Problems And Difficulties For The United Arab Emirates Economics Essay

While the universe ‘s economic system is fighting with a large crisis there are states busy with fixing for the hereafter. It is possible that the powerful economic systems of the universe will be exposed to large alterations now that Asia is quickly spread outing its powers. This assignment will be about one of these powers. The United Arab Emirates is a powerful force in the Asian economic system which is increasing its powers every twenty-four hours. The United Arab Emirates ( UAE ) are interesting to look into because of their manner of using their concerns. Besides the chief ingredient for their success is interesting to look at if you imaging that they could run out of it in a twosome of decennaries. This assignment will supply a expression at these issues but besides will supply a good expression at the state itself. Subjects like Economy, International trade history, demographics, Infrastructure, Politics and many more will be brought into image. Besides Asia as a using economic universe power will be brought into image because the UAE is an of import participant in this economic system. For the UAE and Asia several economical issues will be discussed and besides suggestions will be given at the terminal of the assignment. The terminal of the assignment will besides supply a decision about the UAE and a position on their hereafter.

Table of contents

The United Arab Emirates…………………………………………………………………………………..…4-5

Economy of the United Arab Emirates……………………………………………………………..….5-6

International Trade History…………………………………………………………………………………..7-8

The United Arab Emirates Today……………………………………………………………………………..9

Problems and troubles for the United Arab Emirates……………………………………10-11




The United Arab Emirates

The Emirates are a federation that are ruled by monarchies. There are seven emirates situated in the sou’-east of the Arabian Peninsula in Southwest Asia on the Persian Gulf, surrounding Oman and Saudi Arabia. Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, Ras al-Khaimah and Fujairah are the seven emirates that are all together in the United Arab Emirates.

The capital and 2nd largest metropolis of the United Arab Emirates is Abu Dhabi. This is besides the state ‘s centre of political, industrial and cultural activities. As shown on this image the seashore of the UAE stretches for more than 650 kilometres along the southern shore of the Persian Gulf. Dubai has the biggest natural seaport of the emirates although the programs for a bigger one are in the devising. The population of the United Arab Emirates is about 4.8 million and the most people live and work in Dubai.

The political relations of the UAE consists out of a model of a federal elected monarchy. The president of the UAE is the caput of province and the premier curate is the caput of authorities. The UAE authorities consists out of three subdivisions.




The executive subdivision belongs to the president, frailty president, premier curate federal supreme council and the cabinet. The federal supreme council is composed of the amirs of the seven emirates. They elect the president, frailty president, members of the council of curates and Judgess of the federal supreme tribunal. This supreme council besides formulates authorities policy, proposes and ratifies national Torahs and pacts.

The substructure of the UAE is really modern. There have been great investings done to their oil and gas, building, petrochemicals, power and H2O sectors. All this is done with the eyes on the hereafter. Besides existent estate, touristry and leisure are sectors where immense investings are done. The roads in the UAE are really extended unit of ammunition the city?s. They are prepared for large increasing usage of it and are in good status. Outside the large city?s roads can be unsafe because of lower care. Public transit is besides turning in the UAE and there are already really large undertakings finished.

Economy of the United Arab Emirates

In the 1960?s the UAE started with their oil discoveries which leaded the UAE to a higher evaluation in wealth and advancement. In the old ages afterwards their economic system has grown more and more dependent on oil. Besides some of the universe ‘s biggest states were dependent on the UAE for their oil. This merchandise of great value brought the UAE a great chance for a bright hereafter.

Although the world?s hungriness for oil remains, the UAE know that this beginning which drives there economic system can non last everlastingly. They know that they must put in other resources that could take over oil to drive there economic system and they invested successfully. Over the last 20 till 30 old ages the UAE?s success is mostly owned to a national focal point on developing options for the oil industry. This involves successful plans to turn designated ports of the emirates into elephantine trade centres, development of industries and refinement of oil. Besides the UAE has done a batch for the agricultural sector in their state like for illustration they made the state self-sufficient of fruits and veggies and they created about 6 per centum of the entire district of the UAE into cultivated land which leads that agribusiness contributes 3 per centum of the GDP and using 130.000 people. Besides fishing is an of import nutrient beginning conveying more than 50 kilograms per individual per twelvemonth.

The UAE has an unfastened economic system with a high per capita income and a ample one-year trade excess. The successful attempts of economic variegation have reduced the part of GDP based on oil and gas end product to 25 per centum. Still oil and gas is the most of import for the UAE economic system. Although merely three of the seven emirates have oil development of a big graduated table oil and gas support being the most of import merchandises because there is still a batch of oil militias in all the emirates. In the UAE the criterion of life is high. The authorities has increased disbursement on occupation creative activity and substructure enlargement and is opening up public-service corporations to greater private sector engagement. In April 2004, the UAE signed a Trade and Investment Framework Agreement with Washington and in November 2004, the UAE agreed to set about dialogues towards a Free Trade Agreement with the United States. The states free trade zones are offering 100 percent foreign ownership and nothing revenue enhancements which helps to pull foreign investors. The UAE is really attractive for foreign investors because of the chief industries that the UAE has. These are the chief industries of the UAE:







Ship fix

Construction stuffs

Boat edifice



The UAE has several chief export spouses in Asia. These are:

Japan 23.6 per centum

South Korea 9.2 per centum

Thailand 5 per centum

India 4.8 per centum

Main import goods:

Crude oil, Natural gas, Re-exports, Fish

Main import spouses:

China 12.8 per centum

India 10 per centum

US 8.7 per centum

Japan 6.1 per centum

Germany 5.9 per centum

United Kingdom 5.3 per centum

Italy 4.6 per centum

The UAE external trade had major additions in imports with manufactured goods, machinery and transit equipment which together accounted for 80 per centum of the entire imports. Another of import exchange earner is the Abu Dhabi Investment Authority ( ADIA ) . This is a autonomous wealth fund owned by Abu Dhabi, United Arab Emirates and controls the investings of Abu Dhabi which is the wealthiest emirate and manages an estimated 360 billion in abroad investings and an estimated 900 billion in assets.

To acquire the UAE into a leading place the UAE requires at least 51 percent local citizen ownership in all concern runing in the state, except in the free trade zones.

International Trade History

The United Arab Emirates have a rich trade history since independency. The UAE has maintained an unfastened free market system with attending towards the international economic system. A long clip ago the UAE chief industry was angling but when the oil and gas find ‘s began, a batch of things changed for the state. The UAE changed to a state of wealth and chances. The oil and gas were really interesting for industrialised states like the UK, Italy, Japan, India, Germany and France. The UAE exchanged at that place cherished oil for machinery, autos, transit equipment and nutrient. The most of import states for the UAE to make concern with were the Asiatic states because they wanted the biggest sum of oil.

The United Arab Emirates subsequently suffered a batch from the wars around them which leaded them to inquire aid from the United States to continuo their trade. These were hard times for the UAE and after the Gulf War the UAE faced new rivals. In response they increased their trade with China, The United States and the former Soviet democracies. These states supported the UAE with trade and betterments of their substructure. In response to this the UAE helped the United States to catch Japan in 1996 as the taking exporter to the UAE. Because of this event the United States exports to the UAE increased by 14.5 per centum entirely in 1999.

The most successful old ages for the UAE were in the 1950s and 1960s. Imports raised from 3 million lbs in 1958 to 8 million lbs in 1967 and 41.7 million lbs in 1967. After this the oil unpredictable discovery?s disorientated the economic development. Lack of coordination in economic development and duplicate in installations and industries are jobs that needed to be solved. Although this was the instance they brought a batch of money in the pocket of the Emirates. In the 1970s the state had jobs to cover with the rapid gait of development and jobs with their monolithic sums of imports began to happen. In the 1980s there was a economic lag caused by factors like lower oil grosss and completion of undertakings for the substructure. This caused the GDP to fall from $ 32.5 billion to an estimated 26.7 billion. The export of oil raised in the 1990s and brought the GDP back to $ 34 billion.

Trade ( expressed in one million millions of US $ ) : United Arab Emirates





















Beginning: International Monetary Fund. International Financial Statistics Yearbook 1999.

The United Arab Emirates today

The Emirates in the present twenty-four hours suffers from a lower demand of their oil. The economical crisis has been bad for their concerns and the current developing tendencies will do things worse. The universe wants to be less depended from oil and the UAE needs to take action before there oil militias will run out. The hereafter of the UAE is n’t procure if they wo n’t go less depend on their oil beginnings. Therefore the Emirates are busy with doing their state less depend on oil. Large oil money investings are done to make a new universe concern centre and to pull touristry. Everything is done to set up a repute of a land where everything is possible. The UAE has set up three major aims in a federal scheme that have to be met, these are:

Achieve sustainable and balanced development

Supply the best criterion of life to all UAE subjects

Develop a federal authorities mechanism to raise public presentation degrees in all federal entities.

The UAE authorities purposes to go a leader in public disposal and authorities service in the Arab World. It seeks to guarantee maximal synergism between the local and federal authoritiess in order to accomplish excellence at all degrees in the UAE. The general rules of the UAE federal scheme are:

Keeping cooperation between federal and local governments.

Better the determination devising mechanism

Improve statute law and ordinance

Empower ministries to run their activities based on public and joint policies.

Developing civil service ordinances and human resources.

Better authorities organic structures and client service criterions.

The scheme will cover six major sectors of development:

Social development

Economic development

Justice and safety

Government sector development

Infrastructure development

Rural countries development

The UAE has already established tonss of undertakings coming from this concern program to do the United Arab Emirates the topographic point to travel and to make concern. Some illustrations are:

Luxury Villa ‘s in the ocean

Luxury Hotels

An landing field with tonss of enlargement possibilities

Indoor skiing installation

Massive sky scrapers

Large seaports

Rushing circuits

Problems and troubles for the United Arab Emirates

The economic growing and development is successful but still there are jobs that the state has to work out to be more effectual in their development. First of all there are political tensenesss between several states environing the United Arab Emirates. These tensenesss must be monitored closely which increases the costs for the state. The UAE needs to be prepared for everything to protect their state and economic system. The Iranian Gulf is a comparatively little geographical country. The ground forces ‘s of the gulf provinces are non really big and the oil industries depend on entree to the sea. If something would go on with their seaports or landing fields than the emirates economic system will fall in. Besides the emirates have offshore oil boring, processing and burden installations which are extremely endangered of surprise onslaughts from possible enemies.

There are non merely dangers from outside the state besides inside the boundary lines there are jobs. One of those jobs is the low sum of fresh H2O in the part. The UAE are located between the desert and the sea so utmost deficiency of fresh H2O has ever been a job. To manage this jobs there are several large desalinization workss build but this is non plenty for the lifting demand of fresh H2O for people and farms. To work out this there are besides more Wellss drilled but this allowed saltwater to infringe on Lowlandss, and many farms closed down as a consequence.

Another job is that fish is an of import merchandise for the economic system of the UAE and that over-fishing has at this minute reached a degree where it can hold large effects in the close hereafter. The authorities must move rapidly to forestall the loss of a whole sector.

Another economical job is that higher oil gross, strong liquidness, lodging deficits and inexpensive recognition in 2005 boulder clay 2007 led to a rush in plus monetary values ( portions and existent estate ) and consumer rising prices. The planetary crisis and the tight international recognition market and falling oil monetary values have already begun to deflate plus monetary values and will ensue in slower economic growing for 2010. Dependence on oil and a big work force are of import long term challenges. The UAE strategic program for the following few old ages focuses on variegation and making more chances for subjects through improved instruction and increased private sector employment.

The UAE is besides meeting jobs with organisations like the World Trade Organization because except in the free trade zone, the UAE requires at least 51 percent local citizen ownership in all concerns runing in the state to convey the state into a leading place but this jurisprudence is under reappraisal and the bulk ownership clause will really probably be scrapped to follow the ordinance of the World Trade Organization.

The Economic Crisis is besides still a hard state of affairs for the UAE. They have lost a batch of assurance that other states had in their economic system. This is because at the minute the state still has debts to pay and is fighting with oil supplies and tensenesss between states in the part.


The economic system of Asia is in a rapid growing stage, states like Japan, Taiwan, South Korea, Singapore and the United Arab Emirates are conveying great possibilities to the continent. Besides the states India and China are turning about 8 per centum a twelvemonth were the US and Europe grow about 2 per centum a twelvemonth.

The economic system of Asia consists out of three sectors. The Primary sector, Secondary sector and the Tertiary sector. In the primary sector there are the of import resources in the Asiatic land like oil and gas, but besides gold, Fe, lead, Ti, U and Zn. In the primary sector you can besides happen a high productiveness of agribusiness ( particularly rise ) which means a high denseness in many states like Bangladesh, Pakistan and Cambodia. Besides forestry and fishing is really of import for Asia because it are merchandises that finance the smaller states.

In the secondary sector is the fabrication concern in Asia nowadays. China, Taiwan, Japan, South Korea and Singapore are states were the fabrication concern is spread outing. In these states are merchandises manufactured from really large trade names like Sony and Samsung. Because of the low labour costs these states besides attract western companies to put mills in these states. Particularly the fabric fabrication concern is truly pulling these western trade names towards Asia.

In the third sector there are the six of import fiscal sectors of Asia located in Dubai, Mumbai, Hong Kong, Shanghai, Singapore and Tokyo. Besides the package export, call centres and Business procedure outsourcing in the Asiatic states and particularly India are of import concerns in this sector because they are engine ‘s that drive the Asiatic economic system.

Asia is a continent with great diversenesss. Although a twosome of great states are turning quickly, some others stay behind. Although this is a fact Asia can hold a great future in front of them.

Asia has tonss of possible but the economic system is confronting some jobs. Looking at the hereafter Asia faces terrible disparities, which is a beginning of major tenseness in the part. While the Tiger economic systems such as China, India, South Korea, Japan, Taiwan and Malaysia keep turning stronger and more powerful. There are states who are in great demand of aid in that country.

Asia besides needs to confront political jobs that threaten the economic system and the general stableness of the part and the universe. Some of the states in Asia are a menace for others because they have powerful military beginnings. It is hard for smaller Asiatic states to make protection for themselves against these powerful military beginnings because they have fiscal jobs. Besides this creates tenseness between the Nations in Asia.

Asia besides feels the jobs of the United Arab Emirates. Their economic system have been dependent on oil and are happening it difficult to set up another pillar in their economic system.

Another large economical danger posed by the economic system of Asia to the remainder of the universe is the turning accretion of foreign exchange militias. States with the largest foreign militias are all in Asia. The Euro, USD and GBP are to a great extent influenced by the Asiatic cardinal Bankss because of this.

Because of these jobs it is hard to foretell the hereafter of this part. Some states are really successful but there are other states who have some jobs.


The state of affairs where Asia and the United Arab Emirates are in expressions positive. Although jobs need to be solved the states seems to cover good with several troubles. It is hard to foretell what the economic system will make with this states in the hereafter, but the current state of affairs looks assuring. Very of import for Asia is to maintain the peace between their states. A war can hold dramatically consequences for their big but delicate economic system. Besides Asia needs to accept the fact that the times of inexpensive labour and production will shortly be at an terminal and that the life criterions will travel up. This will be positive for the state but non for the economic system. Besides Asia needs to take history of the fact that they need to be less dependent on oil and demand to happen other solutions for hiking their economic systems. Although some states are already busy with this job there is still a batch to be done. Asia can be ready in a twosome of old ages to be the economic universe leader if it deals with the jobs it faces. For the United Arab Emirates the hereafter looks besides positive, they are good cognizant of their state of affairs and looking at their undertakings they are good under manner to cover with their jobs. Their thought of puting the oil money into things as real-estate is a positive development looking at the possibilities that the land can offer and what non. Besides if they can recover assurance of other states in there economic system they can pay off their debts more easy.

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