The discovery of oil transformed the small fishing and pearling towns of the UAE to the prestigious modern state it is today. It is now the key driver of turning the Middle East into an internationally important commercial and tourist center.
The UAE is currently one of the fastest growing economies in the world, the speed of its growth being aided by its strategic and central location which allows easy access to major regional markets. It is the second largest economy after Saudi Arabia in the Arab world.
It is an open economy with a high per capita income (estimated at $54,882 for 2013 by the Economist Intelligence Unit) and a sizable annual trade surplus. Successful efforts at economic diversification through huge non-oil sector investments have reduced the portion of the GDP based on oil and gas output with estimates suggesting oil contributes around a third to the UAE’s GDP. The government has increased spending on job creation and infrastructure expansion, education, health and tourism, however the export of oil however remains the main engine for growth. Despite this, the UAE already has a strategy to decrease oil dependence by a further 10%.
Lower costs on importing / exporting, faster procedures and less red tape, are in place to boost economic performance, improve the business environment and make the UAE a more attractive destination for business investment. Free Trade Zones - offering 100% foreign ownership and zero taxes - are constantly expanded and help to attract foreign investors.
Dubai’s win of the 2020 World Expo in addition to the prospect of its upgrade to emerging market status has spurred even more dynamism to its already growing economy.