“The richest person is not the one who has the most, but the one who needs the least” — that is an old saying in Arabic, which holds true today in the UAE, where a transformation is under way to right-size the economy for a post-oil world.
By definition, the oil economy is about scarcity: our “black gold” is valuable because everyone needs it, not everyone has it, and the fear of it becoming harder to find — usually, because of a flare-up of Middle East instability — means a higher selling price and more petrodollars for us.
But, one day, because of technology’s relentless march forward, no one will need oil, or we might not have any more to sell; so, the challenge is what’s next?
Imagine the new UAE: a traditional Muslim state that has economic partnerships, cross-investments and extensive trade with a country such as Israel, after the normalisation of ties under the Abraham Accords struck in 2020.
It is an oil economy giving way to a digital economy, powered by a strategic, public and private investment in artificial intelligence capabilities across the country, a path we have travelled since 2017, led by one of the world’s first government ministries for AI; and our beautiful Dubai, a tax haven, that, 18 months from now, will have a right-sized corporate tax of 9 per cent, without needing to tax our residents’ personal income or capital gains, but guaranteeing that our Treasury will always be full.
The tax announcement in January surprised some for its timing, but the numbers and strategy are sound. The UAE’s 9 per cent federal tax is the lowest regionally. It will not be levied against micro-businesses, as the threshold is a net profit of $100,000, and foreign taxes paid by multinationals can offset the UAE’s, so there is no double taxation, either.
For the UAE, which also in January adopted the international Saturday-Sunday weekend, embracing change is becoming the norm.
Enter AI — with machine learning and autonomous robots, the UAE is embarking on an education and retooling campaign to transform the economy into an AI powerhouse.
Omar Al Olama, Minister of State for Digital Economy, AI and Remote Working System, outlined in a national strategy document how the country would invest in robust data infrastructure to embrace the sector.
“The oil of the future is data,” he said.
The AI plan would add Dh335 billion ($91bn) to annual gross domestic product by 2031 from new business and the efficiency gains from eliminating the drudgery from millions of jobs, replacing those hours with added value effort. To put that gain in context, the UAE’s GDP was Dh1.5 trillion going into 2020.
This follows a first stage of deepening the digital economy and inviting FinTech to the UAE. Meanwhile, our own companies emerged to conquer the UAE’s challenges, including writing software to embrace the 200 nationalities held by Emirati residents.
Unicorn-calibre exits of Souq to Amazon and Careem to Uber also validate that our technology and market sense is unrivalled. Others are poised to list on the growing stock exchange this year.
“The UAE government knows its strength is in combining a strong vision with active involvement — investment, legislation and test beds — for technological innovation,” Mr Al Olama said.
That big takeaway is from the success of Abu Dhabi Global Markets and the Dubai International Financial Centre. These grew from building the sandbox that market players, FinTech and entrepreneurial software developers could have access to, enabling them to test the plug-and-play capabilities of their products.
Acceleration was thanks to the federal RegLab initiative, enabling the UAE Cabinet to grant temporary licences to test and vet innovations destined for these regulated environments.
For AI, that meant creating a data-sharing programme and allowing open access to shared, standardised AI-ready data collected through a consistent data standard.
A key lever is every city or state agency leading the way by feeding its information to be swallowed as Big Data for machine-learning programmes to ingest and understand, according to the UAE’s AI Guide.
Plus, education about AI at every level, including a management-level education for 4,000 UAE executives and also by bringing a new K-12 curriculum around coding courses and data science. From immigration to airports to trains to municipal parking, everything here will be boosted by AI.
One of the companies on the cutting edge of native R&D and implementing capabilities of this ambitious vision is G42, a UAE-born AI and cloud computing company. G42 is committed to unleashing the full potential of AI and using it with stealth, at scale. It is very conscious to do it responsibly.
Operating the largest cloud computing infrastructure in the Mena region, G42 is developing expertise in research, development and use of AI for both the public and private sectors to accelerate progress and tackle society’s most pressing problems.
It is hard to imagine how much our emirates can advance in the next decade. But it is important to remember how much this feels like it did a few short years ago, when the UAE refocused on technology; from 2015 to 2018, Dubai booked $21.6bn in technology transfers.
Since then, the Abraham Accords with Israel are already driving more technology adoption and bringing new ideas home; so many important companies in both countries supported President Isaac Herzog’s visit here in January.
The summit marked such a sea change that those Middle East neighbours who would fight for instability tried to ruin the day, but they failed because of our robust defence systems. Most importantly, our people wanted this alliance to be a success.
The numbers show how much we can achieve — if data is the new oil, trade is the flame, tax is the light and it shines back on all of us as we dedicate our knowledge, experience and drive to grow in this exciting future.
Less Arab parable, more 1980s pop, but apropos for our seaside desert kingdom: “The future's so bright, I gotta wear shades.”
Marwan Abedin is chief executive of Flatrace