Economics of UAE Essay Example | Topics and Well Written Essays - 2500 words

Economics of UAE - Essay Example The study also focuses on those factors which can be improved with the aim of increasing the economic stability of the nation. It has been observed in this regard that UAE strongly believes in diversification of the economy, followed by strong resources for supporting the initiatives for development in fields of education towards enhancing the overall competency of the nation. The economy of UAE is one of the fastest growing economies in the world (Ministry of Economy, 2008). Contextually, the economy of UAE offers large scope to foreign investors. The scope of Foreign Direct Investments (FDIs) is very high in UAE which makes the nation one of the most potential hubs for foreign nationals to penetrate through business outsourcing. As UAE has been developing vibrantly, there are many areas or sectors of development which are rendered with utmost priority by the government such as banking, education, industrial and infrastructural development, oil industries among others (Heyzer, 2009) . The keys sectors in UAE that has achieved excellence within the last ten years will be highlighted in this study along with the areas where UAE is criticised to be lacking behind. Correspondingly, an effort will also be made in this study to identify the areas in which future development will be much promising to ensure economic prosperity of UAE. Macroeconomic Performance of the UAE The macroeconomic performance of UAE can be assessed with reference to the major indicators including the GDP growth rate, inflation rate, population rate and its leading industrial components with due significance to the dimensions of oil reserves and oil exports. Contextually, the attributes signifying the diversification and the composition of GDP, international trade (with respect to its performances in terms of exports and imports), unemployment level, BoP, fiscal policies and all the major sectors of growth i.e. industries, infrastructures, banking and education can also be considered as useful when assessing the macroeconomic performance of UAE. With this concern, the economic performance of each of these indicators has been conducted through a brief discussion in the below sections. GDP A degradable growth in GDP has been observed in UAE over the past few years. For instance, in the recent years, its GDP has been falling from 5% in 2012 to 3.7% in 2013. It is worth mentioning in this context that economists have been arguing that the main reason for the decline is largely due to the enactment of new policies which are formed with the sole intention to control oil productivity, ensuring limits over the environmental hazards caused by this particular industry sector, which is often regarded to be the main source of national income in UAE. According to a global report, UAE’s GDP has been observed to have increased by 6.8% in 2012, quite admirably after its steep fall in the year 2008 owing to the occurrence of global recession as can be observed in the pictorial repr esentation below (Mubasher Info, 2013). With an increased rate of GDP in 2012 it can be expected to have more increase in the GDP rate in the year 2013 which can be considered as strength of the economy. But at the same time, the GDP growth rat