United Arab Emirates: Trade, Finance, And Tourism Drive Economic Growth

 

Dubai and other Emirates like Abu Dhabi have leveraged oil revenue to create a more open and diversified economy through globalization. Good governance and political foresight helped capitalize on opportunities. 


 Dubai saw major increases in business licenses (30% increase to 412,000 active licenses in 2023), new company registrations at the Dubai International Financial Centre (1,451 more for a 34% yearly increase), and new residents (over 100,000 in 2023 following 71,600 in 2022). Other Emirates like Abu Dhabi and Ras Al Khaimah also saw positive economic trends.


The UAE proved remarkably resilient during the COVID-19 pandemic through its aggressive vaccination program and quick lockdown easing. It has since benefited from becoming an international vaccination destination and attracting wealthy residents through new visas. Geopolitical factors like tensions between the US and China also boosted its role.


Questions remain about sustainability given the UAE's reliance on desalination and plans for continued rapid urbanization. The global push for lower carbon emissions also threatens oil-dependent government revenue. However, diversification and low production costs put the UAE in a relatively good position. 


 Nearby competitors like Saudi Arabia are also pushing economic models to emulate Dubai's success, but Dubai retains first-mover advantages in sectors like business services. Geopolitical changes like any Russia-Ukraine resolution could also impact sectors like real estate.


 Long-term, the author argues the UAE is well-positioned due to its location connecting Europe, Africa and Asia as global economic and political power shifts toward those regions in the next decade.

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