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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT APRIL 2011
ABU DHABI SECURITIES EXCHANGE
ECONOMIC AND POLITICAL DEVELOPMENTS
Abu Dhabi: Year in Review 2010
The year 2010 will be remembered in Abu Dhabi
for the local government forging ahead with a
counter-cyclical spending regime aimed at
boosting the economy and buttressing the
Economic Vision 2030.
The Union Railway, a nationwide rail project, offers
a good example of this. In early September,
bidding began for the first round of lucrative
packages related to the planned UAE-wide link. It
was seen as a sign of the government’s
commitment to carrying on with plans hatched
before the crisis.
Over the medium to long term the project is
expected to help create a thriving small- and
medium-sized enterprise (SME) sector in Abu
Dhabi and the wider UAE for businesses
specialising in locomotive supplies, maintenance
and manufacturing.
In addition, the railway is also going to play an
important role connecting business and industry
with the country’s sea and aviation infrastructure. It
is all part of a strategy to boost the efficiency of
manufacturing and heavy industrial exports in the
future.
As the different phases of the railway progress it
will eventually link up with another important
government-backed project, the Khalifa Port and
Industrial Zone (KPIZ). The project, which is
another integral plank in the government’s longterm
diversification goal, pressed ahead with
tendering a $131m infrastructure package in early
October to Greek contractor, Consolidated
Contracting Engineering & Procurement.
Shortly afterwards, Abu Dhabi Ports Company
(ADPC), the government entity behind the project,
also awarded a $285m infrastructure works
contract to Al Habtoor Leighton Group.
Construction began immediately and is scheduled
to end in July 2012.
Based around the idea of industrial clusters, the
strategy is to attract tenants from a wide range of
industries. KPIZ will cater to base-metal
specialists, heavy machinery, transport-vehicle
assembly, chemicals, shipyards, building
materials, processed foods and beverages, light
manufacturing and assembly, SMEs, trade and
logistics, information and communication
technology and alternative energy, as well as
others.
Supplying the necessary power for Abu Dhabi’s
growing industrialisation was a focus for the
emirate in 2010, following the selection of Korea
Electric Power Corporation (KEPCO) as the prime
contractor for the UAE’s first four nuclear power
plants in December 2009. In 2010 Emirates
Nuclear Energy Corporation (ENEC) identified a
preferred site on government land in Barka, in the
Western Region of Abu Dhabi for the reactors,
which are scheduled for completion between 2017
and 2020.
The $20.4bn master plan means the benefits to
the economy should be felt far and wide. In total,
KEPCO expects to subcontract around $15bn
worth of the project, awarding up to 200 contracts
to provide components such as steam generators,
turbines and piping.
Meanwhile, the nascent technology industry also
flexed its financial muscles in 2010. Governmentowned
Advanced Technology Investment
Company (ATIC) announced that it plans to invest
between $6-$7bn building its semiconductor
manufacturing facility in the capital.
The 12-inch wafer fabrication facility, the industry’s
most sophisticated, is expected to begin
production by 2015. It will be the first microchip
producer in the Middle East.
Over the long term, the aim of building such a
manufacturing plant is to turn the emirate into a
hub for semiconductor production.
As outlined in the Economic Vision 2030
developing a sustainable technology sector is a
key pillar to industrial diversification and set to be
a significant GDP contributor to Abu Dhabi’s
economy in the future.
For today, however, the government’s policy of
investing billions of dollars across the economy
helps to bolster growth in the non-oil economy,
owing to the multiplier effect of so much
construction work being carried out within the
local market.
Most importantly, though, is the impact
government’s efforts will all have on 2011.
As countries in the West suffer anaemic growth
and budget cuts, the UAE capital can expect a
GDP growth rate of nearly 8% (3.8% in real terms)
in 2011, according to a local study by Abu Dhabi
Chamber of Commerce and Industry.
In addition to this the emirate – thanks to the
government-led recovery in 2010 – will benefit
from a boost of investments of nearly 15%.
Exports will increase 9.5%, while imports will jump,
says the study, by a healthy 8%.
Information obtained from the Exchange.
Key Information Contacts
Abu Dhabi Chamber of Commerce and Industry www.abudhabichamber.ae
Central Bank of UAE www.centralbank.ae
Abu Dhabi Department of Planning and Economy www.adeconomy.ae
REAL GDP
(AED millions)
CONSUMER PRICES (% CHANGE PA; AV)
(%)
600
16
500
14
12
400
10
300
8
200
6
4
100
2
0
0
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
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