United Arab Emirates (UAE) is comprised of seven monarchies; Abu Dhabi, Amman, Dubai, Fujairan, Ras Al-khaiman, Sharjan and Umm al-qaiwan. The country boasts the second largest economy in the entire Arab countries after Saudi Arabia. Emirates’ economy is heavily reliant on oil for revenue generation but in the recent past, diversification through a focus on other sectors like banking, tourism, and agriculture have taken roots. This empire generated $407.2 billion in gross domestic product in 2017 as reported by International Monetary Fund.
Background and economic overview
The UAE established their own procedures and principals several years ago. The country is governed by a president elected by Federal Supreme Council. Preceding leaders initiated the diversification of economy with the earliest being on trade. They set the pace for diving into other thriving sectors that will, in the future, form the pillars of the UAE economy.
The UAE has no income tax and no federal-level corporate tax. The incorporated overall tax burden equal 19.0 percent of total domestic income. The government spending currently amounts to 33% of total GDP while public debt is equivalent to 19.4%. The conducive business environment has been put in place to boost trade and other industries that contribute to Emirate’s economic growth. Regulations and requirements such as minimum capital required, licensing, employment regulations and government incentives have also been streamlined to favor foreign investors and local traders.
UAE Economy projected to grow
IMF predicted immense economic growth of the United Arab Emirates in a recent forecast report. It attributed this to Abu Dhabi’s unexpected oil recovery. The gross domestic product will expand to 3.4% in 2018 as compared to 1.3% in 2017. Abu Dhabi, which holds 6% of world’s proven oil reserves, will experience an estimated oil surge from 0.3% to 3.2%.
The other economic sectors including trade, which accounts for a significant value in GDP derived from exports and imports, will accelerate more modestly. The UAE is an active country that is a member of World Trade Organization and OPEC. Dubai is the cradle of trade in the Emirates; it has been bolstered by the opened Khalifa port and significantly improved financial incentives.
The UAE has improved the labor and industrialization sector in order to uphold its economy. Nationals and foreigners are able to obtain employment easily and hence contribute to the country’s revenue. The infrastructure in the UAE has been modernized and improved which has consequently attracted more international attention from tourist. The UAE’s economy is on the verge of diversification from oil dependent domain to a variety of resourceful activities.