UAE approves Dh58 billion Federal Budget for 2021
ABU DHABI — The cabinet of the UAE on Sunday approved a smaller federal budget for 2021 as the Emirate planned to rationalise expenditures due to the coronavirus crisis and lower oil prices.
The budget for next year was set at Dh58 billion, or $15.8 billion, state news agency WAM reported on Sunday, down from this year’s Dh61.35 billion, which was the largest budget since the establishment of the country.
“The UAE economy will be among the fastest to recover in 2021, and the government has dealt with the 2020 budget efficiently and has all the tools to continue its financial and operational efficiency in 2021,” the Dubai media office said, quoting His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
Sheikh Mohammed chaired the UAE Cabinet meeting that has approved the federal budget for the fiscal year 2021. The Cabinet meeting held at Qasr Al Watan in Abu Dhabi in presence of Lt.-General Sheikh Saif bin Zayed Al Nahyan, Deputy Prime Minister and Minister of the Interior and Sheikh Mansour bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs.
Sheikh Mohammed has asserted that the UAE will continue to implement major projects and focus on social development sectors, despite the global economic conditions. He emphasised that the efficiency of government spending in the UAE is among the highest in the world.
“Aiming to achieve the fastest economic recovery, the 2021 budget is formulated to address economic changes without compromising the national development priorities, and we look forward to more achievements in the coming year,” he said.
The Cabinet approved the general budget of the Union for the fiscal year 2021, with expenditure amounted to Dh58.113 billion. The federal budget continues to focus on both social and economic development.
The budget aims to expand development plans and projects to raise living standards and provide a decent life for Emiratis and residents. A large share of the 2021 budget will be allocated to social development including social welfare, health and education.
The federal budget accounts for only a fraction of consolidated state spending in the UAE as individual emirates such as Abu Dhabi and Dubai also have their own budgets. It is, however, an indication of official plans for the economy.
The planned retrenchment in spending comes amid an economic contraction in the oil-rich Gulf region, bruised by the coronavirus pandemic, lower oil prices and crude production cuts.
Saudi Arabia, the region’s largest economy, said in September it plans to cut spending by around 7% next year.
The International Monetary Fund expects the UAE economy to shrink by 6.6% this year and to swing back to a modest growth of 1.3% next year.
It estimated the UAE government deficit – including consolidated accounts of the federal government and the emirates of Abu Dhabi, Dubai, and Sharjah – at 9.9% of GDP this year, up from a 0.8% of GDP deficit in 2019.
Lalu Samuel, Chairman & Managing Director, Kingston Holdings, said the UAE Federal Budget 2021 reflects the resilience of the UAE economy and the financial strength of the country’s future plans. It does also highlight the fact that the UAE economy is pressing ahead towards further growth and prosperity and that the UAE leadership is forging ahead with implementing its development plans, and achieving the sustainable developments on all levels. This will undoubtedly give a strong impetus to local and foreign investors to increase their investments and projects, Samuel added.
“The federal budget of the UAE is growing year on year, in yet another testimony to the strength of the national economy, which is progressing steadily towards consolidating the economic gains and achievements made over the past decades,” he said.
He noted that the UAE today has become a leading global example for building its economy on solid foundations, adding that the budget once announced every year, includes basic constants that are aimed at serving people by giving greater focus on social aspects, including education and health. This is indeed the fruits of the wise forward-looking vision and strategy of the wise leadership, Samuel said.
Emirates Investment Authority
The Cabinet reviewed a report on the key milestones achieved by the Emirates Investment Authority, EIA, since its inception in 2007. The report highlighted the current assets managed by the EIA and the future plans to support governments priorities.
Restructuring the Emirates Youth Council
The Cabinet approved the restructuring of the Emirates Youth Council headed by Minister of State for Youth, Shamma bint Suhail bin Faris Al Mazrouei. Furthermore, the Council is entrusted with new responsibilities that aim to accelerate youth empowerment in all sectors.
The Cabinet approved the final account of the Emirates Real Estate Corporation, EREC, for the fiscal year 2019, where the EREC achieved an overall growth in revenues by 23 percent compared to the previous year.
The Cabinet also reviewed a report presented by the Ministry of Community Development on the achievements of the Task Force established to evaluate volunteering during crises.
The UAE Nation Brand
The UAE Nation Brand was approved to serve as a visual identity with the goal to further enhance the country’s impact and soft power across the world. The Cabinet advised all government departments to use the brand logo in marketing and advertisements to share the story of the UAE across all fields with the world.
The UAE Government Media Office is the official entity responsible for the coordination with all partners to ensure the optimal use of Nation Brand in such a way that reflects all aspects of the UAE development march.
A total of seven international agreements have been ratified by the Cabinet; including and agreement between the UAE and Israel regarding visa-free entry agreement for citizens of both countries. Two other agreements were between the UAE and the Republic of Sierra Leone regarding the encouragement and mutual protection of investments, the avoidance of double taxation and the prevention of tax evasion imposed on income and capital. Two agreements were signed with Burkina Faso and the Republic of Ghana regarding the avoidance of double taxation and the prevention of tax evasion imposed on income. Two agreements were signed with Guatemala and Rwanda regarding air transport services.