Economy of the United Arab Emirates
Overview
The Economy of the United Arab Emirates (UAE) is the second largest in the Arab world (after Saudi Arabia), with a gross domestic product (GDP) of $377 billion in 2012. Since independence in 1971, UAE's economy has grown by nearly 231 times to 1.45 trillion AED in 2013. The non-oil trade has grown to 1.2 trillion AED, a growth by around 28 times from 1981 to 2012.
Oil and Gas Sector
The UAE has been successfully diversifying its economy, although the UAE remains extremely reliant on oil. With the exception of Dubai, most of the UAE is dependent on oil revenues. Petroleum and natural gas continue to play a central role in the economy, especially in Abu Dhabi. More than 85% of the UAE's economy was based on the oil exports in 2009. While Abu Dhabi and other UAE emirates have remained relatively conservative in their approach to diversification, Dubai, which has far smaller oil reserves, was bolder in its diversification policy.
Services Sector
The services sector, including tourism, aviation, real estate, and financial services, accounts for 86% of the GDP of Dubai. The top sectors contributing to the GDP as of 2014 were: wholesale and retail trade (28.8%); transport and storage (15.2%); and real estate (14.6%). Dubai has a free trade in gold and, until the 1990s, was the hub of a "brisk smuggling trade" of gold ingots to India, where gold import was restricted.
Industrial Sector
The industrial sector, made up of oil, aluminium, cement, and others, takes up about 12.6% of the GDP. One of the largest growing industries in the UAE is the construction industry, which is comprised of the construction of both residential and non-residential buildings, and civil engineering. The construction industry has been fueled by a building boom in both Abu Dhabi and Dubai, and now employs a larger percentage of the workforce than any other industry outside of services and retail.
Financial Sector
The UAE is home to a number of regional and international banks, including the largest bank in the Middle East, the National Bank of Abu Dhabi. The UAE's financial services sector operates with a significant number of overseas banks and brokerage houses along with legal, accounting, insurance and consulting firms. The UAE's banking sector has been seen as a safe haven by investors during the global financial crisis of 2008.
Trade and Investment
The UAE is one of the world's most open economies. Its trade-to-GDP ratio is over 200%, one of the highest worldwide. The UAE's strategic plan for the next few years focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment.