The UAE economy is experiencing a golden period, an assertion supported by plenty of evidence. To begin with, the country’s gross domestic product (GDP) in nominal terms is reportedly getting close to the mark of $400 billion (Dh1.5 trillion) by end-2013.
The new level would further consolidate position of the UAE economy as the second largest of its kind amongst Arab countries, only after Saudi Arabia. Still, Saudi Arabia has the advantage of being the largest oil exporter in the world.
Essentially, the UAE has already surpassed Egypt as the second largest Arab economy. Globally, nominal GDPs of the UAE and Egypt are ranked at numbers 30 and 42, respectively. However, Egypt has advantage over the UAE of GDP on the basis of purchasing power parity reflecting local conditions.
Furthermore, a newly-released report by the Washington-based Institute of International Finance (IIF) projects GDP growth rate of 3.6 per cent in 2013. True, lower than that of 4.8 per cent estimated for 2012, the figure remains outstanding by world standards.
What is more, all such exceptional economic progress is occurring amidst near absence of inflationary threats. Happily, inflation remains non-threatening to the UAE economy by virtue of being below 3 per cent.
Amongst notable developments, the emirate of Dubai in particular has emerged as a refuge for investors as well as tourists following the Arab Spring. In fact, tourists from fellow Gulf Cooperation Council (GCC) countries found in Dubai as a natural substitute for places like Egypt, in turn experiencing instability at times.
Against this backdrop, it is no wonder to see the UAE rising as global leader in the field of travel and tourism.
The country is ranked at number 28 worldwide in the Travel & Tourism Competitiveness Report 2013, issued by the World Economic Forum. This is the best achievement in the MENA region. Qatar comes second regionally with 41st global ranking; yet, Egypt, with all its tourism potentials, is ranked at a distant number 85 amongst 140 nations ranked in the report.
To be sure, the financial value associated with UAE’s travel and tourism sector amounts to a staggering $50 billion; this is a robust figure by virtue of compromising around 14 per cent of the country’s GDP at the moment.
Emirates alone posted net profit of $622 million in 2012, up by a notable 52 per cent compared to that of 2011. Again this is something exceptional for a full-service airline operating in an industry known for its heavy cost burden. According to a recent Financial Times report, Emirates is playing a pivotal role in promoting Dubai’s tourism potentials through its ever expanding fleet and network.
In short, the UAE’s economy is based on some solid grounds like the value of its sovereign wealth funds (SWF). In reality, SWF of the UAE as a country nation including that of Dubai and different funds held by Abu Dhabi totalled some $815 billion by March, thereby accounting for 15 per cent of the world’s total. The source of these statistics is the Sovereign Wealth Institute, in turn regarded as an authority in the field.
For their parts, international rating agencies have one thing in common, namely that of granting investment-grade ratings to the UAE in general and Abu Dhabi in particular. Both Standard & Poor’s and Fitch grant Abu Dhabi (AA) rating with stable outlook. Also, the UAE enjoys a credit rating of (Aa2) from Moody’s.
Yet, unlike some other fellow GCC countries, the UAE has not gone on record issuing critical statements of rating agencies, demanding better rating grades. Clearly, the UAE focuses on achievements, as result count.
The writer is a member of parliament in Bahrain