The UAE has a vibrant free economy with a significant proportion of revenues arising from exports of oil and gas. Successful efforts have been made to diversify away from dependence on hydrocarbons and a solid industrial platform has been created together with a strong services sector. The establishment of free zones has been an important feature of this diversification policy and the reform of property laws gave a major boost to the real estate and tourism sectors.
The Global Competitiveness Report 2016-2017 published recently by the World Economic Forum (WEF) ranks the UAE as the 16th country in the world in terms of competitiveness. The UAE has established a council of competitiveness to enhance efforts to achieve sustainable development through the setting up of legislative frameworks and the provision of developed infrastructure that will further enhance the country’s status as a regional and global hub for investments. The council continues its communication with government agencies and the private sector through workshops and meetings, to coordinate efforts and explore ways to further enhance the competitive advantages of the UAE.
Economic and fiscal policy
Since the early 1980s, the two main economic objectives set by the UAE government have been to reduce reliance on hydrocarbons and boost private sector investment. This strategy is being followed diligently in an effort to offset the country’s vulnerability to fluctuations in oil prices and to propagate economic growth and stability. The fact that there are no restrictions on current and capital account transactions, helps to implement these objectives as does the fact that foreign entities repatriate dividends, profits, interest or royalties without restrictions, with the exception of foreign banks which are required to obtain the Central Bank of UAE’s approval. The UAE aims to promote free trade with minimum restrictions on foreign trade and investment. The policy of the UAE government to encourage foreign investment is evidenced with new and impressive industrial and commercial developments frequently announced.
Infrastructure in the UAE is second to none. Telecommunications, including mobile telephony and land lines as well as internet access are at least as good as that of the world’s largest international business hubs. The road network is constantly upgraded and ports and airports are of world class standards. The UAE is creating one of the world’s biggest and most efficient cargo handling centres. To date, the government has invested heavily in infrastructure development, and it has also opened up its utilities and other infrastructure to increase private sector involvement.
Security and stability
The UAE is enjoying political stability. This has enabled the implementation of sound economic policies reinforcing the country’s social structure to develop one of the most tolerant, prosperous, secure and safe societies in the world. Dubai and Abu Dhabi have been ranked the top two cities in the Middle East region for quality of life, according to latest editions of global surveys. Long-time investors include a wide range of multinational companies headquartered across the globe.
World Expo 2020
Dubai has won the right to host the 2020 World Expo, sparking national jubilation as the business and tourism hub secured an extra recognition for its growing economy. Five years after the economic crisis, Dubai became the first Middle East location designated to host the 2020 World Expo, fending off competition from Ekaterinburg in Russia, Izmir in Turkey and Sao Paulo in Brazil in the international vote held in Paris.