Abdullah bin Touq Al Marri

Abdullah bin Touq Al Marri, UAE Cabinet Member & Minister of Economy, talks to TBY about growth expectations and COP28.

The IMF projects the UAE economy to grow by 3.5% in 2023. What are your own expectations?

Let me start by saying that 2022 was a challenging year for the global economy in terms of inflation, monetary policy normalization, trade bottlenecks, geopolitical tensions, and so on. Yet, it was one of the best years for the economy in the UAE. The GDP is expected to have expanded by 7.6% in 2022, in line with our goal to double the economy based on “We the UAE 2031” vision. UAE’s foreign trade in 2022 achieved a historical record reaching more than AED2.2 trillion—17% growth compared to the previous year. Inflation remained close to 5%, which is certainly undesirable, but still lower than most advanced economies (above 8%). Tourist spending increased 70% in 2022 to reach AED121 billion (USD33 billion) compared to USD18.8 billion the year before. Dubai alone welcomed over 14 million international visitors in 2022. The expected slowdown this year indicated by the IMF will be mainly due to an oil production cut announced for 2023 and slowdown in the global economy. But the fundamentals of the UAE economy remain solid. Our central bank projects non-oil GDP is set to expand by 4.2% in 2023, which is solid given the international macroeconomic environment. I believe, however, that the growth this year will be higher than projected. First, PMI ticked up to a five-month high amid stronger new order growth and stocks of purchases expanded at the sharpest rate in five years. Second, the Comprehensive Economic Partnership Agreements (CEPAs) entering into force or being announced will further support growth. Third, the continuous influx of human capital to the UAE will boost consumption and production. Let’s not forget that the strong performance of 2021-2022 is the outcome of 40+ new policies and structural reforms between 2020 and 2022, including an overhaul of companies’ law to allow 100% free foreign ownership, the modernization of the residency regime, and the CEPAs. The IMF said that non-oil growth in the UAE would accelerate over the medium-term with the implementation of ongoing reforms.

With COP28 due to be held in the UAE for the first time later in 2023, what is your outlook on the country’s sustainability credentials?

2023 was declared the “Year of Sustainability” by the President of the UAE, HH Sheikh Mohamed bin Zayed, culminating in COP28. This is an excellent chance for the UAE to lead global climate discussions, but it also places a responsibility on us to strengthen our sustainability and circularity practices, as well as to promote the country as a global leader of the green transition. The Ministry of Economy is focused on areas of green growth and the circular economy. The green transition can be a once-in-a-generation opportunity to unlock inclusive growth, create quality jobs, and build sustainable wealth. We are targeting investments in new sectors of the economy to drive the next phase of economic growth. This will not only ignite growth, but will also create new industries and expand the technology frontier altogether. The UAE has dedicated considerable efforts to sustainable consumption and production practices. With the support of HH Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the Circular Economy Council was established to chart the national path to circularity and maximize the use of our resources to create a healthier, more sustainable economy. 22 policies have been identified to accelerate the transition in four crucial industries, which are manufacturing, food, infrastructure, and transportation, covering the whole value chain. And we are doing so in collaboration with the private sector. As a chair of the Council’s Policy Committee, I have the responsibility to implement the full Circular Economy Policy 2021-2031 framework. We have made significant progress in this regard. We finalized the recycled polyethylene terephthalate (RPET) standards regulating the trade of recycled plastic water bottles, making the UAE one of the first countries in the region to have classification for products that contain minimum amounts of recycled content. We advanced the electric vehicle (EV) infrastructure policy including the EV standards for car manufacturers, which will play a key role in supporting the country’s transition to carbon neutrality by 2050. We also established the UAE Aluminium Recycling Coalition. And, we have engaged with federal and local entities to harmonize federal and local strategies and to advance the work carried by each entity. We will continue our efforts through programs and initiatives aimed at attracting investments in this sector, in accordance with the net-zero strategy. We are working with the private sector to address issues faced by businesses as they transit to a circular model. Shifting to a new paradigm necessitates funding, therefore we will work to expand private-sector funding for circularity in addition to giving incentives to encourage the transition. We are also developing a circular economy database. Finally, the UAE will ban most single‑use plastics starting 2024.