3. The economic situation of the UAE
Before the discovery of oil in 1960, the economic backbone of the UAE was pearls. It was converted to oil after 1960.
(1) UAE resource endowment
[Mineral Energy] The most important resource of the UAE is oil and natural gas, of which more than 95% is located in Abu Dhabi. The proven oil reserves are currently 97.8 billion barrels, ranking seventh in the world. The proven natural gas reserves are 6.09 trillion cubic meters, ranking seventh in the world. Other mineral resources include: sulfur, magnesium, limestone, etc.
[Plants] The UAE is famous for producing a wide variety and high quality dates. There are more than 40 million date palm trees in the UAE, and millions of tons of date palms are produced each year, with more than 120 varieties. Date palm is an important export crop of the Middle East countries such as the UAE and the food that the Arab nation relied on for survival in the early days. It is rich in nutrition and is also known as desert bread. Better varieties are: Abu Orugo, Anwanu, Umm Maani, Geras, Lulu and so on.
UAE Liva Date Festival
[Aquatic resources] The UAE ’s waters are rich in aquatic resources. There are corals along the coast, rich in pearls, and abundant fishery resources. More than 3,000 fish and marine life have been found.
(2) The macroeconomic situation of the UAE
Historically, pearl collection was one of the main economic activities of the residents of the Gulf Coast. Since the 1830s, Sharjah, Ras Al Khaimah and Abu Dhabi have about 700 ships and 13,000 people engaged in pearl collection activities. By the early 20th century, the scale had further expanded to 1,200 ships and more than 22,000 people. Engaged in this industry. In the late 1920s, Japanese cultured pearls entered the market, and the pearl industry in the Gulf region slumped. In the late 1950s and early 1960s, Abu Dhabi and Dubai discovered oil and gas, and the economy entered another era.
Since the founding of the UAE in 1972, the country's economic construction has undergone tremendous changes. Among the six GCC countries, the UAE is the country with the most open economy and the most developed non-oil economy. Since the economic diversification strategy was implemented in the 1980s, the UAE has provided a series of measures such as strengthening infrastructure construction and establishing free trade zones to facilitate the rapid development of trade. At the same time, increase investment in cement, building materials, clothing, plastic products, seawater desalination, aluminum smelting, food processing and other industries, and actively explore the development of tertiary industries such as agriculture, animal husbandry, fishery and tourism, convention and exhibition, information technology, etc. Increase the proportion of non-oil revenues in GDP. In recent years, the contribution of the UAE non-oil sector to GDP has remained above 60%.
1. Macroeconomic indicators
[Economic growth rate] In 2016, the UAE economy continued to grow steadily. According to the preliminary calculations of the UAE Federal Competitiveness and Statistics Center, the UAE ’s GDP in 2016 was calculated at US $ 349 billion at current prices and at US $ 379 billion at current prices, GDP grew by 3%. The GDP per capita is USD 67,700.
[GDP Composition] According to CIA data, the agricultural, industrial and service sectors of the UAE accounted for 0.7%, 44.6% and 54.7% of GDP in 2016, respectively. According to estimates by the Abu Dhabi Commercial Bank, the UAE ’s non-oil trade GDP in 2016 was US $ 298 billion, accounting for 83.3% of GDP. The current price of oil and gas GDP is calculated at US $ 58.2 billion, accounting for 16.7% of total GDP. In the non-oil field, wholesale and retail accounted for 12.8%, construction accounted for 10.3%, financial industry accounted for 10.1%, and manufacturing accounted for 9.5%.
[Fiscal revenue and expenditure] According to CIA data, in 2016, the UAE ’s fiscal revenue was 98.15 billion US dollars, expenditure was 112.6 billion US dollars, and the deficit was 14.4 billion US dollars. According to data from the UAE Ministry of Finance, the federal budget for 2016 was US $ 13.1 billion, mainly used for government affairs, social development, social welfare, education, and medical care. The federal budget of the UAE accounts for only 10% of the total budget, while the budgets of Abu Dhabi and Dubai account for more than 80%.
[Domestic Debt] According to CIA data, as of the end of 2016, UAE ’s public debt accounted for about 60.3% of GDP.
[Credit Rating]
As of June 2, 2017, Moody ’s, the international rating agency, rated the sovereign credit rating of the UAE as Aa2, with a stable outlook.
[Foreign Exchange and Gold Reserves] As of December 31, 2016, the UAE ’s foreign exchange and gold reserves were $ 84.933 billion. As of the end of 2016, the UAE's foreign exchange reserves were 84.7 billion U.S. dollars.
[Inflation rate]
The UAE inflation rate in 2016 was 1.6%.
[Unemployment rate]
The overall unemployment rate in the UAE in 2015 was about 14%.
2. Featured industries / industries
[Petroleum industry]
The UAE is rich in oil resources, with proven oil reserves of 97.8 billion barrels (about 13.3 billion tons), ranking seventh in the world. Oil production occupies a very important position in the UAE economy. UAE oil production is mainly in the Emirate of Abu Dhabi. Abu Dhabi ’s oil industry is at a mature stage, and based on current production and reserves, it can produce more than 120 years. The oil industry in the emirate of Dubai is in a depletion period and its reserves are limited. Based on current production and reserves, it can be extracted for up to 20 years. Other emirates are in the stage of development, exploration and oil search. The UAE's current oil production is about 2.8 million barrels per day, and plans to increase its daily output to 3.5 million barrels by 2017. From 2011 to 2015, the total energy investment in the UAE will reach US $ 14 billion.
[Natural Gas Industry]
The UAE ’s proven natural gas reserves are about 6.09 trillion cubic meters, ranking behind Russia, Iran, Qatar, Turkmenistan, Saudi Arabia and the United States, ranking seventh in the world. Most of them are located in Abu Dhabi. Although the UAE has a huge amount of natural gas, due to the large domestic demand for natural gas, most of it is used for oil recovery by recharge. At the same time, it is mostly an acid gas field, which is difficult to extract and high in cost. Project) imports natural gas from Qatar.
[Aviation Industry]
The UAE currently has 7 international airports. In the past 10 years, the revenue of the General Administration of Civil Aviation of the UAE has been on the rise, and the number of flights has always increased at a relatively rapid rate. Relying on its unique location advantage and flexible business strategy, the Emirates aviation industry has maintained a good development momentum in the context of the overall downturn in the international aviation industry. The General Administration of Civil Aviation of the United Arab Emirates (GCAA) is a federal self-governing body established under the Federal Decree No. 4 of 1996. Its responsibility is to supervise all activities related to civil aviation and provide piloting, registration and certification services. According to the UAE Civil Aviation Authority, in 2015, the number of passengers picked up and dropped by airports in the UAE was 110 million, an increase of 11% year-on-year. Among them, Dubai International Airport picked up about 80 million passengers, surpassing London Heathrow Airport to become the busiest airport in the world; About 30 million person-times.
[Service Industry]
The UAE's service industries such as convention, exhibition, air transportation and tourism play a very important role in the economic diversification strategy. The UAE hosts various fairs, trade shows and international conferences every year. UAE's convenient geographical location and transportation facilities and first-class service facilities have made exhibitions across the country attract exhibitors and visitors from all over the world. The exhibition brings unlimited business opportunities to the UAE and promotes the development of trade. The businessmen who come to the conference generally also conduct sightseeing and shopping in the UAE attractions. Therefore, the development of the convention and exhibition industry has brought important development opportunities to the UAE's business, tourism and aviation industries, and has become a very important link in the UAE economy. With Dubai gaining the right to host the 2020 World Expo, the number of tourists to the UAE is expected to grow at an annual rate of 10%, surpassing the growth rate of 5% to 6% in the international tourism market.
[Industry]
After recovering oil rights and raising oil prices, the UAE has accumulated abundant funds in a short period of time, creating conditions for the development of the non-oil industry. Therefore, in addition to the petrochemical industry, the UAE has also developed natural gas liquefaction, aluminum smelting, plastic products, building materials, clothing and food processing industries. Abu Dhabi ’s industry is mainly concentrated in the Abu Dhabi Industrial Zone and the Ruvis Industrial Zone. The two largest non-oil industry projects in the UAE are in Dubai, namely the Dubai Aluminum Plant and the Dubai Dry Dock. The aluminum plant uses liquefied petroleum gas in the Dubai oil field to generate electricity, with an annual production capacity of 375,000 tons, and its product exports account for 60% of the country's non-petroleum product exports. A ship repair yard, which has contracted business globally, with an average of more than 200 ships being scrapped and repaired annually. Dubai's industrial sector is mainly concentrated in the Jabal Ali Industrial Zone. The park has infrastructures invested by the government, including power plants, water supply systems and desalination plants, as well as satellite communication ground stations, dormitories and villas. Equipped with business centers, schools, hospitals and sports facilities. Customs and immigration agencies have also been set up in the park to facilitate those who come to invest in various businesses. At present, most industries in Dubai are concentrated in Jabal Ali Industrial Zone.
【Pharmaceutical industry】
The UAE is now the second largest pharmaceutical producer in the six Gulf countries, second only to Saudi Arabia. The annual output value of the pharmaceutical industry is more than 272 million US dollars (1 billion dirhams). The UAE will build a new pharmaceutical factory in the Abu Dhabi Industrial City to meet the growing demand for medicines.
(3) The UAE's absorption of foreign capital and foreign investment
The UAE is rich in natural resources, has long-term political stability, superior geographical location, well-developed infrastructure, good social security, loose business environment, and high economic openness. It is one of the most attractive countries for investment in the Gulf and the Middle East. In addition, in order to promote business prosperity, the UAE government is committed to simplifying business processes and providing measures such as online applications. The UAE ranks 23rd in the World Bank ’s latest ranking of the business environment of 189 economies. In the UAE, it takes only 8 days to set up a company, which is 3 days less than the OECD average.
Overall, the UAE ’s investment attistracvenes is:
One is low tax rate, general goods only charge 5% tariff; second is convenient port logistics and complete supporting facilities; third is one-stop service, network management, fast and efficient service. Especially since the outbreak of the international financial crisis and regional turmoil, the UAE has become a safe haven for regional capital flows and logistics, and its position as a regional trade, finance, and logistics hub has been further strengthened. According to data from Arab Investment and Export Credit Guarantee Corporation, from 2003 to 2013, the UAE absorbed 3437 foreign investment projects, accounting for 35.6% of the total foreign investment attraction of Arab countries. In 2015, the UAE absorbed foreign capital of 770.6 billion dirhams (about 2098 US $ 100 million), which has maintained an upward trend for eight consecutive years, with an increase of 66.8%. 3,246 foreign-funded companies were established in the UAE, accounting for 36% of the total number of foreign-funded companies established in Arab countries.
The World Economic Forum's 2014 Global Trade Promotion Report shows that the UAE Trade Promotion Index (ETI) ranks first in the Middle East and North Africa region and ranks 16th globally. Among them, the business environment index ranks 13th in the world.
In order to continue to improve the domestic investment environment and encourage and attract local capital and foreign direct investment to establish a good financing platform, the emirate governments continue to improve the legal framework and actively pay attention to the development of private enterprises. In April 2014, UAE President Khalifa signed and approved Federal Act No. 2 of 2014 on supporting the development of small and medium-sized enterprises, tilting government procurement and credit resources to small and medium-sized enterprises.
The World Economic Forum's 2015-2016 Global Competitiveness Report shows that the UAE ranks 17th among the 140 most competitive countries and regions in the world.
According to the World Bank's "2016 Global Business Ease", the UAE ranks 31st among 189 economies worldwide. The ranking of three of these indicators has increased: Investor protection increased by 15 places, the convenience of contract execution increased by 9 places, and the convenience of obtaining construction permits rose by 1 place.
The characteristics of the UAE in the field of foreign investment are basically similar to other Gulf countries. That is mainly indirect investment, concentrated in the capital market, including investment funds, bonds, stocks and real estate areas closely related to the capital market. Moreover, investment is dominated by private investment. Some Western newspapers reported that the UAE ’s private hot money reached about 200 billion US dollars.
In 2013, the UAE attracted foreign direct investment of US $ 12 billion, accounting for 40% of the total foreign investment attracted by the Gulf Cooperation Council member states. In 2014, the UAE attracted foreign direct investment of USD 14.4 billion. In 2013, the UAE's foreign direct investment was US $ 3.49 billion, an increase of 22% year-on-year. Foreign exchange reserves increased by 21 billion US dollars. But the opacity of the UAE ’s rich oil dollar income and the dominance of huge sovereign wealth funds is also an important factor for international investors ’wait-and-see sentiment in the UAE ’s financial and investment markets.
In 2015, the UAE attracted foreign direct investment flows of US $ 8.795 billion, and in 2016 the UAE attracted foreign direct investment flows of US $ 8.98 billion. As of the end of 2016, the UAE's foreign direct investment stocks reached US $ 117.94 billion.
(4) UAE's foreign trade
For a long time, foreign trade has occupied an important position in the UAE economy. The UAE has been a party to the General Agreement on Tariffs and Trade (GATT) since 1994 and joined the World Trade Organization (WTO) in 1996. Since 2007, it has fully fulfilled its obligations.
[Regional Agreement] The UAE is a member of the Gulf Cooperation Council (GCC), the Great Arab Free Trade Area (GAFTA), the International Monetary Fund (IMF), the Organization of Petroleum Exporting Countries (OPEC), the International Atomic Energy Agency (IAEA), and Asian infrastructure Member of international multilateral organizations such as investment banks (AIIB). As one of the members of the GCC, the UAE actively participates in the negotiation of free trade zones between the GCC and other countries and regions. At present, the UAE has signed free trade zone agreements with Singapore and European free trade bodies (Switzerland, Norway, Iceland, Liechtenstein). The negotiation of free trade zone agreements with New Zealand has ended and has not been formally signed; Japan and China are under negotiation , India, Pakistan, Turkey, Australia, South Korea and the Southern Common Market (Brazil, Argentina, Uruguay, Paraguay).
[Free Trade Zone]
The establishment of a free trade zone to provide investors in the area with favorable conditions to attract foreign investors to invest and set up factories is an important measure for the UAE to encourage the development of non-oil trade. Now the free trade zone plays a decisive role in the implementation of the UAE economic diversification strategy.
The Jebel Ali Free Trade Zone was established in 1985 and is the earliest and most successful free trade zone in the Middle East and North Africa region. As of the end of 2012, there were about 40 free trade zones in the UAE, of which more than half were in Dubai. Investment in the most famous Jebel Ali Free Trade Zone, foreign capital can be 100% wholly-owned; foreign-funded companies are exempt from income tax for 50 years, and 15 years of tax exemption period can be extended after the expiration; no personal income tax; complete tax exemption for imports; capital and Profits can be remitted freely without restrictions; currencies can be freely exchanged; companies employ foreign employees without restrictions, etc. By the end of 2012, there were 6,918 companies in the Jebel Ali Free Trade Zone, with a total annual turnover of about 82 billion U.S. dollars, accounting for 1/4 of Dubai ’s total non-oil trade for the whole year, and FTZ exports accounting for 1% of Dubai ’s total exports. / 2 or more. The Dubai Airport Free Trade Zone, established in 1996, is one of the fastest growing free trade zones in the region. In addition to the preferential policy of free corporate income tax, investment in this zone also enjoys the Jayber Ali Free Trade Zone Other preferential conditions.
In 2014, there were more than 1,600 companies in the Dubai Airport Free Trade Zone, covering industries including aviation, freight and logistics, medicine, engineering, food and beverage, IT and telecommunications, jewelry and cosmetics; 100 million US dollars, an increase of nearly 73% over 2011. In 2012, the Dubai Airport Free Trade Zone was awarded the first place in the 2012-2013 Global Free Trade Zone Award by the "Foreign Direct Investment (FDI)" magazine of the Financial Times Group. He also won the 2012-2013 Richard Goodman Strategic Planning Award of the United States and the Global Quality, Perfection and Ideal Performance Award.
[Total Trade]
According to UNCTAD data, the UAE ’s total foreign trade in 2015 was US $ 620.38 billion, of which imports were US $ 287.02 billion and exports were US $ 333.36 billion. In 2016, the total foreign trade of the UAE was US $ 569.53 billion, of which imports were US $ 270.88 billion and exports were US $ 298.65 billion. From the perspective of trade between the UAE and China, the bilateral trade volume from 2014 to 2016 was 175.8 billion, 174.6 billion, and 170.2 billion dirhams, respectively. During the same period, bilateral trade with India was 128.8 billion, 125.8 billion, and 131.8 billion dirhams, 111.1 billion, 102.2 billion, and 99.3 billion dirhams with the United States, and 75.6 billion, 83.8 billion, and 71.6 billion dirhams with Saudi Arabia, respectively. Lam, with Germany 55.6 billion, 57.1 billion and 59.1 billion dirhams.
【Trade Partners】
According to data released by the National Bureau of Statistics of the UAE, Asia, Australia, and the Pacific were the largest trading partners in 2015, with a trade volume of 646 billion dirhams (about 175.9 billion US dollars), accounting for 44% of total non-oil trade %. The European region ranks second, with a trade volume of 328 billion dirhams (about 89.3 billion US dollars), accounting for 22% of the total. The Middle East and North Africa followed closely, with trade volume reaching 289 billion dirhams (about 78.7 billion US dollars), accounting for 19%. In the first three quarters of 2015, the top five trading partners of the UAE's non-oil trade were India, China, the United States, Germany, and Iran; of which, India was the UAE's largest exporter of non-oil trade, followed by Saudi Arabia and Switzerland; Iran is the UAE's largest non-oil re-export country, followed by India and Iraq; China is the UAE's largest non-oil trade importer, followed by the United States and India.
[Trade structure] The main export commodities of the UAE are: petroleum and refined products, natural gas, precious stones, precious metals, base metals, mineral products, petrochemical products. The main imported commodities are: machinery, motors, electronic equipment, vehicles such as automobiles and airplanes, precious stones, precious metals, base metals, fruits and vegetables, textiles, chemicals.
In the new century, with the advancement of Internet technology, a new trend of e-commerce has emerged in the form of trade. The UAE government keeps pace with the times, actively develops an e-commerce platform, and combines traditional trade with e-commerce. 50% of Internet users in the UAE are users of e-commerce, and its scale and proportion rank first among Arab and Middle Eastern countries. In order to make Dubai an e-commerce center, information technology research center in the Middle East, and Silicon Valley in the Gulf region, in January 2000, the Dubai Chiefs issued a decree to establish a third free trade area covering an area of 4 million square meters and built it into a The e-commerce zone's development goal is to encourage and promote the development of information technology.
The World Trade Organization has stated that Dubai Port of the UAE is the third-largest re-export center after Singapore and Hong Kong. In 2015, Dubai's non-oil cargo exports and re-exports totaled US $ 132.7 billion.
(5) Financial development of the UAE
In 1972, the UAE joined the International Monetary Fund, and the currency board was established the following year to issue a new currency, the UAE Dirham. In February 1974, the International Monetary Fund officially established the standard value of the UAE Dirham and became one of the most stable currencies in the world. The headquarters of the Arab Monetary Fund is located in Abu Dhabi, and it is also an Arab investment bank and foreign trade bank. In 1980, the UAE established the Central Bank, which was responsible for issuing currency, managing banks and financial institutions, managing credit policies, and ensuring economic development. It replaced the currency board.
The development of the UAE's financial industry has benefited from its superior geographic location, convenient transportation, prosperous business, and increasing population. As a regional financial center, Dubai had only 17 banks in the 1970s. By 2002, there were 42 international banks and 112 local banks. There are 23 domestic banks, 843 branches, and 89 offices in the UAE. 115 foreign banks and other financial institutions. The UAE currency is free to enter and exit, foreign exchange is not restricted, and the exchange rate is stable. The Free Trade Zone has attracted considerable foreign investment in Dubai, and many international companies have established regional headquarters in Dubai. Dubai's financial industry has become another pillar industry in addition to tourism and real estate, forming a unique "Dubai model", but Dubai's entire economic structure is due to the fact that the physical industry is too small, the virtual industry accounts for a large proportion, the economy is rapid The development formed a huge asset bubble, which eventually led to the outbreak of the Dubai economic crisis at the end of 2008. In 2009, Abu Dhabi provided a loan of 10 billion U.S. dollars to Dubai, and the Dubai economy gradually recovered. The International Monetary Fund is optimistic that, given that Dubai World Group has a large number of overseas assets, the impact of its delayed debt repayment on loan banks can be controlled. The latest Global Financial Center Index released in September 2013 shows that Dubai ranks 25th among 80 international business centers and ranks among the top 7 financial centers in the Middle East and Africa.
