United Arab Emirates

IV

Economy

Since the 1960s the UAE has progressed from a largely subsistence economy—mostly farming, fishing, and pearl harvesting—to a developed one that provides a very high standard of living. The main engine for the extraordinary growth and development of the economy has been the petroleum sector, although the non-oil trade has played a significant role and all the emirates have begun to diversify their economies. The 2005 gross domestic product (GDP) was $129.7 billion. The total workforce of the UAE was estimated at 2,723,070 in 2005, with 59 percent working in services.

A unique feature of the UAE’s economy is its dependence on foreign labor. More than 90 percent of the workforce is made up of people from other countries.

A

Mining

The UAE is rich in both oil and natural gas. Proven reserves amount to approximately 100 billion barrels of oil and about 5.7 trillion cu m (about 200 trillion cu ft) of natural gas. At present rates of production—858 million barrels of oil per year—the UAE’s oil will last for more than 100 years. Its gas will last for more than 200 years. These resources directly contribute about one-third of the country’s GDP.

B

Manufacturing and Services

In addition to petrochemical production, other manufacturing has become important, with rapid growth in aluminum production, paint and clothes manufacturing, and food processing. There is a very active private commercial sector, and trading services and other businesses in Dubai are a major factor in the country’s economy. Community and social services such as teaching and government employment are significant sources of jobs.

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Tourism has grown rapidly in the country over past few decades; many Europeans and other foreigners are attracted by the mild winter weather, extensive beaches, areas of scenic and historic interest, and opportunities for shopping in the suqs (markets). Hotels and other tourist facilities are modern and equipped with all the latest amenities.

C

Agriculture

Agriculture and livestock raising make up only 2 percent of the GDP. These pursuits are important, however, because the UAE has achieved a significant level of self-sufficiency in several food categories, including vegetables, eggs, and dairy products. The country is a major producer of dates for both domestic consumption and export. Many of the farms are small, but since agriculture is supported by generous government subsidies it is no longer considered a subsistence activity.

D

Energy

Due to its vast petrochemical resources, the UAE obtains its electricity almost exclusively from oil- and gas-burning power plants. The UAE’s plentiful fuel supply has made extensive desalination facilities and other energy-intensive activities possible.