Applied Economic Policy Design in a Developing Nation Abu Dhabi - UAE

1. Applied Economic Policy Design in a Developing NationAbu Dhabi - UAE Dr. Thomas Kemp University of Wisconsin – Eau Claire

2. The Region

3. People and Places

4. People and Places

5. Basic Macroeconomic Data • GDP – 620,316,000,000 AED (169 Billion USD) • GDP Growth Rate – 15.9% • Oil Share of GDP – 49.7% • Per Capita GDP – 315,300 AED (86 Thousand USD) • Non-Oil Exports - 11,610,900,000 AED (3.1 Billion USD) • Imports – 86,574,100,000 (23.5 Billion USD) • Currency – Dirham – Pegged to Dollar at a constant 3.675/1

6. Foreign Trade Data • Primary Exports • Oil and Refined Petroleum Products • Transport Vehicles • Plastics, rubber, and articles thereof • Base metals and articles of base metals • Primary Imports • Machinery • Transport Vehicles • Base Metals and articles of base metals • Plastics, rubber, and articles thereof • Products of the Chemical or allied industries

7. History • Recent • Originally seven separate Emirates under the protection of Great Britain. (Trucial States) • Gained Independence and Seven Emirates came together to form the UAE in 1971.

8. Task: Determine the Economic Impact of the Maritime Sector on GDP of the Emirate • Issues; • No Employment Data by industry beyond 1 digit ISIC • No Wage Data by industry beyond 1 digit ISIC • No Value Added or Output Data beyond 1 digit ISIC • Reluctance to Share Data by All Parties • No clear definition of the “Maritime Sector” • What to Do? • Normal methods for determining economic impact are not possible. • Studies in other sectors have been done using European data. • Other studies still simply “estimate” impacts based upon those in other parts of the world.

9. Never Say Die • Result: “On this basis direct revenues are about 3.2% of annual GDP while indirect revenues account for another 2.7%. There is no accounting within this report of induced impacts as the data necessary to determine them is not available at this time.”

10. Getting There • First Assess: What do we know? • Building the relationships • Statistic Bureau • Ports Authority • National Authorities • Ports Users • Tourism Authority

11. Next Steps • What can we say and what can’t we say? • Only revenue data – Can’t express as value added. • What exactly is the Maritime Sector? – need to define. • Some of our data is based upon studies that are not available and can not be scrutinized.

12. Being Diplomatic • Combining the two [direct and indirect impacts] gives us some idea about what the economy would look like were there no maritime sector in the Emirate. That is, about 6% of the current Abu Dhabi economy is either directly involved with or wholly dependent upon the maritime sector. That said, it is almost certain that the total impact of the sector is significantly larger than this. Known employment in the sector (excluding fishermen) is over 3,500 individuals. • Ideally these amounts should be expressed in terms of value added rather than total revenues. The data is not available at this time to make these calculations. We therefore must make the problematic assumption that revenues equal value added. At such time that SCAD has the necessary data available a new study should be done. The below study should therefore be seen as a stopgap attempt to get some idea about the scope and scale of the maritime sector within the Emirate of Abu Dhabi. • See section nine (9) for the methodological problems associated with this assumption.

13. Some Principles • Saying “not possible” is not always an option. • Understand the objective – most people don’t speak “Econ.” • Building local human resources is critical. • Be clear about results. • Make polite suggestions about how to improve data.

14. Questions?