UAE is stable and rich.An October 2007, United Arab Emirates United Arab Emirates, federation of sheikhdoms (2005 est. pop. 2,563,000), c.30,000 sq mi (77,700 sq km), SE Arabia, on the Persian Gulf and the Gulf of Oman. (UAE (Uninterruptible Application Error) The name given to a crash in Windows 3.0. In subsequent versions of Windows, a crash was called a "General Protection Fault," "Application Error" or "Illegal Operation." See crash in Windows and abend. ) Country Risk Assessment, published by the Australian Government's Export Finance and Insurance Corporation The Export Finance and Insurance Corporation (EFIC) is Australia’s Export Credit Agency (ECA) and has carried out its role within various statutory frameworks since 1957. (EFIC EFIC
See: Export Finance Insurance Corp. ) (Sydney), was generally approving of the country's current status. "At the national level," says the EFIC, "the UAE operates as a loose confederation of seven emirates." This means that national policy creation is diffuse making it more difficult for the UAE to diversify its economic base for competition in the global economy outside of the oil and gas sector. The UAE has sufficient oil and gas reserves to last an estimated 100 years.
Nonetheless, says the assessment, "Diversification initiatives [are] reducing dependence on oil and gas." But there's a problem. "Industry policies may have hidden costs that threaten their sustainability."
Unquestionably, the UAE is growing rapidly. In 2006, according to the International Monetary Fund (IMF IMF
See: International Monetary Fund
See International Monetary Fund (IMF). ), UAE GDP GDP (guanosine diphosphate): see guanine. increased 9.4 percent. For 2007, the IMF estimates growth in GDP will be 7.7 percent. And in 2008, the IMF forecasts GDP growth of 6.6 percent.
In spite of the evident slowing in growth, the EFIC says, "The UAE's macroeconomy has performed strongly in recent years." And the EFIC also expressed some misgivings. "This strong macroeconomic performance has come at a cost: Inflation has been high and looks set to remain so."
There are also social tensions created by the large expatriate number of foreign workers in the country. "Expatriates dominate the private labour market in the UAE, accounting for around 90 percent of the UAE's labour force of 3 million."