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With a long-term aim of building up its aerospace and defence industry, the government is focusing on establishing a local aviation centre to develop capacity and attract investment. An important element of this is international linkages, which will be essential to the success of both the aerospace and defence industries in the emirate. The UAE’s good relations with most of the world mean restrictions on export of technology to the country are unlikely to prove too onerous. More specifically, within the sector naval shipbuilding is seen to hold particular potential as a future growth area for the UAE – welcome news for the strategists of economic diversity. With military spending on the increase across the GCC, there could be plenty of work for the shipyards in the years ahead. This chapter includes an interview with Homaid Al Shemmari, Executive Director, Mubadala Aerospace.

The government of Abu Dhabi continues to invest in a series of large industrial developments as it endeavours to diversify the economy beyond hydrocarbons, a key aim of its Economic Vision 2030. In the coming five years, growth in the sector is likely to be driven primarily by expanded upstream activity. Aluminium is seen as a segment ripe for expansion, with a number of new companies setting up shop in the emirate and a unique “hot metal road” being built as an efficient aluminium transit system. The petrochemicals sector is also seeing massive expansion, though uncertainties in the global economic climate could temper its growth in the long term. In retail, total retail space is expanding at one of the fastest rates in the region. International brands are looming larger, especially at the top end of the market, where expensive cars and other luxury goods are being sold at record volumes. And while concepts that work well in other parts of the world – such as e-commerce – are not necessarily guaranteed a strong future in Abu Dhabi, the fact that so many developers and retailers are pouring into the emirate is a strong indication of its growth potential. This chapter includes interviews with talks to Mohammed H Al Qemzi, CEO, ZonesCorp; Suhail Al Ameri, CEO, General Holding Corporation (SENAAT); and Khaled Salmeen, Executive Vice-President, Abu Dhabi Ports Company.

With rapid population growth and an increasingly diverse economy, demand for utilities – including electricity, water and wastewater services – has grown considerably in recent years. The sector will need to continue expanding at around 6-10% to meet growing water and electricity demand, meaning that utilities provision remains a top priority. Furthermore, while the vast majority of Abu Dhabi’s electricity today is generated by gas-fired power plants, the government remains committed to the development of renewable energy sources; the emirate plans to have 7% of its electricity-generating capacity sourced from renewables by 2020, with solar power featuring prominently in the mix. In addition to these developments, Abu Dhabi is taking steps to encourage a reduction in consumption, with energy conservation an increasingly high priority. This chapter includes interviews with Abdulla Saif Al Nuaimi, Director-General, Abu Dhabi Water and Electricity Authority (ADWEA); and Nicholas Carter, Director-General, Regulation and Supervision Bureau.

A string of investments in both conventional and alternative resources is ensuring that Abu Dhabi sits at the very centre of the global energy map. The UAE increased production by approximately 14.2% during 2011 to 3m bpd of crude and condensate, faster than any other country in the GCC region. Yet despite vast reserves promising more than 80 years of production at current rates and conditions, and with some 93% of the UAE’s natural gas reserves located in Abu Dhabi, the government is nevertheless keen to develop the latest in enhanced oil recovery technologies to maximise its onshore and offshore assets. Additionally, the government aims to draw 7% of the emirate’s total generation capacity from renewable sources by 2020, a target that surpasses those of all neighbouring Gulf countries and which is expected to keep up the pressure for large investments in utility-scale projects over the coming years. This chapter includes interviews with Abdulla Nasser Al Suwaidi, Director-General, Abu Dhabi National Oil Company (ADNOC); and Mohamed Al Hammadi, CEO, Emirates Nuclear Energy Corporation (ENEC). It also features a viewpoint with Sultan Al Jaber, CEO, Masdar.

Local insurers in Abu Dhabi have weathered a turbulent two years, during which they have been compelled to make the transition from an era of rapid economic expansion to one of more muted growth. Yet the sector has met the challenge of declining investment income while continuing to show healthy profit – a clear indication of the air of optimism that currently prevails within the emirate’s insurance community. A growing population, a relatively low penetration rate and a number of infrastructure developments in the pipeline form the basis of the future growth of the emirate’s insurers. Indeed, a double-digit compound annual growth rate is forecast for the UAE insurance sector until 2015. And although Abu Dhabi’s insurers face a number of challenges, chief among them a difficult investment climate and a wave of regulation that promises to fundamentally alter the way in which they assess their business, the drivers for growth within the domestic market make for a sanguine outlook.

A significant proportion of the UAE’s Islamic financial services sector is based in Abu Dhabi. Home to two of the three largest Islamic banks in the country, three of its most successful takaful (Islamic insurance) firms and a multitude of sharia-compliant investment funds, the emirate is also emerging as an important regional centre of Islamic financing. Moreover, demand for Islamic mutual funds is rising, with sharia-compliant funds accounting for 27% of the UAE’s total of 89. In addition, demand for new investment products has driven a rise in the sukuk (Islamic bond) market. Looking ahead, while Abu Dhabi’s takaful players face potential challenges as a result of regulatory reform, particularly with regard to new solvency standards, a low penetration rate and increasing awareness of insurance products’ utility shows the potential of the domestic takaful market. This chapter includes an interview with Tirad M Mahmoud, CEO, Abu Dhabi Islamic Bank.