Important steps taken in recent times should enable the UAE to bolster its GDP in manufacturing, trading and services and steer clear of dependence on oil revenues which are subject to the vicissitudes of output and pricing.

Free-trade zones in the emirates and in specific fields such as automotive spareparts and information technology as well as the formation of a development and investment authority for Dubai bid fair to generate business that could have far-reaching but positive effects on the UAE economy despite difficult conditions as seen in the aftermath of September 11.

Efforts at making the economy more broadbased are already bearing fruit. Some of the world's leading industrial establishments have set up base in the emirates, prompting the growth of ancillary industries, boosting support sectors including banking, construction and air travel and creating jobs.

An injection of $16 billion in the economy in 2001 helped in the diversification process, with manufacturing benefiting most. The industrial sector's share in the GDP was said to have peaked at 13.8 per cent in 2002.

The London-based Economic Intelligence Unit has forecast that the UAE's GDP will grow in real terms in 2002 by about 1.4 per cent, coming in the wake of a real GDP growth of 2.9 per cent last year. The 2002 growth will register despite a loss of $4 billion projected from the government's decision to cut crude oil production.

The UAE thrust is spearheaded by the Dubai Government, which has won praise for its leadership in boosting investment and economic development. The Dubai Development and Investment Authority (DDIA), aiming to develop the emirate into a world-class trade and financial hub, has outlined strategies to attract and support large investments and facilitate speedier licensing. The plans include building, owning and developing new businesses and investment firms either individually or in co-operation with others.

DDIA chairman Mohammed Gergawi has said the organisation would offer new investment opportunities for local companies to network with major global companies and partner them. The organisation also hopes to conduct feasibility studies in collaboration with major international partners for projects beneficial to the UAE economy. On approval, they will be marketed locally, regionally and globally by DDIA, and investors and partners will be invited for participation. "This will help ... synergise local and global resources," Gergawi said.

The DDIA, aware that Dubai has gained the status of a regional and global investment hub, does not wish to be complacent but to constantly improve the local investment environment to enhance economic development.

A landmark development for the UAE economy was the setting up of the Dubai Metals and Commodities Centre (DMCC) which promises to provide a full range of facilities for trading in gold, diamonds and key commodities in the manner of a free zone.

"Strategic location, world-class facilities, a secure regulated environment - all of these qualities will be available to companies that decide to base themselves at the DMCC," the centre said at the time of the launch. While it will propel economic growth in its own right, the prestige it will bestow on Dubai and the UAE as a jewellery entrepot cannot be exaggerated.

Pivotal for Dubai's and the UAE's economic resurgence is progress at the Jebel Ali Free Zone (Jafz) and the Dubai Airport Free Zone (Dafz). According to Jafz authorities, the number of business establishments in the zone should touch 3,500 in 2003. The manufacturing sector there already accounts for more than 22 per cent of the tenants. Jafz has been well served by the Dubai ports Authority, which during the past two years has upgraded ports facilities and put in place sophisticated portals including MyDpa.

An expansion taking place at Dafz will facilitate construction of new light industrial units and comes in the wake of completion of two phases of infrastructure development leading to 141 companies establishing a presence at the zone.

The emirate's most prominent company, Dubai Aluminium Company (Dubal), plans to raise production capacity by 150,000 tonnes, the smelter currently operating at a full capacity of 536,000 tonnes per year.

The company is also replacing units that are 20 years' old. The company has indicated it will carry out the expansion in stages and upgrade existing technology at low cost.

Another prominent company, Dubai Cable Company (Ducab), is implementing a $13.6 million contract to manufacture and supply all the cable requirements of Kahramaa, also known as Qatar General Electricity and Water Corporation, for a two-year period.

Ducab also won a $4.35 million contract from the UAE Federal Electricity and Water Authority (Fewa) under which it will supply 300 km of 33kV cables.

Other emirates have also made progress. Sharjah's Saif zone has been allotted five million sq m of land as extension to the existing 10 million sq m facility. The number of multinational companies at the zone has risen from 55 in 1995 to more than 475. Sharjah emirate, which has about 1,000 industrial establishments, now houses 45 per cent of the UAE's total industrial units.

And at the Hamriyah free zone, there were no indications that September 11 had affected investments. The zone houses 210 companies from 17 countries with a total of Dh1 billion in investors' assets. Hamriyah has attracted the Indonesian heavy vehicle manufacturer Texmaco, which is due to set up a 15,000 to 20,000 vehicles per year factory; Indian engineering firm Larsen & Toubro; prefabricated steel structural maker Manmut Industries; pipe fabricator Bellily; UK multinational Anmaar Resources' subsidiary Specialty Chemicals and Polymers, and the German company Zosil.

There are now 152 companies operating out of Hamriiyah, 24 per cent of them involved in industrial activities. Potential growth areas have been identified as petrochemicals, food processing, textiles and wood.

Sharjah emirate is the site for a new Dh135 million cables project promoted by Saudi Arabia's Riyadh Cables Group and which is fast coming up.

At Ras Al Khaimah a port upgrade is planned to meet growing demand from industries ensconced in the free trade zone. These are said to exceed 100 and have a total invested capital of Dh120 million, the projects including a shipbuilding company. Another 90 companies with a gross business volume of Dh141 million are expected to be set up before the end of 2002. Investors have come from Iran, the US, Europe, the Indian subcontinent, China and the former Soviet states. An important feature of the zone is the establishment of the Centre of Innovation and International Trade.

Ras Al Khaimah-based pharmaceutical manufacturer Julphar formally opened its sixth plant recently and reported a net profit of Dh36.3 million for 2001, up from Dh32.8 million in the previous year. Another company in the emirate, RAK Ceramics, is to open its eighth tile factory within the next few months.

In Abu Dhabi, the Ruwais Fertiliser Industries (Fertil) plans a doubling of its production capacity of ammonia and urea to cater to the growing demand in Asian markets, especially India. Expansion work, awaiting completion of a feasibility study, could begin as early as this year and would come on the heels of a hike in ammonia production in 2001 to 470,000 tonnes from 425,000 tonnes in the previous year. Urea production was 650,000 tonnes in 2001 compared with some 530,000 tonnes in 2000.

While Fertil exports most of its ammonia to India, roughly 15 per cent of its total urea production is consumed in the domestic market with the rest exported to South East Asia, Africa and the Americas.

The Abu Dhabi National Oil Company (Adnoc) has a 75 per cent stake in Fertil while the remainder of the shareholding is owned by TotalFinaElf. Fertil is the only producer of chemical fertilisers such as ammonia and urea in the UAE.

Another Abu Dhabi company, Gulf Aircraft Maintenance Company (Gamco), expects to increase its revenues by at least $60 million to $80 million this year and earn net profits of $20 million, thanks to an extension of services to include several international airlines rather than just Gulf Air. The company recently opened a maintenance centre for industrial gas turbines.

Earlier this year, the $1.2 billion Abu Dhabi Polymers Company (Borouge) began its first export shipments after having gone on stream last December.

The UAE's zest for free zones includes specific sectors, as can be seen from the launch by the Dubai government of a free zone for re-exporting trucks and heavy equipment and its announcement that it will open a new zone for auto parts firms. The emirate has already won tremendous prestige for its unique Dubai Internet City (DIC)

The 'Dubai Auto Parts City' in Al Aweer will cost roughly Dh400 million and is expected to be completed in 2004. In addition to spare parts businesses, the zone will have companies dealing in tyres, auto batteries, and accessories. Dubai's trade in automotive parts has been estimated between Dh3.5 and 5 billion annually and around 50 to 60 per cent of the parts end up as re-exports.

DIC, part of the Dubai Technology and Media Free Zone, has 310 companies out of a total of 650 companies in the zone, and wants to augment its strength by forging stronger ties with Gulf and Middle East companies including ones in Saudi Arabia, which accounts for 40 per cent of all regional IT sales.

DIC officials, referring to their high-tech data centre built in collaboration with IBM, have pointed out that Gulf banks, financial institutions and other organisations no longer needed to look to the US for world-class hosting facilities as DIC could offer the same within the region.