x Abu Dhabi, UAEFriday 19 January 2018

Capital projects are an economic stimulus plan

The Abu Dhabi spending decisions announced this week will replace anxiety with a new certainty about planning priorities. Now there is much to be done.

Monday's sheaf of project approvals in Abu Dhabi was good news for major building companies, humble job-seekers and just about everyone else as well.

Cost figures are not yet public, but the projects will surely inject billions of dirhams into the economy of the capital and the country. And look where the money is being spent: schools, hospitals, more help for the autistic, housing, roads and mass transit and museums lead the list. These are investments that will improve everyday life.

And this cornucopia has a broader significance as well. The 2008-09 property collapse detoured the capital into years of anxiety. A wide range of long-planned projects had to be postponed. Payments were delayed or disputed. Optimism ebbed. But now, by announcing and reaffirming a clear list of priority projects, the Abu Dhabi Executive Council has moved to banish that uncertainty.

In the UAE, as in other Gulf countries, government spending makes up a large share of the gross domestic product, and so strategic injections of funds can matter more here than elsewhere. The world economy has its problems, but the UAE is well-positioned in uncertain times.

Also we have learnt a useful lesson: even in boom times, the practical approach is to proceed only with the projects deemed most important. When everything is a priority, then the only way to rein in spending in case of a setback is to slow everything down. All concerned benefit from more transparency in the planning process.

Now that we have a streamlined priority list, what comes next is the hard work of converting the Executive Council's decision into bricks and mortar.

The projects greenlighted this week were at various stages when the brakes were applied. Now detailed preparation can accelerate again; there will be new purpose in a lot of planning offices. Construction firms are eager for work although some, affected by past postponements, may be wary.

Blueprints will be pulled off the shelves. Engineering and construction companies will begin to replace any key personnel who left the country during the lean years. Precise budgets will be drafted. Recruiting plans must be written for the hospitals, schools, and other institutions which are now confirmed. There's a lot of work to be done.