Examples of the initiatives include the provision of public Wi-Fi, electric car charging stations, live traffic monitoring, and an eWallet for the Roads and Transport Authority, highlighting how there are tech-related opportunities for American firms in all sectors of the Emirati economy.
Designed to run entirely on solar power, it will have many smart features, including light sensors instead of switches, and a Personal Rapid Transit system running on Podcars. UAE is the first country in the Arab region and fourth globally to launch its 5G network.
In Q3 , Etisalat successfully conducted the first end-to-end 5G stand-alone call in the MENA region, becoming the first operator to achieve the milestone. By the end of , it is estimated that 16 million 5G smartphones will be operational in the region. With the UAE being at the forefront of technological advance and given the strong GDP per capita, demand for 5G services is predicted to be strong over the next five years.
The rollout of 5G and expansion of the telecom network and infrastructure in the UAE will offer many business opportunities for American companies. The UAE continues to grow rapidly in the technology space. Private and public sector players are seeking to modernize by adopting state-of-the-art solutions and catch the broader global wave of innovation, data utilization, digital transformation, and technological advancement. Technology players continue to see the huge potential to grow their business in the UAE.
According to Business Monitor International BMI , the software and services segments have seen significant investment in areas such as cloud computing, smart services, and cybersecurity. IT spending in the UAE is forecast to increase at 6. Software and services demand will drive IT spending growth over the medium term, especially demand from large industries for solutions around cloud computing, data analytics, cybersecurity, and the Internet of Things.
The hardware segment will also see healthy growth as the market tilts towards high-end power users and workstation purchases from the enterprise and commercial sector. Computer hardware sales. Software sales. The company operates five external production facilities located across Dubai and neighbouring Abu Dhabi.
The food industry has also seen growth in recent years. In addition, a growing network of highways and railways are set to continue improving links in the UAE and its GCC neighbours, making Dubai an attractive choice for businesses interested in local and international operations. More than domestic and international firms operate in Dubai, and a number of major multinationals have already established regional headquarters there.
In addition to global players, a number of local and regional players have benefitted from the growth of the food processing industry. Al Khaleej Sugar, established in , exports to more than 40 countries in the region and has become the largest stand-alone sugar refinery in the world.
In recent years, fluctuating commodity prices have created challenges. On one hand, the Consumer Protection Department strives to control price fluctuations and prevent increases. On the other, food processors could feel pressure on their margins if they are unable to pass on rising costs to customers.
The ministry and stakeholders periodically meet to find ways to stabilise prices, including implementing cost-cutting measures and subsidies. Dubai is also looking to leverage its location on one of the busiest shipping lanes in the world and the growing need for maritime support to develop its shipbuilding and maintenance industry.
A strategy was recently developed that will see the company repair, refurbish and build offshore vessels, with particular focus on the oil and gas industry. Although significant challenges like debt refinancing and regional competition could arise in the future, both the government and the private sector have proven their resilience. Successful debt refinancing like that of JAFZ in early , for example, has showed that even companies affected by the financial crisis can obtain credit from global lenders and continue operating profitably.
Indeed, Dubai has created an environment in which industrial enterprise can thrive, even during tougher economic circumstances. Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months. If you have already purchased this Report or have a website subscription, please login to continue. This article is from the Industry chapter of The Report: Dubai Explore other chapters from this report.
All 40 Countries. Request reuse or reprint of article. Abu Dhabi has taken a more cautious approach than some of its neighbours. A recent legislative change has given rise to the prospect of a new phase of debt issuance at the national level. The PDMO will also monitor risks associated with the issuing and trading of public debt instruments.
At the emirate level, meanwhile, the new body will work with local governments to develop efficient primary and secondary debt markets. According to government statements to local media, the UAE was preparing for a credit evaluation of the country at the end of and planning to make its first federal issuance in Although no debt had yet been issued as of March , the passing of the federal debt law paves the way for the CBUAE to become the main issuing agent of government debt, a function that will greatly strengthen its ability to manage liquidity.
During periods of low oil prices, Abu Dhabi has other book-balancing tools at its disposal beyond the issuance of public debt. Its cost-cutting measures in the wake of the oil price decline that started in mid included the removal of transport fuel subsides, and an overhaul of the electricity and water tariff regime.
Its attempts to raise revenue, meanwhile, went beyond the imposition of VAT. In the emirate introduced a number of new fees related to the tourism sector and the value of rental contracts.
Alterations to the tax code and revisions to government spending programmes have not resulted in a significant rise in the inflation rate at either the national or the emirate level. The average annual inflation rate in the UAE has declined from a high of 4. The IMF projects the inflation rate will reach 1. At the emirate level, Abu Dhabi has recently witnessed a deflationary trend for the first time since statistics were made publicly available in according to SCAD, consumer prices in the emirate declined by 0.
Prices also declined in the transport, clothing and footwear, and food and beverage groups. Areas where prices remained on an inflationary trend included recreation and culture, tobacco, furnishings and household equipment, and restaurants and hotels. In March the CBUAE lowered its repo rate on short-term liquidity, as well as its interest rate on certificates of deposit, by 50 basis points following a similar cut in the US.
While long-term growth forecasts for Abu Dhabi are generally favourable, the full extent of the economic shocks anticipated as a result of the global Covid pandemic in early were still unfolding by the middle of the year. A gradual return to fiscal consolidation at both the federal and emirate level is therefore desirable in the medium term, but achieving this without endangering economic growth will be a challenge for government planners going forwards.
Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months. If you have already purchased this Report or have a website subscription, please login to continue. Explore other chapters from this report. Instead of saving and capital accumulation being the conventional drivers of growth, the leaders adopted a resource-based development strategy.
The deployment of the oil windfall, aimed at rapidly and comprehensively boosting the social and economic infrastructure, enabled the UAE to achieve spectacular development.
Today, the UAE has achieved an income level comparable to many industrialised nations. It is an open market economy with a high per capita income and a huge trade surplus. The process of economic diversification continues unabated.
The primary goal of the diversification process is to create high value-added jobs in a wide array of sectors in order to make the growth momentum more sustainable. Success in these efforts has resulted in declining dependence on oil. As a result, the main engine of growth is shifting from the public to private sector, facilitated by channeling huge investments to key non-oil sectors.
Highly liberal and market-oriented policies such as free trade zones - offering per cent foreign ownership and zero taxes - have attracted huge foreign investments. Apart from investment in sophisticated physical infrastructure, the government is stepping up investments in social infrastructure - healthcare, education, training and innovation - in its attempt to incubate knowledge-based economic structure and integrate better with the rapidly globalising world economy.
During the period , higher oil revenues, burgeoning liquidity, cheap credit and housing shortages resulted in higher asset prices shares and real estate and jacked up consumer inflation.
However, with the global financial crisis spreading contagion into the real economic sectors, asset prices deflated and economic growth receded. Being a loose federation, each emirate retains considerable autonomy over economic and financial affairs and has adopted different development strategies contingent upon their resource endowments and core competencies. As a result, the economic development model of the UAE is not uniform. Whilst oil resources allowed Abu Dhabi to focus on oil-based industrialisation, dwindling oil reserves made Dubai focus on transport, logistics, tourism, hospitality, financial services, as well as real estate and construction.
The developments in Abu Dhabi and Dubai have had an impact on other small emirates. Thus, from a macro perspective, the UAE model of economic development is solely based on innovative business strategy of the Dubai Inc.
The Dubai model is unique in the sense that its foundations and strategies not only capture the dynamics of various existing development models such as Anglo-Saxon, Continental European and East Asian , but also demonstrates the success and efficacy of harnessing locational and comparative advantage to excel in the modern era of incipient globalisation. Realising that a sustainable economy enhances a country's standard of living by creating wealth and jobs, encouraging the development of new knowledge and technology, and ensuring stability, the UAE is focussing on a coordinated plan of economic diversification and knowledge-based economy.
While oil will anchor the economy, with plans to increase its oil output capacity to 3. As a result, the non-oil sector's contribution to the UAE's GDP in was 62 per cent, just lower than 64 per cent in By , the government aims to attract increased foreign direct investment in this sector. The emirate and capital of the UAE, which produces more than 85 percent of all oil from the country, had a non-oil sector that contributed 37 percent of the GDP in , which is predicted to increase to 60 percent by One of its flagship projects is the Saadiyat Happiness Island.
Most prominently, it will host five major museums, including the Guggenheim and Louvre. Built by local scientists with South Korean help, the aim of the strategic programme is to develop a team of Emirati scientists and experts to support knowledge-based development.
The fact that UAE sovereign wealth funds actively supported the bailouts and stimulus activities of some of the Western companies has put them in positive light. Thus, it is obvious that the UAE has learnt a lesson after the region squandered oil wealth during the s. For the first time, high oil price has been accompanied by economic diversification, including sports. Investment in sports is not only seen as benefiting the construction, hospitality, travel and tourism sectors, but also as a tool to reposition the country on the world map.
However, while the diversification plan appears to be chugging along well, the road towards creating a knowledge economy is very bumpy.
While the UAE has the required financial resources and leadership, it lacks a proactive national workforce to ensure continuity in the core management of every enterprise it puts up.
Recognising the importance of education as a foundation for economic growth, policy makers are raising their sights.
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