The United Arab Emirates
The United Arab Emirates (UAE) is known as a federation of seven states. The UAE has risen economically as a result of global economic downturns and has become a significant economic hub in the Middle East. UEA is regarded as one of the most secular countries in the world, and it crosses the Persian Gulf and is situated to the south of the Arabian Peninsula. Its official language is Arabic, and its currency is the dirham (AED). In the Gulf Corporation Council, the UAE is referred to as having a higher GDP, and the country is constantly devising policy policies to boost and focus on economic development. The UAE's GDP is largely derived from oil royalties. Politically, it remains to be an authoritarian nation having intense relationships with its neighbors such as Iran. This majorly arises from the territorial disputes that exist over the Gulf Islands. Notably, UEA has diversified and became a regional tourist hub and a trading center.
Overview of Resources
The country is primarily endowed with petroleum and natural gas resources. It has undergone a significant transformation from the discovery of the massive oil reserves. This has greatly added to the country's GDP and also formed the source of living for many people in the country. Crude oil forms one of the primary resources of UAE. Karsay reports that UAE forms the 8th largest producers of crude oil which account for 3.3% of the entire crude oil produced in the world (Karsay). The nation of UAE also comes in as the 7th position in the production of natural gas which accounts for 1.6% of the entire gas supply in the world. Additionally, UAE also supplies aluminum foundry alloy to approximately 45 countries. The country does account for 3.4% of the aluminum smelter production. The country of UAE also involves itself in the production of metals and forms a vital ground for the trading of Gold. It is also endowed with steel and the country has sought to expand the Emirates steel which drives at integrating the steel complex. UAE also has industrial minerals and a leading country in the mining of the fossil fuel.
Type of Economy
UAE is an open market economy. The country\u2019s mining and fuel exports in 2016 accounted for 31% and 30 % respectively. UAE does operate in a free market economy having free trading policies which have fueled investors into the country. According to the Global investment report of 2016, UAE comes in at the 9th position of FDI in Asia with primary investors originating from, Japan, Hong Kong and the UK. The UAE foreign inflow which is fundamentally fueled by the free market economy managed to attract $13 billion in 2016 implying a 25% rise since 2014. Moreover, due to the \u201cfree market economy, investors are attracted to the country and considerably added to the economy of UAE and the terms of trade made easier\u201d (Karsay). The openness to the nation\u2019s resources, the readiness for market diversity, and low cost of energy have driven the foreign investment. The World Bank ranks the county in the \u201c2017 Doing Business report\u201d as the 26th country of the 190 countries in the list.
Economic Indicators
Since 2003, the growth of GDP of the country has been more than that tabled in the world economies. However, in 2009, owing to the downturn in the economic performance, the GDP of the country declined to and UAE registered a negative growth rate of -0.7%. The decrease in the GDP level is particularly explained by the declines in the oil prices. In 2010, the country predicted a growth of 2.5% and UAE is currently ranked as the 35th country in the highest GDP nations in the world. The per capita GDP has been rising steadily since 2010 and it is ranked at the 7th position in per capita GDP in the world. The increase in per capita GDP and the GDP levels imply that the nation is slowly growing and improving. The oil contributes to the large percentage of the GDP accounting for more than 20%. Besides, the manufacturing sector forms 16.2%, real estate takes 8.2% while the construction sector takes a value of 10.7% of the country\u2019s GDP. Inflation is another economic indicator which has considerably increased over the last three decades. The rates of inflation were worse between the years 2005-2008 which was registered to be between 13 and 19% every year. In 2009, the inflation of the country dropped to 11.3%. UAE economic officials note that the unemployment rate in the country h gradually increased from 2.75% in 2004 to 4.25% in 2010. The growth in the industrial production sector increased to 3.2% in 2010
UAE Exports and Imports
According to Observation of Economic Complex, the UAE is at position 30 of the world\u2019s largest export economy and ranked at 61 positions as the most complex economy. The country\u2019s exports in 2015 amounted to 147 billion USD and 217 billion USD. This implied a negative balance of trade of 70 billion USD. However, the figure of the exports was a huge increase from that registered in 2010 which was $ 131 billion. UAE exports include petroleum, crude oil, diamonds, gold, petroleum gas, and jewelry. The primary export destinations are China, India, Japan, Oman, the US, the UK, and Germany. The crude oil petroleum accounts for 31.8% of the total exports while the refined petroleum explains 12.9% of the exports (Observation of Economic Complex). The country is one of the largest importers taking the 19th position in the world. According to OEC \u201cDuring the last five years, the imports of the United Arab Emirates have increased at an annualized rate of 7.5%, from $138B in 2010 to $217B in 2015\u201d (Observation of Economic Complex). The broadcasting materials represent 6.55% of the total imports followed by gold that takes 5.89%.
UAE Economic Growth
The economy of UAE has tabled increased growth in the recent years. The country has been able to realize higher levels of GDP with the economic boom proving to be more impressive to the economy. The country\u2019s heavy reliance on the oil exports and the diversification into other sectors have led to economic growth. Presently, the profits realized from oil significantly contribute to the nation's growth. The growth of the UAE has also been fueled by the number of investors who come into the country for investment purposes. These investors are attracted to the free market economy. However, the volatility in the oil prices hurt the economic growth endeavors of the nation. The capital markets in the country are robust and modern. The markets do enjoy two stock exchanges which have led to the growth of extensive oversight in the market in the protection of the market integrity. The growth in the business also focuses on the development of the Free Trade Zones which \u201coffer many benefits to investors that set up operations within UAE borders\u201d (UAE Business). The county is considered to being a center for business activities. Therefore, the county develops and growth economically, socially and technologically.
Overall summary
Indeed, oil is the greatest primary economic hub for the UAE country and it significantly contributes to its economic growth. More, the country is also seeking in diversifying and investing into other sectors in its attempts to address the \u201cera of oil\u201d (Karsay 2). The country has an objective of investing $35 billion in the clean energy by 2021. This will seek to protect UAE from the crisis that could be associated with the oil depletion. Karsay reports that \u201cThe aim of the clean energy projects is to have an increase in the share of renewable energy to approximately 30% up to 2030. The clean energy will create stability and security for the local energy users. The energy minister reported that the UAE is confident in accomplishing a 44% target of clean energy come 2050 due to the technological advancement\u201d (Karsay 2016). Additionally, the country takes initiatives in investing in the tourism industry. The UAE calls for new developments into the sector to strengthen tourism and thus have a positive impact on the GDP. It looks forward to intensifying its tourist attraction overseas. Unquestionably, the country is a culturally, economically and geographically endowed.
Works Cited
Karsay Ibrahim. UAE beyond oil. Dubai Public Policy Research Center. 2016. Accessed on April, 12, 2017 from http://www.bhuth.ae/articles/uae-beyond-oil
Observation of Economic Complex. United Arab Emirates. 2017. Accessed on April, 12, 2017 from http://atlas.media.mit.edu/en/profile/country/are/
Santander Trade Portal. United Arab Emirates: Foreign Investment. 2017. Accessed on April, 12, 2017 from https://en.portal.santandertrade.com/establish-overseas/united-arab-emirates/foreign-investment
UAE Business. Oil Economy to Tourism Economy, UAE. UAE Business Magazine. 2016. Accessed on April, 12, 2017 from http://uaebusiness.com/2016/07/24/oil-economy-to-tourism-economy-uae/
