The United Arab Emirates (UAE) is a federation of seven states located in the Middle East. The UAE has a diverse economy, with key sectors including tourism, real estate, retail, transportation, and banking カヴァン・ チョクシ. The UAE’s current population is around 9 million people, with over 10 million expected by the end of 2010. The capital city of the UAE is Abu Dhabi, widely considered to be one of the richest cities in the world. In addition, Dubai (the financial hub) and Sharjah (a center for culture) are also major cities in this federation.
The State of the UAE’s Economy
The UAE’s economy, one of the most vibrant in the Middle East, has experienced an impressive amount of growth since its foundation. Before independence in 1971, oil production accounted for nearly all of the country’s exports and about 25% of GDP. However, today oil accounts for less than 5% of GDP, and the UAE has turned away from oil-dependency to focus on tourism, real estate, transportation, and high-end commerce.
The ongoing growth in the UAE’s economy is largely due to its growing population. In addition, the country’s large expatriate communities are an attractive market for foreign investment because of their spending power and status as non-residents. Currently, the UAE’s economic growth is estimated to be about 6%.
The UAE also has abundant natural resources. The country has the world’s seventh-largest supply of oil and substantial natural gas reserves. In addition, the UAE is known for its healthy non-petroleum-based economy with sustainable development achieved through long-term plans aimed at diversifying the UAE’s economic base.
Since oil was first discovered in 1958, income inequality has been an ongoing concern. Despite efforts to redistribute the nation’s wealth, most of the oil revenues continue to accrue to a small portion of citizens living and working near oil and natural gas fields in Abu Dhabi and Dubai.
In its efforts to diversify the economy, the UAE has made several attempts to attract foreign investment and increase tourism. For example, in 2008, Dubai opened Burj Dubai as part of a massive construction campaign designed to show new economic growth strategies.
The government is attempting to reduce dependency on foreign workers by encouraging local entrepreneurship and job creation through government-sponsored loans and public education. New measures have also been introduced to encourage Emiratis to conduct business outside of the country and invest their money in foreign markets, such as Jordan and Pakistan.
The UAE has no taxes on income or capital gains. However, there is a 5% VAT for most goods and services. Property taxes fluctuate depending on the municipality and property value.
The UAE’s financial markets have also experienced rapid growth in recent years, with a stock market capitalization of over $400 billion. The average return on equity exceeded 18% from 2007 to 2008, while labor productivity increased by about 9%.
The country’s main economic challenges include:
- Achieving stability in the real estate market.
- Reducing dependency on foreign workers.
- Increasing the standard of living for the Emirati population.
The primary methods for addressing these issues have included stricter regulations in the mortgage market, immigration laws designed to make it easier for employers to hire locals, and public education campaigns aimed at promoting entrepreneurship and developing a skilled workforce.
The UAE has a thriving economy, with key sectors currently performing well. In addition, the diversification of the UAE economy has helped make it more resilient and stable.