Macroeconomics

UAE has been dependent on oil, and economic policies revolved around this commodity. However, in recent years, UAE has taken steps to diversify its economy. The following is an excerpt from a macroeconomic report on UAE by Dr. Abdulaziz Istaitieh.

"During the last decade the UAE economy has shown steady growth and the value of total
GDP has more than doubled. Oil’s share in GDP has declined, whilst non-oil GDP has been the
major driver behind the UAE’s economic growth (accounting for 73% of GDP in 2005). The
major non-oil sectors in the UAE economy are: manufacturing (20%); trade (17%); real estate
(12%); construction (11%); transport, storage & communication (10%); and finance (9%).
Furthermore, although Abu Dhabi and Dubai both contribute highly to the country’s GDP (59%
and 29% respectively), the latter is actually more responsible for the remarkable growth
witnessed in the majority of non-oil sectors. The UAE’s capital productivity significantly exceeds labor productivity both when including and excluding oil from calculations. When omitting oil, labor productivity in Abu
Dhabi is almost halved and capital productivity drops to fifth place amongst the Emirates, thus
demonstrating the importance of oil to both labor and capital productivity levels in Abu Dhabi
and ultimately the UAE’s overall economic growth."