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Abu Dhabi: Year in Review 2009

The year 2009 saw Abu Dhabi avoid the worst of the global financial crisis, lay out long-term economic plans, buttress its credentials as a home for green technologies and make noteworthy inroads into the global tourism market.

Despite troubling economic results globally, Abu Dhabi is expected by most to register small but positive GDP expansion for 2009. Compared to recent years such modest growth appears unimpressive but when weighed against most economies around the world, the forecasts are actually quite positive.

Moreover, the silver lining to the global slump has been a reduction in inflationary pressures. According to Statistics Centre-Abu Dhabi, the emirate recorded a 0.85% inflation rate in the first 11 months of the year, making it the lowest in the UAE.

Meanwhile, in January 2009 the government made public its Abu Dhabi Economic Vision 2030.

Upon release of the 142 page strategic plan, Mohamed Al Bowardi, secretary-general of the Abu Dhabi Executive Council, said, "The publication of Economic Vision 2030 is a significant further milestone in the government of Abu Dhabi's ongoing commitment to greater transparency and accountability. The document articulates a comprehensive vision for Abu Dhabi's economic development and explains the key policy initiatives that will be implemented by various entities of the government in order to achieve it."

The overall aim of the document is to build a sustainable economy by ensuring balanced social and regional economic development. Revenue diversification via strengthening the non-oil sector is seen as the cornerstone of achieving such a lofty goal.

Although established in 2006, the Masdar Initiative, a multi-billion dollar, multi-faceted investment in alternative energy, is one of the government's ideas to reduce economic dependency on oil receipts over the long term.

On May 30 a small but important step towards that goal was taken. At a ceremony at Masdar City, officials connected a 10-MW solar panel plant to the electricity grid. The project was groundbreaking for the Middle East and supporters believe the $50.3m project is testimony to the argument that solar energy is a viable method of powering, at least in part, the emirate's electricity needs.

It was policies such as these that helped Abu Dhabi to become the new headquarters of the International Renewable Energy Agency (IRENA), the first intergovernmental agency focused on the promotion of environmentally friendly initiatives.

On June 30, IRENA's 136-member body watched as Germany and Austria, the UAE's rivals to host the fledgling agency, agreed to step aside and allow the headquarters to be set up in rent-free offices in Masdar City.

In September the emirate supported its aspiring renewable energy credentials further. The Masdar Institute of Science and Technology, the world's first graduate academic institution dedicated to the research of alternative energy, began classes for the inaugural intake of 92 graduate students. The pupils were selected from more than 1200 applicants from 82 countries worldwide.

They were, however, not the only people to make the trip to Abu Dhabi in 2009. The emirate's tourism sector - though hobbled by weakening global demand - still managed to attract more people than in 2008.

Abu Dhabi Airports Company (ADAC) released figures showing visitor numbers grew at a healthy clip of 7.0% over the first 10 months of the year.

October 2009 saw a 2.8% increase in passengers and 24.3% increase in cargo year-on-year. One of the main reasons for this was the hosting of the inaugural Abu Dhabi Formula 1 Grand Prix .The race, which marked another milestone in the emirate's development, promoted the capital internationally and gave its hospitality sector a welcome fillip.

Etihad Airways, the Abu Dhabi-based airline, also played its part in attracting ever-increasing numbers of travellers to the capital. The company's reward was the top award at 2009's World Travel Awards (WTA), being voted the world's leading airline by more than 180,000 travel industry professionals from over 175 countries.

Policymakers, it appears, seem convinced now is the best time to exploit favourable conditions thanks to low costs and eager contractors. Given its sagacious economic planning, bountiful resources and a healthy cash surplus, Abu Dhabi is well placed going into the new year and beyond.

© Oxford Business Group 2010