Economy of United Arab Emirates

Economy of United Arab Emirates[1]
Burj Khalifa
Rank 30th
Currency United Arab Emirates dirham aed
Fiscal year 1864
Trade organisations OPEC and WTO
Statistics
GDP $360 billion (2012)[2]
GDP growth 4% (2012 est.)[3]
GDP per capita $48,158 (2012) (7th)[1]
GDP by sector Agriculture (0.8%), industry (56.1%), services (43.1%) (2012 est.)[1]
Inflation (CPI) 1.4% (2012 est.)[4]
Population
below poverty line
19.5% (2003 est.)[5]
Labour force 4.34 million (2010 est.)[1]
Labour force
by occupation
Agriculture (7%), industry (15%), services (78%) (2000 est.)[1]
Unemployment 4.6% (2012)[6]
Main industries Petroleum and petrochemicals, fishing, aluminium, cement, fertilizers, commercial ship repair, construction materials, some plane building, handicrafts, textiles.[1]
Ease of Doing Business Rank 26th[7]
External
Exports $300.6 billion (2012 est.)[1]
Export goods Crude oil, natural gas, reexports, dried fish, dates[1]
Main export partners  Japan 15.6%
 India 13.4%
 Iran 10.5%
 Thailand 5.6%
 Singapore 5.5%
 South Korea 5.3% (2012 est.)[8]
Imports $220.3 billion (2012 est.)[1]
Import goods Machinery and transport equipment, chemicals, food[1]
Main import partners  India 17.0%
 China 13.8%
 United States 10.5%
 Germany 5.2%
 Japan 4.2% (2012 est.)[9]
Gross external debt $151.8 billion (31 December 2010 est.)[1]
Public finances
Public debt 40.4% of GDP (2012 est.)[1]
Revenues $130.3 billion[1]
Expenses $99 billion (2012 est.)[1]


All values, unless otherwise stated, are in US dollars

At $360 billion in 2012, the GDP of the UAE ranks second in the CCASG (after Saudi Arabia), third in the Middle East—North Africa (MENA) region (after Saudi Arabia and Iran), and 30th in the world.[10]

There are various inaccurate estimates regarding the actual growth rate of the nation’s GDP, however all available statistics indicate that the UAE currently has one of the fastest growing economies in the world. According to a recent report by the Ministry of Finance and Industry, nominal GDP rose by 20.8% in 2012 to $360 billion, compared with $298 billion in 2011.[11]

Tourism is one of the main sources of revenue in the United Arab Emirates. Although the UAE is less dependent on natural resources as a source of revenue, petroleum and natural gas exports still play an important role in the economy, especially in Abu Dhabi. A massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the UAE diversify its economy. Nationwide, there is currently $350 billion worth of active construction projects.[12] The UAE is a member of the World Trade Organization.

External trade

Major increases in imports occurred in manufactured goods, machinery, and transportation equipment, which together accounted for 70% of total imports. Another important foreign exchange earner, the Abu Dhabi Investment Authority--which controls the investments of Abu Dhabi, the wealthiest emirate—manages an estimated $360 billion in overseas investments & an estimated $900 billion in assets. The UAE is in the top ten for the richest countries.


More than 1 factory operates at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption. A major power plant with associated water desalination units, an aluminium smelter, and a steel fabrication unit are prominent facilities in the complex. The complex is currently undergoing expansion, with sections of land set aside for different sectors of industry. A large international passenger and cargo airport, Dubai World Central International Airport, with associated logistics, manufacturing and hospitality industries, is also planned here.

Except in the free trade zone, the UAE requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis into leadership positions. However, this law is under review and the majority ownership clause will very likely be scrapped, to bring the country into line with World Trade Organisation regulations.

As a member of the Gulf Cooperation Council (GCC), the UAE participates in the wide range of GCC activities that focus on economic issues. These include regular consultations and development of common policies covering trade, investment, banking and finance, transportation, telecommunications, and other technical areas, including protection of intellectual property rights.

The largest trading partner for the UAE is India.

Diversification


Recently, the Emirate of Dubai has started to look for other sources of revenue. High-class tourism and international finance are the new sectors starting to be developed. In line with this initiative, the Dubai International Financial Centre was announced, offering 55.5% foreign ownership, no withholding tax, freehold land and office space and a tailor-made financial regulatory system with laws taken from best practice in other leading financial centres like New York, London, Zürich and Singapore. A new stock market for regional companies and other initiatives were announced in DIFC. Dubai has also developed Internet and Media free zones, offering 100% foreign ownership, no tax office space for the worlds leading ICT and media companies, with the latest communications infrastructure to service them. Many of the world's leading companies have now set up branch offices, and even changed headquarters to, there. Recent liberalisation in the property market allowing non citizens to buy freehold land has resulted in a major boom in the construction and real estate sectors, with several signature developments such as the 2 Palm Islands, the World (archipelago), Dubai Marina, Jumeirah Lake Towers, and a number of other developments, offering villas and high rise apartments and office space.

As of 2001, budgeted government revenues were about AED 29.7 billion, and expenditures were about AED 22.9 billion.

Mean wages were $45.61 per manhour in 2009.

Emiratisation (or Emiratization) is an initiative by the government of the United Arab Emirates to employ its citizens in a meaningful and efficient manner in the public and private sectors.[13][14]

While the program has been in place for more than a decade and results can be seen in the public sector, the private sector is still lagging behind with citizens only representing 0.34% of the private sector workforce.[15]

While there is general agreement over the importance of Emiratisation for social, economic and political reasons, there is also some contention as to the impact of localization on organizational efficiency. It is yet unknown whether, and the extent to which, employment of nationals generates returns for MNEs operating in the Middle East. Recent research cautions that localization is not always advantageous for firms operating in the region, and its effectiveness depends on a number of contingent factors.[16][17]

In December 2009 however, a positive impact of UAE citizens in the workplace was identified in a newspaper article citing a yet unpublished study,[18] this advantage being the use of networks within the evolving power structures.

Overall, however, uptake in the private sector remains low regardless of significant investments in education, which have reached record levels with education now accounting for 22.5% – or $ 2.6 billion – of the overall budget planned for 2010.[19] Multiple governmental initiatives are actively promoting Emiratisation by training anyone from highschool dropouts to graduates in a multitude of skills needed for the - essentially Western - work environment of the UAE, these initiatives include Tawteen UAE,[20] ENDP[21] or the Abu Dhabi Tawteen Council.[22]

Beyond directly sponsoring educational initiatives, the Emirates Foundation for Philanthropy[23] is funding major research initiatives into Emiratisation through competitive research grants, allowing universities such as United Arab Emirates University or Dubai School of Government to build and disseminate expertise on the topic.

Academics working on various aspects of Emiratisation include Paul Dyer[12] and Natasha Ridge from Dubai School of Government, Ingo Forstenlechner[13] from United Arab Emirates University, Kasim Randaree from the British University of Dubai and Paul Knoglinger from the FHWien.

The UAE rulers are striving to make their country's economy free from dependence on oil exports by 2030.[24]

Investment

The stock market capitalisation of listed companies in the UAE was valued at $109.9 billion in October 2012 by Bloomberg.[25]

See also

  • Economy of Dubai
  • The National Sukuk Program
  • List of Free Trade Zones in UAE
  • Oil and Gas Infrastructure in the UAE

References

External links

  • UAE Economy on the CIA World Factbook
  • United Arab Emirates Economy
  • DMOZ
  • Business consultants in UAE
  • PRO Services Dubai
  • United Arab Emirates economic profile from the Lebanese Economy Forum, extracted from the CIA Factbook & Worldbank data
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