Economics of the UAEThe United Arab Emirates (UAE) is one of the highly developed nations in the world basing on among others, energy consumption and Gross Domestic Product (GDP) per capita indices. In terms of GDP per capita, it is rated the fourteenth worldwide. In the middle-east alone, it is ranked at position three after Kuwait and Qatar. The economy is among the fastest expanding in real GDP. In 2006 for instance, there was a rise of 35% to a figure of $175 billion, up from the $130 billion noted in 2005.
Basing on the figures, the UAE’s real GDP was the fastest growing in the world during the period (Icon Group 32). This paper addresses the economic issues surrounding UAE’s economy and OPEC as a regional oil producer. UAE Economic ProgressThe duration of economic development for the UAE began during the early 1970s. The formation of the federation on December 2, which also marked the creation of its political, social and economic institutions, happened together with a serious rise in production and sales of oil exports. This was further boosted by a major increase in oil prices during 1973.
As at the late 1970’s, the UAE was among the least developed nations in the world. At the moment, it has been able to grow to per capita incomes levels that compete with those of industrialized countries. The UAE is among the countries that did not follow the theoretical developmental stages that have been noted in the developed world. Instead of this, the presence of a large amount of oil revenue has enabled the economy to skip the stages and go direct to the stage of high mass consumption (Greenaway 63).
Large amounts of oil revenue have enabled a speeding up of procedures that usually take a long duration of time. The UAE economy was therefore able to avoid the tedious process of accumulating capital and saving money so as to implement economic development. Because of the large amount of gas and oil, the economy has focused on Resource-Based Industries (RBI) in development. This is founded on the maximum use of natural resources. Windfall income has been There has been utilized, mostly aimed at providing a single and final boost of economic and social infrastructure.
This has made it possible for the country to have a considerable amount of economic development in a short while, especially between 1973 and 1982, a time that was characterized by really high prices of oil (Parker 46). The UAE also has among the fastest expanding tourist sectors. It attracts a record number of both international travelers and investors. The country’s tourism sector at the moment comprises about 0.5% of the total worldwide volume of tourism. The tourism industry of the Emirates is projected to grow further by an average of about 4.9% per year up to 2017.
There is a vigorous activity in real estate and this is causing the development of a wide variety of beautiful resort and hotel developments that aim at supplying the ever expanding demand for high quality property within the UAE (FRD 34). Factors That Contributed to the Growth