United Arab Emirates » Introduction

Basic Economic Facts

United Arab Emirates is now the second-richest country in the Muslim world. Though Current GDP per capita contracted by 42% in the Eighties, successful diversification helped register positive growth of 48% in the Nineties.

Oil reserves in Dubai are less than one-twentieth that of the emirate of Abu Dhabi, and oil income is now only a small proportion of the city's income.

Dubai and its twin across the Dubai creek, Deira (independent at that time), became important ports of call for Western manufacturers. Most of the new city's banking and financial centers were headquartered in the port area. Dubai maintained its importance as a trade route through the 1970s and 1980s. The city of Dubai has a free trade in gold and until the 1990s was the hub of a "brisk smuggling trade" of gold ingots to India, where gold import was restricted.

Today, Dubai is an important tourist destination and port (Jebel Ali, constructed in the 1970s, has the largest man-made harbour in the world), but also increasingly developing as a hub for service industries such as IT and finance, with the new Dubai International Financial Centre (DIFC). Transport links are bolstered by its rapidly-expanding Emirates Airline, founded by the government in 1985 and still state-owned; based at Dubai International Airport, it carries over 12 million passengers a year.

Industrial growth will be strong, underpinned by continued - albeit modest - increases in oil production, as high prices allow OPEC to hold back from enforcing quota levels. On average, however, the oil sector will account for less than 10% of the annual increase in the size of the real economy. Revenue will drop by around 3% in 2006. Overall, the study forecast that this will leave the UAE with a trade surplus of US$23.8bn in 2005 (the equivalent of 26% of GOP), a modest drop on the estimated record high of US$25.9bn seen in 2004.

The standard of living in Dubai is very high and cosmopolitan. Amongst the Northern Emirates, Sharjah has established itself as a base for manufacturing. The Northern Emirates are, to a greater or lesser extent, reliant on Abu Dhabi and funds from the Federal Government.

Around 80% of the UAE population are expatriates with approximately 100,000 from the UK.