UNIVERSITY OF LJUBLJANA

FACULTY OF SOCIAL SCIENCES

Tara Sergeja Kadunc (21180226)

red. prof. dr. Andreja Jaklič

UNITED ARAB EMIRATES

Country profile

International Economic Relations

Ljubljana, 17. december 2019

 For the data from the graphs is retrieved from the same source as the most relevant data, which is
given above every graph in brackets.
1. COUNTRY SIZE
o POPULATION: 9 630 959 in 2018, drastically increased, by more than four times, in
the first 10 years of the decade, now quite stable (The World Bank, n. d.).

Population from 1990 to 2018

12
Population in millions

10
8
6
4
2
0
1985 1990 1995 2000 2005 2010 2015 2020

o GDP (current US$): 414,178 billion US$ in 2018, also drastically increased in the 21st
century, also by 4 times (The World Bank, n. d.).

GDP in US$ from 1990 to 2018

500

400
GDP in billions

300

200

100

0
1985 1990 1995 2000 2005 2010 2015 2020

o GDP per capita (current US$): 43,005 thousand US$ in 2018, also rose in the 21st
century, dropped in 2009 and 2016 as GDP, now slowly increasing (The World Bank,
n. d.).

GDP per capita in US$ from 1990 to 2018

50
GDP per capita in thausand

45

40

35

30

25
1985 1990 1995 2000 2005 2010 2015 2020

2
2. INTERNATIONAL TRADE
o TRADE as a part of GDP (%): 161,8 in 2018, rose quickly after 2000 until 2016, now
falling (Global Economy, n. d.).

Trade as a part of GDP from 2001 to 1018

200
180
160
% of GDP

140
120
100
80
2000 2005 2010 2015 2020

o EXPORT
§ Volume of export (current US$): 388,753 billion US$ in 2018 (Global
Economy, n. d.).

Volume of export in US$ from 2001 to 2018

435
Export in billion US$

335

235

135

35
2000 2005 2010 2015 2020

§ Export as a share of GDP (%): 93,9 in 2018, rose after 2010, even over 100, as
GDP is only the value added domestically, they exported more than was
produced in the country, fell in the recent years, just as trade as the share of
GDP (Global Economy, n. d.).

Export as a share of GDP from 2001 to 1018

110
100
90
% of GDP

80
70
60
50
40
2000 2005 2010 2015 2020

3
o IMPORT
§ Volume of import (current US$): 281,552 billion US$ in 2018 (Global
Economy, n. d.).

Volume of import in US$ from 2001 to 1018

330
280
Import in billion US$

230
180
130
80
30
2000 2005 2010 2015 2020

§ Import as a share of GDP (%): 68,0 in 2018, rose until 2016, then fell and still
is falling, but the volume is rising (Global Economy, n. d.).

Import as a share of GDP from 2001 to 1018

80
75
70
65
% of GDP

60
55
50
45
40
35
2000 2005 2010 2015 2020

o TRADE BALANCE
§ External balance of goods and services (current US$): 107,202 billion US$ I
2018 (The World Bank, n. d.).

External balance of goods and services from 2010 to

2018
160
External balance in billions

140
120
100
80
60
40
20
0
2008 2010 2012 2014 2016 2018 2020

4
 § External balance of goods and services as a share of GDP (%): 25,9 in 2018
(The World Bank, n. d.).

External balance of goods and services as a

share of GDP from 2010 to 2018
40
35
30
25
% of GDP

20
15
10
5
0
2008 2010 2012 2014 2016 2018 2020

o CURRENT ACCOUNT BALANCE

§ In current US$: 37,849 billion US$ in 2018 (Ceicdata, n. d.).

Current account balance in US$ from 2008 to 2018

90
80
Account balance in billions

70
60
50
40
30
20
10
0
2006 2008 2010 2012 2014 2016 2018 2020

§ As a share of GDP (%): 9,1 in 2018 (Trading Economics, n. d.).

Current account balance as a share of GDP from 2008

to 2018
25

20
% of GDP

15

10

0
2006 2008 2010 2012 2014 2016 2018 2020

5
o STRUCTURE OF TRADE
§ Exporting partners
a. Main exporting partners in 2017: Iran (4,9 %) Saudi Arabia (4,7 %),
India (4,6 %) and Iraq (3,9 %) (WTO, n. d.).

Main exporting partners in 2017

4.9 3.9
4.7
Iran
4.6
Iraq
Saudi Arabia
India
Others
81.1

b. Main exporting partners in 2007, 10 years prior: Japan (25,42 %),

India (6,02 %), Iran (4,23 %), Iraq (1,91 %), Saudi Arabia (1,06 %)
(WITS-Worldbank, n. d.).

Main exporting partners in 2007

4.9 3.9
25.42 4.7 Iran
4.6 Iraq
Saudi Arabia
India
Others
Japan
56.48

§ Importing partners
a. Main importing partners in 2017: USA (8,6 %), India (7,5 %), China
(6,4 %), Japan (5,2 %) (WTO, n. d.).

Main importing partners in 2017

6.4
8.6 China
5.2 USA
7.5 Japan
India
72.3 Others

6
 b. Main importing partners in 2007, 10 years prior: Japan (4,7 %), China
(4,2 %), USA (3,9 %), India (3,2 %) (WITS-Worldbank, n. d.).

Main importing partners in 2007

4.2 3.9
4.7
3.2 China
USA
Japan
India
Others
84

§ Export products in 2017: Manufactured goods (49,9 %, jewellery, chemical

products), Fuels and mining products (21,5 %, mineral products, precious
metals, petroleum), Agricultural products (2,3 %, cigars, sugar, food) and others
(26,3 %) (WTO, n. d.).

Exporting products
2.31.2

Manufactured goods
21.5
Fuels and mining products
Agricultural products
Others
49.9

§ Import products in 2017: Agricultural products (6.4 %, cigars sugar, food) Fuels
and mining products (3,5 %, gold, diamonds), Manufactured products (45,2 %,
machines, transportation, clothing) and others (44,8 %) (WTO, n. d.).

Import products
Manufactured goods

Fuels and mining

44.8 45.2 products
Agricultural products

Others
6.4 3.5

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3. INTERNATIONAL INVESTMENT – FOREIGN DIRECT INVESTMENT
o FDI Inflows (current US$): 10,385 billion US$ in 2018 (The World Bank, n. d.).

FDI Inflows in US$ from 2008 to 2018

15
13
FDI Inflows in billions

11
9
7
5
3
1
-1
2000 2005 2010 2015 2020

o FDI Outflows (current US$): 15,079 billion US$ in 2018 (The World Bank, n. d.).

FDI Outflows in US$ from 2008 to 2018

18
16
FDI Outflows in billions

14
12
10
8
6
4
2
0
2000 2005 2010 2015 2020

o The IMF estimates the UAE’s net international investment position (NIIP) is at 149
percent of GDP at end-2017 and projects it to be stable over the medium term. That is
the only data connected to UAE’s NIIP that can be found online (IMF, 2018).
o The main investors are: United Kingdom of Great Britain, India, USA, France, Saudi
Arabia, Austria. The main investors have been the same for the last 10 years (UAE
Statistics Authority, 2016).

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 Main investros and the share of their investment
Japan
Austria 8%
9%

Saudi Arabia United Kingdom

9% 40%

France
10%

USA India
11% 13%

o Top investment sectors (UAE Statistics Authority, 2016):

Top investment sectors and the share of their

investment

3.9 Wholesale and retail trade;

8.8 car repairs
24.9 Real estate
9.2
Financial and insurance

Manufacturing
19.3
23.8 Mining

o The only information about the destinations of UAE’s investments is that it’s
investments to Africa doubled in 2018, from $1.81 billion to $3.93 billion, investments
to developing Asian countries more than tripled from $6.18 billion to $22.1 billion, FDI
outflow from the UAE to least-developed countries increased slightly from $1.39
billion to $1.54 billion and investment outflows to small island developing states
increased from $63 million to $179 million (UNCTAD, 2019).
4. TRADE AND GROWTH, BUSINESS CYCLES
o The relation between export growth and GDP growth (info on GDP and export from
The World Bank, n. d., the GDP and export calculated):

9
 50

40

% Export Growth 30

20

10

0
-25 -20 -15 -10 -5 0 5 10 15 20 25 30
-10

-20

-30
% GDP Growth

The Pearson correlation coefficient is 0,92 which shows a positive correlation between
GDP and export growth.
o The relation between FDI inflows and GDP growth is obvious when we compare the
GDP graph from the year 2008 to 2018 and the FDI outflows graph above (already for
years 2008 to 2019). They ascend and descend very similarly but the ascends and
descends are more extreme in FDI graph. The FDI inflows also correlate to GDP in the
way that they ascend and descend in a similar time frame, as seen in the GDP and FDI
outflows graphs above but are not as connected as FDI inflows and GDP, of which the
graphs are almost the same. We can conclude that FDI inflows have a positive effect
on GDP growth. From the correlation, if FDI outflows and GDP, we can also presume
that people invest less in times of lower GDP and more in times of a higher one.
5. TRADE IN VALUE-ADDED AND GLOBAL VALUE CHAINS
There is no profile for trade in value-added and global value chains (GVC) on WTO or
anywhere on the internet. However, I can speculate that the UAE is very actively
participating in GVC, since GVC include all of the people and activities involved in the
production of a good or service and its global level supply, distribution and post-sales
activities and since overall trade, import and export have increased drastically in the last
decade.
6. SUM UP A COUNTRY POSITION IN GLOBAL TRADE
o The GDP and the population both quadrupled in the 21st century. The population was
increased by work migrants which contributed immensely to country's workforce and
consequently to the growth of GDP and the economy. The GDP per capita reached an
all-time high in 2008 with 44 thousand US$ but then drastically fell in 2009, due to the

10
 crisis that led to the fall of GDP while the population was still increasing. After the
crisis GDP started growing and the stabilization of population made way for the
increase in GDP per capita.
o In the 21st century, the country also became a lot more open to trade. Trade as a part of
GDP doubled, the volume of import and export both increased by 10 times and their
share of the country’s GDP both doubled. From 2012 to 2017 export as a share of GDP
was even higher than 100 %, while trade has been and still is, from 2003, more than
100 % of GDP and in 9th place from all countries in trade to GDP ratio (2017, The
World Bank). This may happen when small countries export more than is produced in
the country or import more than is consumed in the country. Nevertheless, trade, import
and export as a part of GDP have been falling since 2016 but are still very high. In
regards to foreign trade, the country offers one of the most dynamic markets worldwide,
listed among the 16 largest exporters and 20 largest importers (Medleva, 2019).
o The external balance of trade also grew quite drastically since 2010 and reached a high
in 2013. It then stabilized at a bit of a lower value but still very high, reaching 6th place
in trade balance as percent of GDP in the world (The World Bank, 2018).
o The current account balance which is a sum of net exports of goods and services, net
primary income, and net secondary income grew drastically after 2010, reached a high
in 2012, then fell again but has been increasing from 2016 and has never in the last 10
years been negative. Very similar trends can be seen with GDP, the volume of export
and import and with trade balance, which all reached a low point around the same time
but all also started increasing and are still increasing now.
o The main exporting partners seem to be the same over the last decade, except for Japan,
who is not an important trading partner anymore. The importing partners remained even
more unchanged and seem to be quite traditional, with their share of trade becoming
even larger.
o Manufactured goods play an important role among export and import products, while
fuels are a lot more prominent in export and agricultural products are a small part of
both. Today, the production of petroleum and natural gas contributes about one-third of
the nation’s GDP and the countries oil and gas reserves are both the seventh-largest
around the globe and it’s currently fifth on the list of the world’s largest oil exporters.
The country’s economy is heavily reliant on the oil industry and for that reason, over
the past few decades, the country has started to look for additional sources of revenue.
Over the last twenty years, the UAE's economic diversification program has led to the

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 rise of several non-oil industries, which now make up a substantial percentage of the
country’s GDP. These include manufacturing, commerce and hotels, real estate,
construction, transportation and finance and insurance, which we also see as top
investment sectors (Medleva, 2019).
o FDI started playing an important role as late as the 21st century. The inflows were still
negative in 2000 and the outflows close to 0, then they both grew exponentially until
reaching a high in 2008, when they both started falling but soon recovered. The FDI
flows are now once again high and growing. The biggest city in the country, Dubai, has
continued to progress in global rankings of the most attractive cities for FDI, ranking
third in the world in attracting FDI, in terms of both capital flows and the number of
greenfield projects. Thanks to the diversity of the business environment, there are a
number of companies one may invest in the country (Gulf News, 2019). The main
investors are United Kingdom of Great Britain, India, USA, France, Saudi Arabia and
Austria and most investments are targeted at wholesale and retail, real estate and
finance, the sectors developed in the diversification program.
o There is a positive correlation between export growth and GDP growth, which is proved
by the Pearson coefficient as well as the similarity between the GDP and the export
graphs. The similarity between FDI graphs and the GDP graph also show the correlation
between the two.
o With all of that said, it’s obvious that the country underwent a big change in the 21st
century, with a drastic increase of population, GDP and the opening to the world market
in which it has become a significant actor. It seems to enjoy mainly positive
consequences of trade with higher GDP, as well as GDP per capita, high FDI inflows
and outflows, a positive current account balance and a very high external balance of
goods and services. We see a country that has taken advantage of their oil-reserves and
developed a competitive economy that goes far beyond only the exportation of oil. As
per the UAE economic growth forecasts, the market value of public and private
companies is predicted to continue its upward movement.

Sources

CEICData. (n. d.). United Arab Emirates Current Account Balance. Available at
https://www.ceicdata.com/en/indicator/united-arab-emirates/current-account-balance

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Dubai attracted Dh46.6 billion FDI in H1 2019. (2019, 29. September) Gulf News.
Available at https://gulfnews.com/business/dubai-attracted-dh466-billion-fdi-in-h1-2019-
1.66768294
Global Economy. (n. d.). United Arab Emirates Economic Indicators. Available at
https://www.theglobaleconomy.com/United-Arab-Emirates/trade_openness/
International Monetary Fund. (2019). United Arab Emirates, Country Report No. 19/35.
Available at https://www.imf.org/~/media/Files/Publications/CR/2019/cr1935.ashx
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https://unctad.org/en/PublicationsLibrary/wir2019_overview_en.pdf
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https://data.worldbank.org/indicator/NE.EXP.GNFS.ZS?name_desc=false
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https://data.worldbank.org/indicator/NE.RSB.GNFS.ZS?name_desc=false
The World Bank. (n. d.) United Arab Emirates. Available at
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us/Pages/Statistics/Statistics-by-
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WITS-Worldbank. (n. d.). United Arab Emirates Exports By Country 2007. Available at
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WITS-Worldbank. (n. d.). United Arab Emirates Imports By Country 2007. Available at
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https://www.wto.org/english/res_e/statis_e/daily_update_e/trade_profiles/AE_e.pdf

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