For anyone watching the direction of the UAE's economic strategy in 2021, manufacturing and industry are the places to look.
On Monday, Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, announced that the Emirates Development Bank (EDB) will offer financing of more than $8 billion (Dh30bn) to create and support 13,500 new UAE-based companies, with the aim that such firms will provide an extra 25,000 jobs. The move is a part of the country's wider "Operation 300bn", a programme that was announced last month to expand the GDP contribution of the nation's manufacturing sector, boosting economic diversification and taking full advantage of the country's reputation as a hub for energy and logistics. The target is a total sum of $80bn, more than double current levels of around $36bn.
These developments are not fully understood just by their numbers, however. They are strategies to deal with a less predictable global economy, which has been uncovered by the Covid-19 pandemic. Furthermore, with the advancement of technology and industries, the UAE is adapting to new realities by investing more in innovation and competitiveness and therefore strategic resilience.
The first-of-its-kind "Make it in the Emirates" campaign is part of this approach, ensuring not only that manufacturing is given a priority, but also research and development. The industrial sector's R&D is expected to contribute two per cent of the gross domestic product by 2031, up from current levels of just over one per cent. At home, the Made in UAE campaign will encourage the consumption of locally made products. Abroad, it will work to boost their export value in foreign markets.
As a first phase, EDB will launch a $270 million investment fund for start-ups and SMEs in 2022. This focus on the smaller scale is to foster a private sector that is friendly to enterprise, which, in an efficient and supportive regulatory environment, develops on its own without the need for intense government involvement.
EDB's strategy will centre particularly on supporting firms in health care, infrastructure, food security and technology, all sectors that have proved their worth during the pandemic. Around the world, their vulnerability, born of overreliance on global supply chains, affected all nations. EDB intends to help companies in these areas with financial support, but also an extensive range of non-financial options, such as advice on conducting market research, as well as corporate coaching and mentoring. This wide-ranging approach was informed by contributions from over 200 advisory stakeholders, as well as data gathered from 10 targeted surveys.
Few nations possess the agility to tie in immediate post-pandemic recovery with longer-term development for the decades ahead. EDB's strategy, as part of "Operation 300bn", does indeed build resilience to adapt to a suddenly more uncertain world. But, in equal measure, it plans for an optimistic future.
