UAE economy 1

The UAE economy

Introduction

About three decades ago, the UAE was one of the least developed economies. The UAE

has experienced unique growth-it did not pass through the development stages of which most

advanced countries went through. The UAE growth can be attributed to abundance of natural

resources-oil and gas. This paper introduces the main sectors contributing to the UAE economy

and finalises with a comparison of UAE with one of the GCC countries.

Sectors contribution to the UAE economy

The main sectors contributing to the UAE economy are crude oil, manufacturing,

commerce, restaurants and hotels, real estate and government services among others (see figure-

1). The UAE is endowed with enormous oil reserves, “both offshore and onshore” (p.). the oil

and gas industry is well managed-using advanced technologies which increases efficiency.

Basing on the daily outputs, it is estimated that oil reserves will last for over 122 years and gas

reserves have been proven to be more than 4 per cent of total world reserves. Then country

enjoys political stability which has paved way for trade and other commercial services. This is

due to good bilateral relations with other countries of the world. The UAE is a capital intensive

economy. This is reflected in the employment patterns; the oil industry employs about 1.6 per

cent of the labour force and 39 per cent of the labour force engaging in social, community and

personal services.

The rate of unemployment stands at 0.5 percent indicating that the UAE is at full

employment currently. Hotel and tourism industry is booming in the UAE with many visitors

(with money to burn) literally flocking into the country. The UAE is has experienced structural
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changes in its employment patterns. The service sector which includes; restaurants, hotels,

communications, finance, insurance among others constitute 58 per cent of the labor force. The

agricultural sector accounts for about 12.6 per cent of the labour force, while the manufacturing

sector employs about 1.6 per cent people (MOP 1999).

UAE accounts for more than 23% of the GCC economy just behind Saudi Arabia. Saudi

Arabia accounts for 47% of GCC economy. However, has great regional impact on the whole

GCC region (GCC business outlook 2010).

References:

Shihab (1996) “Human Development in the United Arab Emirates”, Economic Horizon, Vol.17,

no.66, pp9-31.

M Shihab, (1999) “The UAE economy.” Viewed from:

www.uaeinteract.com/uaeint_misc/pdf/perspectives/12.pdf

GCC business outlook (2010) “United Arab Emirates.” Viewed from:

http://www.ameinfo.com/198405.html
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APPENDIX-I

Figure-1: Labour distributions

Source: (Ministry of planning) (1998), UAE, Economic and social Indicators in the UAE.
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Source: MOP (Ministry of planning) (1998), UAE, Economic and social Indicators in the UAE.