United Arab Emirates will invest $2 billion in India as part of a pioneering initiative that is fired by a vision that goes beyond bilateralism and explores joint opportunities in Asia and Africa as well.
“The UAE has a sovereign wealth fund of $627 billion and India, an emerging global economy, offers an attractive destination for investments, especially after the economic downturn in the West,” said a diplomat who did not wish to be named.
UAE’s state power company Taqa signed an agreement with Turkey’s state-run Electricity Generation for $12 billion worth of power plants and coal mines in the Afsin-Elbistan region — a project with a combined power generation capacity of up to 7,000 MW. As part of the deal, Taqa will acquire and expand the existing 1,400MW Afsin-Elbistan B power station. It was also reported that Taqa would “develop several new power plants and associated mines in sectors C, D, E and G of the Afsin-Elbistan region” and that “the feasibility study for the planned 1,440MW Plant C and associated mine development will start immediately
The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Successful efforts at economic diversification have reduced the portion of GDP based on oil and gas output to 25%. Since the discovery of oil in the UAE more than 30 years ago, the country has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living. The government has increased spending on job creation and infrastructure expansion and is opening up utilities to greater private sector involvement. In April 2004, the UAE signed a Trade and Investment Framework
Agreement with Washington and in November 2004 agreed to undertake negotiations toward a Free Trade Agreement with the US; however, those talks have not moved forward. The country’s Free Trade Zones – offering 100% foreign ownership and zero taxes – are helping to attract foreign investors. The global financial crisis, tight international credit, and deflated asset prices constricted the economy in 2009. UAE authorities tried to blunt the crisis by increasing spending and boosting liquidity in the banking sector.
The crisis hit Dubai hardest, as it was heavily exposed to depressed real estate prices. Dubai lacked sufficient cash to meet its debt obligations, prompting global concern about its solvency. The UAE Central Bank and Abu Dhabi-based banks bought the largest shares. In December 2009 Dubai received an additional $10 billion loan from the emirate of Abu Dhabi. Dependence on oil, a large expatriate workforce, and growing inflation pressures are significant long-term challenges. The UAE’s strategic plan for the next few years focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment.
By. Ayesha Habib
New York News