable management of water resources and the security of the power supply, an effort that will be driven by the Abu Dhabi Water & Electricity Authority, which has partnered with nine independent water and electricity producers, and two independent wastewater treatment firms, to ensure reliable access to utilities.

Transport

The government’s plans to strengthen transport infrastructure are also of interest from the point of view of domestic and international businesses. Initiatives in this area include ensuring the sustainability of the aviation sector, which has expanded to cover not only the airport and the emirate’s flag carrier, Etihad Airways, but also a growing support segment based on aircraft servicing and components. Specifically, progress is being made on a major expansion project at AUH known as the Midfield Terminal Building, which is scheduled to open in 2019. The new terminal will have a capacity of approximately 30m passengers per year, increasing the airport’s total capacity to 45m passengers per year.

The emirate also intends to improve the integration of its road and highway network, develop its sea transport capacity and support the growth of Abu Dhabi as a logistics centre. Much of the latter endeavour will be centred on the deepwater Khalifa Port, strategically located at the mid-point between Abu Dhabi and Dubai, and one of only two semi-automated container ports in the region. The port is a vital link to foreign markets for Abu Dhabi’s exporters – as the 20 shipping lines it serves connect it directly to more than 52 international destinations – and it presents trans-shipment opportunities for the world’s major hubs.

Business Friendly

The Abu Dhabi Plan also tackles the business environment more directly. One important objective is the government’s ongoing commitment to improve the emirate’s performance in terms of business metrics. It can monitor the success at the federal level through the UAE’s standing in surveys such as the World Bank’s “Doing Business” and the World Economic Forum’s “Global Competitiveness” reports, and at the local level through feedback collected by Abu Dhabi Department of Economic Development (ADDED) and the Abu Dhabi Chamber of Commerce and Industry.

In May 2016 the chamber organised the first Abu Dhabi Business Forum, during which it elicited numerous obstacles voiced by the private sector. The forum identified and classified over 50 challenges, ranging from difficulties associated with competing with the public sector in infrastructure and real estate projects to issues with licensing requirements that have hindered foreign direct investment. Subsequently, all of these challenges have been addressed through specialised workshops in close partnership with ADDED and the private sector. The government has also prioritised consumer protection, building on the framework established by the Consumer Protection Law of 2013.

The Abu Dhabi Customs administration, meanwhile, has been charged with improving Customs procedures in a bid to boost exports from the emirate – an initiative that links to another important government goal; namely, attracting new domestic and foreign investment, and promoting the role of the private sector in the economy. Particular attention is to be paid to channelling some of this investment towards small and medium-sized enterprises.

The Abu Dhabi authorities are also working to encourage growth further down the business scale by fostering a more fertile environment for entrepreneurship. Taken together, the new plan’s measures represent a reaffirmation of the government’s intention to invest strategically in order to continue with its policy of economic diversification – a stance that comes as welcome news to the domestic business community and foreign investors alike.