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As the largest and most populous of the seven emirates that make up the UAE, Abu Dhabi plays a central role in the federation’s economy. Following the roadmap laid out in the Abu Dhabi Economic Vision 2030, its long-term economic development plan, the emirate has succeeded in nurturing new economic sectors and seems to be on track to meet its goals. The oil and gas sector accounted for 56.5% of Abu Dhabi’s GDP at current prices in 2012, followed by construction (9.6%), manufacturing (5.9%) and real estate (4.4%). According to the IMF, Abu Dhabi’s efforts to broaden its economic base will help drive annual growth of 4% in the non-oil economy over the coming years. This chapter contains interviews with Nasser Alsowaidi, Chairman, Abu Dhabi Department of Economic Development; Khaldoon Khalifa Al Mubarak, CEO, Mubadala; Butti Ahmed Mohammed bin Butti Al Qubaisi, Director-General, Statistics Centre – Abu Dhabi; Mahmood Ebraheem Al Mahmood, CEO and Chairman, ADS Holding; and Mohamed Thani Murshed Al Rumaithi, Chairman, ADCCI.

Recent economic, social and infrastructure developments have brought along changes in key legislation. This chapter provides an overview of current legal changes, highlighting areas such as business licences and employment contracts, as well as intellectual property protections and rules and regulations for maritime firms and vessels. In addition, it features a viewpoint from Francisco González-Ruiz, Partner, Icaza, González-Ruiz & Alemán.

The tax chapter provides an overview of the Panamanian tax regime, highlighting accounting and reporting procedures as well as the main types of taxies levied. This chapter also provides a look at international agreements and the establishment process for various types of firms, and features an interview with Carlos Karamañites, Partner, KPMG Panama.

At the height of its economic success, Panama seems to be seizing the opportunity to expand medical infrastructure. Funding for health in both the public and private sectors is rising along with spending per capita on medical services. Five new hospitals under construction are expected to add 1500 new beds and benefit some 658,000 patients, boosting the quality of health care in areas outside of the capital. A new medical city, known as Ciudad Hospitalaria, will consist of a 31.9-ha, $587.5m facility that will provide 1700 beds, 40 surgery rooms and 200 emergency room beds. Successful expansion of the sector will nevertheless depend on overcoming its most fundamental setback – a lack of medical staff, which could cause significant operational deficits. Indeed, Panama lags behind regional averages in its ratio of medical professionals to population. A new law allowing foreign medical professionals to work in specific jurisdictions could alleviate some of the pressure for the time being.

As Panama enters a new stage of economic maturity, the quality of its education system has claimed a pivotal role for authorities and the private sector alike. Curricular reform has significantly improved performance across the board: coverage for initial education rose 12.1% from 2011 to 2012, while coverage for primary and pre-middle school education rose 2.1% and 0.8%, respectively. In the World Economic Forum’s “Global Competitiveness Report 2013-14”, the quality of Panama’s education ranked 75th out of 148 countries, a notable leap from the previous year’s ranking of 112th. A new accreditation procedure is expected to address poor institutional quality among universities, while heightened public spending for the sector should not dissipate even with a change of government in 2014. Economic growth should continue to drive demand for higher education, a more diverse curriculum and increasing opportunities to use technology in the classroom.

According to the National Institute of Statistics and Census, the agriculture sector grew 6% in 2011 and 3.9% in 2012. However, its contribution to GDP fell from 8% at the start of the millennium to 2.5% in the third quarter of 2013. One of four key pillars of economic growth in the Strategic Plan 2012-14, the sector has faced a number of challenges. The rapid pace of urbanisation, accompanied by a surge in real estate, has led to a gradual reduction of cultivated surface area and a rise in land prices. Delays in road infrastructure development have also affected profit margins. This has been further compounded by adverse climatic conditions and a rise in crop disease. Government initiatives to improve financial support for local farmers, as well as efforts to expand trade agreements with strategic markets, should bring some dynamism to the sector. Meanwhile, regulations mandating the use of biofuels should encourage new investments and add to the country’s export portfolio.