The glorious four decades of the UAE...
As part of celebrations of the 40th anniversary of National Day of the UAE, the Dubai Economic Council recently launched the 'Union Era Document', which includes brief highlights of the national economy’s march during the last four decades.
Hani Al Hamli, Secretary-General of Dubai Economic Council stated that the National Day is not just a traditional occasion. It’s a chance for us to document an ongoing stream of achievements of a nation which enabled itself to turn into a model of development and civilization for many countries worldwide.
Al Hamli said, “Since its foundation, the UAE witnessed consecutive developments in the economic field. As the country’s’ economic philosophy is based on the principle of freedom of economic activity, also providing all those economic activities equal opportunities to participate in the development process, in addition to providing legal and regulatory framework in order to enhance the business environment competitive spirit and leadership, initiative and innovation.
UAE GDP began from Dh6.5bn and currently exceeds trillion dirham, increasing 192-fold.
UAE is the second largest Gulf Arab economy, and among the fastest-growing economies in the world. Throughout the past 40 years, the GDP grew rapidly, increasing from Dh6.5bn in 1971 to approximately Dh1248bn in 2011, an increase of 192 times.
The GDP growth rate of the UAE over the past years reached record numbers exceeding those of many developed and emerging countries, when the rate of growth over the past five years accounted for 34 per cent. The per capita GDP also increased from Dh100,000 in 1975 to Dh174,000 in 2011.
UAE: Beyond the ranks of developing countries to stand next to emerging markets
The outstanding performance of the UAE’s economy has prompted some international organisations intention to raise the country’s classification to the rank of "emerging market", along with China, India, Russia, Turkey, Singapore, Malaysia and Brazil.
Diversification of income sources… a successful strategy.
Local and international reports indicate that the steady economic growth the country over the past years is not attributed to energy production and export, as is the case with many of the oil economies, but to a strategy of diversifying sources of income, and reduction of oil-reliance for the favor of other sectors, such as financial services, logistics, tourism and trade and industry, where the country was able to strike record highs in these sectors and even become a competitor to many economies.
Statistics unveil that oil contribution to the UAE’s GDP of 70 per cent in 1971 decreased to 29 per cent in 2010 versus 71% for non-oil sectors. The economic sectors except crude oil has grown to Dhs749.1bn over the past five years, compared to Dh511bn by the end of 2006, an increase of 46 per cent. This approach represents one of the most important achievements of the country in the economic area because of its contribution in promoting the stability of the national economy.
Positive and optimistic outlook of the UAE economy
Forecasts reveal that UAE real GDP growth 3.3 per cent in 2011 will rise to 3.8 per cent in 2012 compared with 2.3% in 2010. Those predictions come at a time when many developed countries didn’t realise similar rates to the UAE, for example, it’s expected that growth rates in the USA, Germany and UK, will reach 2 per cent, 2.2 per cent, 1 per cent, respectively.
(2010: Actual Source: IMF, World Economic Outlook, 2011)
Moreover, it is expected that the UAE achieves a surplus in its current account by up to 10.3 per cent of GDP in 2011 and 9.2 per cent in 2012, compared to 7 per cent in 2010.
UAE Genetic Map:
Oil: a strategic sector
Trade, Tourism and logistics: fundamental sectors
Oil, Manufacturing and transportation: growth engine sectors
The oil and gas is considered the most important sector in the economic development of the country, where it was used economically and contributed in providing strong infrastructure and the development of other sectors.
Manufacturing also improved largely in the country as the engine of economic growth and is able to make structural transformation in the local economy.
UAE owns many non-oil industries, such as minerals, chemicals, furniture and wood manufacturing, aluminum, building materials, machinery and equipment and many more. In addition, the transportation network has seen significant development over the years.
Industrial investments exceeding Dh100bn
The Industry sector in the UAE witnessed remarkable development during the past years in terms of the number of establishments, the size of investments and the number of employees. There has also been a significant evolution in the quality of national industrial products which increased their competitiveness edge in domestic and global markets.
According to the latest reports, there has been an increase in the number of industrial facilities in various zones of the UAE of about 3567 establishments with investments worth of Dh70.424bn, and a total number of 264,000 workers in 2006 to 4960 establishments with investment amounted to Dh101.189bn by the end of 2010. This reflects the federal and local governments’ vision to develop the industrial sector.
The country also seeks to increase the industrial sector contribution to GDP of up to 25 per cent in the next few years.
Progress in number of industrial establishments in the UAE and the volume of investments in (2006-2010)
Environment.. an essential component of the UAE development strategy
Amid its development march, UAE hasn’t overlooked the environment, it regarded the environments protection as a major goal for its sustainable development strategy and, thus made intensive efforts in a harsh environmental circumstances and addressed desertification phenomenon as well as increasing greenery it also developed water resources.
Agriculture UAE... when the will of man conquer the nature challenges UAE has made unprecedented achievements in the agricultural sector despite of the nature challenges like desertification and water scarcity.
Nevertheless, the keenness of the country’s leadership to provide food as one element of the national economic security has contributed to the development of the agricultural sector and the rest of the activities associated with it. Nowadays, UAE became imports various food products to markets around the world.
UAE has the latest and finest infrastructure in the region
Over the past four decades, UAE was able to establish a solid and modern infrastructure which provides the citizens and businesses needs of public services. This infrastructure doesn’t only include traditional projects such as roads, bridges and power, but transcended to include economic, specialized and free zones, which now exceeded 30 zones and widely spread in the emirates.
The real estate sector at various parts of the UAE, especially in Abu Dhabi and Dubai, also contributed to the country’s’ transformation eventually classifying it as one of a world renowned real estate fronts modified with new concepts, and most importantly green building.
Tourism ..An infinite resource for the national economy
Tourism plays a key role in the UAEs’ economic development, the sector's contribution to gross domestic product jumped from 3.5 per cent in 1995 to 6.2 per cent in 2010.
The tourism sector has realised a record high last year, as the number of visitors and tourists in the UAE reached over 10 million. The employment of momentum and gravity of the sector, it is hoped that the number of tourists to the country in 2010 around 15 million tourists.
What also contributed to the prosperity of the country’s tourism sector is the strategic location and the increasing flow of local and foreign investments in the sector. The size of investments in infrastructure associated with tourism and transport amounts to Dhs47b per year over the last decade. Today Dubai’s Airport is ranked fourth among the top airports in the world.
Etihad Airways and Emirates airlines are considered a distinguished trade mark in the aviation industry in the UAE, and have enhanced the country’s position on the global civil aviation map. The spread of luxurious chain of hotels throughout the country was also one main contributor to the development of tourism.
According to the Travel and Tourism Competitiveness Report 2011, issued by the World Economic Forum, the UAE ranked 30 among 139 countries, and got first place in the Middle East as the most advanced country in the travel and tourism sector with 4.78 points.
UAE: The interface of regional and global trade
Foreign trade accounts for 70 per cent of UAE GDP
Foreign trade turned to be an engine of growth for the UAE economy. The country enjoys a vast network of bilateral trade relations with dozens countries around the globe. It also signed several MOU’s, including the trade and exports, imports and re-exports.
The general trend of trades curve in the past years perceived constant rise except in 2009 when the said trend showed slowdown as a result to the economic downturn which hit the international trade as a whole, this was the impact of the global economic crisis.
It is estimated that the volume of foreign trade of the country will grow at a rate 24-25 per cent at the end of 2011 due to the significant improvement in the economic environment of the UAE.
The UAE Ministry of Foreign Trade Data indicates that the volume of non-oil trade to the UAE increased from Dh13bn in 1971 to Dh1737bn in 2011, over of 133 times.
UAE is among the largest exporters and importers of the world
Last year, the UAE ranked among the top 13 of the exporting countries, as the volume of exports $235bn, including approximately 2 per cent of overall world exports of goods. Similarly, UAE named as one of the largest importing countries in the world and was ranked 18 with $170bn worth of commercial goods, representing 1.4 per cent of total world imports.
Structure of UAE Foreign Trade (2010)
Source: UAE Ministry of Foreign Trade, 2011
Non-oil exports increased thirty-fold during the period 1981-2009
The value of the country’s non-oil exports increased of about Dhs2b in 1981 to Dh7.147bn in 2000 then witnessed a dramatic increase to reach Dh60bn in 2009.
UAE products have reached over 198 markets around the world, but they are concentrated in the Asian markets. India is the main trading partner for Dubai, with exports worth Dhs27.4b in 2010. Dubai holds 82 per cent of total (non-oil) exports of the UAE in 2010, followed by Abu Dhabi (14 per cent), and then Ras Al Khaimah (2.5 per cent).
Today UAE is one of the most important centers of re-exports regionally and globally. The re-export sector ranked second in terms of relative importance in the of foreign trade structure of the country (25 per cent).
This trade has maintained its strength during the last ten years, until it reached dhs9.185b in 2010. Re-exports are distributed to 202 customs territory, and is concentrated in Asia, particularly India.
Imports contribution make up two thirds of the UAEs’ foreign trade, with $485.4bn in 2010. Asia is the main supplier of the UAE; India is at the forefront of emerging Asian markets supplier to the country. The data indicates that about one third of imports are re-exported abroad, raising the value of re-exports over the years.
UAE’s financial sector made it a regional financial center
Financial services sector in the UAE has also witnessed rapid growth the past years. Commercial and specialized banks played an important role in promoting economic activity and trade in the country. Currently 51 bank is operating in the country, 23 national, and the rest are foreign, in addition to several money exchangers.
Financial markets had their share of contribution by mobilizing domestic savings, as the Abu Dhabi Securities Market and Dubai Financial Market are considered to be the main markets are in the country.
Dubai the first financial centre in the UAE and the Arab Gulf
Besides the Dubai Financial Market, Dubai International Financial Centre (DIFC) was established to become a free zone for one of the most important financial centers in the Middle East and North Africa. The Nasdaq Dubai International Stock Markets serves as a link between Western and East.
The government also invested part its accumulated surpluses in international institutions and bodies established for this purpose, such as Abu Dhabi Investment Authority, which contributed to the development of the country’s national wealth.
UAE achieves record figures in Arab and international competitiveness field
Competitiveness is regarded as of one of the most strategic direction of the UAE. For this purpose, the Government established the Emirates Competitiveness Council, which aims to improve the performance of country’s key sectors to ensure the well-being and quality of life for its citizens. Dubai Economic Council has also set up Dubai Competitiveness Center, which aims to make Dubai the most competitive city in the world. A competitive office has also been established by Abu Dhabi's Department of Economic Development. All of these bodies working for the national economy that is making rapid strides to join the list of the best economies in the world by the year 2021.
UAE among the top international competitive Group: Third in Arab World and the 27th World wide
The global competitiveness report for the past three years, issued by the World Economic Forum (WEF) says that the UAE holds a high ranks in global competitiveness. UAE leads a long list of emerging markets such as China, India, in addition to Russia and Brazil, also surpassed some developed countries like Ireland, and Spain, and Italy.
According to the Arab World Competitiveness Report 2011-2012, the UAE was ranked 3rd place in Arab world, and the 27th in the Global Competitiveness Index, with a total of 4.89 points. The report also ranked UAE within the 3rd group for the third consecutive year, which is considered the highest ranked countries based on innovation.
(Source: World Competitiveness Report, WEF, various editions)
The UAE was ranked 33 out of 183 economies in the Doing Business 2012 report issued by the World Bank.
UAE business environment conducive to productivity and innovation
Over the past decades UAE turned into a hub for business and investment for various sectors, one of the strong factors for this transformation is the macroeconomic conducive environment which led to attracting foreign investment operating in many sectors; this has contributed to the development in technological knowledge, competencies, and capital.
UAE is among the best sites for global FDI
The World Investment Prospects Survey Report issued by the UNCTAD revealed that UAE is among the best 30 places for FDI globally. The country was ranked 46 internationally on the economic freedom index, exceeding many countries in the region and the world.
UAE today, ranked 2nd after Saudi Arabia in terms of the total inflow of FDI, reaching Dh54bn in 2010. These investments contributed to mobilizing economic resources, transfer of expertise, experience and knowledge of modern technology, thus expanding the scope of economic activities and increase employment rates.
Macroeconomic policy contribution to national economic stability and growth
The UAEs’ experience in the field of developmental stability and sustainability of growth is stood out in most years. Perhaps the most important elements of that stability and growth are the country following prudent fiscal and balanced monetary policies.
For instance, in its monetary policy, the government used a strategy aiming to achieve monetary stability against reduction of inflation rates except for a few years before the global financial crisis. Perhaps one of the strategies and tools used by the UAE Central Bank to achieve these goals is to adopt a fixed exchange rate system.
Then, the fiscal policy stems to complement monetary policy in achieving the goals of economic stability and growth. The fiscal policy flourished in most years the embodiment of the ambitious leadership of the country to keep pace with the requirements of the development process. Last year, the UAE Cabinet Affairs adopted the UAE zero budget, amounting to Dh122bn for the three years 2011-2013, this is a pioneering experiment in the region and based on the medium-term plan.
Private sector.. a strategic partner for the public sector
The UAE government has opened the doors for the private sector to take a serious and constructive part in the development process. The embodiment of the principle of public and private partnership (PPP), a number of councils across the Emirates where set up to achieve this partnership through economic decision-making, such as the Dubai Economic Council, and the Abu Dhabi Council for Economic Development, along with the formation of several committees and bodies dealing with this area.
The Dubai government has recently launched the "Dubai of the partnership agenda," which aims to make policy recommendations to support the implementation of the Dubai Strategic Plan 2015 and the UAE Government Strategy 2013 and Vision 2021.
Although many economic achievements made in the Unions’ era, there were parallel achievements in other areas of social, culture and civilization forming together an integrated march, making the country a model to follow in the field of comprehensive development.
The UAE constitution guarantees rights of all members of the community whether in labor or education. According to local statistics, the number of economically active labor force in the country has increased dramatically from about 288,000 in 1975 to nearly 2.5 million in 2005, increased by about nine times. The rate of the economically active at the state level in 2010 reached 65.2 per cent.
Emiratisation.. an essential article on the UAE overall development agenda
As per the UAE government vision, ‘citizen’ is the center of development and its purpose, and for this aim, it extends all support to sufficient and modern education and training to the citizens to enable them to serve the society. Other issue that has been taken in remarkable interest is the imbalance in the population structure. To confront this challenge, the government formed several commissions and committees.
Statistics reveals that the banking sector realizes the highest percentage of Emiratisation, male and female, about (34.6 per cent), followed by the finance sector (9.9 per cent), insurance sector (6.47 per cent), and the banking sector (4.85 per cent).
Sectors of higher rations of Emiratisation (2011)
The country’s leadership consistently makes generous gestures as per directions of the President His Highness Sheikh Khalifa bin Zayed Al Nahyan, and Their Highnesses Rulers of the Emirates in various events throughout the past four decades. These initiatives have become of high importance to serve the needs of the community and contributed significantly to the achievement of social stability.
Creative initiative to support SMEs
Realising the of SMEs as a backbone of the developed, the UAE leadership showed considerable interest in these projects and provided them with all kinds of support and guidance to serve the overall development process.
It’s estimated that 94 per cent of the total registered companies in the UAE and up to 300,000 company contribution of up to 60 per cent. In Dubai alone, the number of these companies amounts to 72,000 companies, about 40 per cent of GDP.
Among the institutions established for this purpose is Khalifa Fund to support projects and the Mohammed Bin Rashid Establishment for Development of Small and Medium Enterprises. As well as in Sharjah, where Sharjah Foundation was established to support pilot projects "Ruwad."
UAE Women Found Themselves in the Unions’ Era
Emirati women did not take its rightful place but only after the establishment of the Union. The country’s leadership focused on women to be given all the opportunities as men. Not only in education but also to be involved in various stages including labour and social responsibilities. The contribution of Emirati women in various sectors, began at 3.3 per cent in 1975 to 10 per cent in 1985 and then to 14 per cent in 2007. Business women councils where formed, in addition to women's associations and other organisations.
The national strategy of women empowerment has contributed to advancing women role in the UAE, which was launched by Sheikha Fatima bint Mubarak, Chairperson of General Women's Union in December 2002 to activate the participation of women in many areas.
Education.. the top priority
In education, the UAE witnessed a boom in this vital sector, as part of the country's leadership persuasion to graduate trained and qualified citizens who can contribute effectively to development programs.
Hundreds of KGs and schools were built in various parts of the country.
Also a multitude of universities, colleges, institutes where established, its number exceeds 50 majors in different degrees which saw a horizontal and vertical expansion. Graduate programs have also grown significantly.
It also allowed many of the world-renowned universities to open branches in the country in order to take advantage of global developments in the field of education and transfer into the UAE.
UAE.. the first welfare country in the region
UAE is among the countries in the region most interested in social welfare, through the provision of various public services aimed at maintaining an advanced level of social and economic stability. This has included the provision and development of infrastructure and municipal services, education and health. The Sheikh Zayed Housing Programme is one of the social development projects, aimed at providing adequate housing for the UAE citizens.
At the Emirate of Dubai’s level, Dubai’s Government established the Mohammed bin Rashid Housing Establishment to provide adequate housing for its citizens to meet requirements of life and well-being.
In an effort to achieve a cohesive society dominated by the social Arab and Islamic values , the country's leadership has taken the initiative to set up a ‘Marriage Fund’ which was integrated with social policy legislated by the country since the beginning of the Union.
On the other hand, the country's leadership focused on the health sector and built dozens of general and specialized hospitals and clinics which are available across country that to provide health services, curative and preventive.
UAE enhances its economic and international role in various economic issues
UAE.. a founding and active member in the GCC
UAE is at the forefront of the GCC in response to calls for the establishment of the Gulf Cooperation Council, which began its launch of the capital Abu Dhabi in May 1981 as Gulf summits held many meetings. The UAE contributed to the development of initiatives to build a foundation for all projects at the level of economic integration, such as the Customs Union and the Gulf Common Market and Monetary Union, in addition to its role in promoting the GCC unified voice in moderating thr dialogue with advanced regional blocks.
UAE retains a strong network of international economic relations
Over the last 40 years, UAE established and maintained a remarkable record of economic relations with many countries, advanced and emerging. These relations covered a wide range of areas.
UAE was the first Arab country that hosted the IMF-WB annual meeting
In 2003, UAE has been selected to host the annual meeting of IMF and the World Bank Group. That was a recognition on the significant role that UAE and Dubai plays in the international financial order.
Emirates Vision 2021: inauguration of futuristic strategy
In the midst of strategic vision on the future of the country, His Highness Sheikh Mohammed bin Rashid Al Maktoum, presented the National Document of the UAE in 2021 entitled "We want to be among the best countries in the world by 2021". This document looks forward to the desired future through the achievement of four elements, one of them concerning in knowledge and innovation by working to provide a competitive economy based on knowledge-based economy, and utilization of the potential of national human capital, in addition to diversified economy.
Moreover, The UAE government presented its 2011-2013 strategy, which laid the foundations for the work of federal agencies to develop strategic and operational plans, importantly strengthening national manpower participation and development of their capabilities to increase efficiency, flexibility and productivity in the labor market as well to support SMEs, and develop and promote leadership business and support areas of current and emerging new-productivity and high value added, attract and maintain talent, encouraging innovation and research and development, and strengthening the country's position in international trade.
Dubai Strategic Plan 2015.. road map to Dubai’s’ Economic Future
In 2007, HH Sheikh Mohammed bin Rashid Al Maktoum, announced Dubai Strategic Plan 2015, which aims to establish Dubai’s leading position regionally and globally and to maintain economic growth rates around 11% annually and reach a GDP of $108bn and increase real per capita GDP total to $44,000 in 2015.
Dubai positions UAE on the map of world economy
Dubai's Economy .. Numbers Speak for Themselves
A recent report released by the Dubai Economic Council says that the overall economic growth in Dubai has made an unprecedented increase in the past few decades. The GDP increased in the emirate by 6 per cent per annum in 1975-1990, rising about 9 per cent annually in the last fifteen years.
The report noted that only a few of the world's economies have maintained such an exceptional rate for a long period of time, including the high-performing economies such as Hong Kong, and Singapore. The GDP doubled in Dubai in 2008, about 11 times what it was in 1975.
Dubai’s overall economic growth has been exceptionally high over the past few decades. Dubai’s GDP grew between 1975 and 1990 at around 6% per year, and for the last 15 years it has grown at almost 9 per cent per year.
Indeed, few economies in the world have sustained such an extraordinary pace of growth for an extended period of time, including the high performing city economies of Hong-Kong and Singapore. While the difference in the growth rate between Dubai and these city economies may not look significant, the impact of sustained growth over a period of 35 years is remarkable. The US economy, a proxy for the world economy, has nearly tripled in size during that period (1975- 2008), while Hong Kong and Singapore’s GDP multiplied by a factor of 7 and 10 respectively. The GDP of Dubai by 2008 was 11 times its size in 1975. This is a significant achievement.
Sustainability and accommodation.. characteristics of the UAE economy UAE economy characterized by its high ability to keep up with changes occurring in the global markets, including the geopolitical, economic and financial crises. Perhaps the economic crisis shadowing the world since more than three years and the subsequent regional crises such as the crisis in the euro area and others, all are significant challenges in front of the world economies and the region, hence the continuation of the country’s economic achievements in light of these challenges indicate the strength of the economy’s resilience with regards to foundation of the emirate's economy.
The global economic crisis .. challenge and response International recognition of the UAE economy’s quick recovery from the repercussions of the global economic crisis International reports approve of the recovery of the UAE economy and its success in avoiding the worst of the crisis faster than any other economy in the region. The World Bank Group ranked the UAE among the top ten countries who’ve taken active steps to limit the repercussions of the crisis. Signs of recovery manifested in the country's economy, when indicators of consumer and investor confidence rose in the domestic market.
Among other signs is the inflow of dozens of foreign companies to work in different sectors, the growing movement of domestic lending, low interest rates, shrinking the gap between loans and deposits as a result of to improve domestic liquidity. The findings on the impact of policies and measures taken by the Government to move the economic wheel and move forward in economic development projects, in addition to the successful negotiation with 99% of creditors, "Dubai World" to reschedule debts of the group.
Meeting the knowledge-based economy requisites, the most important challenges ahead
- To meet the requisites of a knowledge-based economy adopted by the UAE as a long-term development strategy in order.
- Complete a series of economic and institutional reforms undertaken by the country to get to the stage of the knowledge based economy.
- Activate the concepts of governance in both public and private sectors.
- To activate the PPP based on best practices worldwide.
- Completion of the legal infrastructure and legislative business.
- To focus on both education and health as keys for the development of economic and social development.
- To pay attention to financial sustainability.
- Strengthening national action aimed at fostering the integration of the UAE, as well as the country’s role at the level of regional and international relation
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