UAE knowledge based economy becomes vital with crisis in Oil based industry
United Arab Emirates is looking for new dimensions in the growing economy; this would be a knowledge –based economy. The reason is the falling price and situations developed in Oil industry. Shaikh Nahyan Bin Mubarak Al Nahyan, UAE Minister of Culture and Knowledge Development, insisted on the facts and urged for more focus on the talent development and knowledge based economy.
The UAE is transitioning to an economy based on production, distribution and use of knowledge and information as part of its Vision 2021 National Agenda. The strategy was set before the oil crunch that has put pressure to tighten budgets and rein in spending.
“This is very important and that of course requires development of human resources and also the education and the training required for the 21st century,” Shaikh Nahyan stated at an Indian business conference in Dubai.
Through a knowledge-based economy, in addition to promoting other non-oil sectors, the UAE is seeking to cut its reliance on oil to 20 per cent over the next 10 to 15 years, according to comments by the UAE Minister of Economy Sultan Bin Saeed Al Mansouri last October. The oil sector accounts for 30 per cent of the country’s gross domestic product today.
“If we want to develop a knowledge economy we have to improve our acquisition of knowledge and our ability to disseminate and to make it useful for our economy,” Shaikh Nahyan said. He also stated that “We are of course putting in place all the required regulation needed to enhance the use and development of the technology.”
Under the 2021 strategy, the UAE says it is “promoting innovation and research and development, strengthening the regulatory framework for key sectors, and encouraging high value-adding sectors.”The UAE, with relatively liberal business regulations compared to other countries in the region, has been able to attract entrepreneurs from across the Middle East and elsewhere.
However, as of 2014, the construction, business and industrial sectors accounted for about 70 per cent of the 4.4 million employees in the private sector registered with the Ministry of Labor.
The UAE, despite being arguably the most diversified economy in the region, is facing pressure with oil below $40 (Dh146) a barrel and has trimmed its budget this year by 1.1 per cent. The UAE Economy Minister has said it will be “a challenge” for its economy to grow by more than 3 per cent this year. The International Monetary Fund is forecasting the country’s economy to grow by 2.6 per cent this year and post a 7.5 per cent fiscal deficit.