Across the United Arab Emirates, the pace of economic and infrastructure growth has been little short of phenomenal over the past four decades.
The economy of the United Arab Emirates is the second largest in the Arab world, with a gross domestic product (GDP) of $570 billion (AED2.1 trillion) in 2014. The United Arab Emirates has been successfully diversifying its economy and 71 per cent of UAE’s total GDP is derived from non-oil sectors.
Prior to independence from the UK and unification in 1971, each emirate was responsible for its own economy. At the time, pearl diving, seafaring and fishing were together the mainstay of the economy, until the development of Japanese cultured pearls and the discovery of commercial quantities of oil.
Previous UAE President Sheikh Zayed Bin Sultan Al Nahyan is credited with bringing the country forward into the 20th century and using the revenue from oil exports to fund all the necessary development. Likewise, former UAE vice-president Sheikh Rashid Bin Saeed Al Maktoum had a bold vision for the Emirate of Dubai and foresaw the future in not petroleum alone, but also other industries.
Although UAE has the most diversified economy in the GCC, its economy remains extremely reliant on oil. With the exception of Dubai, most of the UAE is dependent on oil revenues. Petroleum and natural gas continue to play a central role in the economy, especially in Abu Dhabi. More than 85 per cent of the UAE’s economy was based on the oil exports in 2009.
While Abu Dhabi and other UAE emirates remained relatively conservative in their approach to diversification, Dubai, which has far smaller oil reserves, was bolder in its diversification policy.
Significant investment in infrastructure has transformed large areas of the region and tourism has become a major source of revenue in the UAE, along with retail, and some of the world’s most luxurious hotels are now based in the UAE.
Dubai’s development is recognised on the global stage and Dubai International Airport in 2015 officially became the world’s busiest airport. In November 2013, Dubai was selected to host the World Expo 2020, placing further emphasis on hotels and infrastructure development.
Although the UAE is now less dependent on natural resources as a source of revenue, petroleum and natural gas exports still play an important role in the economy, especially in Abu Dhabi. A massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the UAE diversify its economy. Nationwide, there is currently $350 billion worth of active construction projects underway.