Building the Future – Aired March 2008
Foreign direct investment into the Arabian Gulf is booming, and fantastic development plans are being laid.
The capital of the United Arab Emirates, Abu Dhabi, has long lain in the shadow of its glamorous, more famous sister-city of Dubai.
Now, Abu Dhabi has revealed plans to develop the city that will purportedly mark its place on the map.
Is her new masterplan for the development of the city enough for her to catch-up to Dubai? And how will the city attempt to balance the pace of development while still preserving its natural environment?
Join Asia Business Channel as we explore this city of promises, and take a closer look at its development plans.
Between the trade routes of Asia and Europe, in the heart of the Arabian Gulf, bordered by Oman and Saudi Arabia, lies the United Arab Emirates, or UAE. A federation of 7 neighbouring emirates, the UAE was formed in 1971, after the British pulled out of ruling the area.
The country’s success would not have been possible without the vision of the late President Sheikh Zayed bin Sultan Al Nahyan, who was the driving force behind the creation of the UAE. Pouring oil revenues into better infrastructure, health services, and education, he improved the lives of his people, and paved the way for future diversification of the economy.
Today, it has an open economy, and its currency, the Dirham, is stable. The World Bank has ranked the UAE first in good governance in the Middle East, ahead of Oman, Qatar, Bahrain and Saudi Arabia.
The largest, the richest and the most heavily populated emirate is Abu Dhabi. It accounts for over 60% of the UAE’s GDP, with enough oil reserves to last another century.
Both the political and business capital of the federation, it has a per capita GDP that is higher than that of several European countries, and is well on its way to becoming a state-of-the-art metropolis.
After a recent meeting with his local counterparts, an Asian politician had this to say about the city’s leaders.
Given this vision that Abu Dhabi has for herself, the city’s future is definitely one to keep an eye on.
Abu Dhabi is the place to do business in the region. Its gleaming skyscrapers and luxury cars are proof of the huge amount of oil wealth here. Over the years, the city has actively diversified its economy to reduce its dependence on oil. Long the home of many foreigners who live and work here, one can expect world-class standards in the city.
The government of Abu Dhabi has come up with a long-term plan for the city. The Urban Structure Framework Plan, also known as “Plan Abu Dhabi 2030”, presents a coherent picture for the future of the city.
It outlines a way to take advantage of the economic opportunities at hand, without sacrificing the character of the city. Opportunities for growth and new elements that will help to make it a metropolis are also highlighted.
About 3 years ago, the government’s functions were also restructured and streamlined.
Ties between Abu Dhabi and Asia go back a long way. And today, those ties are being strengthened in new ways. Many agreements have been signed between private companies and governments both in Abu Dhabi and Asia.
Indeed, representatives of Asian countries are full of praise about the partnerships forged.
There are many incentives that make Abu Dhabi a favourable place to invest for Asians. Apart from a tax-free environment and physical security, the returns on investment are real and not just speculative. With an annual growth rate of 6% to 7%, slowdown in the economy is not expected at least for the next 10 years. Currently the rate of return available in the city is one of the highest in the region.
With its stable economy, open markets, and a sound regulatory framework, Abu Dhabi offers many concrete investment opportunities.
With plans for future growth and diversification in place, property development in Abu Dhabi is a sector that is primed for major expansion.
In just the last 5 years, the city has reportedly grown to thrice its original size.
Almost everywhere in Abu Dhabi there is evidence of construction going on. Buildings that are deemed not up to the standards of this rising metropolis are torn down to make way for newer and higher structures.
One of the key projects that is much talked about in the city is the development of Saadiyat Island.
The development is the biggest project to date in the transformation of the emirate. It will be the largest single natural island development in the region and will be completed by 2018. The centre piece of Saadiyat will be the Cultural District.
Abu Dhabi is confident the city’s development will bring about more such international co-operation.
The boom in Abu Dhabi’s property sector does not only refer to sheer numbers, but also to the development of the technology used in these buildings.
With all this modernization knocking on their door, Abu Dhabi is careful to pay attention to the preservation and continuation of its heritage.
The natural environment has always been close to the emirate’s identity, and the government is keen to conserve this environment.
While the city is keen to encourage more foreign investors to participate in the burgeoning development sector, private developers have to follow strict rules set out by the government that strive towards sustainable development.
Already, new developments like Saadiyat island are carefully planned with the environment playing a key role.
In an effort to preserve pockets of nature in the rising real estate market, land is also earmarked for developments which marry nature and lifestyle easily. One such development is the Abu Dhabi Golf Club.
Indeed, complementary development of a 21st century city together with a coveted quality of life is what Abu Dhabi aims for.
With a strong foundation already in place, Abu Dhabi’s position as a prime and safe location looks set to climb, and she will remain a popular choice for many investors.