Abdullah bin Touq Al Marri

The UAE Ministry of Economy has taken several decisive steps to ensure the diversity and modernization of its economy and move toward an innovation and knowledge-based economy.

Following the excellent response of the UAE government to the economic impact of the pandemic, and, considering the recent reforms, what are the economic priorities for the UAE in a post-COVID-19 world?

Following the COVID-19 outbreak, our government has set an ambitious goal to be the fastest recovering country from the impact of pandemic. The economy registered 3.8% growth in 2021, largely beating expectations of international organizations and forecasters. The priorities in a post-COVID world are illustrated in the “Projects of the 50.” We want to build one of the most dynamic economies in the world and we are conducting a series of unprecedented economic policies and structural reforms to accelerate the UAE’s development and transform it into a comprehensive hub in strategic sectors and make it a top destination for talents and investors. Under the leadership of His Highness Sheikh Mohammed Bin Zayed and His Highness Sheikh Mohammed Bin Rashid, we are re-engineering our economy for the next 50 years with focus on sustainable trade, investments in the economies of tomorrow, clean energy, agritech, the digital economy, artificial intelligence, space, and human capital.

Silver linings such as digital acceleration and increased resiliency emerged over the past two years. How has the economy leveraged on the opportunities to increase trade in light of these economic changes?

The COVID-19 pandemic affected traditional economies and forced us to innovate and think of new approaches and processes. The adoption of technology and digitalization in the UAE limited the impact of the sanitary restrictions on the economy and improved resilience. Today, 40% of the population uses government digital services more than once a week. The services by the Ministry of Economy are done digitally. On the retail front, e-commerce is growing rapidly and is playing a major role in shifting trends in the retail industry. In 2021, I told TBY that the UAE had a reputation for being a lab for implementing promising emerging technologies. Since then, the Cabinet has approved a new Digital Economy Strategy that seeks to double the sector’s contribution to GDP from 9.7% to 19.4% over the next 10 years. The Cabinet also established the UAE Council for Digital Economy, chaired by Minister of State for Artificial Intelligence, to support the implementation of the strategy. The government is also working to build resilience vis-à-vis the rest of the world. The UAE believes in opening the economy to the world and further integrating into the global trading system by strengthening and diversifying our supply chains. We have been discussing with key trading partners the establishment of Comprehensive Economic Partnership Agreements. We have signed bilateral trade deals with India, Indonesia, and Israel so far, and the staff at the ministry is working hard to finalize the remaining agreements. We also presented our candidacy to host the WTO 13th ministerial meeting next year. Just as growing trade tensions in the 1980s led to a rethink of international trade in 1990s with the creation of the World Trade Organization, we believe that now is the right time to ensure transparent and predicable rules in areas of digital trade and cross-border data flows.

In January 2021, the UAE approved its UAE Circular Economy Policy to achieve sustainable governance and the ideal use of natural resources. Over a year later, how has the Ministry of Economy actioned on this policy?

The UAE is committed to ensuring sustainable consumption and production patterns as per the SDG 12. We have been taking tangible steps to address waste and cut carbon emissions, whilst strengthening growth and creating jobs. But transitioning to a circular economy will require concerted efforts from federal and local governments, the private sector, and the population. Therefore, in the beginning of 2021, we adopted the Circular Economic Policy as a comprehensive framework that defines the UAE’s directions in achieving sustainable management and efficient use of natural resources. The policy prioritizes a few sectors such as green infrastructure, transport, manufacturing, food production and consumption, technology, and R&D. In the past year or so, we established the Circular Economy Council to oversee the policy implementation. The council aims to incentivize the participation of the private sector in initiatives related to the circular economy, and further promote partnership between the public and private sectors, and advance scientific research. We also formed a policy committee that is currently developing a national strategy for the circular economy with a roadmap comprising of solutions and initiatives in support of the circular economy policy. In doing so, the committee is collaborating with government agencies, the private sector, and international stakeholders.

The global rise in inflation is a trend many economists underestimated that is now impacting the global economy. How can the UAE mitigate the inflationary challenge?

The inflation that most countries are currently experiencing is caused by interesting factors. Some are specific to each country, and some are imported. 80% of the advanced economies and 60% of emerging economies are seeing inflation over 5% according to the Bank of International Settlements. There is no doubt that this is a challenging situation for governments and central banks around the world. The duration of these pressures on prices will depend on global challenges. Inflation is an important economic indicator that is closely monitored by the central bank. The consumer price index (CPI) increased by 3.35% in the 1Q2022 YoY as per the latest data by the Federal Competitiveness and Statistics Centre. And whilst food and energy prices increased significantly, inflation seems broad-based as eleven main sectors registered higher prices. The dynamics reflect among others the impact of supply chains disruptions and bottlenecks, the surge in prices of agricultural and industrial commodities as well as energy prices. The rise in borrowing costs could slow growth in the non-oil sector. Elevated oil prices are expected to boost government revenues, but fiscal policy should be more aligned with the macroeconomic environment, channeling domestic surpluses into sustainable investments and targeted support for the most vulnerable. Trade policy has a key role to play in protecting our population from some of the rise in global food prices by offering consumers greater access to low- or no-tariff products—and this is what the CEPAs will do. Also, we are moving forward with a broad series of structural reforms, including policies related to consumer protection and a revamp of the competition law, which would partly cushion some of the inflation on consumers. Finally, by committing to net-zero emissions by mid-century, the UAE has adopted a bold strategy to shield the economy from oil shocks, which is also likely to add some certainty and predictability to prices in the future.