UAE Fact Sheet

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.

Annual data 2008(a) Historical averages (%) 2004-08
Population (m) 5.6 Population growth 6.9
GDP (US$ bn; market exchange rate) 254.4(b) Real GDP growth 12.2
GDP (US$ bn; purchasing power parity) 190.9 Real domestic demand growth
GDP per head (US$; market exchange rate) 45,178 Inflation 11.9
GDP per head (US$; purchasing power parity) 33,893 Current-account balance (% of GDP) 14.2
Exchange rate (av) Dh:US$ 3.67(b) FDI inflows (% of GDP) 7.4
(a) EconomistIntelligence Unit estimates. (b) Actual.

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.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.

Policy issues: Although the UAE controls about 8% of the world’s oil reserves, it is seeking to reduce its dependence on hydrocarbons and diversify its economic base. The second-largest emirate, Dubai—in part because of falling oil output—has led the way in developing its services sector, particularly financial services and tourism. The UAE is heavily reliant on expatriate labour (over 80% of UAE residents), which creates issues about the potential marginalisation of UAE nationals and has led to “Emiratisation” employment policies to give preference to nationals.

Taxation: There is no personal income tax and the only corporate taxpayers are foreign banks and foreign energy companies. Increasingly, the Dubai government is generating revenue by extending fees and charges for services. For example, Dubai charges tenants 5% of their annual rent. As of 2009 some UAE firms will have to pay an Islamic tax (zakat) of 2.5% of their net operating capital. Value-added tax at 3-5% may be introduced later in the forecast period to supplement revenue.

Foreign trade: In 2008 the merchandise trade surplus was estimated at US$63bn. Export receipts grew by 34% to US$239bn and import spending by 33.4% to US$176bn. The current-account surplus was US$22bn, or 8.8% of GDP.

undefined

Major exports 2008 % of total Major imports 2007 % of total
Crude petroleum 34.0 Machinery & electrical equipment 18.1
Re-exports 39.4 Precious stones & precious metals 14.3
Gas 3.9 Vehicles & other transport equipment 10.0
Base metals & related products 8.9
Leading markets 2008 % of total Leading suppliers 2008 % of total
Japan 22.7 China 12.9
South Korea 9.3 India 12.0
Thailand 9.1 US 8.7
India 6.4 Germany 6.4
Download in spreadsheet format