A qualitative shift in organizing partnerships between the public and private sectors

In continuation of the UAE’s efforts to enhance its economic growth and enable the private sector to contribute to consolidating the economic development process, the Ministry of Finance announced on January 18, 2024 the issuance of Federal Law No. (12) of 2023 regulating the partnership between the federal and private public sectors.
This law aims to regulate the partnership between the public and private sectors, encourage the private sector’s participation in development projects and value-added projects, economically and socially in the public sector, enhance the efficiency and effectiveness of government projects, and benefit from the private sector’s capabilities and expertise, financial, technological, organizational, technical and administrative, which enhances the return. Economics for public services.
The law also aims to transfer knowledge and experience from the private sector to federal agencies, train and qualify employees of federal agencies to manage and operate projects, reduce the burden of financial and operational risks on the government that may result from implementing projects, and stimulate the competitiveness of projects in local, regional and global markets.
For the purposes of flexibility, continued implementation of work, and non-interruption of any government services, the law included a provision for the continuation of implementation of Cabinet Resolution No. (1/1) of 2017 regarding the Guide to the Provisions and Procedures of Partnership Contracts between Federal Entities and the Private Sector and Cabinet Resolution No. (4/8) of the year 2019 regarding the guideline for the provisions and procedures of partnership between the public and private sectors in the country, until the issuance of the guide for partnership projects stipulated in the law.
In fact, the partnership between the public and private sectors is one of the issues that is strongly present on the agenda of the governments of developed and developing countries at the same time, and some countries have achieved remarkable progress in this context, while other countries are moving to activate this partnership.
The World Bank’s database on private sector participation in infrastructure projects indicates that private sector investments in infrastructure projects in 44 countries reached about $36.4 billion, in 161 projects, during the first half of 2023. China, the Philippines, Brazil, India, and Egypt each acquired On 70% of those investments ($25.5 billion). The types of partnership contracts vary between the public and private sectors, the most prominent of which are service contracts, management contracts, leasing contracts, construction, operation and transfer contracts, design, construction and maintenance contracts, and others.
The importance of partnership between the public and private sectors in the Emirates comes within the vital role that the private sector plays in the national economy, as the Emirates has set a target of doubling its gross product to 3 trillion dirhams by the next decade, and the rate of Emiratization in the private sector increased by about 157% between 2021 and 2023, as The number of citizens working in it at the end of 2023 reached approximately 92 thousand, and the private sector currently participates with the public sector in the fields of education, infrastructure, waste management, and other public services.
The UAE has a set of elements that support partnership between the public and private sectors, the most prominent of which are: the availability of strong economic policies and institutional and regulatory frameworks, the ability to present a variety of bankable projects, the existence of clear mechanisms for identifying and evaluating projects proposed for partnership, as well as the presence of a developed banking sector to finance projects. And the political will to enhance the role of the private sector in the national economy.
It is worth noting that the issuance of this law to regulate partnership between the public and private sectors is in harmony with the “Emirates Economic Principles Document” approved by the government in November 2023, and it confirmed a set of principles that reinforce this trend, including building a sustainable economy, preserving resources for future generations, and stabilizing the state’s financial systems. The continuous development of economic legislation, transparency, credibility and rule of law, the best banking system to enhance economic growth, and the best logistical infrastructure in the world, which enhances the well-being of society and sustainable development.

*Issued by the Emirates Center for Strategic Studies and Research