In 1971, the year of the UAE’s formation, the country’s GDP was Dh6.5 billion. Thirty-seven years later it stood at around Dh753 billion, a multiple of 115 times. However, past growth rates are unlikely to continue indefinitely. Instead, the UAE economy is maturing and stabilising.

The UAE continues to be a strategic hub, with business-friendly free zones and a quickly growing economy. The country has experienced significant economic growth. Average GDP growth over 2000 to 2006 in the UAE was about 8.4 percent - the highest in the Gulf Cooperation Council, which averaged 6.5 percent.

The nominal GDP for 2007 was $192 billion. This reflects the rich natural resources in the UAE, which has 10 percent of the total world supply of oil reserves and the world’s fifth largest natural gas reserves.

Despite the impact of the global financial crisis being felt throughout the region, the UAE’s economy continues to expand and its financial fundamentals remain sound.Not only has the slow down encouraged the property development sector to take stock of decisions made at a time of rampant growth and surging inflation, it has also resulted in the stabilisation or reduction of prices for many essential building materials, such as steel and cement.

The UAE Government has been making efforts to ensure that the over-heated credit market does not get out of control in the future and has brought in more stringent guidelines for lending to both individuals and companies.

There is no doubt that revenues from oil exports were instrumental in transforming the economy of the country. Nevertheless, there is a deep awareness that the security of future generations depends on prudent investment both at home and abroad.

The UAE has launched a diversification and liberalization program to reduce reliance on oil and transform its economy from a conventional, labor-intensive economy to one based on knowledge, technology and skilled labor. The federal and individual Emirate governments have invested heavily in sectors such as aluminum production, tourism, aviation, re-export commerce and telecommunications.

In 2007 the non-oil sector accounted for 64.1 per cent of GDP (amounting to Dh467.9 billion) and the hydrocarbon sector 35.9 per cent. Remarkably, the non-oil sector figure was achieved in a year when oil prices increased by 18.2 per cent, inevitably boosting earnings. The UAE has diversified its economy to an extent that it is not totally at the mercy of the fluctuating world of oil prices. Manufacturing (12%); wholesale, retail and maintenance (10%); construction and real estate (each 8%); government services (7%) and financial enterprises and transport/storage/communications (both 6%). Agriculture, electricity and water, restaurants and hotels, together with social and private services, accounted for around 6% of total GDP.

It is worth remembering that diversification has been a necessity rather than a luxury for most of the emirates. With Abu Dhabi holding over 90 per cent of the country’s hydrocarbon reserves, other emirates were forced to look elsewhere for economic growth. Dubai, where as little as 3% of GDP is contributed by oil, depends more on tourism, transport, trade, construction, real estate development and financial services.

Each of the emirates has adopted its own formula for growth, playing to their individual strengths and tapping into the network of advantages that membership of the federation has brought them.

The Free Zones have been one of the strongest pillars of the country’s diversification strategy, attracting significant amounts of foreign investment, creating thousands of jobs, and facilitating technology transfer into the country. At US$19 billion in 2007 the value of foreign direct investment in the UAE is the highest in the region.