Economy of the United Arab Emirates
Encyclopedia
The United Arab Emirates
(UAE) is a rapidly diversifying, highly developed economy, based on various socioeconomic indicators such as GDP per capita, energy consumption per capita, and the HDI
.
At $270 billion in 2008, 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 38th in the world.
There are various deviating 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 35 per cent in 2006 to $175 billion, compared with $130 billion in 2005.
Although the United Arab Emirates is becoming 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. The UAE is a member of the World Trade Organization
.
--which controls the investments of Abu Dhabi, the wealthiest emirate--manages an estimated $360 billion
in overseas investments & an estimated $900 billion in assets.
More than 200 factories operate 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.
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.
In , 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.
. http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20394793~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html
United Arab Emirates
The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
(UAE) is a rapidly diversifying, highly developed economy, based on various socioeconomic indicators such as GDP per capita, energy consumption per capita, and the HDI
Human Development Index
The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...
.
At $270 billion in 2008, the GDP of the UAE ranks second in the CCASG (after Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
), third in the Middle East—North Africa (MENA
MENA
The term MENA, for "Middle East and North Africa", is an acronym often used in academic, military planning and business writing.The term covers an extensive region, extending from Morocco to Iran, including the majority of both the Middle Eastern and Maghreb countries...
) region (after Saudi Arabia and Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
), and 38th in the world.
There are various deviating 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 35 per cent in 2006 to $175 billion, compared with $130 billion in 2005.
Although the United Arab Emirates is becoming less dependent on natural resources as a source of revenue, petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
and natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
exports still play an important role in the economy, especially in Abu Dhabi
Abu Dhabi
Abu Dhabi , literally Father of Gazelle, is the capital and the second largest city of the United Arab Emirates in terms of population and the largest of the seven member emirates of the United Arab Emirates. Abu Dhabi lies on a T-shaped island jutting into the Persian Gulf from the central western...
. 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
Construction
In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking...
projects. The UAE is a member of the World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...
.
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 AuthorityAbu Dhabi Investment Authority
The Abu Dhabi Investment Authority is a sovereign wealth fund owned by Abu Dhabi, United Arab Emirates founded for the purpose of investing funds on behalf of the Government of Abu Dhabi....
--which controls the investments of Abu Dhabi, the wealthiest emirate--manages an estimated $360 billion
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
in overseas investments & an estimated $900 billion in assets.
Jebel Ali
Jebel Ali is a port town, located 35 kilometres southwest of the city of Dubai in the United Arab Emirates . The village has a thriving expatriate community with over 300 residents. The area is also home to "5,500 companies from 120 countries"....
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
Transshipment
Transshipment or Transhipment is the shipment of goods or containers to an intermediate destination, and then from there to yet another destination....
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
Dubai World Central International Airport
Al Maktoum International Airport is a major airport in Jebel Ali, Dubai, United Arab Emirates that opened on 27 June 2010. Previous working names have included "Jebel Ali International Airport," "Jebel Ali Airport City" and "Dubai World Central International Airport". It will be officially known...
, 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.
Diversification
In 2009, more than 85% of the UAE's economy was based on the exports of natural resources.Recently, the Emirate of Dubai
Dubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
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
Withholding tax
Withholding tax, also called retention tax, is a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government. In most jurisdictions, withholding tax applies to employment income. Many jurisdictions also require...
, 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
Palm Islands
The Palm Islands are an artificial archipelago in Dubai, United Arab Emirates on which major commercial and residential infrastructures will be constructed...
, the World (archipelago)
The World (archipelago)
The World or World Islands is an artificial archipelago of various small islands constructed in the rough shape of a world map, located off the coast of Dubai, United Arab Emirates. The World islands are composed mainly of sand dredged from Dubai's shallow coastal waters, and are one of several...
, Dubai Marina, Jumeirah Lake Towers, and a number of other developments, offering villas and high rise apartments and office space.
In , budgeted government revenues were about AED
United Arab Emirates dirham
The dirham is the currency of the United Arab Emirates. The ISO 4217 code for the United Arab Emirates dirham is AED. Unofficial abbreviations include DH or Dhs. The dirham is subdivided into 100 ....
29.7 billion, and expenditures were about AED 22.9 billion.
Mean wages were $45.61 per manhour in 2009.
Investment
The stock market capitalisation of listed companies in the UAE was valued at $225,568 million in 2005 by the World BankWorld Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
. http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20394793~menuPK:1192714~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html
See also
- Economy of DubaiEconomy of DubaiThe economy of Dubai was valued at US$ 46 billion as of 2006. The Late-2000s recession slowed the construction boom.The International Herald Tribune has described it as "centrally-planned free-market capitalism." Although Dubai's economy was built on the back of the oil industry, revenue from...
- The National Sukuk Program
- Oil and Gas Infrastructure in the UAE
- [twofour54 Abu Dhabi]]