United Arab Emirates - Overview
Sunni Muslims: 78%; Shia Muslims: 18%; Christians: 3.5%; Others: 0.5%
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The UAE economy in a fairly good shape, characterised by low inflation, growing tourism revenues and a lavish budget surplus. A slight slowdown of the oil sector growht in Abu Dhabi has been offset by the accelerating development of non-hydrocarbon activities in Dubai thanks to the country's effort to reform its financial sector. Similarly to its previous budget and in accordance with the three-year developmental plan for 2014-2016, the 2014 budget (12.5 billion USD) allocates half of the resources to social spending, especially focusing on healthcare, education, welfare and public servcies. In Dubai, a number of large-scale projects which had been suspended during the crises have now been given the green light and new projects have been also planned (such as Mohamed Bin Rashid City or MBR). Abu Dhabi is focusing on diversifying its economy and developing alternative energy sources. In 2017, it should launch a fleet of nuclear power plants and massively invest in renewable energies (the "Masdar" project costing USD 22 billion). It still needs to implement a more rigorous guidelines for the banking a real estate sector in order to avoid cyclical crises. Because it is aware of the finite nature of its oil resources, the UAE have lauched a policy of economic diversification in order to reduce it dependency on hydrocarbons and guarantee a more fair distribution of wealth. The strategy pursued is trying to take advantage of the complementarity between the different emirates. While Abu Dhabi has taken the lead in economic diversification, Dubai is primarily trying to develop its tourism.
The UAE has one of the highest per capita income levels in the world and a highly developed welfare system. It also has one of the lowest rates of unemployment in the Middle East (4.5%) and depends heavily on foreign labor (more than 85% of the workforce). A policy of "emiratization" has been launched to encourage the employment of the local workforce.
Manufacturing activities have witnessed 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, fertilizers, petrochemical industry, fiberglass and finally real estate.
As for tertiary sector (especially international trade, air transport, tourism, financial activities), it contributes up to 55% of the GDP
Foreign trade overview
In 2013, due to the imports rising more quickly than exports, the country's trade surplus diminished but still remains significant. WIth the development of exports unrelated to oil the UAE should retain its trade surplus.
UAE is considered a central business hub of the Gulf countries, Iran, South Asia and East Africa. The main UAE trade partners are Japan, South Korea, Thailand, Singapore, China and Pakistan. The main products exported by the country are hydrocarbons, natural gas, dried fish and dates. Its main suppliers are India, China, the United States, Germany and Japan. The United Arab Emirates mainly imports machinery, transport equipment, chemical products and food stuffs
The absence of direct business taxation (excluding banks, oil companies and telecommunications operators) and direct income taxation, of exchange controls and of any limitations on the repatriation of capital, as well as the existence of a strong and profitable banking sector, plus a large pool of expatriate labor are the country's undeniable assets. Its main weakness is the small size of its domestic market.