The extremely wealthy Abu Dhabi is set to tighten its belt as the price of oil drops and affects its export incomes. This alludes to how the wealthiest Gulf economies are not free from the effects of low-cost oil.
There is no direct economic pressure on the 24 million residents at the moment. Having backed assets from their country’s wealth stock, Abu Dhabi’s Investment Authority (ADIA), assessed that at over $770 billion, the country can cope effortlessly with a halving of all of its earnings under oil since last June.
Abu Dhabi spends frequently on esteemed cultural ventures, such as on a division of the Louvre Museum, which is projected to cost hundreds, if not millions, of dollars, in addition to transport development, extension of its oil industry, housing/shelter, and advanced technology projects that are intended to expand the economy in more than just the oil sector.
There is hardly any sign of the luxurious lifestyles which are changing in Abu Dhabi. Sergi Arola, a well-known celebrity, launched a flashy and ostentatious Spanish restaurant in April. Just last month, developer Aldar was reported to state that it received around $135 million for the reservation of the proposed villa developments on two trivial islands close to the city center.
Even though secrecy around the Abu Dhabi government plan makes it impossible to note details, signs of the state expenditure going down in the recent nine months have been noted by businessmen and bankers alike.
There is less money being spent on the high profile or prestigious investments in foreign countries and there is extra emphasis put on building the domestic economy. Several of the projects being done domestically, which are viewed as less important, are either being delayed or cancelled.
One acquaintance who is familiar with the Emirate’s line of thinking, told Reuters, that seeing some level of the tightening of the belt when oil prices drop, is quite normal, and perhaps the days of excessive shopping abroad might be done for the time being.
The main focal point now is on domestic developmental endeavors in order to enhance the economy and generate jobs on a local level, rather than international. Whether in the gas and oil industry, infrastructure and development sector, tourism or other such areas, all areas are being looked at more closely than before.
The communications department of Abu Dhabi stated in an email that its development and strategic goals are continuing to be implemented and have not been affected by recurring changes in the energy sector.
It was further stated that the companies owned by the state would continue their work in accordance with their already established outline and investment guidelines and policies.