Northern emirates look to diversify

29 November 2012

The UAE’s poorer northern emirates have struggled to match the pace of growth in Dubai and Abu Dhabi

When travelling along the UAE’s western coastline from Abu Dhabi to the Omani border, there is a marked contrast in going from the oil-rich capital city and Dubai’s hotel-lined streets to the less-developed northern emirates.

Ajman, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain have benefited from the UAE’s booming growth over the past decade, but their development has been uneven.

In the spring of 2011, during the wave of regional unrest, Economy Minister Sultan al-Mansouri announced there would be a new focus on improving the quality of life for citizens in these areas. The national government sanctioned AED5.88bn ($1.6bn) in extra-budgetary spending on infrastructure, which was seen by some as a way of stemming any signs of similar social upheaval.

Lacking Abu Dhabi’s oil reserves and Dubai’s position as an established trade and finance hub, the northern emirates must look to other sectors to fuel economic growth. Sharjah and Fujairah arguably enjoy the best locations: the former enjoying a trickledown effect from the growth of its close neighbour Dubai; the latter as a shipping hub to bypass the Strait of Hormuz chokepoint.

Despite having the UAE’s highest unemployment rate of about 20.6 per cent, Fujairah’s emergence as a major oil and gas services hub could see it become the strongest economy in the northern emirates.

Following the construction of a 1.8 million barrel-a-day oil pipeline from Habshan, Fujairah is set to export the majority of Abu Dhabi’s crude production. This project, along with several others, including a major refinery, could be the catalyst for a new boom in economic growth on the UAE’s usually quieter eastern coastline.

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