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Country Forecast United Arab Emirates

  • ID: 2138630
  • Country Profile
  • Region: United Arab Emirates
  • 52 Pages
  • The Economist Intelligence Unit
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Background: As part of efforts to secure its trading routes with India during the 19th century, the UK concluded a series of truces and protectorate agreements with individual sheikhdoms in the Gulf. These agreements eventually gave rise to what became known as the Trucial States, covering much of the present-day UAE. There was little in the way of economic development or outside interest in the area until oil was discovered off the coast of Abu Dhabi in 1958. The UK withdrew from the region in 1968, and the sheikhdoms formed a loose federation. In 1971 the UAE became an independent state.

Political structure: The Supreme Council is the highest federal authority and comprises the hereditary rulers of the seven emirates. Between 1971 and 1996 the UAE operated under a provisional constitution, which was renewed every five years. In 1996 the seven emirates agreed to make the constitution permanent and accepted the city of Abu Dhabi as their capital. Sheikh Khalifa bin Zayed al-Nahyan became president of the UAE and ruler of Abu Dhabi in 2004, on the death of his father. The council appoints the prime minister-traditionally the ruler of the UAE's second-largest emirate, Dubai-who is currently Sheikh Mohammed bin Rashid al-Maktoum.

Policy issues: Dubai will focus on repaying debt accumulated by government-related entities while expanding tourism, logistics and business services; Abu Dhabi will seek to diversify away from oil, with mixed success. The UAE will remain reliant on expatriate labour but will continue to encourage more nationals to enter the private-sector workforce. Regionally, the UAE will remain active in supporting political allies and challenging perceived threats from Islamists and Iran. The diplomatic dispute with Qatar will affect broader regional relations and influence energy policy.
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Country Forecast United Arab Emirates

United Arab Emirates--highlights: Political outlook

United Arab Emirates--highlights: Business environment outlook

United Arab Emirates--highlights: Economic outlook

United Arab Emirates--highlights: Demographic outlook

United Arab Emirates--highlights: Market opportunities

United Arab Emirates--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance

Political outlook: Political stability

Political outlook: Political and institutional effectiveness
Efforts are under way to streamline the justice system to reduce the cost of doing business

Political outlook: Election watch

Political outlook: International relations
Enmity towards Iran is set to continue
Rising geopolitical tensions in the Middle East

Business environment outlook: Business environment rankings
UAE will retain highly competitive business environment despite obstacles

Business environment outlook: United Arab Emirates' business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
The labour market
Technological readiness

Business environment outlook: Macroeconomic environment
Growth will strengthen, owing to rising oil output and non-oil development

Business environment outlook: Policy towards private enterprise and competition
New industrial strategy to prioritise SMEs
Ghadan 21 at centre of Abu Dhabi strategy

Business environment outlook: Policy towards foreign investment
Foreign ownership restrictions are being eased in some sectors
Free zones will remain the primary tool to attract foreign investment
More specialised free zones likely

Business environment outlook: Foreign trade and exchange controls
The UAE will continue to expand re-exports despite regional pressures
Asia will be primary focus

Business environment outlook: Taxes
Following introduction of VAT, no further tax changes are expected

Business environment outlook: Financing
SME bank funding remains an issue

Business environment outlook: The labour market
Government seeking ways to retain most skilled expats

Business environment outlook: Infrastructure
Transport infrastructure a major focus of investment
The UAE rail system is developing but regional connections prove harder

Business environment outlook: Technological readiness
Dubai is trying to innovate in the use of technology for government services
Firms launching AI-based applications

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth

Economic forecast: Sectoral trends

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in the United Arab Emirates
Stocks and flows
Origin and distribution

Demographic assumptions
Foreign labour will continue to make up the bulk of the UAE workforce
Emiratisation will require a delicate balancing act

Market opportunities: Market outlook
The UAE will be an important regional base for foreign firms

Market opportunities: Consumer expenditure
UAE consumers will continue to exhibit sophisticated spending patterns

Long-term outlook: The long-term outlook

Long-term outlook: Long-term trends
Climate change and sustainability
Technological developments

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data summary: External debt

Data sources and definitions
Global data
Domestic data

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model
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