Abu Dhabi Business Forum 2016: unlocking the private sector for a sustainable future
Topics discussed at the first Abu Dhabi Business Forum included private sector engagement, fostering sustainability, and moving beyond oil towards a more diversified economy.
Billed as a platform for cooperative dialogue between senior government officials, businessmen and private sector representatives, the inaugural Abu Dhabi Business Forum unveiled itself in the opulent ballroom of Jumeirah Etihad Towers on Sunday 29th May, 2016. Organised by the Abu Dhabi Chamber of Commerce and Industry (ADCCI) in cooperation with the Abu Dhabi Department of Economic Development (ADDED) and the Department of Municipal Affairs and Transport, the forum reflected Abu Dhabi’s commitment to engage the private sector against the backdrop of the Abu Dhabi Economic Vision 2030, the Emirate’s grand vision of economic diversification spearheaded by H.H. Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates.
The high-level conference saw in attendance a number of government agencies and over 250 specially invited business figures and representatives of Abu Dhabi’s local private sector. By far the most notable participant was special guest H.H. Sheikh Dhiyab bin Zayed Al Nahyan, a member of the ruling family of Abu Dhabi, who entered the conference hall to appreciative applause. A panellist even quipped later that it was his presence that kept many participants at the conference for the entire duration.
With characteristic vision, Abu Dhabi began its economic diversification strategy as early as 2008; the recent oil price crisis has only increased the momentum. The Forum’s theme, “To Achieve a Sustainable Economy”, was opened with speeches from H.E. Mohammed Thani Al Rumaithi, Chairman of ADCCI, who highlighted the crucial role that the private sector plays in Abu Dhabi’s diversification efforts, and H.E. Ali Majid Al Mansoori, Chairman of ADDED, who said, “encouraging the private sector is a priority. The first Abu Dhabi Business Forum marks the beginning in a new era of collaboration between the private sector and the government.” Abu Dhabi’s private sector currently accounts for 27 percent of the economy and the government is looking to boost this to at least 40 percent by 2030.
H.E. Khalifa Mohammed Al Mazroui, Undersecretary of the Department of Municipal Affairs, revealed that the government will offer 100 development projects valued at Dh15 billion to private investors over the next four years through a public-private partnership (PPP) model.
The highlight of the Forum was undoubtedly the panel discussion on “How to Achieve a Sustainable Economy”; intended to address the challenges faced by the private sector in Abu Dhabi, it saw ninety minutes of surprisingly lively debate. Deftly chaired by H.E. Jamal Al Jarwan as the General Secretary of the UAE Investors Abroad Council, it featured three representatives from the public sector and four representatives from the private sector, and closed with a 20-minute Q&A session.
The private sector representatives concurred on the importance of implementing clear communication channels between the government and the private sector. H.E. Mohammed Abdul Jalil Al Fahim, Chairman of the Al Fahim Family Council suggested that biannual meetings should be organized for the government to receive and address private sector concerns. H.E. OtaibaSaeed Al Otaiba concurred, adding that public-private interactions should remain flexible and unconstrained by bureaucracy.
The role of foreign investment was also discussed, with H.E. Khalifa Salem Al Mansouri, DED Acting Undersecretary, emphasizing DED’s efforts on attracting foreign direct investment (FDI). H.E. Abdullah Al Mazroui, Chairman of the Al Mazrui Holding Company, pointed out the importance of managing FDI and said the government should ensure that regulations on local content and local component are well-managed to support the local industry.
It was heartening to see Forum participants engaging in the Q&A session to provide constructive criticism. Taxation was a significant point of contention, with Shaikha Nasser Al Nowais, Director at Rotana Hotels, expressing concern over the four percent municipal fees that hotels in Abu Dhabi will charge every guests from June 1, 2016. She argued that, as this had not been accounted for in this year’s budget, and with the hospitality industry negatively affected by the strengthening dollar, to which the UAE dirham is pegged, this policy should be delayed, adding that in general, given the dependence of the UAE’s economy on expatriates, there should be a moratorium on taxation for the next five years; this was met with resounding applause. H.E. Misbah Mubarak Al Marar, Director-General of the Abu Dhabi Municipality, responded that the government is aware of the challenges associated with taxation and so far, only value-added tax (VAT) will be imposed in a couple of years’ time.
Plummeting oil prices have left Arabian Gulf states struggling with double-digit government deficits. In February, International Monetary Fund’s managing director Christine Lagarde advised Gulf finance ministers at the Arab Fiscal Forum that taxation is necessary to generate “much-needed fiscal room for manoeuvre”. Two days later, a landmark agreement to introduce a 5 percent tax on consumption by January 1, 2019 across the Arabian Gulf was signed. H.E. Obaid Humaid Al Tayer, the Minister of State for Financial Affairs, subsequently confirmed that this will be implemented by the end of 2018, making the UAE the first country to do so. Echoing the sentiments of the Forum participants, a recent Deloitte survey found that most businesses across the region are unprepared for this.
Focus Reports subsequently caught up with panellist H.E. Otaiba Bin Saeed Al Otaiba, Chairman of Al Otaiba Enterprises, a leading UAE provider of comprehensive integrated security technology solutions, for a brief interview. Representative of the younger Emirati generation of aspiring business leaders, he projected youthful optimism for the UAE’s diversification programmes, saying “If other countries like Norway and Singapore can do it, why can’t we? I agree with H.H. Sheikh Mohammed, Crown Prince of Abu Dhabi, that we will celebrate the last drop of oil in fifty years, but I think even fifty is too long. I would love to see a huge shift towards non-oil industries in the next five, ten years.” When asked about his thoughts on the first Abu Dhabi Business Forum, he expressed great satisfaction, saying, “I am very impressed with the effort that has gone into it, and personally, I was very honoured to participate in the lively panel debate. Hopefully this is just the beginning of dialogue between the public and private sectors.”