Ruler Sheikh Khalifa bin Zayed al-Nahyan
GDP $169bn (2010)
Per capita GDP $99,825
Key economic sectors Oil and gas, trading, real estate, financial services and construction
Main towns Al-Ain, Al-Gharbia and Madinat Zayed
Abu Dhabi is the largest of the UAE’s emirates, occupying about 85 per cent of the country’s land area. It shares borders with Oman, Saudi Arabia, Dubai and Sharjah, and is the seat of the UAE federal government. The emirate is divided into three administrative regions: Abu Dhabi City; the Eastern Region (Al-Gharbia), with Al-Ain as its largest city; and the Western Region, where Madinat Zayed is the biggest city.
|Abu Dhabi population|
Some 95 per cent of the UAE’s hydrocarbons reserves lie within Abu Dhabi, making it the wealthiest emirate. Abu Dhabi accounts for about 70 per cent of UAE government reserves and generates about 60 per cent of its gross domestic product (GDP). Consequently, it also shoulders the burden of the state budget, covering 30-40 per cent of spending, while Dubai contributes about 3 per cent, and the remainder is provided by income from federal bodies such as the finance, interior and labour ministries.
Sheikh Khalifa bin Zayed al-Nahyan has been ruler of Abu Dhabi and president of the UAE since the death of his father Sheikh Zayed bin Sultan al-Nahyan in 2004. Sheikh Zayed was the founding father of the UAE and had been its president since 1971. Sheikh Mohammed bin Zayed al-Nahyan is the crown prince of Abu Dhabi. He has a wide range of political, economical and legislative responsibilities and is the chairman of the Executive Council of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. The Al-Nahyan family is descended from the Bani Yas tribe, which has about 20 branches. It was originally centred in the Liwa Oasis, but in 1793, the Al-Bu Falah group relocated to Abu Dhabi. The Al-Nahyans are a family within the Al-Bu Falah.
In 2007, Abu Dhabi unveiled its Vision 2030 for economic development, which aims to transform the emirate from being dependent on hydrocarbon revenues into a sustainable, diversified economy.
|Abu Dhabi GDP by sector, 2009|
|Wholesale retail trade and repair services||9,322||5.7|
|Transport, storage and communication||11,773||7.2|
|Real Estate and Business Services||13,593||8.4|
|Restaurants & hotels||2,136||1.3|
|Oil & gas||74,794||46|
|GDP=Gross domestic product. Source: National Bureau of Statistics|
Abu Dhabi has set itself the target of generating 64 per cent of its GDP from the non-oil sector by 2030. Oil and gas account for about 50 per cent of GDP. The plan also aims for GDP to more than double to $400bn by 2030. The vision identifies petrochemicals, metals, aerospace, tourism, education and media as the future drivers of Abu Dhabi’s economy. The government wants industry to double its current contribution from 12 per cent to 25 per cent of GDP. Mubadala Development Company was established in 2002 to drive the diversification of the economy, and today the state-owned firm manages a multibillion-dollar portfolio of local, regional and international investments across sectors including aerospace, energy, healthcare and services. Through its Masdar initiative, Abu Dhabi also hopes to become a world centre for renewable technologies.
To support the diversification of the economy, about $27bn is being spent on a series of transport projects. These include an urban metro, a surface tram system, a new port, an airport expansion, highway improvements, and investment in more buses and bus stops.
At the same time as broadening the emirate’s economic base, the government is conscious of the need to continue developing its oil and gas sector. Abu Dhabi ranks sixth worldwide in terms of proven oil reserves, accounting for 8 per cent of oil producing group Opec’s production. The emirate also ranks seventh in the world in terms of natural gas reserves. Despite this, the UAE is facing a gas shortfall, due to rapidly rising demand for electricity. The country has so far been able to cope with the gas constraints through production from associated fields and imports from Qatar via the Dolphin pipeline since 2007, but investments are also under way to boost oil and gas production.
|Abu Dhabi gross domestic product|
|GDP=Gross domestic product. Source: National Bureau of Statistics|
Abu Dhabi produces about 2.7 million barrels a day (b/d) of oil and aims to raise its total production capacity to 3.5 million b/d over the next decade. One of the biggest planned projects is the development of the $10bn Shah sour gas field. Located onshore about 180 kilometres southwest of the capital, the project will process and distribute 1 billion cubic feet a day of sour, or sulphur-rich, natural gas from the field. After separating the sulphur from the gas, the scheme is expected to yield about 540 million cubic feet a day of processed gas. Some of the gas produced will be used domestically, but the majority will be re-injected into offshore oil fields to maintain reservoir pressure.
November 2009 was a pivotal point in the economic history of the UAE. Dubai shocked global markets by asking for a six-month debt standstill as state-backed real estate developers struggled to meet their debt obligations. At the eleventh hour, Abu Dhabi stepped in and prevented a default with a $20bn rescue package.
At the time, it was thought the capital of the UAE was impervious to the global recession, but three years later, Abu Dhabi is now addressing its own runaway spending. In 2011, the government began delaying new development projects and contract awards, and laying off staff at government bodies and firms. The fiscal cuts are likely to be painful for companies looking to win work on projects in the emirate and for the people who have lost their jobs, but Abu Dhabi sees them as necessary in order to avoid a financing crunch.
The government is also understood to be revising down the growth forecasts laid out in its Vision 2030. This is expected to result in more control over the borrowing of Abu Dhabi government-related entities (GREs).
“There was a feeling that borrowing was getting out of control and the government was racking up a lot of contingent liabilities without really realising,” says one financial adviser in Abu Dhabi. “Abu Dhabi is very clear that it doesn’t want to end up like Dubai, so it is trying to centralise all borrowing authorities to make sure it has a clear view of what its commitments are for the next 20-25 years.”
Looking at the government’s accounts, it is easy to see why Abu Dhabi wants to control spending. Since 2005, spending more than tripled from $22bn to peak at $72bn in 2009, falling to $67bn in 2010. The rise in expenditure was manageable until the end of 2008, when oil prices began to dip. Between 2008 and 2009, average oil export prices fell from $96 a to $63 a barrel. Together with reduced output, this meant the emirate’s revenues fell by more than 50 per cent to $39bn, from their 2008 peak of $82bn. This caused a deficit of $32bn, which was about 82 per cent of revenues. The problem continued into 2010, and although revenues rebounded slightly, they were still down 37 per cent at $51bn, when compared with 2008, and led to a deficit of $16bn.
Debts also grew during this period. According to the Washington-headquartered IMF, Abu Dhabi’s debt in 2011 amounted to $104bn, just short of the $113bn publicly held by Dubai. Abu Dhabi’s larger economy means this debt is more easily absorbed, but it still accounted for 54.8 per cent of its GDP. Dubai’s debt makes up 81.2 per cent of its GDP.
Despite the slowdown in investment from Abu Dhabi’s private sector, these companies have increased their debt by continuing to invest in new projects in the past few years. These contract awards have effectively kept the UAE’s construction industry afloat after the massive losses incurred by contracting firms when Dubai’s real-estate projects grounded to a halt in late 2008.
Mubadala has been among the most active with construction contracts, awarding the $1.5bn New York University, the $1.3bn Cleveland Clinic, the $817m Zayed University, the $327m Sorbonne University, and the $218m Rosewood Hotel.
The Tourism Development & Investment Company (TDIC) also awarded contracts for the construction of its $272m Eastern Mangrove resort, $143m golf course hotel, the $272m Saadiyat villas and the $183m Saadiyat apartments, since late 2008. In November 2012, it received bids for the construction of the estimated $1bn Louvre Abu Dhabi museum.
Abu Dhabi’s GDP grew by 4 per cent in 2010 to $168.8bn.
Free Trade Zones
Khalifa Industrial Zone Abu Dhabi (Kizad)
Situated next to Khalifa Port, the Khalifa Industrial Zone Abu Dhabi is a 417-square-kilometre site planned to generate 15 per cent of Abu Dhabi’s non-oil GDP by 2030. The first phase cost $7.1bn and up to 80 per cent of the products manufactured on site are expected to be exported. The industrial zone is attached to a new port constructed 4.5km offshore and connected by the UAE’s longest bridge.
The first phase of the new port can handle 2.5 million containers a year and 9 million tonnes of cargo – this is four times the number of containers the older Zayed Port handled in 2010. By 2030, Khalifa Port will have capacity to handle 15 million containers and 35 million tonnes of cargo a year. Abu Dhabi Ports Company has a partnership agreement with federal rail agency Union Railway to develop a railway in Kizad. The main branch of the UAE railway will spur off in two directions at Kizad to zones A and B. The spur in Zone A will run all the way to Khalifa port, where freight and containers can be loaded directly on to trains.
Kizad key facts
- Launched September 2012
- Initial container capacity 2.5 million TEUs
- Initial general cargo capacity 9 million tonnes
- Quay length 3.2km
- Draft 16 metres
- Port area 3.2 million square metres
- Cost of dredging/land reclamation $1.5bn
- Cost of port onshore facilities $380m
TEUs=20-foot equivalent units; km=Kilometres. Source: Abu Dhabi Ports Company
Abu Dhabi’s first operational free zone was Twofour54, which is dedicated to the media sector. It aims to develop and promote local media creation, and stimulate local talent. To achieve this, Twofour54 is taking a multi-dimensional approach in supporting key stages of media production.
In the animation industry, Twofour54 has set up an academy with Cartoon Network, owned by US media giant Time Warner. At the same time, its Ibtikar investment arm has invested in projects such as internationally syndicated children’s TV programme Driver Dan’s Story Train, produced in Abu Dhabi. The media zone is creating a self-sustaining network where people are trained in their chosen field, exposed to new technologies, offered funding for viable business ideas and provided with job opportunities and work experience with leading companies.
The free zone allows international companies to retain 100 per cent ownership. Firms that set up there are supported by Twofour54 Tawasol, which acts as a liaison body between firms in the zone and government departments.
To date, Twofour54 houses more than 180 businesses, including the UK’s BBC and Financial Times, the US’ CNN, and regional companies such as Saudi Arabia’s Rotana and Lebanon’s Charisma TV.
Tel: (+971) 2 401 2454
Abu Dhabi Airport Free Zone
Run by Abu Dhabi Airports Company, the first phase of the logistics zone opened for business in 2009. The second phase will be open by 2015. The free zone hosts the Abu Dhabi Business and Logistics Park.
Tel: (+971) 2 505 3403
Masdar City Special Economic Zone
Abu Dhabi Future Energy Company (Masdar) is in charge of the special economic zone that forms part of the Masdar City development. The first phase is not set to open until 2015, but more than 70 companies are currently operating in temporary facilities as part of the zone. It is aimed at businesses in the clean technology and renewable energy fields and offers the offshore benefits of other free trade zones.
Tel: (+971) 2 653 3333
Abu Dhabi International airport
Home of Etihad Airways, Abu Dhabi International airport has been experiencing double-digit growth in recent years , which took passenger numbers up to more than 12 million in 2011. Expansion of the airport is under way and a new midfield terminal complex should see the airport reach a capacity of 40 million passengers a year.
Mina Zayed (Zayed Port) is located in the northeast part of Abu Dhabi city. It covers an area of 510 hectares and contains 21 berths with depths ranging from 6-15 metres and a total berth length of 4,375 metres.
In addition, the port has more than 143,000 square metres of covered warehousing space and cold storage facilities with a capacity of 20,000 tonnes. In 2011, the cargo port handled 770,000 20-foot equivalent units.
Tel: (+971) 2 6730 600
Accommodation and business premises
Historically, quality office space in Abu Dhabi has been difficult to find, but a raft of new developments has boosted the market. US property consultant Jones Lang Lasalle predicts that although 3 million square metres of office space is due to be available by the end of the year, project delays will mean tenants cannot commence fit-out works until 2013.
The effect of this has been a reduction in prices, which peaked at AED3,800 ($1,035) a square metre in 2008, but is currently averaging AED1,540 a square metre. During 2013, about 475,000 square metres of new stock is expected to enter the market, further softening rental rates. Residential property is also becoming more readily available, with new projects including Al-Rayanna Complex, Al-Fallah Community and Al-Durrah Tower delivered in 2012.
The hotel market in Abu Dhabi has expanded greatly over the past five years. Events such as the Abu Dhabi Grand Prix have boosted demand. In the first nine months of 2012, 1.7 million guests stayed in Abu Dhabi hotels, up 15 per cent from the same period in 2011. Abu Dhabi Tourism Authority keeps data and statistics across the industry.
Abu Dhabi made health insurance compulsory for businesses in July 2006. The system works by qualifying residents for one of three levels of cover. The Thiqa system is run by state-owned Daman National Insurance Company and covers all nationals. A basic policy, also run by Daman, is available for those on low salaries (less than AED5,000 a month).
A third option for higher-earning expatriates is an enhanced package of benefits, which locally registered providers are allowed to offer in competition with Daman.
However, the enhanced package must offer cover beyond what is normally included in a standard health insurance policy and this has created a challenge for insurers. There is no limit on maternity cover. Usually an insurance firm has a waiting period of 10 months for maternity treatment to be covered, but this is not the case in Abu Dhabi. It also requires that pre-existing ailments are covered to ensure all residents are able to access healthcare.
Hotels in Abu Dhabi
Abu Dhabi has more than 80 luxury, affordable hotels and hotel apartments.
Government departments and offices
Abu Dhabi Department of Economic Development
Abu Dhabi’s Department for Economic Development is the licence issuing authority responsible for new businesses in the emirate. It is also responsible for proposing the economic and commercial policy of the emirate
Al-Salam Street, Abu Dhabi Municipality
Tel: (+971) 2 403 1333
Corniche Road, Abu Dhabi Chamber Of Commerce & Industry (ADCCI) Tower
Tel: (+971) 2 617 7296
Al-Bateen Municipality Building
Tel: (+971) 2 666 0744
Musaffah Municipality Building
Tel: (+971) 2 554 5370
Al-Wathba Municipality Building
Tel: (+971) 2 5831605
Al-Shahama Municipality Building
Tel: (+971) 2 563 3912
Al-Ain Municipality Building
Tel: (+971) 3 762 6414
Al-Heyar Municipality Building
Tel: (+971) 3 732 1174
Mazyed Municipality Building
Tel: (+971) 3 784 2203
Al-Maqam Municipality Building
Tel: (+971) 3 768 5516
Al-Waqen Municipality Building
Tel: (+971) 3 735 1103
Madinat Zayed Branch
Madinat Zayed Tamm Centre
Tel: (+971) 2 894 5440
Ghayathi Tamm Centre
Tel: (+971) 2 898 9408
Al-Sylah Tamm Centre
Tel: (+971) 2 872 4090
Tamm Centre Dalma Co-op 2nd Floor
Tel: (+971) 2 894 5508
Liwa Tamm Centre
Tel: (+971) 2 898 9348
Al-Marfaa Tamm Centre
Tel: (+971) 28832263
General Directorate of Residency and Foreigners Affairs
The General Directorate of Residence and Foreigners Affairs in Abu Dhabi provides all services related to passports, residency permits and entry permits. It is located in the Mushrif area on Al-Saada Road.
Tel: (+971) 2 446 2244
Ministry of Labour
Work permits are issued through the local office of the Labour Ministry. Proof of trade licence and commercial premises are required for permits to be awarded. The permit then needs to be taken to the residency department to obtain an employee visa. The offices are located in Al-Salam Street, near Khalifa Park
Tel: (+971) 2 449 4293
Abu Dhabi Chamber of Commerce & Industry
The Abu Dhabi Chamber of Commerce & Industry (ADCCI) was established in 1969. Through its membership of the Federation of the UAE Chambers of Commerce & Industry, it plays a major role in drafting new laws and regulations at federal level.
It has affiliations with international groups such as the Arab-French, the Arab-Swiss, the Arab-American, the Arab-Belgian, the Arab Luxembourg and the Arab-German Chambers of Commerce & Industry.
ADCCI is also represented in various business boards to help facilitate dealings with countries such as Turkey, Syria and India.
It is also member of the Federation of the GCC Chambers of Commerce & Industry; the Federation of Arab Chambers of Commerce, Industry & Agriculture; the Islamic Chamber; and the Arab Labour Organisation.
ADCCI has branches in Al-Ain City, Zayed City, Mussafah, Abu Dhabi Industrial City, Al-Shahama, Al-Wathba, Al-Selaa, Gayathi and Dalma to meet the demands of the business community.
Tel: (+971) 2 621 4000
Major Private Hospitals and Clinics
Tel: (+971) 2 626 2666
Tel: (+971) 2 626 5265
Gulf Diagnostic Centre
Tel: (+971) 2 665 8090
Al-Manara International Hospital
Tel: (+971) 2 621 8888
NMC Specialty Hospital
Tel: (+971) 2 633 2255
Centre Medical Franco-Emirien
Tel: (+971) 2 626 5722
Tel: (+971) 2 671 1220
Dar al-Shifa Hospital
Tel: (+971) 2 641 6999
Tel: (+971) 2 633 0440
Tel: (+971) 2 633 5522
Emirates International Hospital
Tel: (+971) 2 44 66422
Tel: (+971) 3 722 1251
Specialised Medical Care Hospital
Tel: (+971) 3 755 2291
Al-Noor Hospital Al-Ain
Tel: (+971) 3 766 7666