Current reports and analysis on the folowing:
Inflation- The inflation rate for the UAE was reduced from 15.8% in 2008 to 1.5% in 2009, a decrease of 14.3%. If you Compare this to the UAEs neighbor of Saudi Arabia where the inflation rate shrank by only 4.8% in 2009, the trend seems to be positive for the UAE. This may be attributed to The UAE lending itself money, which in the long run can possibly lead to more instability.
On the other hand if we look at Qatar, whose economy is well diversified and making itself less reliant on energy, you will see that inflation rate is below zero, far surpassing the UAEs rate.
Another comparison we can use to determine the concern of the UAE inflation rate would be that of Irans where the state controlled utilities such as oil are a major part of thier GDP. The inflation rate in Iran is 13.5% and although that is 12.1% lower than the previous year it is still a very high percentage.
As you can see inflation is fluctuating in wide margins in almost every country in the middle east, a sign of unstable prices which is an overall negative economic indicator for the UAE.
Unemployment- The unemployment rate in the UAE is currently at 2.4%(CIAfactbook). Compared to Oman, at 15% unemployment, the numbers for the UAE are relatively good.
When we compare these numbers to Qatar(0.5% unemployment) we get the view that the unemployment rate for the UAE can be lower with a more concentrared effort on diversifying its economy so that it is better able to handle a widely fluctuating world market economy.
The groups most affected by unemployment will be the expatriates who make up roughly 85% of the workforce(CIAfactbook). The UAEs government spending on infrastructure has helped keep uemployment low in the short term, but raising longterm questions and concerns.
Real GDP- Real GDP for the UAE stands at 186.8 billion(ciafactbook). Compared to Irans GDP at 369.7 billion(ciafactbook) the GDP for the UAE seems relatively small, but once you compare the population size of Iran at 66.4 million(ciafactbook) against that of the UAE at 4.7 million(ciafactbook), you begin to understand the differences between the nations incomes.
When we compare a country with an almost equal population such as Turkmanistan, we begin to understand how strong of a GDP the UAE really has. Turkmanistan has a GDP of 32.56 billion with a population of 4.8 million(ciafactbook).
When we look at the country whose GDP rank is 52, Denmarks population of 5.5 million is nearly 1 million more than the UAE whose GDP rank is 53.
To get down to meaningful comparisons, lets take a closer look at per capita GDP for the UAE and compare it to the countries the UAE most resembles, would like to become, and wants to stay away from in terms of an economic model.
Oman, like the UAE, is highly dependant on oil revenue and is desperatly trying to diversify its economy. Per capita GDP is $25,000 ranking Oman 52(ciafactbook) where the UAEs per capita is at $38,900 ranking them 23(ciafactbook). It would greatly benefit the UAE to look closely at Oman and take action to avoid the concerns of dwindling oil reserves.
Qatar stands in stark contrast to that of both the UAE and Oman in terms of per capita GDP, ranking 2 in the world(ciafactbook) trailing only Lichtenstien. With a well diversified economy and less dependance on oil revenue, per capita GDP for Qatar is $119,000. It must also be taken into consideration that Qatars population is 833,000.
Wether or not the UAE chooses to ignore the lessons bieng given by both Qatar and Oman, it must not dismiss the overwhelming evidence provided by Iran. Strict government regulations and subsidies have strangled Irans private sector leaving it with $12,500 per capita GDP ranking it 91st in the world(ciafactbook).
Many considerations must be taken into account when comparing a countries GDP ranking to its own per capita GDP ranking. Factors such as population size play a major role in determining the GDP. Overall, the UAE's GDP ranking and per capita GDP ranking are consistant with each other. High revenues in oil and a competitive free market have made this possible for the UAE.
Economic Growth- GDP growth for the UAE is at -2.7% in 2009(ciafactbook) a decrease of 9.8% from 2008, when GDP was at 7.4%. This negative growth rate is higher than Saudi Arabia(.01%), Oman(2%), Iran(1.5%), Qatar(9.5%) and much of the rest of the world(-.7%). Falling oil prices and collapsing real estate investments have hit the UAE especially hard. The numbers for the UAE are alarming when compared to past economic growth, and continue to push the UAE towards a better diversified economy.
The greatest area of concern for the UAE undoubtedly will be the negative growth rate it is experiencing presently. The UAE has a high per capita GDP, a high ranking GDP, low unemployment and inflation, and a high standard of living that is the envy of the middle east. A negative growth rate puts all that in jeopardy and leaves the UAE with uneasy questions it must answer about its future. Does the UAE continue follow the example of Oman and wait untill unemployment hits 15% before it realizes that one source of national income is too unstable? Does it go the way of Iran, and nationalize and distribute as the government sees fit? Or do they continue on the path laid out by Qatar and privatize thier energy sector and encourage free market growth? Questions the UAE must answer now if wishes to remain succesful.
Inflation- The inflation rate for the UAE was reduced from 15.8% in 2008 to 1.5% in 2009, a decrease of 14.3%. If you Compare this to the UAEs neighbor of Saudi Arabia where the inflation rate shrank by only 4.8% in 2009, the trend seems to be positive for the UAE. This may be attributed to The UAE lending itself money, which in the long run can possibly lead to more instability.
On the other hand if we look at Qatar, whose economy is well diversified and making itself less reliant on energy, you will see that inflation rate is below zero, far surpassing the UAEs rate.
Another comparison we can use to determine the concern of the UAE inflation rate would be that of Irans where the state controlled utilities such as oil are a major part of thier GDP. The inflation rate in Iran is 13.5% and although that is 12.1% lower than the previous year it is still a very high percentage.
As you can see inflation is fluctuating in wide margins in almost every country in the middle east, a sign of unstable prices which is an overall negative economic indicator for the UAE.
Unemployment- The unemployment rate in the UAE is currently at 2.4%(CIAfactbook). Compared to Oman, at 15% unemployment, the numbers for the UAE are relatively good.
When we compare these numbers to Qatar(0.5% unemployment) we get the view that the unemployment rate for the UAE can be lower with a more concentrared effort on diversifying its economy so that it is better able to handle a widely fluctuating world market economy.
The groups most affected by unemployment will be the expatriates who make up roughly 85% of the workforce(CIAfactbook). The UAEs government spending on infrastructure has helped keep uemployment low in the short term, but raising longterm questions and concerns.
Real GDP- Real GDP for the UAE stands at 186.8 billion(ciafactbook). Compared to Irans GDP at 369.7 billion(ciafactbook) the GDP for the UAE seems relatively small, but once you compare the population size of Iran at 66.4 million(ciafactbook) against that of the UAE at 4.7 million(ciafactbook), you begin to understand the differences between the nations incomes.
When we compare a country with an almost equal population such as Turkmanistan, we begin to understand how strong of a GDP the UAE really has. Turkmanistan has a GDP of 32.56 billion with a population of 4.8 million(ciafactbook).
When we look at the country whose GDP rank is 52, Denmarks population of 5.5 million is nearly 1 million more than the UAE whose GDP rank is 53.
To get down to meaningful comparisons, lets take a closer look at per capita GDP for the UAE and compare it to the countries the UAE most resembles, would like to become, and wants to stay away from in terms of an economic model.
Oman, like the UAE, is highly dependant on oil revenue and is desperatly trying to diversify its economy. Per capita GDP is $25,000 ranking Oman 52(ciafactbook) where the UAEs per capita is at $38,900 ranking them 23(ciafactbook). It would greatly benefit the UAE to look closely at Oman and take action to avoid the concerns of dwindling oil reserves.
Qatar stands in stark contrast to that of both the UAE and Oman in terms of per capita GDP, ranking 2 in the world(ciafactbook) trailing only Lichtenstien. With a well diversified economy and less dependance on oil revenue, per capita GDP for Qatar is $119,000. It must also be taken into consideration that Qatars population is 833,000.
Wether or not the UAE chooses to ignore the lessons bieng given by both Qatar and Oman, it must not dismiss the overwhelming evidence provided by Iran. Strict government regulations and subsidies have strangled Irans private sector leaving it with $12,500 per capita GDP ranking it 91st in the world(ciafactbook).
Many considerations must be taken into account when comparing a countries GDP ranking to its own per capita GDP ranking. Factors such as population size play a major role in determining the GDP. Overall, the UAE's GDP ranking and per capita GDP ranking are consistant with each other. High revenues in oil and a competitive free market have made this possible for the UAE.
Economic Growth- GDP growth for the UAE is at -2.7% in 2009(ciafactbook) a decrease of 9.8% from 2008, when GDP was at 7.4%. This negative growth rate is higher than Saudi Arabia(.01%), Oman(2%), Iran(1.5%), Qatar(9.5%) and much of the rest of the world(-.7%). Falling oil prices and collapsing real estate investments have hit the UAE especially hard. The numbers for the UAE are alarming when compared to past economic growth, and continue to push the UAE towards a better diversified economy.
The greatest area of concern for the UAE undoubtedly will be the negative growth rate it is experiencing presently. The UAE has a high per capita GDP, a high ranking GDP, low unemployment and inflation, and a high standard of living that is the envy of the middle east. A negative growth rate puts all that in jeopardy and leaves the UAE with uneasy questions it must answer about its future. Does the UAE continue follow the example of Oman and wait untill unemployment hits 15% before it realizes that one source of national income is too unstable? Does it go the way of Iran, and nationalize and distribute as the government sees fit? Or do they continue on the path laid out by Qatar and privatize thier energy sector and encourage free market growth? Questions the UAE must answer now if wishes to remain succesful.
