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Post financial crisis state in the Emirate of Abu Dhabi, United Arab Emirates: current economic developments and future prospects.

1. Introduction

The financial disaster was a tornado of unprecedented turmoil and the collapse of confidence, resulting in an interruption of the growth phase witnessed by the global economy in the last two decades, and the exposure of many weaknesses and disadvantages of the practices that prevailed in global financial markets, banks and investment institutions. The crisis also revealed the reluctance of financial and monetary authorities to stop these practices, or perhaps their inability to analyze risks and expect its negative effects on the overall economy and the international financial system.

Despite the global economic crisis had cast a shadow on the local economy since the fourth quarter of 2008, there are reasons and obvious facts, may have given the UAE's economy in general and the economy of the Emirate of Abu Dhabi in particular, considerable flexibility in the face of the effects of the crisis in 2009. This includes the opportunities and possibilities of the economy, which has become at the forefront of leading economies in the region, and the growing of its importance regionally and globally.

The paper is divided into the following sections. Sections one and two will give a general introduction and background to the factors and issues that led to the financial crisis respectively. Section three will describe the global and regional economic developments in 2009-2010 whereas section four discusses the emerging global regulatory framework and the new financial architecture. Section five will describe the present financial status of the Emirate of Abu Dhabi, UAE after combating recession and few corrective measures taken by the Government to alleviate the crisis. Finally, section six will present the conclusion and recommendations (long term development strategy) for Abu Dhabi, UAE in the post crisis global economy.

2. Factors Influencing the Financial Crisis

It is very hard to determine the main cause of the financial crisis. However, economists and analysts indicate that a combined effect of many factors has led to the explosion in the credit market in the United States and later to the rest of the world (Ibrahim, 2009). These factors can be summarized as follows:

* Imbalance in world trade: China has benefited a lot from joining the World trade Organization (WTO) in 2001. It has utilized the advantages of the new global trade system and flooded the world with cheap exports. By keeping the exchange rate of the Yuan very low, Chinese exports were very competitive in the global market. This allowed China to accumulate huge trade surpluses while the rest of the world particularly the United States increased their trade deficit. For example the deficit in the United States Trade Balance has tripled from 69 Billion US$ in 1999 to more than 256 Billion US$ in 2007. Hence, production of industrial and consumer goods has declined sharply in the USA and the American economy has shifted to a service economy.

* Consumption pattern in the United States: The US economy did not adjust for negative effect on its trade balance. High consumption of imports and declining output continued. The deficit in the trade balance and public budget was financed by extensive borrowing. On the other hand, China, which reinvested its huge financial surpluses in buying US treasury bills and bonds. This simultaneous process has worsened the trade deficit and increased the deficit in public budget to around 1.5 Trillion in 2007 (Ramadhan and Naseeb 2010).

* Excessive deregulation of financial markets: Since 1980s, the United States led the world in financial market liberalization. To achieve this, the financial market was heavily deregulated and the government and FED supervision and monitoring were relaxed. Over the last two decades, the concept of market liberalization swept the world with a push from the General Agreement on Trade and Services (GATS). This allowed the United States to expand its role as a dominant player in providing financial services. Many financial products and derivatives were introduced as a result of increasing global trade and liberalization. The involvement of many financial and investment banks in the mortgage market (securities and loans) is an example of the affect deregulation and liberalization. Such an expansion led to the bubble that burst and froze the credit market.

* The dominant role of the US dollar: After World War II, the US economy was the strongest and the most stable. The Bretton Woods agreement in 1944 enabled the US to peg its currency to the gold and dominate global currencies. The growth in demand for US$ and the fear of losing its stock of gold allowed the United States to adopt the system of Floating Exchange Rate in 1971. To meet the global demand for US dollar, the US kept printing the dollar without any effective regulation or criteria. This process allowed the inflow of global goods and capital to the United States for exchange of the US$. More importantly, it kept the United States consuming beyond its capabilities leading to a constant deficit in the Trade Balance. Over the last few decades, high import consumption lowered industrial output and shifted the traditional economy toward services. The influx of money to USA created the concept of "Cheap Money" and led to the abundance of credit that was used in un-productive activities that led to the financial crisis (Ramadhan and Naseeb, 2010).

3. Global and Regional Economic Developments 2009-2010

During the first half of 2009, there was a continuation of the financial crisis but the second half registered a positive status in GDP of some countries and save the world from entering a phase of long term economic recession. In terms of economic growth, US shrank by 2.5% in 2009 whereas all EU countries reported negative growth rates ranged between 4-6%, with the exception of France, which has achieved positive growth. It is worth mentioning that China has achieved a positive growth rate of more than 8.7%. This high rate of economic growth for the second largest economy in the world led to improved growth rate of the global economy compared to what was expected (Musaed, 2010).

The rate of unemployment is one of the best indicators of the depth of the global financial crisis because it reflects the economy's ability to provide new job opportunities. The number of unemployed worldwide reached about 212 million people in 2009, with an estimated 34 million unemployed (layoffs in real estate companies, automakers, banks). Unemployment rates ranged between 4.4% in East Asia and more than 10% in Europe, Central and South-Eastern Europe.

[FIGURE 1 OMITTED]

As evident from Figure 1, the unemployment rates in the United States grew since 2007, rising from 4.6% in 2007 to 5.7% in 2008, and then to 9.3% in 2009 and subsequently reached to 10.6% during the month of February 2010 (Musaed, 2010 and Trading economics.com).

During the global financial crisis, international trade volume marked a significant decline of 12.2% in 2009, which is the largest decline in the past seventy years (Baldwin 2009).

[FIGURE 2 OMITTED]

According to the WTO, China in 2009 has benefited a lot and was ranked first in terms of volume of exports of $1202 Billion followed by Germany, United States and Japan. United Arab Emirates was at the 19th position with its exports volume being $175 Billion. See Table 1 below.

All the Arab countries of the world registered a decline in growth rates in GDP. Especially oil producing countries were most affected due to lowering of world oil prices and reduction in the production quotas.

Most of the Arab States had achieved a reduction in the trade balance and particularly the Gulf States which are characterized by fiscal surpluses in their trade balances. For example, in the case of Saudi Arabia, the trade surplus dropped to SR 156 billion in 2009 from SR 550 billion in 2008. The Arab States that import oil saw an improvement in trade balance in 20092010 due to the reduction of world oil prices. For the United Arab Emirates, the value of non-oil foreign trade increased by 16% during 2009 compared to 2008 (15.6 %) (Musaed 2010).

4. Emerging Global Regulatory Framework

The financial crisis has led to certain fundamental shifts: The global economy is now run by G20, after having been under the control and management of G7. There has been a greater role for the Arab States in the management of global economy as Saudi Arabia became part of G20, and the Emirate of Abu Dhabi plays a pivotal role in global economy through strong participation in international investment (Musaed, 2010).

5. The United Arab Emirates: Overview

The UAE is a union of seven formally separate states or Emirates: Ras Al Khaimah; Umm Al Quwain; Ajman; Sharjah; Dubai; Fujeirah; and Abu Dhabi.

It is bound together by a legal constitution, which was ratified and adopted in 1998, some 25 years after the UAE came into existence. Prior to this time the area was known as the Trucial States. Each Emirate possesses a ruling family, whose head (or ruler) may make decrees that have the force of law (O'Brien et al 2007). The government of the country consists of the Federal National Council (FNC), which includes the rulers of all the Emirates and their closest advisors. The development of plans, policies and legislation is carried out and submitted to the FNC for consideration. If accepted then these development instruments are enabled (Sabah, 2002). This process would appear to be quite democratic; however, this is not the case. The power wielded by each ruler is not equal and the rulers of the Northern Emirates have considerably less power than either Dubai or Abu Dhabi. The ruler of the UAE is also the ruler of Abu Dhabi, the largest and the wealthiest Emirate and has ultimate power at the federal level. Within a particular Emirate, the ruler is autonomous, but the ruler of the UAE does comment either positively or negatively.

The Post-Crisis Emirate of Abu Dhabi 2010

Certainly 2009-2010 was a challenging year for the relentlessly optimistic and progressive thinking United Arab Emirates.

Despite the decline in GDP in the emirate of Abu Dhabi by 18% in 2009 compared to 2008, it could be said that the emirate's economy has achieved an acceptable level performance during 2009, in view of the deterioration of oil prices; and the instability in global economy in the wake of the global crisis.

The decline in oil prices, in addition to the downturn of oil exports of the emirate, had led to a decline in oil GDP growth rate by 34% in 2009; at the same time, non-oil economic activities achieved satisfactory growth rates during the same year, despite of the various challenges; whereas non-oil GDP grew by 6%.

The Economic Report of the Emirate of Abu Dhabi 2010 revealed that all non-oil economic activities maintained the positive growth rates achieved in past years, although these rates were lower than previous ones. This reinforces the emirate's strategy to diversify the economic base, reduce dependence on oil as the main propellant of the economy and furthers progress towards achieving sustainable development.

Following is a review of the true nature of the economy of the Emirate of Abu Dhabi in the light of economic changes witnessed in 2009-2010, with highlighting of development path during the past five years (Economic Report, Abu Dhabi Department of Economic Development 2010).

GDP: Although the global crisis has cast a shadow over most of the economies and the countries of the world, Abu Dhabi economy in the global gamut was no excuse as it was also affected by the crisis and its repercussions. The crisis has vetoed the continuation of the emirate's economy to achieve high economic growth rates, similar to those witnessed in the past few years. The crisis dramatically impacted upon the global oil prices, which in turn reflected on the overall economic performance of the Emirate of Abu Dhabi.

Abu Dhabi's overall economic performance has been slow during 2009, where GDP dropped from AED 666.732 million in 2008 to about AED 546.476 million in 2009 recoiling by about18%. The largest decline was in the share of oil and gas sector in GDP which fell by 33.5% in 2009 compared to a growth rate of about 32% in 2008. This contrast reflects the sharp decline in world oil prices and their impact on the emirate's economy, as the average oil price of $ 97 per barrel in 2008 to $ 61 dollars per barrel in 2009, registering a plummeting by more than 37%.

The non-oil GDP recorded a growth rate of 6% in 2009 compared to 9.6% in 2008, emphasizing the sensitivity of sectors and non-oil activities to fluctuations in oil prices; although the volatility in growth rates of non-oil sectors has become much less than it was in past years.

At the level of GDP components, the year 2009 witnessed a decline in the rate of growth of total commodity activities by 25%, compared to a positive growth of around 26.6% in 2008. This clearly shows the impact of the sharp drop in oil and gas sector which accounted for about 70% of the total commodity activities, on the overall economic performance of the commodity activities. However, some other commodity activities had recorded a rise in growth rates during the past year compared to 2008, such as manufacturing and construction and building activities which achieved growth rates of 4% and 5% respectively.

In contrast, total service activities registered positive growth of 7% in 2009, but its overall performance remained lower than 9% which was attained in 2008. This could be attributed to the drop in performance of financial institutions activity, and real estate and business services activity, which maintained growth rates of 4% and 7% respectively in 2009 compared to 11% and 8% respectively in 2008. The marked decline in the volume of domestic demand in 2009 as a result of the global crisis, as well as the tangible change in the patterns of consumer spending for a large segment of the population, had cast a shadow on the activity of wholesale and retail trade and repair services, which registered a growth rate of around 6% in 2009 compared to 8.4% in 2008 (Economic Report, Abu Dhabi Department of Economic Development 2010).

Gross Fixed Capital Formation: In the light of the importance given by the emirate to economic diversification and stimulation of various economic activities, the capital formation (fixed investments) emerges as core pillar of support in the national economy. Fixed capital formation increases valueadded of services and productive activities and contributes to the modernization and development of technological content (technical) of those activities, increasing the absorptive capacity of the national economy.

The pivotal role played by oil revenues in increasing capital formation by financing projects in economic and social development, is noteworthy. Due to a sharp decrease in oil prices over the past year, there was a significant decline in the growth rate of capital formation, which amounted to about 10% in 2009, compared to 18% in 2008.

Commodity Exchange through Ports: The volume of Abu Dhabi foreign trade hiked up from AED 174 billion in 2004 to AED 487.6 billion in 2008, however; it declined to about AED 425 billion in 2009 on the impact of slowing global demand for commodities and lower prices, due to the global crisis.

The trade balance surplus for the Emirate of Abu Dhabi fell by 22.7% in 2009 compared to 2008, and this decrease was primarily due to the falling down of average oil prices in 2009, and the drop of the emirate's share in global oil exports. Even though, that, surplus was still large; as it amounted to AED 237.3 billion, reflecting the strength and stability of the emirate's economy in the face of the global crisis.

Oil exports of the Emirate of Abu Dhabi totaled AED 313 billion in 2009, registering a decrease of 18.7% compared to 2008, owing to the deterioration in oil prices and the shrink in exports of oil in 2009 due to drop in global demand in the wake of the repercussions of the global crisis.

Abu Dhabi non-oil commodities exports amounted to AED 9.501 billion in 2009, compared to AED 6.252 billion in 2008, marking a high annual growth rate of around 52%. Re-exports of non-oil commodities totaled AED 8.695 billion in 2009, achieving high growth rate of 39.3% compared to 2008.

The value of commodity imports increased to AED 93.872 billion in 2009, growing by 3.98% compared to 2008. That rate of growth was very low especially in comparison to 42.5% in 2008, as a result of the drop in imports of intermediate goods which registered negative growth of 8%, in addition to the meager growth in imports of consumer goods, which did not exceed 1%.

With regard to the coverage of exports to imports, the most important characteristic of the Emirate of Abu Dhabi was the ability of its large exports to cover its commodity imports at high rates exceeding 400% in most years during the period (2004-2009). So the emirate's exports could help in the process of economic development and in securing needs from different resources, and meeting requirements of the population. However coverage rate in 2009 was noticeably low as it reached 352%, which was the lowest rate during the period. This was mainly caused by the drop in oil exports in 2009. Great disparity is noticeable between the coverage ratios of oil exports to commodity imports, compared to coverage rate of the non-oil exports to commodity imports, as the coverage rate of oil exports to commodity imports reached nearly 333% in 2009, compared to 533% in 2005. Non-oil exports coverage to commodity imports increased significantly, reaching about 10.1% in 2009 compared to 6.9% in 2008.

Population: The population of the Emirate of Abu Dhabi represents a driving force, while in the meantime poses as the main focus of the various economic and social development plans. The population presents opportunities as well as challenges at the same time; the one hand, the large size of the population provides diverse resources of human capital needed to implement development plans, and fill in required new jobs. On the other hand, high population growth rates exemplify urgent challenges to the government, in view of the need for continued development of services and public utilities, and determining the optimal geographical and sectorial distribution pattern of the population.

Estimates indicate that the population of Abu Dhabi increased from about 1.30 million people in 2004 to about 1.64 million people in 2009, with an average annual growth rate of about 4.6% during the period (2004-2009).

As for qualitative distribution of population, the emirate still experiences a kind of imbalance between males and females. Males made up about 65% of the total population in 2009. Proportion of females in total population registered a slight improvement, reaching around 35% in 2009, compared to 34.6% and 34.3% of the total population of Abu Dhabi in 2008 and 2007, respectively.

Regarding the structure of population in Abu Dhabi, the 2009 data revealed that the age group (15 years and less than 60) comprised 76% of total population in the emirate, while the age group (less than 15) acquired about 22.5% and the age group (60 and over) accounted for about 1.5%.

On the other hand, estimates of population distribution by nationality showed that UAE citizens constituted about 25% of the total population of the emirate in 2009, the total nationalities of the Middle East, accounted for 23.5%, while nationalities of East Asian countries comprised 46.5% the largest percentage of population in emirate. Nationalities from the rest of the world shared the remaining 5% of the total population of the emirate.

Workforce: Despite the Emirate's policies and initiatives to increase citizens participation in workforce, and attract skilled labor, Abu Dhabi, remains committed to maintain flexibility in labor market in order to ensure rapid response to the requirements of growth.

The total size of the workforce in the emirate has risen from about 815 thousand in 2008 to about 919 thousand persons in 2008 at an average annual growth rate of about 4.1% during the period (2005-2008). This was accompanied by an increase in the number of employees from about 786 thousand employee in 2005 (96.5% of the workforce), to 889 thousand employee in 2008 at an average annual growth rate of 4.1%. This in turn reflected on the rate of unemployment, which fell from 3.5% in 2005 to about 3.2% in 2008. This is a strong indicator of the emirate's continued efforts to maintain high employment levels, supported by continued economic growth.

The distribution of workers in Abu Dhabi by nationality reveals that citizens composed 9.7% of the total workforce in 2008 with a total of 86.272 persons. The activity of public administration and defense attracted the largest part employed citizens (64% of the total employed UAE citizens), followed by education activity and the activity of mining, with 6.5% and 5.8% respectively. In contrast, the total number of employed non-nationals, amounted to about 803.146 persons, most of them work in construction activity which attracted about 22.3% of the total number of migrant workers (Economic Report, Abu Dhabi Department of Economic Development 2010).

Corrective Measures

The Abu Dhabi Economic Vision 2030 aims to achieve effective economic transformation of the Emirate's economic base and bring about global integration and enduring benefits to all. Abu Dhabi has a core commitment to build a sustainable and diversified, high value-added economy by 2030. This will be achieved by broadening the sectors of economic activity, enlarging the enterprise base, and growing external markets. Furthermore, Abu Dhabi will also continuously enhance competitiveness and improve productivity. Delivering on such commitments will be translated, according to base case growth scenarios, into entrenched sustainable development and significant levels of economic diversification by 2030. Moreover, to ensure that social and regional development equitably reaches the whole of society, Abu Dhabi will equip its youth to enter the workforce and maximize the participation of women, particularly Nationals, from across the Emirate. Abu Dhabi will also continue to attract a skilled workforce from abroad, and to stimulate faster economic growth in regional areas. To achieve the Emirate's ambitious economic aspirations, the regulatory and legislative environment must be optimized, importing best practices from around the world and applying them within the local context. Various resources, from infrastructure to human and financial capital, must also be provided as a platform on which the economy can be built. Together, these will constitute the roots of the future economy and the climate in which it can thrive. Abu Dhabi will therefore build an open, efficient, effective and globally integrated business environment, streamlining government processes and facilitating business and investment. It will also significantly improve the efficiency of the labor market and adopt both a fiscal policy that is responsive to economic cycles and a safe monetary and financial system with manageable levels of inflation. When it comes to the Emirate's resources, infrastructure will be further developed, with a focus on utilities, transport and ICT. Human capital will be enhanced through the improvement of education, training, and other methods to improve both the employability of Nationals and the productivity and competitiveness of the workforce in general. Finally, financial markets will be encouraged and further developed in such a way to become the key financiers of economic sectors, industries, and projects. An enabled economy will lead the way towards sustainable development and growth, which will be achieved, in the context of Abu Dhabi, through the effective expansion of a number of strategic economic sectors.

The realization of Abu Dhabi's economic aspirations will be guided by a holistic set of measurable and ambitious targets. Abu Dhabi wishes to drive development to new highs, while at the same time ensuring economic stability.

The need to safeguard the economy is vital to continue growing in a stable and sustainable manner. Through the harnessing of a combination of human, physical, and financial capital, Abu Dhabi will be able to generate the productivity and competitiveness it needs to drive economic growth forward. With these key factors operating in harmony, the twin targets of economic development and stability will be met.

The targets Abu Dhabi seeks to meet will only be met and potentially exceeded if all stakeholders in Abu Dhabi strive together to achieve them. Economic development will involve the averaging of growth at 7% through to 2015, and thereafter at 6%. These growth rates will mean that Abu Dhabi will grow at a faster, yet still sustainable, rate than its chosen benchmark countries. Within overall growth and as part of efforts to diversify, Abu Dhabi will seek to foster non-oil GDP growth at a higher rate than that of the oil sector. The aim is to reach equilibrium in nonoil trade by 2028, thus demonstrating the ability to instill extra depth within the structure of the economy. Economic stability will also be a prime consideration, with the non-oil fiscal deficit set to fall significantly over the target period, while at the same time installing policies that will keep inflation in check to ensure it does not negate the benefits of growth.

[FIGURE 3 OMITTED]

On the human capital side, Abu Dhabi will reduce unemployment among the national population to 5%, effectively achieving full employment. Through such stable and realistic growth targets, the Government aims to increase GDP by more than five times by the year 2030. Even with the expected rise in population, this will result in a healthy growth in income and wealth for all those residing in the Emirate of Abu Dhabi. Physical and financial capital would be further expanded. National asset formation, involving both exports and investments, should grow more than five-fold over the target period. This growth will be mirrored by the development of consistently high national savings levels from both the public and the private sectors (Abu Dhabi Department of Planning & Economy 2008).

This Vision also embraces the Masdar Initiative--a new policy for the promotion of renewable energies. Abu Dhabi has started a process of "transforming oil wealth into renewable energy leadership," and has set the longterm goal of a "transition from a 20th Century, carbon-based economy into a 21st Century sustainable economy" (Danyel Reiche 2010).

All in all, reaching these ambitious targets will confirm and further enhance Abu Dhabi's status as a globally relevant destination. With its wealth and natural resources, Abu Dhabi can already claim a stake on such a title, yet this strength can be better asserted through improving business methods and economic competitiveness. Productivity and efficient business standards will further improve the reputation of Abu Dhabi and in combination with the other targets being set for the Emirate at large, the Emirate should become a shining example globally (Abu Dhabi Department of Planning & Economy 2008).

6. Conclusion and Recommendations

There are strong indications that the global economy is gradually returning to the normal, and if achieved growth rates projected for 2010 in the range of 2.5%, the global demand for oil will rise after falling in 2009. This will maintain prices at levels ranging between 70 dollars and 85 dollars per barrel rate this year, compared to 62 dollars on average in 2009, and 91 dollars in 2008. The recent update shows that the oil price is steadily increasing which as of October' 2010 is 81.85 dollars per barrel (http://www.oilprices.com/).

United Arab Emirates is humble but ready to rise once again like a Phoenix. The Dubai model was seriously exposed and was visibly shaken but no one should doubt its sustainability. Even the real estate bubble which proved to be the weakest link in the Dubai model is recovering gently (Abdullah 2009). The first, the longest, the tallest and the biggest, it all sounds familiar and they are all trademarks of the UAE as a trendsetter in the region.

The economy of Abu Dhabi, United Arab Emirates, is one of the most dynamic economies in the region and assumes a leading position in the global economy, and succeeded in UAE economic diversification and expansion of its production base, and through enhancing the contribution of non-oil sectors of the components of the national economy. The Emirate took advantage of the crisis in the area of protection and empowerment of the national economy through the modernization of laws and legislations, where it worked for the institutions concerned (federal and local) to update a number of legislation to cope with recent economic developments. It is also expected that the economy of Abu Dhabi and UAE as a whole will witness a future growth of 4-5% in 2010 (Musaed, 2010).

"The United Arab Emirates economy is currently in a growth phase, having weathered the worst of a global economic crisis, with average real gross domestic product seen increasing by 2.5 percent in 2010 and aims to boost industrial production to 20-25 percent of gross domestic product, from 16.2 percent at present over the next five years."--Mohamed Al Shehi, Economic Ministry's Director General, Abu Dhabi, UAE. (Gulf News October 21, 2010)

Thus, we can say that the post-crisis Abu Dhabi is full of confidence and determination and it's reassessing some goals in its 2030 Economic Vision. In response to the crisis and lessons learned, the UAE government should also take the initiative and play a leading role in stimulating reforms, including strengthening the rules and practices of corporate governance, emphasizing transparency and disclosure, enhancing the visibility and efficiency of regulations, and providing the appropriate legal framework for new activities in the field of "knowledge-based economy."

This would be particularly important for all Arab countries given the need to encourage and adopt locally designed approaches to sustainable development that are innovative, appropriate, gradual and applicable to the region.

REFERENCES

Abdullah, A. (2009, October 2), "The Post-crisis UAE," Gulf News, http://gulf news.com/opinions/columnists/the-post-crisis-uae-1.512123, retrieved 29th October 2010.

Abu Dhabi Department of Economic Development (2010), Economic Report, Abu Dhabi, UAE. (http://ded.abudhabi.ae/English/DEDStudies /Pages/EconomicReport. aspx), retrieved 4th October 2010.

Abu Dhabi Department of Planning and Economy (2008), The Abu Dhabi Economic Vision 2030, Government of Abu Dhabi, UAE, http://gsec.abudhabi.ae/ Sites/ GSEC/Navigation/EN/publications,did=131400.html, retrieved on 7th October 2010.

Baldwin, R. (2009), "The Great Trade Collapse: What Caused It and What Does It Mean," The Great Trade Collapse: Causes, Consequences and Prospects, a VoxEU publication, http://www.voxeu.org/reports/great_trade_collapse.pdf, retrieved 29th October 2010.

Ibrahim, R. (2009), "The Roots of the Global Crisis," Aletq.com, Electronic Economic Newspaper.

Musaed, S. (2010), "Developments and Prospects of International and Regional Economic," paper presented at the Seminar on Post Financial Crisis organized by Emirates Center for Strategic Studies and Research, Abu Dhabi, May, http://www. zawya.com/Story.cfm/sidWAM20100503121031359/)

O'Brien, J. et al. (2007), "Towards a New Paradigm in Environmental Policy Development in High-income Developing Countries: The Case of Abu Dhabi, United Arab Emirates," Progress in Planning 68: 201-256.

Oil Prices (2010), http://www.oilprices.com, retrieved on 28th Oct. 2010. Ramadhan, M. and Naseeb, A. (2010), "The Global Financial Crisis: Causes and Solutions," paper presented at the 12th International Business Research Conference, World Business Institute, Dubai, April. (http://www.wbiconpro.com/323-Adeel-new.pdf) Reiche, D. (2010), "Renewable Energy Policies in the Gulf Countries: A Case Study of the Carbon-neutral 'Masdar City' in Abu Dhabi," Energy Policy 38: 378382.th

Sabah, M.A.M. (2002), UAE Company Law and Practice, 4th ed. London: Gulf Legal Services. http://gulf-law.com/uae_law.html, retrieved on 01.02.2011.

UAE Economy on the Upswing (2010, October 21), Business, Gulf News, 35.

FAUZIA JABEEN

fauzia.jabeen@adu.ac.ae

Abu Dhabi University

MARIOS I. KATSIOLOUDES

marios.katsioloudes@adu.ac.ae

Abu Dhabi University
Table 1. 2009 World Trade Developments

Rank    The volume of exports       Country

1       1202 Billion dollars        China
2       1121 Billion dollars        Germany
3       1057 Billion dollars        USA
4       581 Billion dollars         Japan
18      189 Billion dollars         Saudi Arabia
19      175 Billion dollars         UAE

Source: World Trade Organization

Table 2. Economic Indicators for 2008 and 2009-2010 for Abu Dhabi

Indicators                  Increase/              2008
                            Decline Status

GDP                         Declined by 18%        AED 666.732
                                                   Million

Share of Oil & Gas          Declined by more       Average Oil
Sector in GDP               than 37%               price of $ 97 per
                                                   barrel

Non-oil GDP                 Growth rate of 6%      9.6%

Performance of              Growth rate            11%
Financial Institutions

Performance of Real         Growth rate            8%
estate & business
services activity

Wholesale, retail           Growth rate            8.4%
trade & repair services

Capital Formation           Growth rate            18%

Commodity Exchange          Declined               AED 487.6
Through Ports                                      Billion

Trade Balance               Declined by 22.7%      --
Surplus

Oil Exports                 Declined by 18.7%      --

Non-oil Commodities         High annual            AED 6.252
exports                     growth rate of 52%     Billion

Re-exports of non-oil       High growth rate       --
commodities                 of 39.3%

Coverage rate of            Declined               400% (2004-2009)
exports to imports-         Increase
(a) Coverage rate of                               533% (2005)
oil exports to
commodity imports
(b) Coverage rate of                               6.9%
non-oil exports to
commodity imports

Indicators                  2009-2010

GDP                         AED 546.476
                            Million

Share of Oil & Gas          Average oil
Sector in GDP               price of $ 61 per
                            barrel (2009)
                            $81.85 per barrel
                            (October, 2010)

Non-oil GDP                 --

Performance of              4%
Financial Institutions

Performance of Real         7%
estate & business
services activity

Wholesale, retail           6%
trade & repair services

Capital Formation           10%

Commodity Exchange          AED 425
Through Ports               Billion

Trade Balance               --
Surplus

Oil Exports                 AED 313
                            Billion

Non-oil Commodities         AED 9.501
exports                     Billion

Re-exports of non-oil       AED 8.695
commodities                 Billion

Coverage rate of            352%
exports to imports-
(a) Coverage rate of        333%
oil exports to
commodity imports
(b) Coverage rate of        10.1%
non-oil exports to
commodity imports

Source: Compiled by the authors
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Author:Jabeen, Fauzia; Katsioloudes, Marios I.
Publication:Economics, Management, and Financial Markets
Date:Mar 1, 2011
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