THE ECONOMY

With a growth in Gross Domestic Product (GDP) of 10 per cent in 1999 (Dh 190.455 billion from Dh 173.147 billion in 1998) the UAE has by far the fastest developing economy among GCC countries. This impressive economic performance, underpinned by sustained strength in oil prices and by the UAE’s successful policy of diversification, has continued in the year 2000. So much so that at the time of writing, UAE GDP for 2000 was expected to grow by 10.5 per cent to Dh 210.40 in real terms. However, even this may be a cautious estimate with the final figure showing a higher growth rate.
The non-oil sector's portion of GDP in 1999 was Dh 141.7 billion (74.4 per cent of the total) against Dh 48.7 billion (25.6 per cent) for the oil sector. Manufacturing, which showed a growth rate of 6.9 per cent (with a total output of Dh 24 billion) continued to play the most significant role in the non-oil sector, accounting for 16.9 per cent of this sector and 12.6 per cent of total GDP value. The Central Bank attributes much of this growth to the close link between oil prices and prices of liquefied gas and petroleum products, and to the increase in the capacity of oil refineries that took place during the period. The continued growth in aluminium production along with a 6 per cent increase in its price, were further significant factors in maintaining growth.
As we have noted in previous issues of this Yearbook, the unprecedented economic transformation which has taken place in the UAE since the creation of the state has been largely funded by the judicious use of oil revenues. However, although oil and gas production remain the primary source of public revenue, the secret of the country's current economic success has been a resolute government strategy of economic diversification, leading to the creation of new productive sectors.