The UAE government is determined to pursue its economic diversification program by promoting the UAE manufacturing sector to reduce its reliance on income earned from the export of hydrocarbons.
A study released by Dubai Chamber of Commerce and Industry shows that the Emirate’s manufacturing sector will benefit from large-scale investments and technological advancements. Some of the key leaders of manufacturing growth, include shipbuilding, basic pharmaceutical products, refined petrochemical products, motor vehicle parts and accessories, and electric power generation, transmission, and distribution products.
At 14 percent of the total economy of the UAE, the manufacturing sector currently contributes the highest amount to the non-oil GDP to the economy. In 2011, a total of 5,201 industrial units employed almost 399,794 workers in the UAE. The manufacturing sector was severely impacted by the global economic downturn, but has made steady recovery and gained growth momentum on the back of rising exports to Asia and Africa.
The study recommends the government focus on trade liberalisation and exports to ensure long-term and sustainable progress of the manufacturing sector. By achieving progress in manufacturing, the UAE will benefit from the introduction of highly advanced technologies and add greater value to the economy. A well-developed manufacturing sector is also important to enhance competitiveness of the Emirate in international markets.
The manufacturing sector may also join hands with similar industries in the GCC countries to limit regional competition and benefit from collaboration in larger projects. Dubai is continuing to focus on service and other light industries, while Abu Dhabi is actively taking measures to develop heavier manufacturing industries through the availability of cheaper energy and establishment of free zones for investment. Even though 40 percent of the manufacturing firms were based in Dubai, Abu Dhabi attracted about 59 percent of manufacturing investments.