The UAE Minister of Economy said yesterday that higher rates of growth would not be possible until struggling countries around the world resolve their financial crises.
Sultan Al Mansouri said if the UAE was to hit its growth target of 4 per cent this year, it needed positive momentum in overseas economies.
“To be able to grow at a much higher rate, we feel the rest of the world must solve their problems,” he said. “Firstly, looking from outside there has been a lot of misfortune in terms of trying to resolve the financial crisis from countries and places we expected to be more professional in how they address these issues.”
Financial markets have been coming under pressure in recent days as the failure of policymakers in the United States to resolve their budget stand-off has spooked investors. Asian shares, oil prices, and the US dollar were all pushed down yesterday as the clock ticks on the October 17 deadline to avoid a historic default.
Mr Al Mansouri was speaking at the UAE Italian Business Forum in Abu Dhabi yesterday, organised as part of a tour of the UAE by representatives from 115 Italian companies in a bid to deepen ties between the two countries.
Italy’s troubles were the other big worry for markets last week ahead of a vote of confidence in the Italian prime minister Enrico Letta. He won the vote in both houses of parliament, easing concerns about the country’s ability to press ahead with ambitious economic reforms.
Mr Al Mansouri said the Emirates “was ready to help and assist” Italy to bolster its economy.
“The UAE is blessed with quite a substantial amount of liquidity and some of the largest sovereign wealth funds in the world are here,” he said. “But what we need is identifying opportunities you have in Italy. We really need to understand … to be able to make a real financial decision.”
Abu Dhabi has in the past been an active investor in Italian business.
Mubadala Development, the strategic investment company controlled by the Abu Dhabi Government, bought a 5 per cent stake in Ferrari in 2005 for a reported €114 million (Dh568m) before selling it back to Fiat, Ferrari’s parent company, in 2010.
Abu Dhabi’s state-owned International Petroleum Investment Company (Ipic) owns a stake in the Italian lender UniCredit through its Aabar Investments unit.
Mr Letta’s government has vowed to push through 50 structural reforms to entice more foreign investment. Among the issues requiring action are cutting labour taxes, which are the highest in the European Union, and cutting the 1,210 days it takes to resolve a commercial lawsuit.
“The government is stable and have a very strong commitment to reform the economy,” said Carlo Calenda, the Italian vice minister of economic development.
Mr Calenda was attending the trip in place of Mr Letta who had to pull out because of the confidence vote.
Mr Calenda also discussed with officials from the Khalifa Fund and Gulf Capital the possibility of investment in UAE and Italian small and medium-sized enterprises with high growth potential.
After nearly two years of recession, Italy’s economy is expected to rebound to slim growth of 0.7 per cent this year, according to the IMF.