The Future of UAE Economy - Example

The paper "The Future of UAE Economy" is a great example of a report on macro and microeconomics. The economy of the UAE has developed greatly in the last 30 years and today its income level can now be compared to the industrialized world (Al-Abedi, 249). Today, the United Arab Emirates is one of the fastest-growing economies in the world. Its annual GDP is estimated to be around 360 billion US dollars and still grows at a rate of 3%. This economic growth is fueled the by oil industry, services, and agriculture. The main industries are petroleum chemicals, aluminum, fishing, construction materials, fertilizers, and textiles. Its economy is also fueled by exports of crude and natural products, the main exporting partners. It is believed that UAE is one of the largest oil producers in the world, infact; it is ranked seventh amongst the countries with the largest oil reserves after Saudi Arabia, Iran, Canada, Kuwait, and Venezuela (Schulte Peevers, 25).

However, in recent years, it’s becoming less dependent on natural resources due to its massive expansion in the construction and manufacturing sectors which has diversified its economy. Today, UAE is a member of the World Trade Organization, Gulf Cooperation Council, and other economic forums and cooperations in the areas of banking, investments, transportation, technical, intellectual properties, and telecommunications.

Its import base includes the transportation of equipment, machinery, and manufactured goods. The country also has massive overseas investments and assets worth billions of dollars. UAE also has several manufacturing, distribution, and processing centers that injects billions of cash into the economy. By and large, UAE’s expanding economy is due to massive sea and land passageways which include the Dubai International Airport that facilitates both passenger and cargo transportation systems.

The economy of the UAE has grown due to its diversity. UAE has diversified its economy from natural recourses, manufacturing, and construction to sectors services such as international finance and tourism. The best example of this initiative is the Dubai International Finance Centre which is half-owned by the foreigners and regulated by the international financial centers and stock exchanges. It is believed that Dubai is ranked second amongst the wealthiest emirates. The shift from an oil-dependent economy to a floating has transformed into an internationally recognized center of investment in the Middle East (Svenj, 7).

Another, international initiative that has expanded the economy of UAE in the development of ICT services, media companies, and the liberalization of property markets. The liberalization of the market has allowed even foreigners to invest in housing markets, real estates, and construction sectors. The diversification of the UAE economy has contributed to massive economic development and also created massive employment.

The other factor that has contributed to the grown of certain industries and also to service is due to the government’s Emiratisation policy. This policy is about the full incorporation and employment of the UAE citizens into private and private sector market economy.

Although, the globalization of international labor has contributed to the expansion of the UAE economy and especially Dubai which highly dependents on expatriates labor (Schulte Peevers, 25), it also poses certain risks. The main risk that the UAE is likely to face in the near future is its over-reliance on the recruitment of foreign cheap labor. The UAE private sector economy is flooded with expatriates and has only registered a few citizens due to cultural, social-economic, and political reasons. However, the government has taken the appropriate measures of trying to solve this situation by investing heavily in education and appreciate ship training especially to those who have dropped out of higher education.

In conclusion, it is fair to say that the economy of UAE will continue to grow because of its diversification policy on various areas including the industrial, construction, and tourism sectors (Khondker, 2009). This policy has proved successful, thus attracting lots of foreign investments that will continue to expand the economy.