Abu Dhabi plans to launch an export development agency within the next six months to spur economic growth as this year's performance is set to fall short of goals. The independent entity would focus on boosting non-oil trade among exporters as well as helping smaller companies to begin selling abroad. It would provide financial grants to companies in addition to access to trade information and support in attending trade fairs.
The agency will form part of the capital's ambitions to boost non-oil trade as part of a drive to nurture growth in the private sector and protect the emirate's economy from future volatility in the price of oil, by far its biggest export. Abu Dhabi wants to raise the contribution of non-oil exports to the emirate's GDP to 11 per cent by 2030 from 1.5 per cent now, under its Economic Vision 2030 plan.
A senior official at the Department of Economic Development said Abu Dhabi would not meet the plan's annual growth target of 7 per cent this year. "We have to make downwards adjustments in terms of the growth," said Mohammed Omar Abdulla, the undersecretary of DED. "The average growth will be 6 to 7 per cent according to the vision, this will not be the case in 2010." Dr Giyas Gokkent, the chief economist and head of research of the asset management group at National Bank of Abu Dhabi (NBAD), said: "It's understandable that some of the goalposts may shift slightly."
Last week, the IMF downgraded its forecast for the UAE of GDP growth to between zero and 1 per cent as it predicted that Dubai's property sector and the restructuring of Dubai World would continue to weigh on the economy. It said the economy contracted by 0.7 per cent last year. NBAD sees growth of between 4 and 5 per cent in Abu Dhabi this year. "The non-oil sector is the key to pushing forward with the diversification drive as it will lead to a greater population growth which will continue to support economic growth," said Dr Gokkent.
The emirate hopes that an export development agency will help reach its long-term growth goals by expanding exports. "Hopefully, in the next sixth months we will have launched it," said Adeeb Alafifi, the director of foreign trade and export support at DED. An export development agency would open the way to creating an export credit agency or export-import bank in the emirate, he added. Abu Dhabi officials are still in discussions with export-import banks in the US and Asia about how to establish a similar entity in the emirate to finance and insure trade deals.