Understanding Economic Diversification in the UAE Table of Contents The UAE economy 4 Concept of Economic Diversification 5 Growth of the Oil and Non-Oil Sectors over the Last Ten Years 6 Contribution of the Following to the Growth of the Non-Oil Sector in the UAE 7 Labor 8 Free Zones 9 The Stock Market 9 Summary and Recommendation 10 References 11 Abstract This paper will explore the economy of UAE by discussing strength and weakness in a way that facilitates the understanding of the topic in the context of Abu Dhabi. The paper will also focus on the concept of the economic diversification by identifying ways through which diversity contributes to the economy.
Growth of the oil and non-oil sector for a period of ten years will be discussed, in way that facilitates understanding of contribution made by these sectors to the economy of UAE. Various issues related to labor, free zone and stock market are discussed in way that depicts their contribution to growth of non-oil sectors in Abu Dhabi. In this section, the paper seeks to identify ways through which labor, free zone and stock markets are supporting the diversification from the oil sector.
Therefore, this gives an illustration of the ways in which Abu Dhabi is reducing the dependence on oil. The paper concludes with a summary and recommendations of the issues that will be explored. Understanding Economic Diversification in the UAE The UAE economy The economy of United Arab Emirates has been ranked the thirty-fifth freest economy in the 2012 index with a freedom score of 6.9, and it has experienced a growth of 1.5 using last year as the base year (Heritage foundation, 2012). This growth has been attributed to improvements in the property rights, monetary freedom and labor freedom.
Moreover, the economy is ranked fourth in a list of seventeen countries in Africa and Middle East due to its overall score that is higher than the averages on various regions in the world (Heritage foundation, 2012). Registration of the best twenty enhancements in 2012 index has made a substantial contribution to improving economic independence (Heritage foundation, 2012). The business environments and conditions boosting investments have contributed to restructuring of the economic systems; thereby facilitating the establishment of pulsating private sector. Furthermore, sustenance of momentum growth has been facilitated by the open trade regime with cost controls.
Therefore, the UAE has been focusing on being a regional financial hub with a banking sector dealing with the financial problems moderately well.
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Heritage foundation (2012). United Arab Emirates. 2012 Index of Economic freedom. Retrieved on 26 December 2012 from <http://www.heritage.org/index/country/unitedarabemirates>
The government of Abu Dhabi. (2008). The Abu Dhabi Economic Vision 2030. The Abu Dhabi Economic Vision 2030. Retrieved on 26 December 2012 from: <http://www.abudhabichamber.ae/Documents/economic-vision-2030-full-version, property=pdf.pdf>