ECONOMIC BACKGROUND OF UAE
The United Arab Emirates (UAE) comprise the seven member states of Abu Dhabi, the capital city, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.
The total area of the Federation is about 83,600 square kilometers, much of it in Abu Dhabi emirate. Dubai, with an area of 3,885 square kilometers, is the second largest emirate. Situated on the banks of the Dubai Creek, a natural inlet from the Gulf which divides the city into the Deira district to its north and Bur Dubai on its south, the city ranks as the UAE's most important port and commercial center.
The UAE has 700 kilometers of coastline, of which 100 kilometers are on the Gulf of Oman. Along the Arabian Gulf coast there are offshore islands, coral reefs and sabkha, or salt-marshes. Stretches of gravel, plain and barren desert characterise the inland region.
To the east, a range of mountains lies close to the Gulf of Oman and forms a backbone through the Mussandam Peninsula. The western interior of the country, most of it in Abu Dhabi, consists mainly of desert interspersed with oasis.
The UAE has a sub-tropical, arid climate. Rainfall is infrequent and irregular. Falling mainly in winter, it amounts to some 13 centimeters a year. Temperatures range from a low of about 10 degrees celsius to a high of 48 degrees celsius. The mean daily maximum is 24 degrees in January rising to 41 degrees in July.
PopulationAccording to the Ministry of Planning, the population of the UAE expanded from 2,083,100 in 1993 to 2,230,000 in 1994. The workforce grew from 856,100 to 906,000. The population of Dubai was estimated to be 605,000.
According to the latest survey in 1996, the total residents in Dubai were estimated to 872,000 of which 126,000 were National, while 746,000 were Expatriots in the ratio of 15:85.
LanguageThe official language is Arabic. English is widely understood and ranks alongside Arabic as the language of commerce.
GovernmentThe Supreme Council of the UAE, comprising the hereditary rulers of the seven emirates, is the highest federal authority. It is responsible for general policy matters involving communications, education, defence, foreign affairs and development, and for ratifying federal laws. The President, HH Sheikh Zayed bin Sultan Al Nahayan, who is also Ruler of Abu Dhabi, and the Vice-President, HH Sheikh Maktoum bin Rashid Al Maktoum, who is also Ruler of Dubai, are elected by the Supreme Council from among its members.
The Federal Council of Ministers, responsible to the Supreme Council, has executive authority to initiate and implement laws. The Federal National Council is a consultative assembly of 40 representatives who are appointed for two years by the individual emirates. The council monitors and debates government policy but has no power of veto.
While Abu Dhabi is the centre of federal government activities, most ministerial departments also maintain offices in Dubai.
International RelationsThe UAE became a member of the United Nations and the Arab League in 1971. It is a member of the International Monetary Fund, the Organisation of Petroleum Exporting Countries (OPEC), the General Agreement on Tariffs and Trade (GATT) and other international and Arab organisations, including the Arab Gulf Co-operation Council (AGCC), whose other members are Saudi Arabia, Oman, Qatar, Bahrain and Kuwait. In its foreign relations, the UAE's stance is one of non-alignment but it is committed to the support of Arab unity.
Economic PolicyIn matters unrelated to diplomacy and defence, each emirate enjoys considerable autonomy in managing its own affairs. In business, the government of Dubai is committed to liberal, free market policies and to the creation of a business environment conducive to commercial activity. This approach is well illustrated by the incentives available to investors in the Jebel Ali Free Zone and by the continuing high level of public sector investment in the infrastructure.
THE DUBAI MARKET
KEY CHARACTERISTICSInternational businesses interested in developing their trade with Dubai will find that the market has a number of attractive features, as follows:
Large. Despite a relatively small population, Dubai's total imports in 1994 exceeded $14 billion. The reason is that Dubai is the major re-export centre for the region.
Growing. The emirate's non-oil imports expanded by 200% between 1986 and 1994. Many of the economies of the region served by Dubai are still at a relatively early stage of development, so there is plenty of long term scope for diversification and expansion in the future. Another important consideration is Dubai's rapidly developing role as a supplier to such emerging markets as India, the CIS, Central Asia and South Africa.
Diversified. There is potential for almost any type of goods and services. In the prosperous, but sparsely populated Gulf states, there is demand for foodstuff, high technology equipment and luxury products. But, through its re-export trade, Dubai also reaches an "outer ring" of less prosperous markets. This means there are also opportunities for manufacturers and exporters of less sophisticated equipment and mass consumer products.
Free. There are no foreign exchange controls, quotas or trade barriers. Import duties are extremely low, and many products are exempt.
Accessible. The emirate's transport infrastructure is unrivalled in the region in terms of size, facilities and efficiency. Its ports are served by more than 100 shipping lines and the airport by 65 airlines. Also, overseas businessmen will find that their counterparts combine local and regional expertise with a full understanding of international business practices. English ranks on a par with Arabic as the main business language of business and there are plenty of foreign banks, lawyers and other advisors - as well as the Dubai Commerce and Tourism Promotion Board, The Economic Department, Chamber of Commerce and Industry and Jebel Ali Free Zone Authority to help those wishing to enter the market.
Competitive. Inevitably, the various attractions outlined above have caught the attention of manufacturers and exporters from around the world. Any exporters seeking success in the Dubai market must ensure that their products can hold their own in terms of their price, tech-nology, design and value, just as in any other market of the world.
TaxationThere is no corporate tax in UAE. The only exceptions to this are oil producing companies and branches of foreign banks. Likewise, there are no personal taxes. Direct taxation is against the traditions of the UAE and it is highly unlikely that it will be introduced in the near future.
Exchange ControlThere are no exchange controls in the UAE and its currency, the UAE dirham, is freely convertible. The dirham is linked to the UA dollar, the currency in which oil revenues are paid. The current exchange rate is Dh. 3.675 - US$ 1 and no revaluation has occurred since 1977.
Banking and FinanceThe regulatory authority since 1980 has been the UAE central Bank. Some 47 commercial banks operate, with a total of around 350 branches, of which about 28 are foreign banks with a combined total of more than 200 branches. Federal law restricts foreign banks to no more than eight branches each.
Trade Marks and PatentsTowards the end of 1992, the UAE President enacted three Federal Laws on the protection of industrial and intellectual property. These laws came into effect in 1993 and provide protection against commercial piracy and fraud. The laws are: Federal Law No. 37 of 1992 on Trademarks, Federal Law No. 40 of 1992 on Protection of Intellectual Property and Copyright, and Federal Law No. 44 of 1992 on Protection of Industrial Property.
Legal SystemThere is a comprehensive framework of legislation to ensure that business in the UAE is conducted in a fair and orderly manner. There are laws dealing with commercial transaction, intellectual property, labour and other aspects of business life.
Dubai has many local and international law firms willing to advise foreign business organisations on legal matters.
There are Federal Courts in all emirates except Dubai and Ras Al Khaimah, which have retained their local courts. Dubai has civil, criminal and Shariah (Islamic) Courts of first instance. All court decisions may be brought to the Dubai Court of Appeal. Thereafter, a final appeal may be made to the Dubai Court of Cassation.
The Civil Court (as opposed to the Shaiah Court) has jurisdiction over labour, civil and commercial transactions, as well as personal matters (e.g. wills, divorces etc.) relating to non-Muslims. The language of the Courts is Arabic and advocates admitted to plead are Arab nationals.
LIFESTYLEExpatriates and foreign visitors - both male and female - can enjoy a relaxed and pleasant lifestyle in Dubai. There is virtually no crime, the city is clean, there are few traffic jams, apartments and villas are modern and spacious and, surprisingly to many, the climate is not only tolerable, but also extremely pleasant for most of the year.
There are many clubs and societies in UAE. Freedom of worship is allowed to all religions, and Christian churches have existed in Dubai for many years. Foreign newspapers, magazines, films and videos are readily available. Alcohol may be consumed at home, in hotels, and on licensed club premises. Women can drive and move about unaccompanied.
EducationThere is a comprehensive network of government schools throughout the emirate, providing free primary and secondary education to UAE nationals.
The Ministry of Education runs 34 boys' schools, 32 girls' schools and 10 kindergartens. These work to an Arabic curriculum. There are also 27 private institutes and 22 evening schools for adults.
For expatriate families, there are 79 private foreign schools offering education of a high standard to the curriculum requirements of the UK, USA and a number of others including Italy, Japan, Iran, India and Pakistan. In neighbouring emirates there are French and German schools. English is usually the main language of instruction, but other languages are used as necessary by foreign schools.
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