Abu Dhabi’s significant economic expansion over the past five years, ushered primarily by its 2030 development plan, has proven to be a watershed in the history of one of the world’s richest, and simultaneously most culturally-conservative capitals. With an annual increase of over 6 percent in GDP per capita since the launch of Abu Dhabi’s 2030 Vision in 2008 – comparable to leading economies Norway, Ireland and Singapore – the emirate’s aspirations of global economic prowess seem untethered. However, the more subversive and yet critical elements behind the success of socioeconomic development, such as culture and individual consciousness, may prove to be the oil-giant’s greatest challenge.
Abu Dhabi has collaborated with some of the world’s leading public and private financial institutions to devise the mechanics aimed at delivering a vision of Abu Dhabi’s evolvement towards economic and cultural preeminence in the international arena. Spearheaded by three main government bodies – namely the Department of Economic Development, The Abu Dhabi Council for Economic Development and the Executive Council – the 2030 plan focuses mainly on alleviating the emirate’s reliance on oil. Currently, the UAE’s capital owns just under 10% of global oil reserves and 5% of the world’s natural gas resources. One of the government’s stated central motivations behind creating its 2030 Vision is to safeguard its country’s future against a monolithic economy and the consequences that would have on its society’s growth in an increasingly competitive global atmosphere.
Abu Dhabi’s 2030 Vision is broken down into distinct five-year plans, all of which are geared towards creating an open and regulated economy attractive to international capital, and emphatically, a society prepared to receive it. The plan stipulates methods to encourage small and medium sized enterprises as a move away from Abu Dhabi’s historically heavy state-centric apparatus, and to overhaul the legislative system in preparation for more business-friendly laws. The plan also states that human resource development is one of its top priorities, and aims to increase its human development index further by building stronger and more sustainable educational and healthcare infrastructures.
So far, Abu Dhabi has stuck to form. Recent reports have stated that the emirate’s nonoil and gas GDP has outdone the energy sector by constituting 64% of the Emirate’s total GDP this year. Investment arms in the emirate, such as government-run TDIC and privately-owned Aldar, have cumulatively initiated some of the largest projects yet, with the Louvre and Guggenheim museums, the world’s first carbon-free Masdar City and Ferrari World being only a few to mention. Yet, plans are being delayed, postponed and restructured by 5-15 years on average for most of the largest projects. Masdar City alone may take 15 years longer to complete than initially planned, and other sectors, such as communications and media, have taken hits with companies being shutdown or merged with government entities, and hundreds of employees displaced. A brunt of the reasons attributed to the setbacks center around hindrances with resource allocation, stemming primarily from the conflict between the financial preparedness for such intense growth, and the cultural capacity to absorb it in a relatively short amount of time.
Although Abu Dhabi’s 2030 Vision expresses the intention to veer from large state-owned enterprises, it is also the government’s abundant financial resources which will support the growth of the private sector. Privatization’s success entails trusting businesses to implement a government-sponsored vision, and trusting the capacity of the collective human resource to carry the vision through. Perhaps more time is needed, and more focus on human development is required for a balance to be reached between the government’s vision and the reality of the strength of codependency between state and citizen. However the best of intentions have been made clear, and time will eventually tell how much further Abu Dhabi is set to grow.
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