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2 December, 2020

Solid economic foundations to drive UAE’s growth for next 50 years

The country has taken a multipronged approach to create a diversified knowledge-based economy that harnesses technology

Since its independence in 1971, the UAE has risen from being an economy dependent on pearl diving and fishing to a dynamic economic power and a major linchpin on the world energy market. The country's forward-thinking investment in infrastructure, which helped anchor it as a global trading and transportation hub, its continued economic diversification and harnessing of technology have placed it on a strong footing to evolve further over the next 50 years. Though the UAE is the world's seventh-largest crude producer, Opec's third-biggest member, and accounts for 5.6 per cent of the world’s proven oil reserves, the country's multipronged futuristic approach is paying off. The World Intellectual Property Organisation's Global Innovation Index ranks the UAE 34th globally compared with 47th in 2015. The country has maintained its spot as the most competitive economy in the Middle East and North Africa in the World Economic Forum's Global Competitiveness Index, which also ranks it 25th globally. The World Bank's ease of Doing Business Report considers the UAE as the 16th easiest place to set up a venture, a big improvement from 2015 when it was ranked 34th. “The UAE could not have achieved its economic success without oil to fund the accelerated development but it needed visionary leaders to realise the oil bonanza,” Scott Livermore, chief economist and managing director at Oxford Economics, said. The country’s gross domestic product has grown from a base of just Dh11 billion in 1973 to about Dh1.5 trillion in 2019. While the UAE’s hydrocarbon-fuelled growth is impressive by any standard, a three-year slump in oil prices that began in 2014 did not slow the country's momentum but accelerated efforts to reduce its reliance on oil.

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