International Economy – The United Arab Emirates
The United Arab Emirates is an amalgamation of seven states of the Arabian Peninsula – Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain. ; located in southwest of Asia in the Persian gulf. United Arab Emirates is like a dreamland to setup business operations. The reason is most probably the attractive, noninterventionist and liberal laws, policies and situations, environment and surroundings as compared to many other countries. The United Arab Emirates has recognized itself as a great economic power.
Due to a prominent boom in the UAE’s economy in current years; this country is attracting more and more organizations, companies, investors, entrepreneurs and individuals to invest and establish their businesses there. Basic Reasons of Investment in UAE The basic reasons that attract the investors to start investing in the UAE are high standard of living, tax free atmosphere, one of the safest countries of the world, small price increases, unwavering currency, low cost of living, multicultural, liberal society, survival of many cultural groups in peaceful environment, large expatriate community and so on.
(Dubai Property Investment, n. p. ) Another benefit of starting a business in the UAE is that there is no constraint over the movement of funds in or out of the country by the Government. Economic Overview The elementary industries of the UAE are oil and gas; these two industries support the country’s substantial wealth. Apart of oil and gas industries, the country has also a sector of refining and production of chemicals; that are a by product of oil or gas.
This sector is sponsored by the government and it has been introduced so that the country’s dependence on oil and gas should be reduced and there should be any other mean of economy growth. This strategy has proven to be a successful one and now the contribution of oil sector to GDP has been reduced to about 45%. The UAE has evolved as high-ranking power in the international dome with a growth rate of 8. 5%. The recorded GDP $145. 8 billion in which industrial sector constitutes 59. 3%, service sector shares 38. 9% where as agricultural sector shares 1. 8%.
The industrial or business conditions are much favorable in the UAE as the growth rate of industrial sector is 5. 1% and more than half of country’s GDP is constituted by this sector. The major portions of industrial sector comprises of fisheries, petroleum, aluminum, cement, fertilizers, handicrafts and textile. This sector works out for higher GDP and hence limits the inflation due to which investors are getting attracted to invest their money in the UAE. The pillar of the UAE economy is the production and export of crude oil and gas. The current oil production is almost 2.
2 million barrels per day. Most of the oil is produced in Abu Dhabi and after Abu Dhabi comes Dubai and Sharjah. The UAE has shown an extraordinary boost in export revenue, which shoots to $152. 1 billion. The UAE has an open economy and the country has always struggled for the diversification of economy. Tourism is the UAE’s another rapidly growing sector of economy. Dubai invests 11. 6% of its GDP into tourism. The UAE wants to be the focal point for the Middle East and mid point between the manufacturing economies of Far East and consuming economies of Europe.
The country has 6 international airports and the 2 largest handle around 6 million passengers in a year which is mounting the amount of freight and hence proving the UAE as a center for tourism, trade and commerce. The government wants to mount the number of visitors to 10 billion till 2010 and it seems that they will reach their target as this sector of tourism is also representing $1. 9 billion of the economy. (Dubai property investment- Buy off plan property in UAE, n. p. ) Significant investments are also being made in country’s infrastructure.
They have developed a number of power generation plants and desalination plants and hence producing satisfactory quantity of electricity and water not only for the consumption of population but also for the usage of other industries and sectors. It is a fact that the UAE is a country having no river and low percentage of rain fall but still its agricultural sector is not weak and they are provided by the supplies of water from the desalination plants and are self sufficient in the field of producing agricultural crops, fruits and so on.
They are producing abundance of fruits and crops that they are not only for the use of the country itself but also being exported to other countries. (United Arab Emirates, n. p. ) International Trade The Minister of economy and planning is keenly pursuing the Government’s economic strategy of liberalization and diversification of economy and he also wants to promote the private sector of the country. The country is having strong economic policies for individuals. The economic policy for the individuals is basically focusing on the strength, growth and development of individuals themselves.