Category: Analysis

Mohamed Shihab

As Mohamed Shihab, the author of the article Economic Development in the UAE says, it can be hard to believe it now, but about thirty years ago, the United Arab Emirates was one of the least developed countries in the world. This state started implementing its development policy extremely quickly and level it has achieved nowadays can be compared to that of the industrialized countries. Mr Shihab supposes that the UAE did not even have specific stages of development, which are usual for any other developing country. Instead, massive oil revenues gave it an opportunity to take a short cut. By present days, the UAE has increased levels of all the institutions within the country, as well as communication with other nations. The author provides evidence to his opinion on the above-mentioned and reflects on the way the UAE developed throughout its history and it can be seen that his position is direct and clear. The understanding of factors which played an important role in the UAE development is significant due to the fact that it can serve as an example for other developing countries.

The UAE used the resource-based industries as a development strategy. It became possible due to the abundance of oil, gas and other natural resources within the country. Certainly, the economic development is not possible without the social, institutional, and political context, as truly as the human factor. Mr. Shihab is sure that the UAE did its best to gain success. In the following, the main points he reflects upon in his article are examined.

Oil in the UAE

Previously, until the oil was discovered in the UAE, the economy of the country depended upon agriculture, trade of pearls, fishing, and seafaring. In 1970, the United Arab Emirates saw the beginning of economic development. It coincided with an increase of oil production and export and a subsequent rise of prices for oil. The author calls it the major advantage of the country’s development.

Political Stability Emirates

The Emirates has always had political stability. It has a wise system of oil resources distribution, which results in high social standards, salaries, standard of living, as well as in the reduction of internal political and social unrest. This stability resulted in good relations with other countries, international trade and investment. Thus, according to the table 1 provided in the article, it can be seen that main economic indicators developed very well. This, throughout the decade since 1990 till 1999, GDP rose from 125.3 till 181.5, whereas the amount of imports and exports also rose, as well as the population rate. Inflation and total external debt, in their turn, decreased, and the average exchange rate remained stable.

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The Main Economic Sectors

Importance of the main economic sectors in the UAE from 1975 till 1998. Thus, the sector of crude oil took 67.7 percent of GDP in 1975, and in 1998 it turned into 22.4 percent, whereas the involvement of other sectors, such as commerce, restaurants and hotels (13.7 percent), manufacturing (12.4 percent), government services (11.8 percent), real estate (10.5 percent) and so on, increased significantly. It is important to note that these spheres numbered less than 5 percent in 1975. It proves the author’s opinion that the overall development began with the oil production and expanded to other spheres afterwards.

In the meantime, the UAE health services also improved a lot since the 1970s. According to the table 3, the number of health institutions increased significantly since then, as well as the number of doctors, nurses and hospital facilities (namely, beds). For example, while there were only 65 dentists in the UAE in 1975, in 1997 the number raised to 220.

Further, the table 4 compares the human development in the UAE to the one in other developing countries and industrial countries. It can be seen from it that all the indicators bring the UAE much closer to the industrial counties. For example, while the maternity rate in developing countries are averagely 491 per 100,000 live births, in the UAE it is 26 and in industrial countries – 13. The only point that remains relatively weak for the UAE is the literacy level, which is 74.8 percent (in industrial countries it is 98.7 and it developing countries – 71.4 percent). Thus, even though the author tells that the education development is high there, it still needs further development.

The above-mentioned facts prove that the UAE developed extremely quickly and mostly it was possible due to the fact that the country has large oil recourses. The author seems to approve the way the UAE developed and the way it builds its social structure in the present days. Mr. Shihab’s article makes a reader want to study the economic development of the UAE further. This country has achieved impressive improvements in many economic and social development indicators, successfully implemented the human development policy and managed to use natural resources wisely. Therefore, as we know now, it is one of the wealthiest countries and it can serve as an example for other developing countries to use strong points for developing weak ones.

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