2017年-IMF国际货币组织全球_United_Arab_Emirates_Selected_Issues_30页_999kb

UAE Medium-Term Fiscal Policy Framework Summary

Core Content

The document outlines the need for enhancing the Medium-Term Fiscal Framework (MTFF) in the United Arab Emirates (UAE) to better align fiscal policy with long-term economic and development goals, particularly in the context of a lower-for-longer oil price environment. It highlights the importance of fiscal transparency, intergovernmental coordination, and risk management in ensuring fiscal sustainability and intergenerational equity.

Main Points

A. Introduction

• The UAE is a federation of seven emirates, each with autonomy over oil resources, fiscal policy, and debt issuance.
• Fiscal decentralization is extensive, with emirate-level spending accounting for 88.5% of total government spending, compared to 75% in Canada and 65% in Switzerland.
• The federal government is partially funded by transfers from Abu Dhabi and Dubai, with Abu Dhabi also covering security and defense expenses.
• The federal government has a five-year budgeting cycle and a balanced budget as its fiscal anchor.
• Abu Dhabi has an internal five-year fiscal framework, while Dubai has a three-year MTFF, though not published.
• Fiscal data and coordination have improved, with macro-fiscal units and a fiscal policy coordination unit established.

B. Current MTFFs in the UAE

• Federal MTFF: Anchored by a balanced budget goal, uses sectoral expenditure caps, and is approved by the Federal National Council.
• Abu Dhabi MTFF: Based on macroeconomic models and the Permanent Income Hypothesis (PIH), includes revenue forecasts and expenditure paths.
• Dubai MTFF: Includes three-year projections for revenue, expenditure, and debt, and sets non-binding limits for annual deficits and public debt.
• Fiscal transparency is still limited, as annual budgets and MTFFs are not published in Abu Dhabi.

C. Strengthening and Consolidating MTFFs

• A consolidated, comprehensive, and forward-looking MTFF is essential to address the fiscal and economic challenges of the UAE.
• Macroeconomic and fiscal forecasts should be anchored by fiscal rules to guide policy.
• Expenditure ceilings and resource envelopes should be used to integrate local and federal frameworks.
• Contingent liabilities, including those from public-private partnerships (PPPs) and government-related enterprises (GREs), require better monitoring and analysis.
• Fiscal rules based on fiscal anchors can discipline policies while allowing flexibility in response to shocks.
• Abu Dhabi should focus on intergenerational equity due to its low debt and high precautionary buffers.
• Dubai should maintain a debt ceiling and ensure consistency between deficit rules and debt targets.
• Fiscal transparency and communication are critical for external scrutiny and attracting foreign investment.

D. Conclusion

• The UAE should build on existing progress to strengthen MTFFs at both federal and emirate levels.
• MTFFs can help align annual budgets with medium-term policy goals, including diversification and non-oil economic growth.
• Improved fiscal data and transparency will enhance policy credibility and decision-making.
• Consolidated and emirate-level fiscal data should be made more available and reliable, with a focus on accrual accounting.
• Enhanced coordination among federal and emirate governments, GREs, and SWFs is necessary to manage liquidity and fiscal risks effectively.

Key Information

• The UAE has high fiscal decentralization, with emirate governments managing their own budgets and debts.
• The federal government relies heavily on Abu Dhabi and Dubai for funding.
• Abu Dhabi has a more conservative fiscal position, while Dubai has higher debt levels and increased investment needs.
• The MTFF should include non-oil growth objectives, expenditure needs, and risk scenarios.
• PPPs and GREs can be sources of contingent liabilities, and thus require careful monitoring.
• Fiscal transparency and data sharing are essential for enhancing credibility and coordination.

Recommendations

• Develop a consolidated MTFF that integrates federal and emirate frameworks.
• Improve fiscal data availability, quality, and timeliness.
• Establish expenditure benchmarks at the national level to ensure alignment with national objectives.
• Strengthen intergovernmental coordination and fiscal rules.
• Enhance liquidity management and risk analysis.
• Implement transparent communication and fiscal reporting.
• Strengthen legal frameworks for PPPs and GREs to mitigate risks and support infrastructure development.

Annexes Overview

• Annex I: Focuses on education and healthcare as key areas for fiscal expenditure.
• Annex II: Discusses public-private partnerships and their fiscal implications, emphasizing the need for monitoring and risk management.

References

• The report draws on international experience, including resource-rich countries like Norway, Azerbaijan, Russia, and Timor-Leste, as well as federations such as Brazil, India, Germany, Mexico, Switzerland, and the United States.
• It also references the European Union’s fiscal governance framework as a model for expenditure benchmarks and fiscal rules.

Summary

The UAE is at a critical juncture in its fiscal policy development, especially given the long-term decline in oil prices. A comprehensive MTFF is necessary to ensure fiscal sustainability, intergenerational equity, and economic diversification. The document emphasizes the importance of fiscal transparency, intergovernmental coordination, and risk management, while highlighting the unique challenges posed by fiscal decentralization and diverse emirate fiscal positions. Implementing a consolidated MTFF that integrates federal and emirate frameworks and includes non-oil growth objectives, contingent liabilities, and PPPs will be key to achieving long-term fiscal stability and economic resilience.