With sovereign wealth funds for investment in development and infrastructure projects, healthy financial reserves, and an ideal strategic location, the UAE has created a modern and diverse economy. The economic hub that the UAE boasts of today came into being in a short span of fifty years. In a brief period, UAE has managed to redefine its limits. The pandemic outbreak is the best parameter that revealed the country’s solid economy, growth, and adaptability to the global challenge.
Productive Inflow
Cumulative inward FDI growth stood at 44.2 percent from 2019. UAE ranked first in the Arab world and 15th globally in the Kearney FDI Confidence Index for foreign direct investment in 2021. The UAE ranks first in the West Asia region, receiving 54.4 percent of total FDI inflows amounting to $36.5 billion and first in the MENA region with 40.2 percent of the total FDI inflows amounting to $49.4 billion. In a staggeringly short time, it has managed to redefine its limits.
Remarkable Infrastructure
The desire to extend the nation’s horizons, push forward, and have a favorable business environment along with the updated procedures to meet global standards keeps up the capital inflows. UAE exhibits a model environment for investment and entrepreneurship. UAE stands a class apart as a worldwide magnet for capital and talent. The country aims to excel in the following fields in the immediate future: artificial intelligence, the Internet of Things, Blockchain, Innovative Medical Technologies, highspeed transportation, augmented virtual reality, robotics, self-driving cars, and renewable energy. Having ranked second globally in the Resilience to Epidemics 2021 index issued by the Consumer choice center during the Covid scenario, UAE owes it mainly to the prompt action taken in handling the situation by strict sanitation, lockdown, and social distancing measures. During the pandemic, the Central Bank’s support was equally crucial contributing AED 100 billion and a range of support packages to the economy. In 2022, the growth chart is set to hit 3.5 percent growth in real GDP and 3.9 percent growth in real non-oil GDP.
Regulatory Environment
UAE is cited as one of the most advanced countries globally in creating a regulatory environment that protects the investor and supports commercial activity providing a flexible and competitive legislative and procedural umbrella that helps stimulate foreign investment and ensures business stability. Home to several businesses, including free zones, the total trade of goods for free zones rose to AED 658.9 billion in 2019, signifying an 11 percent increase compared to the previous year. Being a nation built on trade and with a logistics infrastructure connecting to more than 250 cities worldwide with shipping routes to more than 400 cities, the UAE is the most efficient and most geographically broad in the region.
Planning for the Future
The Emirates Energy Strategy 2050 is set to meet a mix of renewable and clean energy sources to balance economic needs and environmental goals. UAE will invest AED 600 billion until 2050 to ensure that the demand for energy and sustainable growth in the country’s economy is met. Its priority in the next 50 years is to accelerate economic development, encourage small and medium-sized enterprises, and instil an entrepreneurship culture. This comprehensive economic and developmental program will focus on developing a knowledge economy, fostering innovation, establishing strong bilateral relations with international partners, and upgrading the legal frameworks to attract investment, ideas, entrepreneurs, and highly skilled candidates from around the world.
Competitive Costs
AED 58 Billion is the allocated UAE 2021 budget to instigate the much talked about program “Projects of the 50”. The World Competitiveness Yearbook 2020 Report ranked UAE first in the list of countries with the best electronic infrastructure globally and 31st for quality of digital life in 2020. The UAE is a member of the World Trade Organization (WTO) and the Greater Arab Free Trade Area and has free trade agreements with the European Free Trade Association. Having signed 117 double taxation agreements with countries across five continents, UAE has no restrictions imposed on foreign exchange. Its competitive finance costs, extensive liquidity levels, robust banking system, low inflation, low tariffs all boost the economy. The country turned in 2021 when it allowed 100 percent foreign ownership of companies in many sectors, thus removing the need for an investor to secure a local partner. The Projects of the 50 also has revamped the visa and residency system to attract skilled professionals in key fields like health, scientific research, technology, and other sectors. With the help of the well-focused program “Projects of the 50”, the nation is sure of creating an optimum commercial and legal environment and forging international partnerships with futurefocused countries, thus making the UAE a catalyst for regional and global growth.