The UAE maintains a free-market economy and is also one of the most politically stable and secure in the region. This ensures that the country has a robust competitive edge as the region's premier commercial hub and second largest economy.
Economic growth in the UAE is steady despite a short-lived hiatus as the global economy faltered. Recovery was helped by high oil prices, increased government spending and a resurgence in tourism, transport and trade. In addition, successful restructuring of debt owed by high-profile companies, solidarity among the emirates and accommodative monetary and fiscal policies all played a role in bringing significant economic stability to the market.
Following the dip in 2010, UAE GDP rose to reach US$419 billion at the end of 2014, up 4.8 per cent on 2013. The IMF predicts that GDP will continue to grow at a rate of 4 to 5 per cent over the next seven years.
Abu Dhabi's Economic Vision 2030
Dubai's Strategic Plan 2015 are leading the drive towards diversification. The strategy is to increase investment in industrial and other export-oriented sectors, including heavy industry, transport, petrochemicals, tourism, information technology, telecommunications, renewable energy, aviation and space, and oil and gas services. Much has already been achieved in these fields, especially in satellite and telecommunications, the aviation sector and in renewable energy, and although short-term priorities have been altered to accommodate changing realities, the long-term strategy remains the same.
At the federal level, the UAE is pursuing
2021 Vision, which aims to place innovation, research, science and technology at the center of a knowledge-based, highly productive and competitive economy by the time of the federation's golden jubilee in 2021.
Trade has played a major role in UAE economic life for many centuries. This is not altogether surprising considering the country's strategic geographical position. However, focused and far-seeing investment in airports, ports and services, as well as an enabling business environment, has ensured that the UAE has become an important trading hub connecting regional markets to the outside world. Steady recovery of most economic sectors has also led to an increase of foreign trade. The UAE foreign trade indices bounced back in 2013 to pre-global financial crisis levels whilst bulk commodity exports, including oil, are expected to grow by 5.8 per cent to US$381 billion in 2014, compared with US$354 billion in 2013.