Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology (MoIAT) and Chairman of Emirates Development Bank said the UAE is an important economic centre in the region and provides an ideal environment for businesses.
The UAE also offers an “exceptional”support system, a factor that enhances its attractiveness to private sector investments, he added in an interview with Emirates News Agency (WAM).
Dr Al Jaber gave examples of the UAE’s key advantages to the investors, citing economic stability, strategic location, strong financial reserves, large sovereign wealth funds and sustained government spending.
Below is the full text of Dr Al Jaber’s interview:
1. What were the steps taken by MoIAT in preparing the strategy?
In line with the leadership’s vision for the industrial sector and as part of our ongoing preparations for the UAE Centennial 2071, we launched the strategy to serve as a national programme designed to ensure sustainable economic growth and achieve a quantum leap for the UAE’s industrial sector through enhancing its regional and global competitiveness.
The world is currently going through exceptional times, with Covid-19 having impacted all countries and sectors without exception. The global economy has been affected, and the ways in which we live, manufacture, work, and study have transformed irrevocably. Countries around the world have now begun to re-prioritise their focus areas.
However, there is a consensus among different countries on the importance of certain sectors such as health, medicine, food, sustainable production, advanced technology, and energy. At the Ministry of Industry and Advanced Technology (MoIAT), we have aimed to ensure that our strategy contributes to meeting wider national priorities and serves as a catalyst for economic growth.
To ensure that the strategy reflects the reality on ground and addresses the ambitious goals for the future, we took into consideration global developments and changes. And realising the importance of concerted effort and cooperation with stakeholders in the industrial sector, our strategy was developed in collaboration with partners in the public and private sectors. So far, our efforts included engaging with more than 200 stakeholders, hosting over 40 workshops and collating 10 specialised questionnaires.
The industrial strategy pursues four main objectives: creating an attractive business environment for local and international investors in the industrial sector, ensuring the continued competitiveness and value of locally manufactured products, encouraging innovation, and adopting advanced technology and Fourth Industrial Revolution (4IR) solutions, and creating strong foundations to elevate the UAE’s position as a leading global hub for future industries.
In general, the Ministry’s strategy is based on five pillars that include: encouraging the wide adaption of advanced technology solutions, enhancing standardisation, increasing in-country value, accelerating the growth of advanced industries and facilitating all forms of support.
2. With the launch of the National Strategy for Industry in the country, what are the industrial areas that will be the focus in the coming years? What is the target share of this sector’s contribution to the UAE’s GDP?
The strategy aims to shape and expand the industrial sector’s contribution and enhance the UAE’s global competitiveness. In addition, it defines the future of the country’s industrial sector within a consolidated vision that seeks to enhance the attractiveness of the UAE as a hub for pioneering and innovative industries and creates a competitive ecosystem that acts as an incubator for future industries.
In this context, we have identified 11 priority sectors – space technology, medical supplies, clean and renewable energy, machinery and equipment rubber and plastic, chemicals, metals, advanced technology manufacturing, electronics, pharmaceuticals, and food and beverage (F&B).
These industries fall under three main areas. The first area involves industries where we already have an established presence and expertise to stimulate economic growth and encompasses energy, petrochemicals, and heavy industries. The second area comprises strategic industries that are related to our health and food security such as F&B, medical and pharmaceutical products. The third area of focus is to instill a culture of innovation in industries of the future – in sectors that are powered by 4IR technologies.
Over the coming years, we will focus on promoting these industries, enhance their competitiveness and draw investments into these sectors to create a relevant, attractive and engaged business environment to meet local and international investor needs. These sectors are important because they increase in-country value, enhance demand for locally made products through instilling a sense of pride, create new high skill job opportunities, fortify research and development activities in the country, encourage adaption of advanced technology across the value chain, and finally, increase exports while reducing reliance on imports.
As for the targeted share of the industrial sector in the GDP, the strategy aims to achieve a big leap in the contribution of the industrial sector to sustainable economic growth and to the GDP by 2031.
3. How do you see the role of the private sector in the future of industrial investment in the country, and will incentives be provided to encourage investors to enter certain industrial fields?
The partnership between the public and private sectors has historically been the basis for the success and diversification of our economy. Today, we renew our commitment to this direction, especially with the central role of the private sector in the development of the UAE’s industrial sector.
In addition, the UAE has a world-class ICT and logistics infrastructure, a vastly diverse energy mix, multiple industrial economic and free zones, a high credit rating and enabling legislation, cultural diversity, and a long-term residency system, among others.
In this context, the strategy was launched to prioritise partnerships with the private sector. Therefore, we have set major goals that will serve as a general framework for initiatives supporting the private sector through this strategy. Some of these initiatives are ready for implementation, while others will be gradually implemented.
This includes: Creating an attractive busines environment for local and international investors in the industrial sector through updating the Industrial Law to support local entrepreneurs and attract foreign direct investment. The revised law will include flexible conditions to provide opportunities to small and medium-sized companies and industrial enterprises while allowing foreigners to own 100 percent of their industrial establishments. In addition, it offers customs exemptions, facilitates licensing of SMEs and industrial enterprises, and supplies gas to the industrial sector at competitive prices We have also launched the “Make it in the Emirates” campaign as a first of its kind campaign to encourage local and international investors, innovators and developers to benefit from the facilities and incentives offered within the country’s industrial sector.
4. How pressing is the need for industrial sector projects to enter more global strategic partnerships, especially in specific and delicate projects?
Global partnerships are a dynamic element of ambitious national strategies, and the UAE, in line with the vision of its leadership, has established an advanced business environment that positions it as a hub for international companies and investors from across industries. The UAE offers unique competitive advantages, including credibility and reliability, a legislative framework that safeguards investors, a well-developed transport infrastructure, logistical services, exceptional geographical location, an advanced ICT infrastructure that facilitates the employment of artificial intelligence solutions and applications, as well as the raw materials and energy sources that are critical to drive industrial growth.
In addition, the UAE is considered a model nation to live and invest in, attracting exceptionally talented and highly competent individuals to the country.
Perhaps, what also distinguishes the UAE in the eyes of international institutions is its long and successful track record of implementing many strategic partnerships.
From this point forward, we are keen to build global synergies in priority industries, such as those focused on advanced technology and Fourth Industrial Revolution applications. We are also committed to strengthening local expertise to ensure that the UAE becomes a regional industrial hub, topping regional and international rankings for competitiveness, stability, and sustainable development.
5. What are the highlights of the new EDB strategy, especially with regard to housing projects? Will specific privileges be offered to borrowers?
Through its new strategy, the EDB aims to ensure that the Bank is a key driver for growth by supporting the UAE’s national agenda to diversity the economy, empowering industrial growth and preparing for the future. We will do this by accelerating industrial development and the adoption of advanced technology using dedicated funds. As well as enhancing and supporting the role of small and medium enterprises in the national economy and stimulating entrepreneurship and innovation by providing practical support and guidance to entrepreneurs, start-ups and SMEs.
To achieve those goals, the EDB has allocated a portfolio of AED 30 billion to support priority sectors by 2025, which will contribute to financing 13,500 small, medium and large companies and creating over 25,000 jobs.
As part of Operation 300bn, the new Emirates Development Bank strategy is aligned with the Ministry of Industry and Advanced Technology, and will focus its funding on manufacturing, Infrastructure, Technology, Healthcare and Food Security.
In the next phase, EDB will step up the financial support provided to the industrial and business ecosystem. Its priorities include targeting industrial companies that need financing and investment in priority sectors. It will also strengthen its partnership with UAE banks to extend financial services to small and medium enterprises. The EDG is increasing direct financing facilities to support SMEs and large companies in priority sectors from 2021. In addition, it is launching a AED 1 billion fund for equity and growth finance to SMEs and startups in 2022.
Naturally, the EDB will continue its existing services, providing UAE nationals with financing for housing. This continued service will ensure that Emiratis have access to real estate credit designated for the construction, maintenance and the development of buildings intended for personal housing.
6. What’re EDB’s directives on SMEs and encouraging them? Are there specific objectives in this regard?
SMEs play a fundamental role in the economy of any nation. In the UAE, SMEs employ 86% of the workforce in the private sector and contribute more than 60 percent to the GDP.
EDB’s refreshed strategy supports the UAE’s economic diversification agenda through strengthening the industrial sector and making it future ready. This will be achieved through accelerating industrial growth and advanced technology adoption with specialised financing programs. The strategy will enhance the role of large corporations and SMEs in supporting the national economy with financial solutions and business services and technical advisory, encouraging innovation and entrepreneurship through the SME and startup investment arm of EDB.
To achieve these objectives, EDB has allocated a portfolio of AED30 billion to support priority industrial sectors over a period of five years, which will contribute to financing more than 13,500 SMEs and creating 25,000 jobs.
EDB has also developed non-financial services, including digital programmes to help companies prioritise technology investment, to ensure specialised advisory in project management and business efficiency, and to transfer knowledge to SMEs and build their expertise. EDB will also connect startups to specialised entities through professional networks, with the aim of helping them expand and support them in market research.
7. Is there a tendency to provide more facilities to finance industrial projects in the country to drive the industrial sector? Will there be a focus on the specific types of these investments?
In line with its new strategy, the Emirates Development Bank is collaborating and has just recently singed a framework agreement with the Ministry of Industry and Advanced Technology (MoIAT), to finance and focus on five priority sectors that hold great potential to drive economic growth. These include manufacturing, infrastructure, technology, healthcare, and food security.
The bank has developed new and unique financial products aligned with its strategic objectives and vision in terms of economic development. These include: Asset based financing: A loan secured by high quality assets Receivable financing: Short-term revolving credit Reverse factoring: A method allowing small and medium enterprises to get paid early for goods and services supplied to large companies Long-term financing: Long-term corporate financing to support medium and large investments Project financing: Financing large projects in the initiation/ development stage Government programs: Financing relevant government projects such as the Sheikh Zayed Housing Program Real estate financing: Continuing to ensure housing facilities and solutions for UAE citizens Capital Investment: Investment solutions to support startups and small and medium enterprises operating in priority sectors To activate the new strategy, the Emirates Development Bank has identified seven development initiatives, including two to build and launch large corporate programs, as well as a program to drive advanced technology as a core pillar and accelerate its adoption.
As part of the pillar for enhancing the role of SMEs in the economy, the bank has identified four initiatives, including the relaunch of the direct lending programme for micro-SMEs specialising in economy, the relaunch of the Credit Guarantee Scheme and co-lending program, the design and launch of the non-financial services, and the expansion of the National Supply Chain Finance platform. The establishment of the Emirates Development Fund with an AED1 billion capital is an initiative to support the pillar to enhance entrepreneurship and innovation.
With the launch of the new strategy, EDB will focus on playing an active and influential role in collaborating with MoIAT, which will drive the development process and empower the industrial sector, raise the competitiveness of Emirati products, and reinforce the UAE’s position on the global industrial map.
8. How can individuals, whether citizens or residents, benefit from the services and solutions provided by the bank?
As part of building future industries and transforming the UAE into a global centre in this vital field, we invite all those with ideas to present them and participate in the UAE’s new industrial era. We are keen to see more entrepreneurs and innovators from among the UAE youth and from across the world join us in the process of developing the industrial sector, enhancing the presence of SMEs and enabling entrepreneurship – key and common goals in the strategies of MoIAT and EDB. Each entity will work to support creative talent starting with identifying viable ideas, through to studying the feasibility of the projects, and onward to financing and implementation, as well as training.
We live in a country that does not recognise the word impossible. Our actions prove this to be a fact and our leadership believes that the young generation is our most valuable asset. Enabling them to succeed is a key goal, and a guarantee to ensuring the progress of the industrial sector as part of our national journey of the next 50 years.–TradeArabia News Service