A falcon gracefully takes flight over a cluster of buildings and soars majestically over a body of water. Blue robotic vines extend from the water, adorning the falcon in silver armor against the background of skyscrapers and futuristic buildings. This captivating animation, displayed on the walls of a specially designed dome on the premises of the Abu Dhabi Global Market (ADGM), set the stage for the four-day Abu Dhabi Finance Week (ADFW) that took place from November 27 to 30, 2023. ADFW brought together global leaders to explore the dynamics of the evolving “falcon economy,” symbolizing Abu Dhabi’s economic resilience and cultural heritage.
The falcon, a regal bird and an enduring icon of the UAE, reflects the central role played by the nation in the region’s cultural tapestry.
Amidst geopolitical shifts, inflation, sluggish growth, and pressing climate change concerns globally, ADGM, the designated financial free zone of the UAE’s capital city, organized ADFW to highlight the significance of the rising falcon economy. ADFW saw leaders from over 100 countries sharing insights with thousands of attendees about the world’s trajectory and Abu Dhabi’s pivotal role in navigating the intricate global landscape.
During the opening ceremony, Ahmed Jasim Al Zaabi, member of Abu Dhabi’s Executive Council and chairman of the Abu Dhabi Department of Economic Development (ADDED) and ADGM, said that “economic winds have shifted, sands beneath us have been unsteady. But like the dunes of our magnificent desert, we too adapt and reshape ourselves.”
Building an inheritable world for future generations
In a bid to shape a future that aligns with generational aspirations, Abu Dhabi, traditionally reliant on its massive oil reserves, has been pursuing economic diversification. Presently, 54% of Abu Dhabi’s GDP is from its non-oil sector, with a goal of reaching 80% eventually.
During the Abu Dhabi Economic Forum, one of ADFW’s sub-events, Abdulla bin Touq Al Marri, the UAE’s minister of economy, outlined the key components to spur further growth in the falcon economy. Emphasizing the transformative power of innovation, Al Marri elaborated on the UAE’s commitment to doubling down on new economy sectors, including renewable energy, artificial intelligence, and advanced manufacturing, among other areas.
Waleed Al Mokarrab Al Muhairi, deputy group CEO of the Mubadala Investment Company, recognizes the benefits of impact investing. Mubadala has deployed capital in over 650 deals worldwide in 2022, yet Al Muhairi was keen in emphasizing the sovereign wealth fund’s underlying principle of investing only where there are sustainable, long-term financial returns. “We will gradually reduce exposure to sectors with prevailing headwinds,” said Al Muhairi, “but we will double the size of our portfolio in the coming decade, focusing on promising geographies such as Asia and other emerging markets.”
Echoing this sentiment is ADQ, the UAE’s youngest fund—established only in 2018. According to Jaap Kalkman, group chief investment officer of ADQ, the fund contributed 22% to Abu Dhabi’s non-oil GDP in 2022 and its mandate is to invest in companies that champion the core sectors of the capital’s economy. Kalkman outlined the fund’s priorities which include energy and utilities, healthcare and life sciences, food and agriculture, mobility, and logistics. ADQ is also eyeing emerging sectors such as financial services, entertainment, real estate, and sustainable manufacturing.
A hub for the green economy
With COP28 on the horizon, recent discussions about climate change have centered on finance as a critical enabler for meaningful global change. Leveraging its historical role as a trading crossroad, the UAE aspires to become a hub for green finance and carbon trading, aligning with its vision for a net zero future.
Speaking during ADFW, Mariam Almheiri, UAE’s minister of climate change and environment, stressed the need to make climate finance accessible and affordable to developing countries. “The UAE believes that climate action is good for growth—for creating new industries, new technologies, and new sustainable jobs for generations to come,” said Almheiri.
During the Fortune Global Forum, another ADFW sub-event, Laura Cha, chairman of the Hong Kong Stock Exchange (HKEX), detailed the upcoming growth areas for capital markets in the digital and green economy. “China is leading the way,” said Cha, acknowledging the country’s leadership in sustainable finance, decarbonization, and the production of green technologies such as wind turbines, solar panels, electric vehicles, and batteries. “What we need next is a breakthrough for accessibility and affordability.”
Cha noted that both the digital economy and green economy will contribute approximately 5% to China’s forecasted GDP growth AI and sustainable finance will be among the drivers seeking new capital, and Hong Kong is poised to provide it.
Continued collaborations between China and the UAE
The slowdown of China’s growth has had a ripple effect on the global economy. When asked if investors were overly bullish about China’s economy, Joey Wat, CEO of Yum China, said that the lower 5% growth that analysts have griped about China’s USD 17.9 trillion GDP in 2022 “still works out to be more than USD 800 billion per year,” said Wat. “That’s two Vietnams. I don’t need to look outside of China.”
Al Muhairi plans to expand Mubadala’s portfolio in China, focusing on innovative companies in life science, clean energy, and consumer-focused solutions.
The UAE will continue to be a market of opportunity for Chinese companies. Max Yuan, CEO and founder of AI company Xiao-i, plans to open its first branch in the UAE by the end of 2023. During a presentation of Xiao-i’s solutions, Yuan shared how Xiao-i’s large language model (LLM) facilitated the collaborative development of a smart baby crib with Ubebis, a maternal and infant health tech company. “A parent saw our exhibition at the Four Seasons Hotel and ordered one immediately,” said Yuan.
During the Huawei Cloud Fintech Summit, an ADFW side event, the Chinese tech giant unveiled its Pangu finance model and the new distributed core financial database GaussDB. “This marks the first time these solutions have been made available to countries and regions outside of China,” said Frank Dai, president of Huawei Cloud Middle East and Central Asia. During the event, Huawei Cloud also signed memorandums of understanding with several UAE-based fintech companies, including Finmaal, Klaim.ai, and Emirates Digital Wallet, signaling its commitment to collaborate with partners through its cloud-native and AI models.