United Arab Emirates: Economic and Political Outline

Economic Overview

After the 2009 recession (contraction of -3.2%), the growth rate of the GDP of United Arab Emirates (UAE) was about 3% in 2010-2011, mainly because of soaring prices of oil. In the context of the eurozone crisis, growth is estimated at 3.8% for 2012, driven by rising oil prices and production volume.

GDP is dominated by the economic strength of Abu Dhabi (60%), including its hydrocarbon production (Abu Dhabi owns 9% of world oil reserves and 5% of natural gas reserves) and its management of almost all of the savings. Dubai contributes about 26% of GDP and constitues the trade platform of the Emirates, especially thanks to its port and airport infrastructure.

Since the 2009 financial crisis, the priority is to protect the banking system and maintaining investor confidence, particularly with regard to the real estate sector in Dubai. In late January 2012, the Abu Dhabi government announced a spending plan covering various projects in the sectors of health, infrastructure, education, tourism, energy and trade. While Abu Dhabi will lead the initiative of economic diversification, Dubai will work on repaying its debts. Major cultural projects (museums, including an annex of the Louvre), educational projects (university La Sorbonne) and sport events (Formula 1) are also in the works. The Emirates have also decided to diversify energy sources by launching a fleet of nuclear plants by 2017 as well as massive investments in renewable energies, with the "Masdar" project costing 22 billion USD.

The UAE depends heavily on foreign workers (over 85% of the workforce).

Main Sectors of Industry

Agriculture contributes to less than 3% of the GDP. Raw material exploration accounts for nearly 36% of the GDP. United Arab Emirates is the 3rd largest oil producer in the world, with large reserves. Presently, their oil and gas reserves are estimated for 100 years of exploitation.

Manufacturing activities have witneesed an unprecedented growth in the last five years, particularly in sectors such as metal processing, furniture, industrial preparation of food stuffs, aluminum production, cement and construction materials, fertilisers, petrochemical industry, fiberglass and finally real estate.

As for tertiary sector, it contributes around 40% of the GDP and is dominated by international trade, air transport, tourism and financial activities.

Source: World Bank - Last Available Data.

Indicator of Economic Freedom

Score:

67.8/100

Position:

Moderately free

World Rank:

45/179

Regional Rank:

6/17

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Sources of General Economic Information

Ministries

Website of the Ministry of Economy
Website of the Ministry of Finance

Statistical Office

Office of Statistics-Dubai Municipality

Central Bank

Central Bank of the United Arab Emirates

Stock Exchange

Dubai International Financial Exchange
Abu Dhabi Stock Exchange

Other Useful Resources

Ministry of Communication.

Main Online Newspapers

Emirates Today
Gulf News
Al Khaleej Times

Economic Portals

Erutledge

Political Outline

Type of State

Federation uniting 7 Emirates : Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Qaiwain.

Executive Power

Each Emirate is governed by an Emir and is under his administration. Every Emir preserves the autonomy for management of his Emirate's resources.
The Supreme Council of Emirs is the highest authority of UAE ; it holds legislative and executive powers. The Emir of Abu Dhabi, the biggest oil producing Emirate, has been President in 2004 and succeeded from his father. The Emir of Dubai has been nominated the Vice-President and Prime Minister.

Legislative Power

There is only one Chamber: The National Federal Council. It consists of 40 members of which 20 are appointed by the President and 20 are elected, each Emirate has a number of representatives equivalent to its demographical weight. Their mandate is for two years. This council has only consultative functions.

Main Political Parties

There are no political parties.

Current Political Leaders

President : Sheikh Khalifa bin Zayed Al Nahayan (since November 2004)
Prime Minister : Sheikh Mohammed bin Rashid Al Maktoum (since January 2006)

Next Election Dates

Presidential Election : 2014
Designation of members of the National Federal Council : 2011

Indicator of Freedom of the Press

World Rank:

112/179

Evolution:

25 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).