The UAE is a young country, yet it has the world's second largest economy. It has been able to attract a large number of investment funds from around the globe. Among its numerous benefits, one of the most important contributing factors has been the UAE's ability to maintain a stable development process despite the challenges that come with doing business in such a young developing country. Its stable economy and strong and ever-growing financial sector have all the more contributed towards its rapid economic development. The following paragraphs will give you an in depth insight on what are the key aspects of UAE economic growth that are making it so unique.
A major contributing factor to UAE's rapid economic growth has been its very efficient and well-structured system of administration and trade. All products and services that come from the country are duty-free. This means that there is no restriction on the type of entity that can be trading and doing commerce in the country. As a result, there are no restrictions on the type of entity that can start trading or carry out trade within the country. This has lead to a much greater degree of freedom for companies and entities from around the world to establish themselves in Dubai. This has created a much larger and capable set of business operators who are able to access the markets in Dubai and do business with locals and foreign nationals alike.
The growth in tourism in the UAE has played a major role in the overall growth of the economy. Tourism is the single biggest industry in Dubai and makes up over 17% of the total gross domestic product (GDP). There is a huge demand for international tourists and visitors to visit the city. Because of the large number of foreign tourists that visit Dubai each year, there are numerous opportunities for foreign direct investors (FDI) to enter the market. Both local and international businessmen are attracted by the high potential for profits when they invest in the trade and commercialization of the tourism industry in Dubai.
Another important factor on the UAE economic development has been the establishment of the Dubai airport. The Al Maktounah International Airport located in Dubai has served thousands of international passengers every year since it was opened in 1992. With more travelers landing in Dubai, the demand for more space and resources in the city is constantly growing. This has led to a rapid increase in the number of companies that have established bases in the area and offered jobs to many foreign nationals working in Dubai.
The infrastructure development in Dubai has also played a big part in the overall UAE economic development. With the construction of the world's first mega-mall, the Palm Islands in the UAE, the market for commercial real estate was greatly increased. The increase in the demand for commercial property in the area has spurred the growth of the private sector in the economy of the UAE. Private sectors have started to take advantage of the increasing demand for commercial properties in Dubai.
A crucial factor in the UAE's economy is the presence of an oil refinery in the south of the country. The Saleh bin AbdulAziz oil refinery is one of the biggest refineries in the world. It produces a large amount of petroleum and natural gas, which is used for domestic use and for transporting goods all over the country. The . . . . . . main source of energy in the UAE is the oil. A further important aspect in the area is the presence of several water bodies which provide sources of water and fish that are commercially important to the economy.
When it comes to the foreign trade of the country, the trade deficit of the UAE is quite low due to low oil prices. This has lead to increased exports of both products and services to other countries, which could help the economy of the country. There has been a gradual process of internalizing the financial systems of companies operating in the country. This has increased the reliability of the country's currency, the Dubai dhow, as it is considered as a secure currency. The gradual process of internalization of the financial systems is expected to boost the confidence of investors in the country and help the economy grow.
The rapid political and social changes that took place in the country after the start of the Arab Spring uprisings have also had a positive effect on the economy. As a matter of fact, the number of skilled workers has been increasing since the start of the uprisings. This is beneficial for the economy as skilled workers can help firms reduce their overheads thereby increasing the overall efficiency and thus the economy's potential growth rate. There have been a number of investments in the pharmaceutical sector, which have helped improve healthcare in the country. These kinds of factors contribute to the UAE economic growth.