Economy Of The United Arab Emirates
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The
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
is a high-income developing
market economy A market economy is an economic system in which the decisions regarding investment, production, and distribution to the consumers are guided by the price signals created by the forces of supply and demand. The major characteristic of a mark ...
. The UAE's economy is the 3rd largest in the
Middle East The Middle East (term originally coined in English language) is a geopolitical region encompassing the Arabian Peninsula, the Levant, Turkey, Egypt, Iran, and Iraq. The term came into widespread usage by the United Kingdom and western Eur ...
(after
Turkey Turkey, officially the Republic of Türkiye, is a country mainly located in Anatolia in West Asia, with a relatively small part called East Thrace in Southeast Europe. It borders the Black Sea to the north; Georgia (country), Georgia, Armen ...
and
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in West Asia. Located in the centre of the Middle East, it covers the bulk of the Arabian Peninsula and has a land area of about , making it the List of Asian countries ...
), with a
gross domestic product Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...
(GDP) of US$415 billion (AED 1.83 trillion) in 2021-2023. The
UAE The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a federal elective monarchy made up of seven emirates, with Abu Dhabi serving as i ...
economy is heavily reliant on revenues from
petroleum Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring un ...
and
natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...
, especially in
Abu Dhabi Abu Dhabi is the capital city of the United Arab Emirates. The city is the seat of the Abu Dhabi Central Capital District, the capital city of the Emirate of Abu Dhabi, and the UAE's List of cities in the United Arab Emirates, second-most popu ...
. In 2009, more than 85% of the UAE's economy was based on the oil exports. In 2011, oil exports accounted for 77% of the UAE's state budget. In recent years, there has been some economic diversification, particularly in
Dubai Dubai (Help:IPA/English, /duːˈbaɪ/ Help:Pronunciation respelling key, ''doo-BYE''; Modern Standard Arabic, Modern Standard Arabic: ; Emirati Arabic, Emirati Arabic: , Romanization of Arabic, romanized: Help:IPA/English, /diˈbej/) is the Lis ...
. Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to diversification. Dubai has far smaller oil reserves than its counterparts.
Tourism Tourism is travel for pleasure, and the Commerce, commercial activity of providing and supporting such travel. World Tourism Organization, UN Tourism defines tourism more generally, in terms which go "beyond the common perception of tourism as ...
is one of the biggest non-oil sources of revenue in the UAE. A massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the country to diversify its economy. In 2007, there was US $350 billion worth of active
construction Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...
projects. The UAE is a member of the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...
and
OPEC The Organization of the Petroleum Exporting Countries (OPEC ) is an organization enabling the co-operation of leading oil-producing and oil-dependent countries in order to collectively influence the global oil market and maximize Profit (eco ...
.


Economic overview

UAE has the second-largest economy in the Arab world (after Saudi Arabia), with a gross domestic product (GDP) of US$414 billion (AED 1.52 trillion) in 2018. A third of the GDP is from oil revenues. The economy was expected to grow 4–4.5% in 2013, compared to 2.3–3.5% over the previous five years. Since independence in 1971, UAE's economy has grown by nearly 231 times to AED1.45 trillion in 2013. The non-oil trade has grown to AED1.2 trillion, a growth of around 28 times from 1981 to 2012. The UAE's economy is one of the most open worldwide, and its economic history goes back to the times when ships sailed to
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
, along the
Swahili coast The Swahili coast () is a coastal area of East Africa, bordered by the Indian Ocean and inhabited by the Swahili people. It includes Sofala (located in Mozambique); Mombasa, Gede, Kenya, Gede, Pate Island, Lamu, and Malindi (in Kenya); and Dar es ...
, as far south as
Mozambique Mozambique, officially the Republic of Mozambique, is a country located in Southeast Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west, and Eswatini and South Afr ...
. The UAE economy has been ‘inspected’ by international economic institutions on a regular basis, generally receiving good reports on economic developments.
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) expected UAE's economic growth to increase to 4.5% in 2015, compared to 4.3% in 2014. The IMF ascribed UAE's potentially strong economic growth in
World Economic Outlook The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of l ...
Report to the increased contribution of non-petroleum sectors, which registered a growth average of more than 6% in 2014 and 2015. Such contribution includes banking, tourism, commerce and real estate. Increase of Emirati purchasing power and governmental expenditures in infrastructure projects have considerably increased. Internationally, UAE is ranked among the top 20 for global service business, according to AT Kearney, the top 30 on the WEF "most-networked countries" and in the top quarter as a least corrupt country per the TI's corruption index. The government of the
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
announced a broad restructuring and merger of more than 50% of its federal agencies, including ministries and departments, in an attempt to deal with and recover from the economic shocks following months-long
coronavirus Coronaviruses are a group of related RNA viruses that cause diseases in mammals and birds. In humans and birds, they cause respiratory tract infections that can range from mild to lethal. Mild illnesses in humans include some cases of the comm ...
lockdown.


Historical background

Before independence from the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
and unification in 1971, each emirate was responsible for its own economy. At the time,
pearl diving Pearl hunting, also known as pearl fishing or pearling, is the activity of recovering or attempting to recover pearls from wild Mollusca, molluscs, usually oysters or mussels, in the sea or freshwater. Pearl hunting was prevalent in India and Jap ...
,
seafaring Seamanship is the skill, art, competence (human resources), competence, and knowledge of operating a ship, boat or other craft on water. The'' Oxford Dictionary of English, Oxford Dictionary'' states that seamanship is "The skill, techniques, o ...
and
fishing Fishing is the activity of trying to catch fish. Fish are often caught as wildlife from the natural environment (Freshwater ecosystem, freshwater or Marine ecosystem, marine), but may also be caught from Fish stocking, stocked Body of water, ...
were together the mainstay of the economy, until the development of Japanese
cultured pearl Cultured pearls are pearls which are formed within a cultured pearl sac with human intervention in the interior of productive living molluscs in a variety of conditions depending upon the mollusc and the goals. Having the same material as natur ...
s and the discovery of commercial quantities of oil. Previous UAE President
Zayed Bin Sultan Al Nahyan Sheikh Zayed bin Sultan Al Nahyan (; 6 May 1918 – 2 November 2004) was an Emirati royal, politician, philanthropist and the founder of the United Arab Emirates. Zayed served as the governor of Eastern Region from 1946 until he became ...
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 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. In the 1980s, Dubai's diversification centred around trade and the creation of shipping and logistics centres, notably Port Rashid and the port and Free Zone of
Jebel Ali Jebel Ali () is a port town south-west of Dubai. The Jebel Ali Port is located there. Al Maktoum International Airport has been constructed just outside the port area. Jebel Ali is connected to Dubai via the UAE Exchange (formerly Jebel Al ...
as well as
Dubai International Airport Dubai International Airport () is the primary international airport serving Dubai, United Arab Emirates, and is the world's busiest airport by international passenger traffic as of 2024. It is also the busiest airport in the Middle East as ...
, leading to a number of major global plays in shipping, transportation and logistics (
DP World DP World is a multinational logistics company based in Dubai, United Arab Emirates. It specialises in cargo logistics, port terminal operations, maritime services and free trade zones. Formed in 2005 by the merger of Dubai Ports Authority and ...
,
Emirates Emirates may refer to: * United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective ...
, DNATA).


2008-present

The emergence of Dubai's lively real estate market was briefly stopped by the
2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
, when Dubai was bailed out by Abu Dhabi. The recovery from the overheated market led to tighter regulation and oversight and a more realistic market for real estate throughout the UAE with many 'on hold' projects restarting. Although the market continues to expand, current market conditions for developers have been characterised as 'tough'. As a result of the COVID-19 pandemic in the United Arab Emirates, the UAE’s economy shrank by 6.1% in 2020. The country’s account balance dropped to six per cent of GDP in 2020 from 8.5 per cent in 2019 due to the underperformance of both hydrocarbon and non-hydrocarbon exports mitigated by lower imports. In late 2021, the authority announced that UAE’s banking assets are expected to grow by between 8 per cent and 10 per cent in 2022 as the second-biggest Arab economy continues to recover from the covid-19 pandemic. It was also announced the UAE’s economy might grow at a faster than projected rate, reaching 4.6% in 2022.


Data

The following table shows the main economic indicators in 1980–2024 (with IMF estimates between 2022-2028).


External trade

With
imports An importer is the receiving country in an export from the sending country. Importation and exportation are the defining financial transactions of international trade. Import is part of the International Trade which involves buying and receivin ...
totaling $273.5 billion in 2012, UAE passed Saudi Arabia as the largest consumer market in the region. Exports totaled $314 billion, making UAE the second largest exporter in the region. UAE and
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
are each other's main trading partners, with the latter having many of its citizens working and living in the former. The trade totals over $75 billion (AED275.25 billion). In 2021, the main export partners of the UAE were India (14.2%),
Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
(8.3%), China ( mainland) (7.7%),
Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in West Asia. Located in the centre of the Middle East, it covers the bulk of the Arabian Peninsula and has a land area of about , making it the List of Asian countries ...
(7.5%),
Iraq Iraq, officially the Republic of Iraq, is a country in West Asia. It is bordered by Saudi Arabia to Iraq–Saudi Arabia border, the south, Turkey to Iraq–Turkey border, the north, Iran to Iran–Iraq border, the east, the Persian Gulf and ...
(4.8%),
Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
(4.0%), the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...
(4.0%),
Oman Oman, officially the Sultanate of Oman, is a country located on the southeastern coast of the Arabian Peninsula in West Asia and the Middle East. It shares land borders with Saudi Arabia, the United Arab Emirates, and Yemen. Oman’s coastline ...
(3.8%),
Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...
(3.4%), and
Thailand Thailand, officially the Kingdom of Thailand and historically known as Siam (the official name until 1939), is a country in Southeast Asia on the Mainland Southeast Asia, Indochinese Peninsula. With a population of almost 66 million, it spa ...
(3.0%). The main import partners in 2012 were China (17.3%), the European Union (12.1%),
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
(9.4%), the United States (5.5%), Saudi Arabia (5.2%), the United Kingdom (2.8%),
Mali Mali, officially the Republic of Mali, is a landlocked country in West Africa. It is the List of African countries by area, eighth-largest country in Africa, with an area of over . The country is bordered to the north by Algeria, to the east b ...
(2.7%),
Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...
(2.6%),
Turkey Turkey, officially the Republic of Türkiye, is a country mainly located in Anatolia in West Asia, with a relatively small part called East Thrace in Southeast Europe. It borders the Black Sea to the north; Georgia (country), Georgia, Armen ...
(2.1%), and
Vietnam Vietnam, officially the Socialist Republic of Vietnam (SRV), is a country at the eastern edge of mainland Southeast Asia, with an area of about and a population of over 100 million, making it the world's List of countries and depende ...
(2.0%).


Diversification of the UAE's economy

Although the UAE has the most diversified economy in the GCC, the UAE's economy remains extremely reliant on oil. With the exception of Dubai, most of the UAE is dependent on oil revenues.
Petroleum Petroleum, also known as crude oil or simply oil, is a naturally occurring, yellowish-black liquid chemical mixture found in geological formations, consisting mainly of hydrocarbons. The term ''petroleum'' refers both to naturally occurring un ...
and
natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...
continue to play a central role in the economy, especially in
Abu Dhabi Abu Dhabi is the capital city of the United Arab Emirates. The city is the seat of the Abu Dhabi Central Capital District, the capital city of the Emirate of Abu Dhabi, and the UAE's List of cities in the United Arab Emirates, second-most popu ...
. More than 85% of the UAE's economy was based on the oil exports in 2009. While Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to diversification, Dubai, which has far smaller oil reserves, was bolder in its diversification policy. In 2011, oil exports accounted for 77% of the UAE's state budget. Dubai suffered from a significant economic crisis in 2007–2010 and was bailed out by Abu Dhabi's oil wealth. Dubai's current hen?prosperity has been attributed to Abu Dhabi's petrodollars. In 2014, Dubai owed a total of $142 billion in debt. The UAE government has worked towards reducing the economy's dependence on oil exports by 2030. Various projects are underway to help achieve this, the most recent being the
Khalifa Port Khalifa Port () is the Abu Dhabi Ports' flagship deepwater port. It is a gateway to Abu Dhabi and handles all of the emirate’s container traffic. The transfer of container traffic from Zayed Port was completed in December 2012. Khalifa Port ...
, opened in the Emirate of
Abu Dhabi Abu Dhabi is the capital city of the United Arab Emirates. The city is the seat of the Abu Dhabi Central Capital District, the capital city of the Emirate of Abu Dhabi, and the UAE's List of cities in the United Arab Emirates, second-most popu ...
at the end of 2012. The UAE also won the right to host the World Expo 2020, which is believed to have a positive effect on future growth, although there are some skeptics which mention the opposite. Over the decades, the Emirate of
Dubai Dubai (Help:IPA/English, /duːˈbaɪ/ Help:Pronunciation respelling key, ''doo-BYE''; Modern Standard Arabic, Modern Standard Arabic: ; Emirati Arabic, Emirati Arabic: , Romanization of Arabic, romanized: Help:IPA/English, /diˈbej/) is the Lis ...
has started to look for additional sources of revenue. High-class tourism and international finance continue to be developed. In line with this initiative, the Dubai International Financial Centre was announced, offering 55.5% foreign ownership, no
withholding tax Tax withholding, also known as tax retention, pay-as-you-earn tax or tax deduction at source, is income tax paid to the government by the payer of the income rather than by the recipient of the income. The tax is thus withheld or deducted from the ...
, freehold land and office space and a tailor-made financial regulatory system with laws taken from best practice in other leading financial centers, like New York, London, Zürich and Singapore. A new stock market for regional companies and other initiatives was announced in DIFC. Dubai has also developed Internet and Media free zones, offering 100% foreign ownership, no tax office space for the world's leading ICT and media companies, with the latest communications infrastructure to service them. Many of the world's leading companies have now set up branch offices, and even changed headquarters to, there. Recent hen?liberalization in the property market allowing non-citizens to buy freehold land has resulted in a major boom in the construction and real estate sectors, with several signature developments, such as the 2
Palm Islands The Palm Islands consist of three artificial island, artificial archipelagos: Palm Jumeirah, Dubai Islands (formerly known as Palm Deira or Deira Islands), and Palm Jebel Ali, off the coast of Dubai, United Arab Emirates. The Palm Islands were ...
,
the World (archipelago) The World Islands () are an archipelago of small artificial islands constructed in the shape of a world map, located in the Persian Gulf, off the coast of Dubai, United Arab Emirates. The World Islands are composed mainly of sand Sand mining, ...
, Dubai Marina, Jumeirah Lake Towers, and a number of other developments, offering villas and high rise apartments and office space. Emirates (part of the Emirates Group) was formed by the Dubai Government in the 1980s and is presently hen?one of the few airlines to witness strong levels of growth. Emirates is also the largest operator of the
Airbus A380 The Airbus A380 is a very large wide-body airliner, developed and produced by Airbus until 2021. It is the world's largest passenger airliner and the only full-length double-deck jet airliner. Airbus studies started in 1988, and the pr ...
aircraft. , budgeted government revenues were about AED 29.7 billion, and expenditures were about AED 22.9 billion. In addition, to finding new ways of sustaining the national economy, the UAE has also made progress in installing new, sustainable methods of generating electricity. This is evidenced by various solar energy initiatives at Masdar City and by other renewable energy developments in parts of the country. In addition, the UAE is starting to see the emergence of local manufacturing as new source of economic development, examples of significant government-led investments, such a
Strata
in the aerospace industry, under Mubadala, are successful, while there are also small scale entrepreneurial ventures picking up, such as Zarooq Motors in the
automotive industry The automotive industry comprises a wide range of company, companies and organizations involved in the design, Business development, development, manufacturing, marketing, selling, Maintenance, repairing, and Custom car, modification of motor ve ...
. In August 2020, the Barakah nuclear power plant, the first nuclear power plant in the
Arab world The Arab world ( '), formally the Arab homeland ( '), also known as the Arab nation ( '), the Arabsphere, or the Arab states, comprises a large group of countries, mainly located in West Asia and North Africa. While the majority of people in ...
, became operational. In its hard push for economic diversification, the UAE had been increasing its presence in Africa. One of the areas of interest had been clean energy, for which Abu Dhabi’s Masdar built infrastructure, including five wind farms in South Africa, a battery energy storage system in
Senegal Senegal, officially the Republic of Senegal, is the westernmost country in West Africa, situated on the Atlantic Ocean coastline. It borders Mauritania to Mauritania–Senegal border, the north, Mali to Mali–Senegal border, the east, Guinea t ...
and solar power facilities in
Mauritania Mauritania, officially the Islamic Republic of Mauritania, is a sovereign country in Maghreb, Northwest Africa. It is bordered by the Atlantic Ocean to the west, Western Sahara to Mauritania–Western Sahara border, the north and northwest, ...
. Emirati companies were also investing in fossil fuels, where ADNOC purchased 10% stakes in
Mozambique Mozambique, officially the Republic of Mozambique, is a country located in Southeast Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west, and Eswatini and South Afr ...
’s Rovuma gas basin. UAE’s e& also established a foothold in around 12 countries across Africa. The Emirati companies also entered the mining sector, where Tahnoun bin Zayed’s
International Holding Company The International Holding Company (IHC) is a holding company headquartered in Abu Dhabi, United Arab Emirates, which manages a diversified portfolio of domestic and foreign investments. The conglomerate is said to have close ties to the House of ...
expressed investment interests in mines in
Kenya Kenya, officially the Republic of Kenya, is a country located in East Africa. With an estimated population of more than 52.4 million as of mid-2024, Kenya is the 27th-most-populous country in the world and the 7th most populous in Africa. ...
,
Tanzania Tanzania, officially the United Republic of Tanzania, is a country in East Africa within the African Great Lakes region. It is bordered by Uganda to the northwest; Kenya to the northeast; the Indian Ocean to the east; Mozambique and Malawi to t ...
and
Angola Angola, officially the Republic of Angola, is a country on the west-Central Africa, central coast of Southern Africa. It is the second-largest Portuguese-speaking world, Portuguese-speaking (Lusophone) country in both total area and List of c ...
. However, certain investments had also been controversial. Tanzanian authorities were alleged of forcing several Maasai off their land for a safari and hunting project of an Emirati firm. A Dubai-based firm, Blue Carbon, signed preliminary agreements in
Liberia Liberia, officially the Republic of Liberia, is a country on the West African coast. It is bordered by Sierra Leone to Liberia–Sierra Leone border, its northwest, Guinea to Guinea–Liberia border, its north, Ivory Coast to Ivory Coast–Lib ...
,
Tanzania Tanzania, officially the United Republic of Tanzania, is a country in East Africa within the African Great Lakes region. It is bordered by Uganda to the northwest; Kenya to the northeast; the Indian Ocean to the east; Mozambique and Malawi to t ...
,
Kenya Kenya, officially the Republic of Kenya, is a country located in East Africa. With an estimated population of more than 52.4 million as of mid-2024, Kenya is the 27th-most-populous country in the world and the 7th most populous in Africa. ...
,
Zambia Zambia, officially the Republic of Zambia, is a landlocked country at the crossroads of Central Africa, Central, Southern Africa, Southern and East Africa. It is typically referred to being in South-Central Africa or Southern Africa. It is bor ...
and
Zimbabwe file:Zimbabwe, relief map.jpg, upright=1.22, Zimbabwe, relief map Zimbabwe, officially the Republic of Zimbabwe, is a landlocked country in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Bots ...
, aiming to generate carbon credits. However, it was accused of attempting to acquire millions of hectares of African forests in a greenwashing attempt. Meanwhile, DP World also invested around $3bn in Africa, and operates ports from Mozambique in the south to
Algeria Algeria, officially the People's Democratic Republic of Algeria, is a country in the Maghreb region of North Africa. It is bordered to Algeria–Tunisia border, the northeast by Tunisia; to Algeria–Libya border, the east by Libya; to Alger ...
in the north and
Angola Angola, officially the Republic of Angola, is a country on the west-Central Africa, central coast of Southern Africa. It is the second-largest Portuguese-speaking world, Portuguese-speaking (Lusophone) country in both total area and List of c ...
on the
Atlantic The Atlantic Ocean is the second largest of the world's five oceanic divisions, with an area of about . It covers approximately 17% of Earth's surface and about 24% of its water surface area. During the Age of Discovery, it was known for se ...
. The Emirates had also been alleged of controversial actions in the war zones in Africa, including in
Libya Libya, officially the State of Libya, is a country in the Maghreb region of North Africa. It borders the Mediterranean Sea to the north, Egypt to Egypt–Libya border, the east, Sudan to Libya–Sudan border, the southeast, Chad to Chad–L ...
and
Sudan Sudan, officially the Republic of the Sudan, is a country in Northeast Africa. It borders the Central African Republic to the southwest, Chad to the west, Libya to the northwest, Egypt to the north, the Red Sea to the east, Eritrea and Ethiopi ...
. The UAE targeted another major milestone in its diversification plans, as it granted a “Commercial Gaming Facility Operator” license to
Wynn Resorts Wynn Resorts, Limited is an American publicly traded corporation based in Paradise, Nevada, that is a developer and operator of high-end hotels and casinos. It was founded in 2002 by former Mirage Resorts Chairman and CEO Steve Wynn and is now r ...
in October 2024. Wynn is developing a $3.9 billion integrated resort, Wynn
Al Marjan Island Al Marjan Island is a group of 4 coral-shaped islands in a man-made archipelago located in Al Jazirah Al Hamra, Emirate of Ras Al Khaimah, in the Persian Gulf. It is administered by the Al Marjan Island Company. Several resorts, beaches, touris ...
, in
Ras Al Khaimah Ras Al Khaimah (; ), often referred to its initials RAK, is the largest city and capital of the Emirate of Ras Al Khaimah in the U.A.E. The city had a population of 191,753 in 2025, and is the sixth-most populous city in UAE after Dubai, Abu ...
, which will also include a 224,000 sq. ft. casino component. Set to open in 2027, the project aims at targeting foreign tourists and boosting tourism. Although the UAE established the General Commercial Gaming Regulatory Authority (GCGRA) in September 2023, it has no laws that legalize gambling or its tools and machines. Gambling remains a cultural taboo and illegal for local citizens. Despite the casino facility being constructed in the Emirates, project operators and insiders avoided talking publicly about it.


Foreign trade

Concerning foreign trade, UAE's market is one of the world's most dynamic markets worldwide, placed among the 16 largest exporters and 20 largest importers of commodities. The top five of the Main Partner Countries of the UAE in 2014 are Iran (3.0%), India (2.9%), Saudi Arabia (1.5%), Oman (1.4%) and Switzerland (1.2%). As for the top five of UAE suppliers are China (7.4%), United States (6.4%), India (5.8%), Germany (3.9%) and Japan (3.5%). In 2014, the United Arab Emirates managed to export 380.4bn dominated by four products which ar

(19.8%
Diamonds, whether or not worked, but not mounted...
(3.4%
Gold in UAE
3.2%) incl. gold plated with platinum, unwrought.
Articles of jewellery and parts thereof, of...
2.8%). In the same year, the United Arab Emirates imported 298.6 bn dominated by five countries which are China (7.4%), United States (6.4%), India (5.8%), Germany (3.9%), Japan (3.5%). On one hand, the United Arab Emirates managed in 2013 to export 17 bn USD services exported in 2013 dominated by travel (67.13%), transportation (28.13%), Government services (4.74%). On the other hand, it imported 63.9 bn USD of services imported services dominated by transportation (70.68%), travel (27.70%) and government services (1.62%). In September 2021, the UAE announced its plans to aggravate its trade ties with other economies, particularly in
Asia Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
and
Africa Africa is the world's second-largest and second-most populous continent after Asia. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 20% of Earth's land area and 6% of its total surfac ...
. The country indicated that it was looking for inward foreign investments of around $150 billion in the next nine years, that is, by 2030. The Emirates aimed to be one of the world’s ten biggest investment nations. However, it had to face strong competition from its neighbor, Saudi Arabia, creating a broader gap in the once-assumed alliance between the two countries. The Emirati minister of state for foreign trade said, "Let the Saudis increase the competition. It means the pie is going to be bigger and having a bigger pie means that the UAE share out of this pie is going to be bigger." The EU identified that the Emirati firms were involved in direct trade of weapon components to
Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...
. The EU sanctions targeted two
UAE The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a federal elective monarchy made up of seven emirates, with Abu Dhabi serving as i ...
-based companies, I Jet Global and Success Aviation Services, which were exporting dual-use goods. The EU warned that countries that will be used for Russia’s benefit could face a total ban on imports from the EU military and high tech kit. Besides, a trade war with UAE was expected, if it continued trade with
Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...
. The United Arab Emirates has introduced significant changes to its regulations concerning the promotion and distribution of foreign investment funds within the country. As part of these changes, encapsulated in several decisions by the Securities and Commodities Authority, is that foreign-owned funds can no longer directly advertise or distribute units publicly in the UAE. Instead, these activities are confined to private distribution aimed at Professional Investors and/or Market Counterparties. This shift signifies a strategic move to tighten the circumstances under which foreign funds can interact with UAE-based investors, particularly Retail Customers and Professional Investors, underscoring a push towards a more regulated investment environment. These regulatory updates have also led to changes in the distribution to Professional Investors, as they are now no longer exempt under the Securities and Commodities Authority Rulebook. Only firms licensed by the SCA to conduct the regulated activity of "Promotion" are now permitted to promote such funds, and only on a private placement basis. Furthermore, the promotion or distribution of foreign funds to retail investors is outright prohibited, although reverse solicitation from retail investors is not prohibited in itself. All foreign funds to be distributed in the UAE must be registered with the SCA, barring those that can prove documented reverse solicitation. Three Emirati companies were found involved in trade of Iranian petroleum or petrochemical products, and were sanctioned by the US State Department in June 2024. One of the companies was Sea Route Ship Management FZE, which engaged in transport of Iranian petrochemical products as the commercial manager of the vessel ASTRA. The other two firms, Almanac Ship Management LLC and Al Anchor Ship Management FZE were involved in transport of Iranian petroleum products as the commercial manager of the vessels BERENICE PRIDE and PARINE respectively. In July 2024, Samco Petroleum Energy FZE, located in Hamriyah Free Zone, was put up for sale for $17.7 million, with a promise to provide a turnkey oil trading operation. The sale emerged amidst the US sanctions imposed on several oil traders in the UAE's free trade zones, particularly Hamriyah, for continuing business with Iran and Russia. In November 2023, OFAC sanctioned a dozen companies in various UAE’s free zones for facilitating the sale of Iranian products in third countries through Sepehr Energy, which is affiliated with Iran's Armed Forces General Staff. In March 2023, more companies operating in the UAE were sanctioned for exporting petrochemical products from Iran’s Persian Gulf Petrochemical Industries to India and Southeast Asia. The Emirati authorities were also pushed to halt Russian imports and exports via Dubai. In September 2024, the UAE and Australia agreed on a free trade deal, which was expected to increase investment in Australia’s significant mineral and clean energy sectors. The deal was to eliminate tariffs on imports of over 99% of Australian goods. However, Australian unions criticized the deal, highlighting the UAE's poor human rights and labor record, including modern slavery under the kafala system. Michele O'Neil also expressed concerns regarding the exploitation of migrant workers in the UAE, calling it one of the most repressive regimes with which Australia has entered into a bilateral trade deal.


Human Resources and Employment

Many buildings were built primarily by workers from South Asia and East Asia. This is generally because the current generation of UAE locals prefer governmental jobs and not private sector employment. On 17 June 2008, there were about 7,500 skilled workers employed at the Burj Khalifa construction site. Press reports indicated in 2006 that skilled carpenters at the site earned £4.34 a day, and labourers earned £2.84. According to a BBC investigation and a
Human Rights Watch Human Rights Watch (HRW) is an international non-governmental organization that conducts research and advocacy on human rights. Headquartered in New York City, the group investigates and reports on issues including War crime, war crimes, crim ...
report, the workers were housed in abysmal conditions, and worked long hours for low pay. During construction, only one construction-related death was reported. However, workplace injuries and fatalities in the UAE are "poorly documented", according to Human Rights Watch. In March 2006 about 2,500 workers, upset over buses that were delayed for the end of their shifts, protested and triggered a riot, damaging cars, offices, computers and construction equipment. A Dubai Interior Ministry official said the rioters caused almost £500,000 in damage. Most of the workers involved in the riot returned the following day but refused to work. Workers at Dubai airport also protested.


Emiratisation

Emiratisation is an initiative by the government of the UAE to employ more UAE Nationals in a meaningful and efficient manner in the public and private sectors. While the program has been in place for more than a decade and results can be seen in the public sector, the private sector is still lagging behind with citizens only representing 0.34% of the private sector workforce. While there is general agreement over the importance of Emiratisation for social, economic and political reasons, there is also some contention as to the impact of localization on organizational efficiency. It is yet unknown whether, and the extent to which, employment of nationals generates returns for MNEs operating in the Middle East. Recent research cautions that localization is not always advantageous for firms operating in the region, and its effectiveness depends on a number of contingent factors. In December 2009 however, a positive impact of UAE citizens in the workplace was identified in a newspaper article citing a yet unpublished study, this advantage being the use of networks within the evolving power structures. Overall, however, uptake in the private sector remains low regardless of significant investments in education, which have reached record levels with education now accounting for 22.5% – or $2.6 billion – of the overall budget planned for 2010. Multiple governmental initiatives are actively promoting Emiratisation by training anyone from high school dropouts to graduates in a multitude of skills needed for the – essentially Western – work environment of the UAE, these initiatives include Tawteen UAE, ENDP or the Abu Dhabi Tawteen Council. There are very few anti-discrimination laws in relation to labour issues, with Emiratis – and other GCC nationals – being given preference when it comes to employment. Unions are generally banned and workers with any labour issues are advised to be in touch with the Ministry of Labour, instead of protesting or refusing to work. Migrant employees often complain of poor workplace safety and wages based on nationality, although this is being slowly addressed. Beyond directly sponsoring educational initiatives, the Emirates Foundation for Philanthropy is funding major research initiatives into Emiratisation through competitive research grants, allowing universities such as United Arab Emirates University or Dubai School of Government to build and disseminate expertise on the topic. Academics working on various aspects of Emiratisation include ''Paul Dyer'' 2and ''Natasha Ridge'' from Dubai School of Government, ''Ingo Forstenlechner'' 3from United Arab Emirates University, ''Kasim Randaree'' from the British University of Dubai and Paul Knoglinger from the FHWien. In 2020, economy of the United Arab Emirates became vulnerable to the
COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
, witnessing an economic shutdown. Among the Emirates,
Dubai Dubai (Help:IPA/English, /duːˈbaɪ/ Help:Pronunciation respelling key, ''doo-BYE''; Modern Standard Arabic, Modern Standard Arabic: ; Emirati Arabic, Emirati Arabic: , Romanization of Arabic, romanized: Help:IPA/English, /diˈbej/) is the Lis ...
was facing extreme situation, where the expat workers were left jobless. Thousands of the Britons working in the city started selling off their possessions to collect money, as the strict visa regulations forced them to return to the UK. According to an April 2021 report published by the Democracy Centre for Transparency on the ''Discrimination against foreigners and expatriates living in the UAE versus Emirati citizens'', despite labor reforms in the UAE, foreigners and skilled or unskilled
migrant workers A migrant worker is a person who Human migration, migrates within a home country or outside it to pursue work. Migrant workers usually do not have an intention to stay permanently in the country or region in which they work. Migrant workers ...
face discrimination and racialization from the citizens of the country. Foreigners and expatriates are often subjected to discrimination at work concerning promotions and wages, or
gender inequality Gender inequality is the social phenomenon in which people are not treated equally on the basis of gender. This inequality can be caused by gender discrimination or sexism. The treatment may arise from distinctions regarding biology, psychology ...
. The findings of the DCT concern the organization as the UAE’s
economy An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...
largely relies on foreign workers and thus fulfills a crucial international role. The organization demands that the UAE abide by universal
human rights Human rights are universally recognized Morality, moral principles or Social norm, norms that establish standards of human behavior and are often protected by both Municipal law, national and international laws. These rights are considered ...
principles. The 31st edition of World Report 2021 released by Human Rights Watch reiterates that labour abuses driven by an exploitative kafala system are persistent in the UAE. During the Covid-19 pandemic, migrant workers faced massive unemployment issues and were also left stranded in dire conditions without legal residencies. Also, many migrants suffered wage theft and were unable to pay rent or buy food.


Investment

The stock
market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...
of listed companies in the UAE was valued at $109.9 billion in October 2012 by
Bloomberg Bloomberg may refer to: People * Daniel J. Bloomberg (1905–1984), audio engineer * Georgina Bloomberg (born 1983), professional equestrian * Michael Bloomberg (born 1942), American businessman and founder of Bloomberg L.P.; politician a ...
.


Outward investment

A investment institutions were created by the government to promote manage investments made by the UAE abroad: Abu Dhabi Investment Authority (ADIA) * Abu Dhabi Investment Council (ADIC) * Mubadala Development Company (MDC) * International Petroleum Investment Company (IPIC) *
Dubai World Dubai World () is an investment company that manages and supervises a portfolio of businesses and projects for the Government of Dubai across a wide range of industry segments and projects that promote Dubai as a hub for commerce and trading. A ...
* Dubai International Capital (DIC)


Inward investment

The UAE is in the 17th position in term of the Global Competitiveness Index (GCI). The report says that the UAE competitiveness stems from "high quality ..infrastructure" and "highly efficient good markets." 


Corporate Governance Code

The Securities and Commodities Authority (SCA) introduced a new corporate governance regulation (the Corporate Governance Code), which applies to all joint stock companies and institutions whose securities are listed on
Dubai Financial Market The Dubai Financial Market (DFM) () is a stock exchange located in Dubai, United Arab Emirates. It was founded on 26 March 2000. Overview , there are 67 companies listed on DFM. Most of them are United Arab Emirates, UAE-based companies and a fe ...
(DFM) and Abu Dhabi Securities Exchange (ADX) in 2009.


Banking

On 19 June 2020, rating agency
Moody's Moody's Ratings, previously and still legally known as Moody's Investors Service and often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its histo ...
changed its outlook regarding eight banks in the
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
from stable to negative. The change was due to "the potential material weakening in their standalone credit profiles", where the UAE's economy was facing additional challenges amidst the
COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
and low oil prices. The eight banks included
Abu Dhabi Commercial Bank Abu Dhabi Commercial Bank PJSC () (), commonly called ADCB, is a bank in the United Arab Emirates. Abu Dhabi Commercial Bank (ADCB) was formed in 1985 as a public shareholding company with limited liability, following the mergers between Emirates ...
, Emirates NBD, HSBC Bank Middle East, Dubai Islamic Bank, Abu Dhabi Islamic Bank, National Bank of Fujairah, National Bank of Ras al-Khaimah and Mashreq Bank. The
Fitch Ratings Fitch Ratings Inc. is an American credit rating agency. It is one of the three nationally recognized statistical rating organizations (NRSRO) designated by the U.S. Securities and Exchange Commission and is considered as being one of the " Bi ...
in its 22 June 2020 report predicted that the Standalone Credit Profiles of
UAE The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a federal elective monarchy made up of seven emirates, with Abu Dhabi serving as i ...
-based banks are to possibly weaken in the following year due to the
COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
and oil price collapse. As per the Fitch report, despite the implementation of timely measures for supporting the
economy An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...
, the profitability of banks in the UAE are prone to get affected by a lower non-interest income worsened by a controlled business volume, lower interest rates, and higher loan recovery charges. In addition, the asset quality is expected to weaken, too, following the unbearable impact of the economic downturn that all borrowers may not be able to withstand.


Real estate

The development in the real estate and infrastructure sectors during the recent year has contributed in making the country a global touristic destination. The contribution of tourism in the Emirati GDP increased from 3% in the mid-1990s to more than 16.5% by the end of 2010. This trend is supported by the huge public investments in touristic projects (47 Billion Dollars per annum) carried mainly to expend airports, increase their capacity, set up new airports and ports. The real estate sector have a positive impact on development, job opportunities, investments and tourism as estate projects were launched to meet the needs of market and the increasing demand for housing and commercial units especially in Dubai and Abu Dhabi. The UAE has about 37% of the region's petroleum and gas industries, chemical industries, energy and water and garbage projects. The UAE's government have been injecting huge funds in tourism and real estate projects, especially in Abu Dhabi and Dubai. Al Saadiyat Island in Abu Dhabi and Burj Khalifa in Dubai, the tallest tower in the world, world central near "Jebel Ali" are a point in case of the milestones that have given the UAE its high profile of a global tourist destination. According to 2013–2014 Global Competitiveness Report, the UAE ranked fourth worldwide in terms of infrastructure quality. On 28 November 2020, the
Abu Dhabi Abu Dhabi is the capital city of the United Arab Emirates. The city is the seat of the Abu Dhabi Central Capital District, the capital city of the Emirate of Abu Dhabi, and the UAE's List of cities in the United Arab Emirates, second-most popu ...
Media Office announced that the government of United Arab Emirates, ahead of the 49th National Day, granted house loans, land and homes worth $2 billion (7.2 billion dirhams) to their citizens. The package is said to consist 3,099 plots, 2,000 house loans and 601 homes and exempting some families of the deceased citizens and retirees from the repayment of
mortgage A mortgage loan or simply mortgage (), in civil law (legal system), civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners t ...
. The Director General of the Abu Dhabi Housing Society, Basheer Al Mehairbi said the initiative of providing sustainable housing aimed at ensuring a good standard of living for the citizens of the UAE.


Real-estate projects

Some of the significant real-estate projects are: *
Burj Khalifa The Burj Khalifa (known as the Burj Dubai prior to its inauguration) is a megatall skyscraper in Dubai, United Arab Emirates. With a total height of 829.8 m (2,722 ft, or just over half a mile) and a roof height (excluding the antenna, but inc ...
* Creek Tower * Mohammed bin Rashid City * Falcon City of Wonders *
International City An international city is an autonomous or semi-autonomous city-state that is separate from the direct supervision of any single nation-state. Rationale for establishment International cities have had either one or both of the following characte ...
*
Dubai Marina Dubai Marina (), also known as Marsa Dubai, is a district in Dubai, United Arab Emirates. It is built around an artificially constructed canal along a stretch of the Persian Gulf shoreline. In 2018 it had a population of 55,052. The district ...
*
Jumeirah Beach Residence Jumeirah Beach Residence (also known as JBR) is a long, gross floor area waterfront community located on the coast of the Persian Gulf in Dubai Marina in Dubai, United Arab Emirates. It is a residential development and contains 40 towers (35 ar ...
* Jumeirah Lakes Towers (JLT) *
Business Bay Business Bay (: ''Al-Khaleej Al-Tijari'') is a central business district under construction in Dubai, United Arab Emirates. The project features numerous skyscrapers located in an area where Dubai Creek has been dredged and extended, and located ...
* Dubai Hills * Dubai South * City Walk * Al Furjan * Dubai Sports City * Dubai Motor City *
Saadiyat Island Saadiyat Island (; ', for "Island of Happiness") is a natural island and a Cultural tourism, tourism-cultural environmentally friendly project for Culture of the United Arab Emirates, Emirati heritage and culture that is located in Abu Dhabi, U ...
* The World, the Palms and the Palm (
artificial island An artificial island or man-made island is an island that has been Construction, constructed by humans rather than formed through natural processes. Other definitions may suggest that artificial islands are lands with the characteristics of hum ...
s) * Dubai Miracle Garden, the world's largest natural flower garden. * Masdar City, a zero carbon, zero waste city. * Yas Island, in Abu Dhabi, featuring attractions such as Ferrari World, * Yas Marina


Financial centers

Among the most prominent financial centers in the UAE are: * Dubai International Financial Center (DIFC), a
Dubai Dubai (Help:IPA/English, /duːˈbaɪ/ Help:Pronunciation respelling key, ''doo-BYE''; Modern Standard Arabic, Modern Standard Arabic: ; Emirati Arabic, Emirati Arabic: , Romanization of Arabic, romanized: Help:IPA/English, /diˈbej/) is the Lis ...
-based federal financial free zone * Abu Dhabi Global Market (ADGM), an international financial centre located on Al Maryah Island


Regional GDP

Data shown are for the year 2023 in nominal numbers.


See also

* Ministry of Finance (United Arab Emirates) * Economy of Dubai * National Bonds Corporation PJSC * List of Free Trade Zones in UAE * List of largest companies of the United Arab Emirates * Human rights in the United Arab Emirates * Israel–United Arab Emirates peace agreement


Notes


References


External links


UAE Economy on the CIA World Factbook

Gulf Resources United Arab Emirates

World Bank Summary Trade Statistics United Arab Emirates
{{Asia topic, Economy of
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
Economy of the Arab League
United Arab Emirates The United Arab Emirates (UAE), or simply the Emirates, is a country in West Asia, in the Middle East, at the eastern end of the Arabian Peninsula. It is a Federal monarchy, federal elective monarchy made up of Emirates of the United Arab E ...
Petroleum industry in the United Arab Emirates