Economy of Ras Al Khaimah, United Arab Emirates
The Ras Al Khaimah economy is based principally on the agriculture (dates, oysters and rearing goats and camels), but also on the origin of some gold and iron. The emirate since 1975 has a cement plant, Union Cement Company, 40% owned by the German HeidelbergCement, and also opened a mill in 2007, Kamil Steel Factory.
The economic system of the United Arab Emirates, launched at the beginning of the century pearl of fishing and maritime trade, was transformed by the oil industry.
The recent increase in oil prices and lower cost of credit has pushed up prices of movable property (shares sold on the local market) and real estate.This, in turn, has lessened the attractiveness of the UAE to investors. Dubai, in particular, is a regional financial center for many multinationals.The economy depends on a large part of the immigrant labor.
The economic system
In the beginning, the UAE, a protectorate of the British Empire, were small traditional states whose economy depended on trade with the interior of Arabia, with India and Persia by sea (dhows).The discovery of oil led to a rapid growth of federal lands in the form of oil revenues, with conservation of traditional society, in conjunction with high immigration.Prince Sheikh Khalifa Bin Zayed Al Nahyan succeeded his father in 2004 and decided to enlarge the structural reforms, in terms of culture, education, telecommunications sectors. 80,550 km ² with a total of 83,600 sq km in total, the Emirate of Abu Dhabi dominates the federation by area and its resources. For its part, Dubai relies on tourism.
The hydrocarbon sector
A giant oil
Oil production began in 1962 in the territory of the Emirate of Abu Dhabi, which remains the primary producer of the confederacy. To the important crude oil reserves those of natural gas are added. In 2003, the UAE produces 2.3 million barrels of oil per day. The emirate of Abu Dhabi accounts for approximately 90% of the reserves of the federation, the equivalent of 10% of global oil reserves, the rest being divided between Dubai and Sharjah. It is estimated that Dubai still has ten years of petroleum reserves, and Sharjah has even less. The gas reserves are also restricted in both Emirates.
A dynamic industrial center
The oil wealth has led to a rapid modernization: urbanization and industrialization (metallurgy, chemicals and petrochemicals, desalination of seawater, shipyards). Dubai has one of the largest aluminium smelters in the world, greedy business of energy, which benefits from low cost electricity.
The UAE, which is rare among the oil-producing countries, anticipating the post-oil seeking new economic resources other than petroleum. Seeking to cut dependence on petroleum, the UAE aim at a greater diversification achievement of the local economy to ensure future economic growth.
In 2008, non-oil sectors accounted for 63% of GDP, which equates to a contribution of $ 590 billion to the economy, even if the cost of oil and gas are high. In the succeeding 15 years, officials aim at an oil sector contribution reduction to approximately 20%. Simultaneously, it is meant to encourage the development of other economic sectors. With its Economic Vision 2030, Abu Dhabi, presented in 2009 its plan to allow greater economic diversification, for example, by reducing the dependence of Abu Dhabi on the petroleum sector as an economic sector. On the other hand, the plan furthers the economic development benefit to focus on knowledge-based industries. In this development to reform the economy of the UAE, the industry plays an important role, based on dynamic sectors such as the manufacture of aluminum, ceramics and pharmaceuticals.
The acquisition by the Advanced Technology Investment Company (ATIC) of Abu Dhabi Chartered Semiconductor Manufacturing, communicated in 2009, was significant of an important step in achieving this goal, as this acquisition outcome in the creation of one of the greatest makers of computer chips in the world. Chartered Semiconductor in 2010 merged with Globalfoundries, a manufacturing electronic chip company that ATIC runs through a joint venture with US-based AMD.
Moreover, the emirate also aims at a major center of aerospace manufacturing development. The strategic investment arm of Abu Dhabi government, Mubadala Development Company, plans to commission an aerospace plant which was under construction until the end of 2010. Mubadala also made progress in the formation of a joint venture of $ 8 billion with GE, the U.S. conglomerate. This should allow a contribution of commercial capital in the region.
Vision to diversify the national economy naturally also influences the growth of the other Emirates. In this country, for example, in December 2009 the Board of Investment of Ra’s al-Khaimah (RAKIA) has announced its plan for a new concept of industrial zone’s theme. Thus, the aim is to create clusters of manufacturing facilities in Ra’s al-Khaimah. The proposed groups are expected to cover various sectors, including food, chemicals, plastics and rubber, minerals, metals, electrical equipment, transportation and logistics.
In the Emirate of Fujairah, was created the first virtual free zone in the UAE. This “Virtuzone” which is part of the free zone of Creative City Fujairah. In this virtual free zone, companies owned by international companies can carry on the job at a lower cost than in traditional zone’s cost.
International contractors registered in this area and can operate from anywhere in the UAE, including government agencies and private residences. The emirate of Abu Dhabi has 95 percent respectively and 92 percent of oil and gas available in the area. In future, the emirate aims to invest revenues due to oil in the increased production of energy from renewable sources.
The government’s goal of the emirate is then to meet 7% of Abu Dhabi’s energy needs from renewable sources by 2020. Public Masdar specializes in future energy; it should play a vital role in achieving this goal, with investments and also working on the development of low-carbon energy solutions.
The Masdar City project includes the creation of an eco-city that should be one of the most sustainable cities the emirate’s world at a cost of 55 billion Dirhams. The first phase of the project will be completed in 2015. Finally, it is expected to house 40,000 residents and provide space for approximately 1,500 companies specializing in clean energy should employ nearly 50,000 people.
Moreover, Masdar is investing heavily in the technology of photovoltaic thin film cells. For this, we established a factory in Abu Dhabi capable of producing annually enough cells to produce 130 MW.
Furthermore, the financial sector is, nevertheless, important for the economy of the UAE, despite the global economic crisis impact. This sector is of great importance, especially in Dubai, where the International Financial Centre and the stock market, together with the Abu Dhabi National Stock Exchange, go on boosting future growth in this sector.
Moreover, the UAE government aims at developing an industrial law, which should ease the growth of domestic industries.
International tourism (and not only Arab-Muslim) is becoming increasingly important due to the accumulation of huge projects, including the Burj Al Arab, Dubai ski slope that completely covered the edge of the desert or the famous Palm Islands. It is true that the Emirates are not equal to the hydrocarbon resource.
Tourism is a major growth area of the economy across the UAE. After the recent re-branding of Abu Dhabi, hotels and leisure resorts are becoming increasingly important in the country, such as the island of Sir Bani Yas west of Abu Dhabi, and the various resorts located as Qasr Al Sarab in Liwa and Al Maha and Bab al-Shams in Dubai.
Many different resorts are situated near the ocean, where hotels and iconic buildings are built, such as the Emirates Palace Hotel, Burj Al Arab and Madinat Jumeirah. The state is expected to welcome 11.2 million tourists in 2010, which would help to ensure the success of the effort to increase investment in the sector of hotels and restaurants.
The economic and financial sector
Except in free zones, the Commercial Code requires that corporate capital is majority owned (51%) by about Emirates. This law should be changed, and the property clause will probably be canceled to conform to the principles of the World Trade Organization.
The World Financial Center Dubai was established in September 2004 and was soon a center of the global financial system. 218 financial-services companies settled there in four years. Of 130 asset managers, 64 have a decision-making center in the UAE.
The sovereign wealth fund of the emirate of Abu Dhabi, Atic, has such large reserves that allow it to intervene in the financial markets as a full participant, including during the financial crisis of autumn 2008. It occurs, for example, to keep the bankrupt U.S. company Advanced Micro Devices (AMD), No. 2 global chip industry, including Abu Dhabi is already a shareholder in the sum of 8.1% since 2007. The emirate is expected to blow up its shareholding up to 19.3% in early 2009, investing more than $ 2 billion, reduce AMD quarter debt, and encourage new investment in the growth of the society.
The economy of culture and communication
The United Arab Emirates have their aim to become one of the world centers of civilization. The number of projects in Abu Dhabi as Dubai let more imagine. Oil revenues, combined with a slow economic diversification allow spectacular projects.
However, against the oil shock at the end of 2008 may presage a less frenetic period. The emirate of Abu Dhabi has decided to invest $ 1 billion between 2008 and 2013, in film, in collaboration with other production companies, some of Hollywood. A branch of the Sorbonne, and soon an art Institute at Yale University, moved to Abu Dhabi.
The Louvre Abu Dhabi will open its doors in 2013; this may be one of the leading museums of the world. The park museums Abu Dhabi includes several major museums, counting the largest Guggenheim museum in the world (32,000 m²). Dubai Opera House, designed by architect Zaha Hadid, will be inaugurated in 2013.
According to the Ministry of Economy, in 2007, the UAE had 4,488,000 inhabitants. 80% of the UAE populations are immigrants, continuing to dominate over UAE citizens.
On the other hand, the population has increased dramatically, from 74.8% between 1995 and 2005, according to the last census. The population grew 2.9% in 2006, and the expatriate population by 6.9%. Abu Dhabi was the most populous emirate in late 2007, with a total of 1,493,000 inhabitants, followed by Dubai, with approximately 1,478,000 inhabitants, followed by Sharjah, which lived some 882 000 inhabitants.
Like most of the thousands of immigrants arriving in the country each year are men; they represent a significant greater percentage of the population compared to women.
The majority of jobs in the UAE were in the private sector, nearly 63.3% of all workers in 2008. According to national statistics office in the UAE, the unemployment rate was about 4% in 2008. The majority of Emirati employees are working in the federal public sector, which represents 45% of the total work force in the nation, according to data from the Ministry of Economy.
According to estimates of the Ministry of Labor, in 2007 3.11 million expatriate workers were filed in 2007 and 4.07 million in 2008, which correspond to an annual growth of 31%.
Expatriates occupy 99% of businesses in the private sector and 91% of businesses in those utilities. The authorities concerned to find only 4% of the work force in the UAE in 2020, if the current trend continues in the future. Each year, 800,000 jobs were created in the country, the majority of which is in the private sector.
Despite this, each year up to 10% of UAE workers renounce because of problems at the place of travail26. This is why we decided to inaugurate new initiatives that should result in a better representation of the UAE, especially in the private sector.
Called “Emiratisation,” this political system is one of the primary areas of concern of the government. Thus, an increasing number of UAE companies began to take measures to increase the number of UAE they employ.
One difficulty, however, is to create a pool of candidates with qualifications and training to enable them to take required responsibility.
The chief trading partners are Japan, the United States and the European Union in 2007; the total turnover of the country’s trade was 1.01 billion Dirhams (275.1 billion dollars), which represents
22.2% of the total Arab trade amounting to 1.234 trillion, although the UAE population represents only 1.4% of the entire Arab population.
This sharp increase in trade has been attributed to a rise in crude oil and gasoline; the growth of non-oil exports from FTZs and other sectors and constant growth in re-exports, and a significant augment in imports due to strong domestic demand.
Total trade figures for the whole of the UAE, show enlarged activity. The value of direct foreign trade of the non-oil sector of Dubai, for example, rose by 54.3% during the first half of 2008, reaching 296.6 billion Dirham’s (about $ 80.8 billion), against 192.2 billion Dirham’s.
Among the major trading partners in Dubai, India ranks first in the list, followed by China and the United States third. Regarding the UAE exports, India was also on the first position in the first half of 2008, followed by Switzerland, which had moved on to the second position of the fifty-fourth it took before.
The value of bilateral trade in Dubai with Switzerland rose from 24.7 million Dirham’s 1.5 billion. India was also the principal partner of Dubai in the first half of 2008 in the re-export trade, followed by Iran and Switzerland.
Source : Wikipedia