MoF launches economic research initiative

As part of its strategy to enhance scientific research and studies that provide accurate data to support decision makers, the Ministry of Finance (MoF), launched an initiative to conduct studies by experts in managing the overall economy and the Ministry’s financial policies. Research papers are and will be published in international scientific journals.

The initiative was launched after publishing two distinguished research papers in the ‘International Journal of Economics and Financial Issues’ (IJEFI) journal- which is considered one of the most prominent international scientific and academic journals covering current financial and economic topics.

The first research paper is titled ‘Gulf Cooperation Council Stock Returns and the Effect of Domestic Monetary Policy Shocks’ and analyses the effect of monetary policy on stock returns and stock return variability in the Gulf Cooperation Council (GCC) as well as the monetary union project. The research also covered the contribution of linking GCC currencies to the Dollar to maintain macroeconomic stability and provide added value to the stock markets, specifically in countries with flexible peg (Bahrain, UAE, Qatar, and Saudi Arabia).

The second research paper is titled ‘Does Financial Development Induce Economic Growth in the UAE? The Role of Foreign Direct Investment and Capitalization’ and investigates the relationship between the financial and economic growth in UAE over the period of 1975Q1-2012Q4, and reffering to the existence of cointegration between financial development and economic growth. The research also discussed the foreign direct investment (FDI) and the capital’s role as key drivers to economic growth in the country. The paper suggest using FDI appropriately redesigning financial policy for sustainable economic growth. The study highlighted that achieving the wise leaderships’ economic vision requires local governments combined efforts, especially with UAE being a destination for foreign investors.

HE Saeed Rashid Al Yateem, Assistant Undersecretary of Resources and Budget Sector at MoF said: “The Ministry of Finance is determined to continue its efforts to strengthen institutional work based on foundations of a sound financial plan. The Ministry recently launched the Emirates Gate of the Government Finance Statistics (GFS) report which provides decision makers with accurate information and data in a timely manner. The report also allows decision makers to plan for financial policies and make effective decisions based on accurate data. The system also provides an advanced and unified electronic database for the country to ensure integration in the financial statements for different sectors that will result in a level of transparency.”

HE AL Yateem added: “The Emirates Gate of GFS report provides multiple benefits to users, as it enables local finance departments and independent federal entities to share and send their financial data in a secure environment to maintain confidentiality, users can access the data to prepare integrated reports. The system supports the independence of accounting principles used within different local and federal entities.”

The Emirates Gate of GFS reports also works on unifying data presentation despite the differences in applied accounting principles and computer systems. The Ministry can review and analyse the data and assemble them automatically which enhances result accuracy in results and saves time and effort, especially when preparing quarterly statistical data.

Abeer Al Abdooli, Director of the Financial Policies Coordination Department said: “The Emirates Gate of GFS reports has worked on connecting electronically the federal government’s system to that of UAE local governments, whereby four quarterly financial reports were prepared as well as UAE’s yearly financial report. The system also contributed in establishing an integrated financial database to develop different financial reports, particularly financial analysis reports.”

Al Abdooli added: “The system contributed in implementing the Classification of the Functions of Government (COFOG) at the Federal and local government levels, issue reports on the Ministry’s website, as well as publish the UAE’s unified financial data in GFS’s annual report and in the International Financial Statistics (IFS) book by the International Monetary Fund (IMF).”