Private sector growth
For a long period, the UAE had been associated only with the incomes obtained from hydrocarbons. However, the given pattern also introduced a certain instability and vulnerability into the financial sector as the level of income depended on the price of oil greatly. Oscillations of this very index affected the UAEs economy greatly. For this reason, the government introduced a set of measures to stimulate private sector growth and create another stable and predictable source of income (“Economy of the UAE”). For this reason, this tendency is considered one of the leading indicators of the UAE financial sector.
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It is another distinctive feature of the UAE economy. At the moment, there is a tendency towards the reconsideration of the basic lending practices to make them more beneficial for small and middle businesses (“Economy of the UAE”). The initiation of the given process is a good sign for the UAEs financial sector as it indicates the economys gradual growth and could be considered one of the most important drivers that should be taken into account when creating certain forecasts.
Despite numerous attempts to find other sources of income, oil remains the main driver of the UAE economy (Kane). it contributes to the UAEs further rise and guarantees great financial power. At the same time, it is vulnerable to the global recession, which means that a certain instability in the economy could be observed.
Strong financial reserves
The durable banking sector combined with strong financial reserves contributes to the increased security of investments (“United Arab Emirates Economic Outlook- Spring 2016″). The given fact attracts numerous investors and creates the basis for the rapid evolution of the financial sphere. Banks can increase their lending and provide more comfortable conditions for their clients (Economy of the UAE”). Furthermore, the unique stability in the financial sector contributes to the increased paces of the UAEs economic evolution and could be considered one of the main drivers for its further rise. The government supports the given tendency by introducing the programs and regulations aimed at the attraction of new investments and improvement of the governments financial security.
Etihad Rail project
- The government plans to introduce a new and extremely efficient transporting system that will provide numerous opportunities for the evolution of small and medium businesses in the UAE (“About Us”). It will offer numerous opportunities for inland transport by the year 2021 and increase the pace of the UAEs evolution greatly (“UAE Vision 2021”). According to the Etihad Rail project, the most important regions of the UAE will be linked by it.
- The policy of economic diversification.
The government perfectly realizes the governments great dependence on hydrocarbons and incomes provided by the oil industry. That is why other spheres are given great attention. The given policy has already resulted in the impressive rise of such sectors as tourism, air transport, financial services, alternative energy, etc. (The Government of Abu Dhabi).
There is no value-added tax at the moment in the UAE. However, there is a tendency towards the implementation of a common framework agreed between all GCC states (UAE, Saudi Arabia, Qatar, Oman, Bahrain, and Kuwait) (“Dubai to Implement Value-Added Tax”). The implementation of the given framework will create the basis for the usage of a value-added tax (VAT) system which at the moment does not exist in the UAE. VAT legal framework is expected to improve the functioning of the states that managed to reach an agreement on the Treaty and want to implement the common VAT system (“Update on VAT and Corporate Tax in the United Arab Emirates”).
The Abu Dhabi Economic Vision
The UAEs rapid evolution introduced the unique necessity of the strategic plan describing the most important stages of its rise and growth. For this reason, in 2006 the Crown Prince of Abu Dhabi signed the document incorporating the main aspects needed to develop a long-term economic vision for the Emirate.
According to the program called Abu Dhabi Economic Vision 2030, the given year will be an important milestone in the countrys rise and economic growth (The Government of Abu Dhabi). Furthermore, diversification of the UAEs economy and the empowerment of its financial sectors are the main goals for the government.
It could be achieved in different ways. For instance, a large and powerful private sector, deep knowledge based on economy, transparent environment, and other factors should contribute to the countrys further reorganization and appearance of new positive tendencies (The Government of Abu Dhabi). Abu Dhabi Economic Vision 2030 is one of the most important strategic plans that impact the government greatly.
Dubai the Capital of Islamic economy
The economic development of the UAE and the whole Middle Eastern region introduced new tendencies in the financial flows movement. Under these conditions, Dubai became the heart and capital of the Islamic economy. This idea is reflected in the official governments statement that proclaims the enhancement of Dubais position as the global capital to be the main goal for the next several years (Dubai Islamic Economy Development Centre). At the moment the city is a global trade and logistic hub that contributes to the creation of trade links between 1,5 billion people in the Gulf region (Dubai Islamic Economy Development Centre). Dubai is given a leading role in the whole countrys economic empowerment and rise. Thus, according to the existing plan, Dubai will continue to increase its great significance and contribute to beneficial outcomes (Kane). The region needs such a center where trade links will be fostered and cultivated. That is why Dubai is gradually turning into one of the most important cities in the region.
Smart City Initiative
According to the government program aimed at the improvement of the quality of life, the most populated cities of the UAE should be reorganized in a way that should help people feel happier (“Our Vision”). The main task of Smart City Imitative is to embrace technology innovation and make Dubai and other important cities the most efficient, seamless, safe, and impactful experience for people who live and work there. (“Our Vision”). For this reason, the government devotes great resources to accomplish this task and guarantee that the most innovative technologies will be used to alter the environment and introduce new opportunities for residents. Residential areas, transport systems, rest areas, and other elements of infrastructure should be improved.
“About Us.” Etihad Rail, Web.
Dubai Islamic Economy Development Centre. “Dubai: the Capital of the Islamic Economy.” Iedcdubai, Web.
“Dubai to Implement Value-Added Tax.” Oxford Business Group, Web.
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“Economy of the UAE.” Government.ae, Web.
Kane, Frank. “Global capital of the Islamic economy? Dubai is Close to it.” The National. 2016, Web.
“Our Vision.” Smart Dubai, Web.
The Government of Abu Dhabi. “The Abu Dhabi Economic Vision 2030.” Ecouncil, Web.
“UAE Vision 2021.” Vision 2021, Web.
“United Arab Emirates Economic Outlook- Spring 2016.” Pubdocks, Web.
“Update on VAT and Corporate Tax in the United Arab Emirates.” PWC, 2015, Web.