A Conversation with His Excellency Mohamed Hassan Alsuwaidi | Middle East & Africa Summit 2023

Context and Mandate of the New Ministry

• The UAE Ministry of Investment was established in July 2023, led by His Excellency Muhammad Hassan Al-Sawadi, who also serves as Managing Director and CEO of ADQ.
• The Ministry's primary mandate is to unify the separate investment strategies of the seven Emirates into a single national strategy, moving away from the historical siloed approach of each local government.
• The Ministry functions as an advocate for homegrown companies rather than a regulator, aiming to facilitate inward capital inflows and support the international expansion of domestic firms.

Inward Investment Landscape and Economic Data

• The UAE economy demonstrates resilience with average GDP growth of 7% over the last decade and approximately 5% since 2010.
• Non-oil sectors now constitute approximately 80% of the total GDP.
• Capital markets are expanding due to the privatization and public listing of state-owned enterprises (e.g., ADQ, Mubadara, Adnoc pipelines, and Dubai toll gates).
• Inward investment is supported by world-class infrastructure, including high air connectivity (350–400 aircraft) and ports, alongside a reliable energy supply where renewables account for 50% of capacity in winter and 35–40% in summer.
• The population is projected to double to over 20 million within the next decade, driven largely by growth in financial services and the attraction of family offices and asset managers.

Strategic Focus on Industries

• The Ministry is prioritizing downstream oil and gas, petrochemicals, plastics, and recycling.
• Key sectors identified for expansion include materials for export and wastewater recycling, exemplified by SWS, which is targeting international markets for water treatment and agricultural redistribution services.
• Homegrown success stories cited as models for international expansion include Etihad Airways, DP World, Majid Al-Futtaim (retail), and Lulu Hypermarkets.

Geopolitical and Competitive Environment

• Minister Al-Sawadi expressed confidence that regional conflicts, including the war in Gaza and civil unrest in Egypt or Syria, have historically not deterred talent or investment flows to the UAE.
• Regarding competition with Saudi Arabia (which recently proposed 30% tax exemptions for regional headquarters), the Minister characterized the choice of location as a business decision based on specific needs rather than a zero-sum rivalry between states.
• The UAE's strategy relies on its proven track record of growth and security despite regional instability.

Climate Finance Initiatives

• The UAE announced a $30 billion Climate-Related Investment Fund at COP28 to address the lack of funding in the climate sector by leading with direct capital deployment.
• The fund is partnered with Lunette, a private asset manager, which has launched the fund "Altera."
• Altera has already secured three Limited Partners (LPs) contributing approximately $5–$6 billion to initiate the fund's operations.

2024 Economic Outlook

• The Minister forecasts a strong year for 2024, citing opportunities driven by advanced AI adoption and potential distress situations in the debt market that could allow for growth through acquisition.
• The outlook anticipates increased demand for partners capable of delivering large-scale projects, with UAE companies expected to play a central role in global infrastructure and development.
• The forecast acknowledges potential volatility from "black swan" events but maintains a positive trajectory for company growth and Ministry facilitation of investments.