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Obaid Humaid Al Tayer, Minister of State for Financial Affairs, opened today the first Arab Fiscal Forum – FFiscal Policy and Growth, in Abu Dhabi, held in co-operation with the International Monetary Fund (IMF).
The two-day long event, is attended by Christine Lagarde, Managing Director of IMF, Arab Finance Ministers, senior officials, experts from regional and international financial institutions, and Arab Central Banks.
The forum examines recent fiscal developments in the Arab region in the context of broader global developments in the light of intensifying conflicts and depressed international oil prices that have affected the region’s oil exporters. The platform also reviews proper use of fiscal buffers and financing options to mitigate the adverse impact.
In his inaugural speech, Al Tayer welcomed the guests, notably the IMF Managing Director, for her keenness to attend the event, congratulating her for winning the second term in office.
He referred to the significant achievements of the UAE in strengthening public finances and increasing the efficiency of spending and financial planning, especially through adopting the state competitiveness in a manner that enhances a sustainable growth.
"The UAE has adopted a set of policies and procedures such as the public finance medium-term framework, zero budgeting, liberalisation of fuel prices, in addition to enacting a set of draft laws in this respect," Al Tayer said.
He said that the federal government carried out a range of important initiatives consistent with the vision of the wise leadership in the field of innovation, while noting that the state established a fund to support innovation with AED2billion, and also held a brainstorming high-level session in order to draw a post-oil strategy. As a result of these efforts, he continued, the UAE has been catapulted to advanced positions worldwide regarding the fiscal policy indicators by various international competitiveness reports.
Al Tayer said the forum tackles issues from the strategic perspectives, stressing the importance of having policies or economic solutions based on models that precisely fit the economic structures of the countries in the region. He added that the economic changes do not work in isolation from the political, social and cultural changes. Hence, there is a need for deep understanding of the economic issues on this basis, while new economic models should be developed in accordance with these perspectives.
He said that the GCC economies experience significant transformation towards diversification of the economy and new sources of income, stressing the importance of not tying the extent of strategic transformation with variable changes, as the region had experienced successive cycles of the drop and rise in oil prices. He added that the region's economies in the past proved resilient and absorbed the shock.
The minister stressed the importance of adhering to international standards and adoption of best practices to achieve greater integration with the global economy. "But we believe it must come within the framework of in-depth understanding of economic and social structures in the region, and developing appropriate policies that promote competitiveness," he added.
Legarde said, "This event is taking place at a pivotal moment not only for this region but for many other countries that have seen fiscal issues rise to the top of their policy agendas."
She noted that oil exporting-countries are adapting to a new reality of low commodity prices. "Developing economies need more domestically generated revenue to achieve the new Sustainable Development Goals."
The IMF Managing Director underlined that the importance of countries' ability to generate robust government revenue. "This is, of course, the lifeblood of modern states. This is what allows governments to provide public goods that support strong and durable growth."
She said that more reliable sources of revenue would help avoid volatility in public expenditure and pro-cyclical fiscal policy.
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