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United Arab Emirates - Economy (Notes)

ECONOMY Prior to the first exports of oil in 1962, the U.A.E. economy was dominated by pearl production, fishing, agriculture, and herding. Since the rise of oil prices in 1973, however, petroleum has dominated the economy, accounting for most of its export earnings and providing significant opportunities for investment. The U.A.E. has huge proven oil reserves, estimated at 98.8 billion barrels in 2003, with gas reserves estimated at (212 trillion cubic feet); at present production rates, these supplies would last well over 150 years. In 2006, the U.A.E. produced about 2.8 million barrels of oil per day. Major increases in imports occurred in manufactured goods, machinery, and transportation equipment, which together accounted for 70% of total imports. Another important foreign exchange earner, the Abu Dhabi Investment Authority--which controls the investments of Abu Dhabi, the wealthiest emirate--manages an estimated $600 billion in overseas investments. More than 6,000 companies from more than 120 countries operate at the Jebel Ali complex in Dubai, which includes a deep-water port and a free trade zone for manufacturing and distribution in which all goods for re-export or transshipment enjoy a 100% duty exemption. A major power plant with associated water desalination units, an aluminum smelter, and a steel fabrication unit are prominent facilities near the complex. Except in the free trade zone, the U.A.E. requires at least 51% local citizen ownership in all businesses operating in the country as part of its attempt to place Emiratis into leadership positions. As a member of the Gulf Cooperation Council (GCC), the U.A.E. participates in a wide range of GCC activities that focus on economic issues. These include regular consultations and development of common policies covering trade, investment, banking and finance, transportation, telecommunications, and other technical areas, including protection of intellectual property rights.