United Arab Emirates: Economy

Figure 1.--The photo was taken in Dubai City during May 1948 before oil began to transform the UAE. The boy and the old man, probably his grandfather, belong probably to a wealthy family, at least in relative terms. Their curved knives and at their clean white tunics are sybols of wealth. These knives are called khanjarand are among a boy nd man;s most valuable possessiins. The boy, however, is barefoot.

The location of the Arabian Peninsula between Europe and the Far East conveyed great importance in terms of trade. Goods coveted by the Europeans from China, the Spice Island and India until the European maitime outburst passed throufg Arabia. This gave the Arabs a huge trading advantage. With the decline of the Caliphate, the Turks exerted increasing influence, eventially seizing the Arab Lands. At the same time, the Europeans rounded the cape of Good Hope and defeated Arab sea power in the Indian Ocean (16th century). The Bedouin remained in control of the sandy desert interior, but the change in trade flows made the Arab lands a cultural and economic backwater. The bedouin seized control of Abu Dhabi and Dubai, but without the previous lucrative trade flows they were poor centers compared to the days when trade fom the East flowed through them. The Emirates were some of the poorest communities in the world. Technology was virtually unchanged from medieval times. The pearling industry was a rare economic success, but hurt by the Great Depression (1930s) and the Japanese developmnt of a culture pearl industry. The economic situation began to change when Western oil companies initiated geological surveys. Crude oil exports began (1962). As a result of the oil, the UAE economy is the second largest Arab economies after Saudi Arabia, The UAE like Saudi Arabia has been sattempting to diversifying the economy. The UAE has made some success, but the diversified sectors are almost all dependent on the huge oil resenue. Sectors like agriculture, construction, finance, manufacturing, and others are all financed by the oil income. More than 85 percent (2009). The situation is today little changed. While Abu Dhabi and other UAE emirates have remained relatively conservative in their cultural outlook. Dubai, which has few oil reserves of their own, has been more aggresive in its diversification efforts. Tourism is the only inportant economic sector not linked to the oil revenue.



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Created: 12:00 AM 6/17/2017
Last updated: 12:00 AM 6/17/2017