A snap-shot of the UAE economy
CW looks at the seven Emirates that make up the UAE
UAE National Economy
The UAE national economy made huge strides in the last few years due to the successful economic policies implemented by the federal government.
The government follows an approach based on diversifying the economy to reduce dependence on oil and gas.
Non-oil sectors' contribution to the GDP reached 61% and is expected to increase considerably in the near future.
According to latest IMF data, the UAE GDP grew at a rate of 4.8% to reach AED1.54tr ($422bn) compared to AED1.47tr ($402bn) in 2013.
It is expected to reach AED2tr in 2019, an increase of approximately AED500bn ($136mn) in five years. Foreign currency reserves in the UAE are estimated at AED293bn ($187.7bn) and are expected to reach AED690bn ($187.8mn) by end-2019.
The UAE boasts a business-friendly environment with modern legislations and infrastructure. The enabling business environment helped turn the UAE into an attractive destination for investments. The UAE today features some of the best airports and seaports globally, robust logistical capabilities and more than 30 free zones. These factors holistically helped the country rank first among Arab countries in attracting foreign investments, capturing 21% of the total incoming direct investments into the Arab world in 2013, valued at $10.5bn according to the annual report issued by the Arab Investment and Export Credit Guarantee Corporation.
The UAE government encourages innovation, research and development, seeking to increase the contribution of the knowledge economy to the GDP by 5% by 2021.
In 2012, Abu Dhabi was the largest contributor to the UAE’s GDP with a share of 65%. It accounts for 42% of the country’s workforce.
The GDP of Abu Dhabi stood at $707.5bn in 2013 with a growth rate of 5.2%. The contribution of non-oil sectors was 49% of the total GDP.
The Emirate of Abu Dhabi laid out the Public Policy Agenda, which formed the basis of the Abu Dhabi Economic Vision 2030. The vision is a long-term roadmap for economic and social development with the aim of achieving sustainable economic development within a diversified knowledge-based economy.
To articulate these goals the Emirate works on five-year plans that translate the ambitious vision into strategies and policies at the sectoral level with clear mechanisms to achieve the set goals.
Dubai’s progress since the beginning of the last decade has been phenomenal.
During the period from 2000 to 2013, the average growth rate in Dubai was 9%, one of the highest growth rates internationally for the same period.
As a result, Dubai’s GDP tripled from AED110bn ($29.9bn) in 2000 to reach AED325bn ($88.4bn) in 2013.
Dubai’s performance has been mainly attributed to the strategic vision and ambitions goals of its leadership that has seen the emirate take giant strides in a relatively short period.
Dubai’s policy of diversifying economic activities, especially in high value-added sectors, has resulted in its prosperity. The government and semi-government sectors played a critical role in establishing a distinct investment environment that encouraged entrepreneurs and businesses.
The economy of Dubai is recognised internationally as an open and attractive one that follows best international standards and practices.
The Emirate of Sharjah has witnessed rapid growth in the last decade with an average growth rate of 11%.
The Emirate’s economy, though marginally affected by the global financial crisis, registered one of the highest recovery rates (-5% in 2009 to 4% in 2010).
Its economic reliance on oil is minimal and the contribution of commodities exports is increasing.
The GDP of Sharjah surpassed AED70bn ($19bn) in 2012 and is expected to exceed AED80bn ($21.7bn) in 2014. Sharjah’s GDP grew by 7% in 2011, 5% in 2012 and 8% in 2013.
Ras Al Khaimah
Ras Al Khaimah enjoys a stable and diverse economy in which oil contributes only 4.6% to the GDP.
The geographical location of the Emirate made it an important hub for commerce and trading services.
The Emirate has witnessed economic growth in manufacturing and extractive industries, construction, financial services, wholesale and retail services and tourism in recent years.
Manufacturing offers the largest contribution to the Emirate’s GDP at 25% followed by wholesale and retail at 12%, construction at 8.6%, and financial services at 7.5%.
Fujairah plays an important role in the economic development of the UAE due to its location on the east coast.
The geographical location of the Emirate offers significant growth opportunities in tourism and mineral wealth.
Fujairah’s economy is dependent on the integration of its port, airport and industrial area, which serve as pillars for several of the emirate’s key projects.
Fujairah’s prime waterfront location in proximity to the Arabian Sea and Indian Ocean, the presence of the Fujairah Zone for Petroleum Industry (FOZ) as well as other specialized industrial zones have led to the emergence of a number of tourism and property development projects.
Ajman has witnessed an economic boom across a number of sectors - the Emirate’s GDP in 2013 grew by 4.7% over 2012.
The economy of Ajman depends on a number of sectors, with manufacturing contributing nearly 35% to its GDP in 2013, followed by construction that accounted for 15% of the GDP, wholesale and retail that contributed 13%, properties and business services that added 11% and transport and storage that contributed 6%.
Ajman enjoys a developed infrastructure, an active free zone, an enabling economic environment and investment-friendly policies.
Investments in Ajman grew in 2013 by 5% compared to 2012. Exports (including re-export) grew in the second quarter of 2014 by 53%.
A number of ambitious projects are currently underway in Ajman like the airport project, Manama development project, marina project, and Emirates City. These projects are part of the Ajman Vision 2021 that is aligned to the UAE Vision 2021.
Ajman’s vision aims to achieve sustainable development that factors in economic, social, and environmental dimensions.
Ajman currently focuses on the development of five strategic sectors - industry, tourism, logistics, outsourcing and media.
The economy of Umm Al-Quwain has developed rapidly in recent years.
This was assisted by the location of the emirate and infrastructure development projects like Ahmed Bin Rashid Port & Free Zone.
The local legislations in the emirate also encourage investment and businesses.
The Emirate is today focused on developing the industrial sector. This is evident in the creation of industrial zones with the purpose of attracting factories and manufacturers.
Key industries in Umm Al Quwain include light industries, cement and building materials, rubber, aluminum and readymade clothing.