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UAE

Beyond oil score(out of 100 points) 32.0
Index ranking(out of 26 countries ranked) 23
Overall status*  
General Economic Framework  
Political Framework  
Society and Future Skills  
(Beyond) oil related factors  


The UAE controls roughly 10 percent of the world's oil supply and nearly 5 percent of the world's proven natural gas reserves. Oil and gas production provides about 30% of the country's GDP.

Beyond-oil investments to drive future growth

Thanks to high income from oil, UAE’s real GDP has been growing at a pace of minimum 4% from 2004. Meanwhile the UAE government has been successful in reducing inflation through strict macro and microeconomic practices, such as control of the country’s interest rates, and expenditure discipline.

The UAE economy is bolstered by several important sectors. Construction is one of them. Today the skyline of Dubai and Abu Dhabi is dotted with cranes, which are taking part in one of the biggest construction booms in the Middle East. Projects such as Palm island and Burj Dubai, the world’s largest sky scraper, is attracting attention and investment. Tourism is also another major income generator for the UAE economy. UAE’s attraction as a conference centre, sports tournaments and examples such as the newly constructed indoor Ski park (the world’s largest indoor facility of this type) continue to attract many foreign tourists. Meanwhile UAE companies themselves are leading the way in the growth of local economy, especially in the construction and Telecom sector.

Ettisalat, UAE’s telecom operator is the Middle East’s biggest Telecom company, with stakes in Saudi Arabia, Pakistan, and a number of African countries. Meanwhile Emaar construction, a UAE company, is the Middle East’s biggest construction company, with massive stakes and deals in numerous countries across the globe. Dubai’s retail sector is another important sector. Many tourists, from Europe, Iran and the Indian subcontinent visit the UAE for long shopping trips. There are concerns that the UAE economy may be overheating. This was seen early in 2006, when the country’s stock exchange fell by more than 5% in a space of a week.

Beyond Oil Summary

One of the major drivers of the UAE economy, and its beyond oil preparations, is the country's business friendly regulations. The UAE government has created a secure legal environment to protect the rights of the local and international investor. This is indicated by UAE's economy being ranked as “mostly free” by the Heritage Foundation/Wall Street Journal Index of Economic Freedom for the year 2005. This factor has lead to an increase in the level of foreign investment in UAE’s non oil sector. Furthermore, the UAE government is currently involved in, and actively encouraging UAE companies to invest in the non oil sector in the UAE and abroad. All such investments will produce income streams for the UAE economy for the day oil runs out. This focused policy has lead to UAE becoming of the most prepared countries for the Beyond oil era. The biggest indicator of the success of the UAE economy’s efforts to diversify is the fact that today, only 30% of the country’s GDP is provided by oil. This is compared to 20 years ago, when 65% of the GDP being provided by income from oil.

  Indicates high preparedness   Indicates deficits but potential for development   Indicates unfavourable preconditions.
 
     
   
 
 
Beyond oil © 2007.