UAE at a Glance - UAE Interact
UAE at a Glance - UAE Interact
UAE at a Glance - UAE Interact
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50<br />
<strong>UAE</strong> AT A GL ANCE 2008 @ www.uaeinteract.com/economy<br />
The Arab World Competitiveness Report 2007, issued by the World Economic Forum (WEF),<br />
ranks the <strong>UAE</strong> in top position among Arab countries and in twenty-ninth position among the 40<br />
most advanced economies worldwide. It st<strong>at</strong>es th<strong>at</strong>: 'Sound economic management has<br />
contributed to stabilizing the macroeconomic environment and strengthening public institutions’.<br />
It is not surprising, then, th<strong>at</strong> foreign direct investment into the <strong>UAE</strong> has been increasing steadily<br />
from the beginning of this decade. So much so th<strong>at</strong> the United N<strong>at</strong>ions Conference on Trade and<br />
Development (UNCTAD) ranked the <strong>UAE</strong> twenty-fourth worldwide in terms of foreign direct<br />
investment flowing into the country. According to UNCTAD, the volume of incoming direct<br />
investment was estim<strong>at</strong>ed <strong>at</strong> Dh30.79 billion (US$8.39 billion) in 2006 compared with Dh40<br />
billion (US$10.9 billion) in 2005 and nearly Dh36.7 billion (US$10 billion) in 2004.As far as foreign<br />
investment eman<strong>at</strong>ing from the <strong>UAE</strong> is concerned, the <strong>UAE</strong> ranked twenty-fifth worldwide, with<br />
UNCTAD estim<strong>at</strong>ing the volume of foreign direct investment outflows from the <strong>UAE</strong> to overseas<br />
countries <strong>at</strong> Dh8.51 billion (US$2.32 billion) in 2006 compared with nearly Dh13.76 billion<br />
(US$3.75 billion) in 2005 and Dh8.1 billion (US$2.21 billion) in 2004.<br />
Trade<br />
The <strong>UAE</strong> considers th<strong>at</strong> free trade is a sine qua non for improving competitiveness and<br />
productivity, and th<strong>at</strong> high tariff barriers and technical barriers to trade would only result in a<br />
stagnant and inefficient priv<strong>at</strong>e sector. It is in this spirit th<strong>at</strong> the <strong>UAE</strong> has signed several free trade<br />
agreements (FTAs) and embarked on negoti<strong>at</strong>ions for others, either individually or through the<br />
GCC. Bil<strong>at</strong>eral preferential agreements signed with Syria, Jordan, Lebanon, Morocco and Iraq<br />
accord both the <strong>UAE</strong> and its co-sign<strong>at</strong>ories preferential access for certain specified goods. The<br />
FTA between the GCC and the EU, in final stages of negoti<strong>at</strong>ion during 2007, covers market<br />
access for industrial and agricultural products, trade in services, intellectual property, rules of<br />
origin, government procurement, investment and legal and institutional arrangements. It is<br />
expected to boost trade between the two regions from its current level of 40 billion euro to<br />
<strong>at</strong> least twice th<strong>at</strong> figure.<br />
A comprehensive FTA th<strong>at</strong> had been under negoti<strong>at</strong>ion for over two years with the USA<br />
stalled in March 2007. Whilst informal discussions were continuing, both sides acknowledged<br />
there were some difficulties in reaching an agreement.<br />
Goods imported into the <strong>UAE</strong> from countries with most favoured n<strong>at</strong>ions (MFN) st<strong>at</strong>us are<br />
subject to the GCC Common External Tariff (CET), which averaged around 5 per cent in 2006.<br />
Over 400 basic food items and pharmaceuticals are duty free. Tobacco products <strong>at</strong>tract up to a<br />
100 per cent tax r<strong>at</strong>e, depending on the item.<br />
With the exception of oil, gas and petrochemicals, the primary export centres in the <strong>UAE</strong> are<br />
free zones th<strong>at</strong> provide logistical, administr<strong>at</strong>ive and financial advantages for exporting or<br />
re-exporting companies. These free zones are exempt from the licensing, agency, emir<strong>at</strong>is<strong>at</strong>ion,<br />
and n<strong>at</strong>ional majority-ownership oblig<strong>at</strong>ions th<strong>at</strong> apply in the domestic economy. There are many