Economic diversification a winning recipe

Developing
countries around
the world have a
lot to learn from
the United Arab Emirates
(UAE) which has managed
to transform itself into a
robust and fast growing
economy.
One of the key elements
of its success has been its
ability to economically
diversify, breaking its
dependence on oil which
now only accounts for one
third of its GDP.
According to Jean-
François Seznec, a political
scientist specialising in
business and finance in
the Middle East and a
senior fellow at the Atlantic
Council’s Global Energy
Centre, access to low-cost
energy to make electricity
has allowed the country to
develop several industries,
including aluminium
manfacturing.
“It has invested in several
mines in Africa allowing
access and control over
the entire chain – from the
mineral resource through to
the final product,” he said.
“Dubai establishing itself
as a logistics power house
has added further value to
their manufacturing sector
and they are able to really
compete on a global scale.”
He said the country had
also established a clear
vision for itself and
was focusing on
value-added
production.
“The
answer to
how they
achieved
this is
relatively
simple,”
he told
FTW.
“They
know what
they are good at
and where they have
a natural advantage. Abu
Dhabi is renowned for cheap
energy and Dubai is home to
brilliant traders. Historically
speaking they have always
been traders and so they
put together a plan based
on those exceptional areas
of expertise – and they are
following it through.”
He said this approach
could be seen in several
Middle Eastern countries.
“Saudi Arabia is another
example,” said Seznec.
“They are one of the world’s
largest polyethylene
manufacturers – also based
on their ability to produce
cheap energy.”
These countries
were also
focused on
producing
what the
world
demanded,
he added.
“They are
moving in
the right
direction
as they are
servicing the
growing demand
they are seeing.”
He said from fibre optic
cables to advanced chemicals
and fertilisers these countries
were focused on producing a
wide variety of products.
“The Middle East has a
very clear understanding
about the dynamics of trade
and that has played a major
role in their success.”