A DIVERSE ECONOMY
UAE is primarily known as a petroleum producing economy that has achieved tremendous economic and social development in the last two decades. The country firmly believes in investing in its infrastructure, industry, trade and tourism, which are expected to lead to the economic expansion in future.
The UAE has a well-developed infrastructure. The capital city of Abu Dhabi and the city of Dubai are very modern. Most of the UAE’s petroleum reserves are located in Abu Dhabi. While the petroleum sector dominates economic development in the UAE, attempts are being made to diversify into other sectors. Although the country is a federation, member emirates largely pursue their own policies. Dubai, the commercial hub and second largest emirate in the UAE, in particular is positioning itself as a regional trade centre, and is rapidly developing into a major tourist destination.
Since the rise of oil prices in 1973, petroleum has dominated the economy, accounting for most of its export earnings and providing significant opportunities for investment. The U.A.E. has huge proven oil reserves, estimated at 98.8 billion barrels in 2003, with gas reserves estimated (at 212 trillion cubic feet); at present production rates, these supplies would last well over 150 years. In 2006, the U.A.E. produced about 2.8 million barrels of oil per day.
More than 6,000 companies from more than 120 countries operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption.
Except in the free trade zone, the U.A.E. requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis into leadership positions.
ECONOMIC & BUSINESS ENVIRONMENT
Some of the features that provide an economic and business environment in UAE include; a coordinated infrastructure that provides all essential utilities to the major centres; excellent communications systems; a virtual absence of taxation; customs duty-free for most imports and exports; a well-structured financial sector with virtually no exchange control regulations; free trade zones that ensure ease of registration and efficient operating facilities; international fairs and exhibitions; an attractive social environment including educational, medical and recreational facilities.
GOVERNMENT AND BUSINESS
The government has traditionally played a key role in the planning and development of the economy. In addition, the government is involved significantly in the ownership of key sectors of the economy, including oil and gas production and refining, the petrochemical industry, large-scale manufacturing, energy and water production, telecommunications and transportation.
FREE TRADE ZONES
To attract foreign businesses, free trade zones have been established in Dubai’s port city of Jebel Ali, Sharjah, Umm Al Quwain and Fujairah. Currently, there are ten free-trade zones in the UAE. Since UAE tariffs are low and not levied against certain imports, the main attraction of these free trade zones is the waiver of the requirement for majority local ownership.
IMPORTS AND EXPORTS
Imports estimated at $37.3 billion: consumer goods, capital goods. Main import partners are Japan, UK, USA, Italy, Germany and South Korea.
Exports estimated at $45.9 billion are dominated by oil and gas. Over 60 % of oil and gas exports go to Japan. Other prominent export markets are India, Singapore and South Korea.
BANKING & FINANCE
The Central Bank Law establishes five principal categories of institutions in the UAE – commercial banks, investment banks, financial establishments, financial intermediaries, and monetary intermediaries, all of which must be licensed by both the Central Bank and the local licensing authorities. The well-structured network of local banks and branches of foreign bank provides a full range of commercial banking services.
The U.A.E. is also a member of the following international organisations: UN and its specialised agencies (ICAO, ILO, UPU, WHO, WIPO); World Bank, International Monetary Fund (IMF), Arab League, Organisation of the Islamic Conference, Organisation of Petroleum Exporting Countries, and the Non-Aligned Movement.
