Interview with the UAE Economy Minister

Q. What is the government's plan of action to develop the UAE economy in 2004?

A. As you know, our economy grew last year, and this year as well, by 6.1 percent. I think this will continue - taking into consideration oil prices, of course.

Added to this, the policy of the government to encourage the non-oil sector and the private sector to diversify will also help the economy to grow. Oil prices are very encouraging, and we predict our economy will be more productive in the coming four or five years.

Q. What sectors will you diversify into?

A. First of all services, then industry, trade, tourism and agriculture. These are the sectors that are in mind.

Q. How will you progress in these areas? Are you counting on private-sector initiatives or is the government making investments?

A. In fact, the private sector is now really being encouraged by the government to take the lead in investing in these sectors. But the government might help sometimes to encourage the private sector. It is going to be up to the private sector - with a little help from the government.

Q. Ideally, what percentage of your economy should be non-oil?

A. Oil contributes less than 30 percent of our GDP. We will follow this trend. We want to bring in industry more because industry now represents about 14 percent of our GDP. Now we're embarking on industry, especially in petrochemicals and oil-related industries.

Q. How will you tackle unemployment and create jobs for nationals?

A. We have a small problem with unemployment, but we are talking with local governments. The UAE is trying to absorb young graduates. Also, we are trying to convince the private sector to absorb part of those graduates.

We are also trying to rehabilitate some of them in order to provide the private sector with highly qualified workers. The challenge for the government is twofold: to reduce the number of public-sector employees and to create enough jobs.

The private sector is not involved in this issue. We are encouraging the private sector and local graduates to be more knowledgeable in computer science and so forth in order for the private sector to absorb them.

Q. Is growth equal across the UAE?

A. There are some underdeveloped areas, but the federal government is doing its utmost to accommodate those regions with electricity, schools, roads and even financial help. Eventually, they will be absorbed within the total economic scheme.

Q. Do you think the gap between the richest and poorest regions is widening?

A. No. The federation is extending its wealth to underdeveloped regions. In Fujairah, the federal government has recently established a huge water desalination camp, which will provide Fujairah and the northern emirates with fresh water. We also want to encourage industry there.

Q. Why did Abu Dhabi sign the Volkswagen deal?

A. I think this is part of Abu Dhabi's economic design to diversify their economy. To find strategic partners either in this deal or with China, for example, or Korea or Japan. To find joint ventures and new partners.

Part of this deal with Volkswagen - some of these parts could be manufactured in Abu Dhabi itself. But that is still only a feasibility study, there is no commitment from Volkswagen. When somebody from Germany says they are committed to do that, they will do it. Like their cars, they are very reliable.

Q. Do you see more of these link-ups for Abu Dhabi in the future?

A. Yes, I'm certain that we will see more in the future. I think they will probably be in oil-related industries