IMF urges UAE to focus on foreign ownership, PPPs

The IMF has reportedly encouraged the UAE to relax foreign ownership restrictions and encourage public-private partnerships to attract more investment and weather lower oil prices.

IMF Middle East and Central Asia department director Masood Ahmed told The National that the country should continue its focus on these measures, along with promoting innovation and boosting finance to SMEs, but said global conditions could be challenging.

“The challenge for the UAE is that it is going to need to continue the process of diversification, and it has to do that in a global environment that has more uncertainty, and where the economic outlook in many parts of the world remain quite modest for years to come,” he said.

The emirates is the region’s most diversified economy but remains impacted by lower oil prices.

It hopes for foreign direct investment and innovation to each account for 5 per cent of GDP by 2021, according to the Ministry of Economy.

The IMF has maintained its growth forecast for the country at 2.3 per cent, following 4 per cent growth last year. Abu Dhabi and Dubai are expected to grow by 1.5 per cent and 3.3 per cent this year respectively.

Ahmed said increasing the country would benefit from recent increases in oil prices that have seen prices move from lows of below $30 a barrel to between $45-50 but this “is more or less offset by the lower effect from Brexit”.

The UK’s decision to leave the European Union is expected to impact Dubai in particular, where British nationals were the second largest international investors in real estate last year and the third largest tourist visitor market.