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Economy

Economy overview

The United Arab Emirates (UAE) is a rapidly diversifying, highly developed economy, based on various socioeconomic indicators such as GDP per capita, energy consumption per capita, and the HDI.(Human development index).

Although there are various differences on the actual statistics of the nation's GDP, in spite of this it is undeniable that the UAE has one of the fastest growing economies in the world.

According to the Ministry of Finance and Industry, real GDP rose by 35% in 2006. Traditionally, the UAE has relied on natural resources to support its economy, and at the same time crude oil makes up 45% of the country's exports, moves are being made to try and diversify the economy. The UAE has seen 25% capital appreciation over the last year and developers and investors are keen to cash in on that.

Even though the United Arab Emirates is becoming less dependent on natural resources as a source of revenue, petroleum and natural gas exports still play an important role in the economy, especially in Abu Dhabi. A substantial construction boom, an escalating manufacturing base, and a successful services sector are helping the UAE diversify its economy.

Trade

The UAE has benefitted from recovery in global trade flows. On the other hand, World Trade Organization has forecast global trade to rebound by 9.5 per cent in 2010 as the economy solidifies.

Although oil remains by far the most valuable commodity exported by the UAE, other goods and services, particularly those requiring high energy use such as petrochemicals and aluminium are becoming increasingly important contributors to trade. Free zones scattered across the emirates, particularly Jebel Ali Free Zone in Dubai, are the main sources of the country's non-hydrocarbon exports, accounting for nearly 60 per cent of such exports.

In a bid to further boost the value of non-oil exports, Abu Dhabi plans to establish an export credit agency, which would issue loans to overseas companies that import goods produced in the emirate. It hopes to establish by the end of 2011 an export promotion agency, to provide funding for private sector firms to secure export buyers overseas. Dubai launched in 2010 its own version of the scheme called an export assistance programme.

The UAE's major export is crude oil, along with other natural resources, whilst manufactured goods, machinery and transport equipment made up 80% of the country's imports. The UAE benefits from a substantial trade surplus, which totaled around $55 billion in 2007.

Another important foreign exchange earner, the Abu Dhabi Investment Authority which controls the investments of Abu Dhabi, the wealthiest emirate--manages an estimated $360billion in overseas investments & an estimated $900billion in assets.