The United Arab Emirates (UAE) was formed in 1971 and comprises seven states – Abu Dhabi, Dubai, Ajman, Fujairah, Ras al Khaimah, Sharjah and Umm al Qaiwain. Today, the UAE is one of the world’s most important economic centres, largely due to its huge oil industry.
The seven states each maintains a great deal of independence, but they are governed by a Supreme Council of Rulers, made up of the seven emirs, who appoint the prime minister and cabinet for each state.
Although oil was the catalyst for growth in the UAE, it is the way the boom in the economy was handled that has led to the UAE being the centre of economic wealth that we see today. Oil was discovered in 1950s and the UAE began to export it in 1962. Sheik Zayed, the ruler of Abu Dhabi and president of the UAE spotted the potential for his country and directed the money from the oil sales into other areas of the economy – healthcare, education and the national infrastructure.
The UAE government has also realised the need for diversification and so, the UAE now has a booming tourism, construction and financial sector. Each of the states has approached diversification differently, but Dubai, which has smaller oil reserves, has been the state that has embraced diversification to the greatest extent.
The result has been an influx of investment into the Middle East, and Dubai itself is now seen as a financial gateway and cosmopolitan hub to the Middle East.
While the UAE remains conservative and authoritarian, it has relaxed its attitudes towards visitors, and Dubai in particular, is seen as very liberal in comparison to many Middle Eastern nations.
For UK-based companies the attractiveness of trading with the UAE is easy to see. It has an open-minded approach to business opportunities, it is aggressively diversifying, it is a gateway to commercial dealings with the remainder of the Middle East, Africa and South Asia, and it has a buoyant economy.
Among the growth sectors are : commercial aircraft; power generating equipment; defence equipment; computers and electronic products; and transport and infrastructure related goods and services. Oil and gas remain central to the economy, contributing about one-third of GDP and generating $118 billion in export revenues in 2012, and the industry is set for expansion as it seeks to increase its daily barrel production from 2.7 million to 3.5 million by 2017.
For companies seeking to trade in the UAE, it is essential to have a local partner – foreign firms must have a local agent or distributor. While each of the seven states is independent when it comes to trading arrangements with foreign companies, the UAE is a member of a number of international organisations, for example the United Nations, International Monetary Fund, World Bank and World Trade Organisation.