When one thinks of the United Arab Emirates (UAE), Dubai often eclipses other emirates with its glitz and glamour. However, the capital, Abu Dhabi, is steadily rising to prominence, refusing to be relegated to the shadows. As recognized for its investment potential, Abu Dhabi recently dispatched a high-ranking economic delegation to China, under the leadership of Ahmed Jasim Al Zaabi, the Minister of the Department of Economic Development (ADDED) in Abu Dhabi. This governmental body is pivotal in steering economic growth and diversification in the emirate.
In recent years, many Gulf nations have fervently sought to diversify their economies, with notable initiatives like Saudi Arabia's Vision 2030 and Qatar's National Vision 2030. Concurrently, these nations are accelerating partnerships with China, a country recognized for its burgeoning market and industrial prowess. When asked if this surge of collaboration would cultivate competitive dynamics among nations, Jasem Al Awadhi, the Economic Strategy Director at ADDED, emphasized the necessity for cooperative engagement to create a robust business environment. He asserted that collaborative development in the region provides mutual lessons in success while allowing each nation to focus on its unique priorities. Hence, the overall interrelationship is one of harmony rather than competition.
Comparing Dubai and Abu Dhabi reveals their distinctive economic trajectories. The UAE comprises seven emirates, including Abu Dhabi, Dubai, and Sharjah, with each unique in its economic focus. Dubai’s relatively modest oil reserves prompted an early pivot towards economic diversification. Back in 1985, Dubai established the region's first free trade zone, which became a magnet for foreign investment, enhancing trade and logistics.
As the 21st century dawned, Dubai sharpened its focus on tourism and real estate, effectively attracting global tourists and investors. The iconic skyline filled with architectural marvels catapulted Dubai to international fame, transforming it into a world-class tourist and commercial hub, often regarded as the first stop for investors looking to make inroads into the Middle East.
In stark contrast to Dubai’s flamboyant skyline, Abu Dhabi presents a more understated image. Yet, it's crucial to note that Abu Dhabi serves as the financial backbone of the UAE. As the largest emirate in size, it houses about 95% of the country’s oil reserves and hosts several sovereign funds, earning it the moniker “Capital of Capital.” In recent times, an increasing number of Chinese enterprises are eyeing Abu Dhabi as a preferred entry point into the UAE, with some companies that initially established themselves in Dubai contemplating a move to Abu Dhabi. Their rationale lies in Abu Dhabi's proximity to capital and funding opportunities, offering new pathways for business. However, such relocations require careful consideration as the areas of expertise differ between the two emirates.
For instance, Zhao Ziqiang, CEO of AG Capital, who has worked in Abu Dhabi for 12 years, noted that Dubai excels in retail, real estate, and tourism, while Abu Dhabi prioritizes sectors such as energy, manufacturing, and technology. Taking the energy sector as an illustration, Abu Dhabi National Oil Company stands as one of the three national oil giants in the Gulf region, boasting a crude oil production rate of 4.85 million barrels per day. Projections indicate that this figure will soar to 5 million barrels per day by 2027, solidifying Abu Dhabi’s leadership in the global energy marketplace.
Furthermore, Abu Dhabi is characterized by vast desert landscapes enriched with abundant sunlight, making solar energy a prime contender for clean energy solutions. Situated about 45 kilometers south of the city center is the Al Dhafra Solar Photovoltaic Plant, constructed by a Chinese enterprise. This facility is currently recognized as the world’s largest single solar photovoltaic plant. Zhao emphasized that historically, Chinese enterprises arriving in Abu Dhabi predominantly comprised engineering and real estate firms, mainly state-owned. However, in the last two to three years, the diversity of Chinese firms has increased, now spanning new energy, technology, and finance. It is essential for Chinese businesses to be prepared for a longer decision-making process in Abu Dhabi, as project initiation and progression tend to be less rapid compared to China.
Shifting the focus to another emerging sector, Abu Dhabi is placing significant emphasis on artificial intelligence (AI) and cutting-edge technologies. Mohammad Ali Al Kamali, the Chief Trade and Industry Officer at the Abu Dhabi Investment Office (ADIO), stated that the emirate actively welcomes AI enterprises to establish operations there. Since its inception in 2017, the UAE has been proactive in fostering an AI strategy with the aim of becoming a leader in the field by 2031, implementing AI across diverse sectors such as energy, transportation, tourism, and education to bolster governmental efficiency and fuel economic growth.
Abu Dhabi residents can now utilize AI to expedite processes surrounding tax, visas, and business licenses. The UAE immigration authority has introduced a smart visa application platform powered by AI, which streamlines the entire process, reducing processing times while enhancing accuracy. Additionally, in a bid to improve the overall travel experience, AI technology has been integrated into facial recognition systems at airports and border control, ensuring safe and efficient passage for travelers.
Reports from the Abu Dhabi Chamber of Commerce and Industry suggest that the average rate of new AI companies being established hovers around one every two days in the first half of 2024, marking AI as the fastest-growing sector for new registrations. Furthermore, Abu Dhabi is not working in isolation; it collaborates with international tech giants like Google, Microsoft, and OpenAI to set up AI labs and R&D centers, co-developing algorithms and advanced technologies.
Additionally, in 2019, Abu Dhabi founded the world’s first university dedicated to AI—Mohamed bin Zayed University of Artificial Intelligence (MBZUAI). This institution is instrumental in attracting top-tier talent globally, offering scholarships and waiving tuition fees for postgraduate students to encourage young minds to gravitate towards Abu Dhabi. The UAE government acknowledges AI as a pivotal element in diversifying the economy. Projections indicate that in 2024, Abu Dhabi’s sovereign fund will exceed $57.6 billion in external investments, with a noteworthy portion directed towards the AI sector. Abu Dhabi aspires to lead in global tech competition through its investments in AI, hoping to transform AI into the region's new oil, vital for economic rejuvenation.