Over four decades, the UAE has become one of the most important economic centres in the Gulf, due primarily to its forward-thinking leaders. Expo 2020 beckons.
On the ranking of the best destinations for direct foreign investment, the United Arab Emirates regularly scores within the Top 15. The reasons for this are foresight, excellent planning and a unique ability to understand investor needs.
UAE’s achievement in becoming one of the most important economic centres in the Gulf region within four decades is due primarily to the forward-thinking of its leaders. They have built a fully integrated investment environment with all the components of a competitive and knowledge-based economy: advanced infrastructure, diversified economy and a dynamic open market approach.
UAE’s thriving economy
The country runs a free market economy that’s based on oil and natural gas production. Together these comprise over a third of GDP. However since the 1990s the UAE has diversified into many other non-oil sectors: Oil & Gas – 33.6% Manufacturing – 12.6% Commerce and hotels – 11.4% Real estate – 9.1% Construction – 8.6% Transportation – 7.3% Finance and insurance – 6.4% Government services – 11%
Open market access
The Government has taken many steps to create an open market environment that’s convenient for foreign investors. The UAE is a member of the World Trade Organization (WTO), the Gulf Cooperation Council (GCC) and a signatory to the Great Arab Free Trade Agreement (GAFTA). It has signed Bilateral Investment Treaties (BIT) with 38 countries and Double Taxation Agreement (DTAs) with 49 countries. The UAE also signed an agreement with the OECD to harmonize taxation issues. The pathways for investors are highly accessible.
UAE economy indicators in 2013
• The population reached 5.7 million
• GDP Growth (constant prices, national currency) is 3.136%
• GDP Per Capita (current prices, US Dollars) is US$ 64,780
• Investment (% of GDP) is 23.156%
• Inflation (average consumer price change %) is 1.585 %
The UAE achieves a good balance between regional independence and central control. While each of the seven Emirates – Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah – has its own leader, the nation is governed by a Supreme Council of Rulers made up of the seven Rulers, who appoint the prime minister and the cabinet. This spirit of cooperation creates political stability and stimulates economic growth.
A promising place to do business
Taking all factors into account, the composite picture is very encouraging. The UAE is progressing on many levels and in many directions to increase its influence on the world. Many ambitious projects are in progress and the opportunities for astute investment have never been better.