The United Arab Emirates has a highly industrialized economy that makes the country one of the most developed in the world, based on various socioeconomic indicators such as GDP per capita, energy consumption per capita, and the HDI. At $168 billion in 2006, the GDP of the UAE ranks second in the Gulf states (after Saudi Arabia), third in the Middle Eastâ€”North Africa (MENA) region (after Saudi Arabia and Iran), and 38th in the world (ahead of Malaysia).Â
There are various deviating estimates regarding the actual growth rate of the nationâ€™s GDP, however all available statistics indicate that the UAE currently has one of the fastest growing economies in the world. According to a recent report by the Ministry of Finance and Industry, nominal GDP rose by 35 per cent in 2006 to $175 billion, compared with $130 billion in 2005.Â
Although the United Arab Emirates is becoming less dependent on natural resources as a source of revenue, petroleum and natural gas exports still play an important role in the economy, especially in Abu Dhabi. A massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the UAE diversify its economy. Nationwide, there are currently $350 billion worth of active construction projects.
The government’s decision to diversify from a trade-based but oil-reliant economy to one that is service- and tourism-oriented has made real estate more valuable, resulting in the property boom from 2004â€“2006. Construction on a large scale has turned Dubai into one of the fastest-growing cities in the world. Many areas of Dubai are dominated by the large number of construction cranes. Construction in Dubai and the UAE in general is a much faster process than in any Western country.Â
One of the main reasons for the boom in construction in Dubai is its drive to diversify the economy. The Dubai government does not want to depend on its oil reserves which are largely believed to become exhausted by 2010 and, as such, has diversified its economy to attract revenues in the form of expanding commercial and corporate activity. Tourism is also being promoted at a staggering rate with the construction of Dubailand and other projects that include the making of mammoth shopping malls, theme parks, resorts, stadiums and various other tourist attractions. The property boom is largely driven by megaprojects â€” these are just some of many projects planned for Dubai:
- Palm Islands
- The World
- Dubai Marina
- The Burj Dubai Complex
- Dubai Waterfront
- Business Bay
- Jumeirah Village
Another reason for the construction boom is the recent reversal of a law in 2002 that allows non-nationals of the UAE to own property (not land) in Dubai (albeit freehold and 99 year leases are actually sold to people with ownership still remaining with private companies). In Dubai, demand is currently outstripping supply by a significant margin and is showing no signs of slowing in the near future.