· GDP ( Million $ ) - 504.000
· GDP Per Capita ( $ ) - 47.793
· Growth Rate ( % ) - 5
· Population - 10.544.000
· Area ( km² ) - 71.020
· Capital - Abu Dhabi
United Arab Emirates, federation of seven emirates along the eastern coast of the Arabian Peninsula. The largest of these emirates, Abu Dhabi, which comprises more than three-fourths of the federation’s total land area, is the center of its oil industry and borders Saudi Arabia on the federation’s southern and eastern borders. The port city of Dubai, located at the base of the mountainous Musandam Peninsula, is the capital of the emirate of Dubai and is one of the region’s most vital commercial and financial centers, housing hundreds of multinational corporations in a forest of skyscrapers.
The UAE is a mixed free-market economy based on oil and natural gas production, and these industries combined take up more than a quarter of UAE gross domestic product (GDP). Over the past 2 decades, the UAE's economic diversification program has led to the rise of several non-oil sectors that now make up a significant percentage of the UAE's GDP: manufacturing (12.6 percent), commerce and hotels (11.4 percent), real estate (9.1 percent), construction (8.6 percent), transportation (7.3 percent), and finance and insurance (6.4 percent). The UAE also has a strong re-export sector. Government services account for nearly 11 percent of GDP. Industrial growth has been assisted by free trade zones, including Jebel Ali in Dubai, which have been magnets for international firms. In recent years Dubai has succeeded in attracting high-profile technology firms to the emirate's "Internet City," including Microsoft, Oracle, Hewlett Packard, and Cisco Systems.
Nonetheless, the health of the UAE's economy as a whole continues to fluctuate with the world price of hydrocarbons and the economic vitality of its largest trading partners, particularly Japan, which accounts for close to a third of UAE petroleum exports. In part this is due to the large percentage of GDP taken up by petroleum and in part to the fact that government revenues—70 to 80 percent of which come from oil—and spending are closely linked to oil prices. These links have meant that different sectors of the economy have risen rapidly in recent years as oil prices increased sharply after oil prices hit historic lows in 1998. One exception to this trend is the demand for electricity and power: demand for power grew by nearly 400 percent between 1980 and 1998.
Among the most important corporations based in the UAE is the Abu Dhabi National Oil Company (ADNOC). It manages the petroleum and gas extraction operations in Abu Dhabi along with the 2 major petroleum refineries in the UAE. Other key corporations are: Dubai state-owned Dubai Aluminum, a leading supplier of aluminum to the states of the Gulf Cooperation Council; Etisalat, the Abu Dhabi state-owned telecommunications firm; and Emi-rates Airlines, Dubai's state-owned airline. The airline has won a plethora of international "Best Airline" awards and maintains one of the most modern airline fleets in the world. It has outclassed "Gulf Air" (a consortium owned by Abu Dhabi, Qatar, Bahrain, and Oman), which remains one of the leading airlines in the Arabian/Persian Gulf region despite experiencing steep losses in the 1990s.
INDUSTRY
While the manufacturing industry in the UAE is based on hydrocarbons, some other manufacturing industry sub-sectors have also started to grow. Most of the industrial establishments in the sector are food (flour, sugar, dairy products, soft drinks, fish), construction and building materials (cement, ceramics, marble, iron and steel), metals (aluminum, copper, steel), chemicals (sulphur, fertilizer), electricity, materials, furniture, plastics (pvc, kitchenware) and ready-made clothing.
Oil and petrochemical, energy (Dubai Petrolum-Dubai), Aluminum (Dubal-Dubai), ceramics (RAK Ceramics-Ras Al Khaimah), pharmaceutical (Julphar-Ras Al Khaimah) facilities constitute the large-scale production activity in the country, and these are owned by the relevant Emirati/Emirati companies. Dubai Aluminum is among the top 10 aluminum producers in the world. It exports most of its production. There are SME level manufacturing facilities in Sharjah.
Mubadala Development Company is important for the expansion of Abu Dhabi's industrial base. While Dubai aims to be the center of the service sector and technology, Abu Dhabi believes that the sectors that create competitiveness (with the effect of easy access to cheap energy and labor resources) are heavy industry and manufacturing sectors.
ENERGY
The sector includes crude oil, petroleum products and natural gas. UAE ranks 6th in the world in terms of its oil and natural gas reserves. It has reserves of 105 billion barrels of crude oil. Currently, the UAE, which is the 3rd largest oil producer after Saudi Arabia and Iraq, has a daily production of 3 million barrels. According to Abu Dhabi National Oil Company (ADNOC) reports, the company extracts 3.165 million barrels of oil per day. The aforementioned figure will be kept constant until April 2022 with the agreement reached under the umbrella of OPEC in July 2021, and then 3.6 million barrels of oil per day will be extracted until December 2022. Upon this development, the UAE updated its new daily oil extraction strategy to 4 million barrels per day until 2025 and 5 million barrels per day in 2030.
Of the 3 million barrels of oil per day, approximately 1.7 million are obtained from fields on land and 1.3 million from offshore fields. 95% of the oil is produced in the Emirate of Abu Dhabi. The oil reserves of the Emirate of Dubai are around 4 billion barrels, the Emirate of Sharjah 1.5 billion, and the Emirate of Ras-al Khaimah around 100 million barrels.
Ranking 12th among the world's oil producers, the UAE accounts for 4% of global crude oil production and exports about 2.2 million barrels of daily oil production. China, India, South Korea and Japan are the largest buyers of UAE oil.
The UAE has reserves of 273 trillion cubic feet of natural gas. According to S&P data, the daily natural gas processing capacity of the UAE is 8.6 billion standard cubic feet, of which 5.6 billion is processed from gas from land and 3 billion from offshore gas. According to Abu Dhabi National Petroleum Corporation (ADNOC) data, 217,000 barrels of liquefied natural gas are processed.
Like many Gulf countries, the UAE has started to give more importance to the use of renewable energy sources in recent years. It invests heavily in developing alternative energy sources, especially solar energy. For example, electricity generation is planned by completing the first floating solar power plant project in Abu Dhabi. Again, the UAE was the first among the Arab countries to implement a nuclear power plant. Barakah, the first nuclear power plant of the UAE in the Arabian Peninsula, is aimed to meet 25% of the country's electricity needs with 4 nuclear reactors and a capacity of 5,600 megawatts.
SHIPBUILDING INDUSTRY AND EQUIPMENT MANUFACTURING
The UAE heavy industry is growing rapidly and plays an increasingly major role in the total national production. Despite the fact that the industries associated with the use of high technologies have entered the economy of the United Arab Emirates relatively recently, heavy industry opens up new opportunities for private business. A vivid example of this is the active construction of sea docks.
The economic sector associated with the construction of yachts and boats is also of an increasing investment interest. Moreover, both partial assembly and full production are combined here. Today, several large shipbuilding companies are already represented in the UAE. This market segment is very attractive in terms of both reexport and export. The yachts manufacturers, which operate in the United Arab Emirates, have already established export bases in other developed countries.
Production of heavy mechanical equipment, which is used in professional activities, is one of the emerging segments of the UAE economy. The results of the study conducted by the state authorities of the Emirate of Dubai revealed that more than one million units of the new professional equipment is produced every year in the regional heavy machinery market. In particular, there is an investment boom in production of mechanical equipment and vehicles used in mining and construction industries.
It should be noted that the products manufactured and certified in the United Arab Emirates have high quality indicators and are recognized worldwide. Besides, the UAE heavy mechanical equipment enters regional markets of the Persian Gulf with the considerable customs privileges.
The UAE Industry includes not only production of ships and professional equipment. Among the other branches of industry, it is possible to single out the production of steel and building materials. This line of activity is largely due to the construction boom and unprecedented demand for construction materials. Today, the United Arab Emirates produces complementary parts and construction materials, tiles and marble, roof tiles and building blocks, cement, pipes, rebars and much more.
Taking into account the rapid growth of the UAE population and an intention of the authorities to diversify the national economy, the industrial sector has become the main investment direction. Now, the United Arab Emirates has taken another step to the introduction and development of the initiatives aimed at supporting specialized free trade zones.
The United Arab Emirates is the country that is ready to offer a really advantageous and attractive business environment for potential investors. This became possible due to the sound and reasonable public policy. When analysing the UAE economy, it may be established that the state, in a relatively short period of time, has developed not only a resource-based, but also a manufacturing economy. This particularly fact has become a reason for the global economic changes and has ensured a consistently high economic performance.
ELECTRICAL EQUIPMENT AND ELECTRONICS SECTOR
UAE is one of the highest ranked countries for the consumption of consumer electronics and appliances. Furthermore, due to its strategic location,Dubai in particular, has been an important supplier of electronic products to the Middle East, Africa and CIS countries.
The UAE manufactures a wide spectrum of electrical equipment, yet the country still highly relies on imports. The country is leveraging the captive demand of national companies to expand local electrical equipment manufacturing.
HEAVY INDUSTRIES SECTOR
The UAE heavy industry is growing rapidly and plays an increasingly major role in contributing to the nation's GDP.
The UAE manufactures a wide spectrum of metal products. By adopting emerging technologies that enable the automation and remote management of operations, the country aims to improve efficieny and product competitiveness in this sector.
AUTOMOTIVE INDUSTRY
The UAE is well-known for its opulent lifestyle. It will be challenging to walk through the streets of Dubai without encountering any supercars. You can see European-made car brands on its roads, but the UAE also has supercars. Several supercars have been designed and manufactured in the UAE. Dubai is a crucial automotive hub for exports and re-exports of vehicles in the surrounding region, owing to its strategic location and future-ready infrastructure.
Among its thriving industries and sectors, the automobile sector is an essential pivot for future growth. Dubai is home to global mobility leaders and a leading hub for automotive vehicle export and re-export to the Middle East and North Africa (MENA) region. The UAE's low import and fuel costs, favorable tax regime, and high disposable incomes have also contributed to the country's automobile sector's strength and encouraged global conglomerates to set up shop and manufacture in the country. The government has also stimulated research and development in autonomous or driverless vehicles and smart and environmentally friendly alternatives such as hydrogen, natural gas, and hybrid cars.
Aside from its geographical location as a gateway to the East and West trade lanes, Dubai also has an excellent transportation infrastructure for goods and its growing population, lending the city a particular ring in terms of automotive. For global players, Dubai's automotive market is both lucrative and in high demand, but it is also highly competitive. Optimizing your company's supply chain strategy and providing excellent customer service is critical to success in this industry.
Automotive suppliers looking to enter the abundant Dubai market will undoubtedly benefit from understanding their customer's personas and how they can deliver better by thoroughly understanding the city's logistics operations.
According to Aranca, the Middle East's car park (number of vehicles on the road) reached 21 million in 2018. These figures include selling 1.03 million new passenger cars and 270,000 commercial vehicles. At the research time, 27 million vehicles were expected to hit the road by 2023.
The policies for vehicular imports, low fuel costs, low import tariffs, high per capita disposable income, and favorable tax structure attract automotive companies to Dubai and the UAE. These factors contribute to the country's reputation as one of the most vibrant automotive markets in the Gulf.
Purchasing a car in the UAE is also relatively simple due to attractive financing and insurance options. With the UAE's substantial shift toward more environmentally friendly practices in various areas, the adoption of hybrid and electric vehicles has also increased. Free trade zones in Dubai are the first place suppliers should look if they want a piece of this market growth.
CONSTRUCTION INDUSTRY
Dubai's construction sector is a significant economic driver, and the city's visionary approach to sustainability and innovation is helping to shape the future of cities worldwide. Dubai's iconic structures and developments have made it instantly recognizable, and the construction industry, in general, has laid the groundwork for the city's growth in recent decades.
According to MEED Projects, the UAE construction market is valued at US$805 billion, with Dubai at the heart of this with a dynamic real estate market that elicits a strong appetite for investment from around the world, highlighting the city's long-established attractiveness. The value of real estate transactions in Dubai increased to US$62.1 billion in 2019, and despite the COVID-19 pandemic, the sector grew 3.7 percent in the first quarter of 2020 compared to the same period in 2019. FDI into Dubai's real estate market increased 17 percent during this period, reaching US$28.9 billion, with new investors accounting for 57 percent of transactions and investments. With the UAE's population expected to grow from 9.34 million to 11.5 million by 2025, Dubai's construction and real estate sector has plenty of room for expansion.
Despite near-term challenges in specific construction sectors, the UAE's medium to long-term growth story remains intact. The construction industry in the UAE is expected to expand steadily over the next four quarters. The growth momentum is expected to continue throughout the forecast period, with a CAGR of 3.9% between 2022 and 2026. The country's construction output is expected to reach AED 286,350.5 million by 2026.
MINING, MINERALS & METALS INDUSTRY
The discovery of oil fields in the United Arab Emirates marked the beginning of the country's new economic policy. The UAE government's policy of active diversification of the oil economy has, in turn, contributed to the development of many related industries. As a result, the national mining sector has emerged as one of the most promising production areas. It is no secret that the UAE's minerals have the potential to attract potential investors from all over the world.
Furthermore, to attract potential investors, the government has abandoned its traditional methodology of exploration and research work on UAE territory. Today, the state has adopted the most cutting-edge technologies and scientific methods. In turn, ongoing mapping studies, scientific research, and aerial photography have confirmed the UAE's mineral diversity and abundance.
The United Arab Emirates mines a wide range of minerals, including raw steel, aluminum, gypsum, copper, precious stones, and metals such as salt and marble.
According to recent economic results, minerals in the UAE have become a significant revenue item for the state treasury, and the mining product trade continues to show positive annual dynamics.
