It is tempting to declare that the retreat attended by the leadership on Saturday and Sunday marked a major turning point. The truth is that, significant as it was, the meeting was part of a continuing project to reinvent this country. The issue at hand was the development of a new strategy to steer the economy in the wake of low oil prices.
While nobody predicted that the oil price would decline as drastically as it has in the past 18 months – from $110 to $35 a barrel – the UAE has always been aware that it could not rely on fossil fuels for ever. In February last year, Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, spoke about the day when the last barrel of oil was extracted, saying: “If we are investing today in the right sectors, I can tell you we will celebrate at that moment.”
The retreat was about formulating the economic strategy that will take us to that point. The pillars of discussion, as outlined by Sheikh Mohammed bin Rashid, the Vice President and Ruler of Dubai, included human capital, the knowledge economy and community.
The emphasis on people is important: we all play a part in this reinvention. The foresight of the leadership has already served us well. Even while oil was at its peak price, we were investing in more efficient, more sustainable forms of energy. We are building a nuclear power plant and are experimenting with solar and other renewable resources. The UAE has become a global air transport hub, a centre of finance and a major tourist destination. But our oil and gas still contribute 80 per cent of government revenue.
Significantly, many recent policy initiatives have encouraged innovation and entrepreneurship, with the message being that the Government will support individuals and small businesses with big ideas.
With our large sovereign wealth funds and the steps already taken towards diversification of the economy, the country is fortunate enough to have a financial cushion. But that should not breed complacency. The retreat was about ensuring that the UAE will continue as an economic powerhouse into the foreseeable future. Tough decisions will have to be made in terms of economic reform, but there will also be great opportunities. Oil has given this young country an important economic head start: it is up to each of us to build on it.