The Imports And Exports Of Dubai Economics Essay
Objective
The objective of our study is to show UAE’s Imports and Exports flow through the country’s economy and its influence on its suppliers, retailers, and consumer purchasing power. And to provide you with Dubai’s economic development in precise its role in UAE’s entire economy. We also provide you with numerical statistics to show the increase and decrease of UAE’s imports, exports, and GDP.
Introduction
UAE has been a very strong trade center for many years, very famous for its trade in copper, oil, and pearls. About 60 percent of UAE’s crude oil and gas is exported to Japan, until it became the third most important re-exporter. Its population has been increasing in the past years accordingly the demand is getting higher for importing and re-exporting requirements leading an increase in the level of individual expenditure.
Dubai Economy
Dubai’s economy is one of the most remarkable economies in the world. As in the free port duties there are no taxes to be charged for imported goods and as in free zones such as Jebel Ali, Dubai marine city, and Dubai Internet and Media City which have always attracted a lot of foreign investors. It has lately combined the internet and media zone to become TECOM (Dubai technology Electronic Commerce and media free zone). Within this place you can find multi international and national huge firms such as Microsoft, IBM, BBC, CNN, Sky news and other associated press. Dubai’s Income has reached 17% of annual growth rate from 2000 to 2006 by 68.21 million and increased eventually in 2009 to 68.397 million. The oil Industry has a noticeable share while natural gas and petroleum contributed with less than 6%. On the other hand what had the largest share of all was the real estate market. In addition Dubai’s banking sector, including government services, hotels, restaurants, were elastic enough during the economies depression.
Dubai liberal economic policy and world class facilities helped develop it to be the Arabian Gulf premier business center and to be called the Hub City. It’s ideal attractive culture pulled many local and expatriate businesses to settle there for its vibrant and forceful market economies. Many factors contributed in Dubai’s success, such as Dubai economic and politic stability, minimum government control over the private sector, stable exchange rates, and world class service sector with the best infrastructure facilities as well as highly utilized two seaports, free zones, cargo village, international airport, in extremely flexible, affordable and efficient utilities. The greatly living conditions which is Dubai’s private sector that includes residents, commercial properties, and leisure facilities, makes it the ideal location for superior living, along with a clean environment, modern lifestyle, government tolerance and a wide range of goods and services. Finally the rapid development of the manufacturing sector had made it the most profitable sector with its major achievements in the foreign trade network giving investors extensive choice in exporting products such as metal products, textiles, gold and jewelry, electronics, refined petroleum, etc.
Foreign Trade in Dubai
At the late 2008 foreign trading was going down, Dubai’s economy was thriving. After the oils discovery it was the main reason for UAE’s rapid development and by exporting it to other countries due to its strategic location on the Persian Gulf. Dubai is located at the center of two ports Port Rashid and the Jebel Ali Port, where highly valued and low volume goods are being transported to all places via extreme facilities. Most of Dubai’s trade is over sea which is estimated to be about 152bn which is about 52% of Dubai’s entire foreign trade transactions. Even though Dubai is noted for its oil and gas production but sarcastically it only makes 5%, while non0oil exports present 80% in this area.
Dubai (Imports & Exports)
Increase in Population and demand both raised the value and amount of imports in UAE. This for sure increased the competition among the Asian countries which has the biggest share of the market and second comes the European countries and third comes the US. Not to forget Dubai’s gold market, which was recorded to import about 360 tons of gold by 1998, but the drop in the Indian rupee against the American dollar affected the Indian demand on gold from Dubai after it has been at the top for many years in addition to the Indian’s government new policy about allowing European countries to import gold directly from Switzerland, UK, S.Africa, Korea, and Russia.
Despite all what Dubai’s economy is going through, India remains Dubai largest partner in both imports and exports, mentioning Iran as the largest export destination through free zone, while china comes to be Dubai’s top import partner. It has been recorded that by 2005 Dubai government nearly invested about 11 billion in projects, which raised the foreign trade from 112 to 280 billion dirhams from between 2001 and 2005, increasing Dubai’s GDP from 170% to 200%. Dubai’s ideal port makes it the best location for foreign trade, Including the first class, well equipped airports and massive sea port to facilitate all sorts of imports and exports. Dubai oil and gas production makes only 2% of the state’s economy, while it contributes in 82.2% of non-oil exports. Such as dried fish, dates, and scrap metals which are shipped to countries such as Japan, India, Taiwan, china and US.
US Census Bureau foreign trade statistics
U.S. Imports from United Arab Emirates by 5-digit End-Use Code
2005-2009
(In thousands of dollars)
End-Use Code
Value 2005
Value 2006
Value 2007
Value 2008
Value 2009
(00000) Green coffee
111
(00110) Dairy products and eggs
6
2
68
(00120) Fruits and preparations, including frozen juices
1,014
738
789
649
529
(00130) Vegetables and preparations
688
1,381
2,014
6,262
5,289
(00140) Nuts and preparations
402
367
10
228
45
(00150) Food oils and oilseeds
6
25
22
78
520
(00160) Bakery and confectionary products
3,179
3,637
3,516
1,561
793
(00170) Tea, spices, and preparations
146
149
187
286
496
(00180) Other (soft beverages, processed coffee, etc.)
1,118
1,438
1,888
2,770
2,655
(00200) Feedstuff and food grains
1,676
1,809
1,442
7,816
8,041
(01000) Fish and shellfish
28,655
25,701
21,178
10,806
7,049
(10000) Crude
230,748
157,355
232,633
161,603
688,428
(10010) Fuel oil
8,156
5,380
34,831
854
(10020) Other petroleum products
18,499
44,150
34,079
7,700
13,867
http://www.census.gov/foreigntrade/statistics/product/enduse/exports/c5200.html U.S. Exports and Imports to United Arab Emirates, Retrieved on April 28th 2010 1:00 am
U.S. Exports to United Arab Emirates by 5-digit End-Use Code 2005-2009
(In thousands of dollars)
End-Use Code
Value 2005
Value 2006
Value 2007
Value 2008
Value 2009
(00000) Wheat
2,590
1,534
40,772
7,561
19,132
(00010) Rice
2,393
2,386
3,331
8,701
8,337
(00100) Soybeans
53
35,472
32,566
133
222
(00110) Oilseeds, food oils
7,848
6,896
30,822
41,473
23,008
(00200) Corn
4,058
11,327
13,087
17,782
22,526
(00210) Sorghum, barley, oats
847
8
1,875
14
47
(00220) Animal feeds, n.e.c.
6,870
9,775
17,095
40,904
171,463
(00300) Meat, poultry, etc.
17,341
20,265
37,996
84,953
72,819
(00310) Dairy products and eggs
4,803
4,286
9,135
15,180
10,200
(00320) Fruits, frozen juices
26,935
30,232
35,146
58,265
74,444
(00330) Vegetables
14,177
11,455
9,786
27,061
20,453
(00340) Nuts
57,166
86,682
111,449
104,869
179,737
(00350) Bakery products
14,832
26,085
26,780
29,096
34,053
(00360) Other foods
36,889
29,737
40,195
54,823
63,941
(00370) Wine and related products
4,668
4,415
5,637
6,056
4,852
(01000) Fish and shellfish
2,426
3,610
4,931
5,628
4,852
(01010) Alcoholic beverages, excluding wine
2,682
4,098
4,386
7,143
5,703
http://www.census.gov/foreigntrade/statistics/product/enduse/exports/c5200.html U.S. Exports and Imports to United Arab Emirates, Retrieved on April 28th 2010 1:00 am
Trade with United Arab Emirates: 2009
NOTE: All figures are in millions of U.S. dollars, and not seasonally adjusted unless otherwise specified.
Month
Exports
Imports
Balance
January 2009
1,116.0
73.2
1,042.8
February 2009
1,144.0
110.8
1,033.2
March 2009
1,314.9
89.8
1,225.1
April 2009
904.5
137.6
766.9
May 2009
944.0
138.3
805.7
June 2009
970.3
183.3
787.1
July 2009
849.0
360.3
488.7
August 2009
794.8
114.1
680.7
September 2009
784.6
64.3
720.3
October 2009
1,134.2
62.5
1,071.7
November 2009
1,057.1
87.5
969.6
December 2009
1,093.8
75.2
1,018.6
TOTAL
12,107.3
1,496.8
10,610.5
Trade with United Arab Emirates: 2008
NOTE: All figures are in millions of U.S. dollars, and not seasonally adjusted unless otherwise specified.
Month
Exports
Imports
Balance
January 2008
953.4
80.5
873.0
February 2008
1,049.4
134.7
914.7
March 2008
836.8
129.0
707.8
April 2008
1,108.7
110.0
998.6
May 2008
1,180.0
101.9
1,078.2
June 2008
1,174.8
96.7
1,078.1
July 2008
1,109.3
202.3
907.1
August 2008
1,559.1
84.5
1,474.6
September 2008
1,068.7
83.7
985.0
October 2008
1,329.2
108.5
1,220.6
November 2008
1,532.5
67.9
1,464.6
December 2008
1,515.5
86.5
1,429.0
TOTAL
14,417.4
1,286.2
13,131.2
http://www.census.gov/foreign-trade/balance/c0007.html Trade with United Arab Emirates, , Retrieved on April 28th 2010 1:00 am.
Dubai Markets
Dubai Financial Market
DWTC (Dubai World Trade Center) which is the Middle East’s leading destination for all conferences, exhibitions and events. Which includes DIFC (Dubai International Finance Center) is one of Dubai’s most famous stock market sites, which gives you the opportunity to attend the largest transactions and central projects held in the city. In addition to all sorts of significant exhibitions held in the DICEC (Dubai international convention and exhibition center).
Dubai Tourism Market
Emirates Airlines is Dubai’s national local air line that has over 37 flights daily from north to east. Tourism in Dubai has been estimated to have over 100,000 visitors to enter daily for tourism and willing to stay for more than a week. Dubai has provided visitors with all sorts of entertainment which include sea trips, helicopter rides, beach parties, wide shopping range Malls, desert safaris, and a luxurious variety of hotels, clubs, and significant sites to be visited.
Dubai Film Market
Has been very exquisite where Dubai holds its well known film festivals that make it possible for the world’s cinema and multinational movies, directors and actors to gather in one place emphasizing the international film production and trade. Also the process of producing high Cinetech digitized films and documentaries.
Dubai Flea Market
It’s a second hand market where people can buy and sell everything used, such as household products, furniture, textiles, electrical equipment, clothes, etc.
Dubai Real Estate Market
The booming real estate sector has always been Dubai’s deal, where it had been the first city to construct the tallest khalifa tower, and the man made palm, and the famous seven star Burj Al Arab. But after Dubai’s financial crisis Abu Dhabi has lent Dubai $25bn to help wrap up their obligations and even property prices have fallen up to 60% just to encourage people on buying more property in order to help promoting the market.
Dubai Fund market:
Fund market specialized in issuing and exchange short term financial tools which are able to exchange into financial liquidity and the date of maturity pay ability to these papers which are the most useful during three months or to a whole year.
Fund deposits are a good way for low risks investments to achieve regular income and keep the main value to money.
Fund market in Dubai faces a big crisis during global financial crisis and this request is from international fund to find a quick solution to Dubai national group loans that need to overcome this crisis and re-schedule it.
The connection between the Emirate DH and American dollar offered average stability in Dubai.
Dubai Predial markets:
It makes personal evaluation because there is no central market to Predial circulation despite the use of Predial conversion. Predial Dubai markets are more attractive to the holders and selling is raised in predial market in Dubai in a rate of %0.7 at the end of 2009. It stabled during the first quarter of 2010, entered 30000 residence units to Dubai market in 2010.
Dubai Free zone Trade:
The Dubai Government worked to establish a free zone in Dubai Airport and other area in Jebel Ali to facilitate the investments in relatively simple procedures. And opening a business in free zones in Dubai is very suitable for companies that wished to use Dubai as a manufacturing and regional distribution place. As most of the sales in Dubai that will go out of the country. And the most important objective of establishing Dubai’s free zones is to contribute to the development and growth process.
The features of Dubai Location:
%100 foreign property.
Exemption from all import duties.
%100 turning the capital and profits abroad.
Free of system taxes which applied in Dubai in addition to guarantee of renewing the renting contract for 15 years.
A plentiful of cheap energy.
The facilities of employment that offer a high labor competition with well experienced people.
To encourage employment and reduce unemployment.
Some of the negatives:
The possibility to turn some areas from exporting to outside the country is to smuggling products inside the country.
The possibility of the dominant of the capitals from certain nationalities in these areas because of the facilities that deprived the national economy from these investments inside it.
GDP growth Rate in UAE
What is GDP?
The gross domestic product is the result of the measurement of all the goods and services that a country produces over a specific period of time, usually a year. The GDP focuses on the market value of the goods and services in order to reach to a number that is used to rule the growth rate of the country’s economy.
Why GDP is important?
It helps each country to measure the growth of its economy and this is the main importance of GDP.
GDP is important to compare the growth of the economy among different time periods like comparing the economy’s growth in the current quarter with a previous quarter in the previous year that can help in comparing or determining in which period the economy was facing much growth.
Calculating the GDP makes it easier to compare the size and growth Rate of any country in a short time.
The Federal Reserve uses the GDP to determine whether to rise up the interest rates or to fall them down in order to encourage or restrain the economy.
The GDP growth rate in the UAE:
The UAE’s gross domestic product increased in the last two years 2008 and 2009 and faced a wider increase in the current year 2010.
In 2008 and 2009, the GDP growth rate was 23.25% from a total of 163 billion dollars or 0.26% of the whole economy in the world.
The UAE is not only a very open country and has a high per capita income for its population, but also it has a large yearly surplus for its trade that was a main reason for encouraging the diversification of the economy. As a result, the UAE’s GDP will grow and flourish and rise up.
After discovering oil, everything in the UAE has changed, including the GDP has increased because of the success of economy, which made the country more successful and prosperity.
Of course, when the production of the country becomes more, the total GDP of the whole country will become more. And also some of the analysts studied the growth rate of gross domestic product in the UAE from the year of discovering oil and gas tell the year of 2009 and found out that in the last 30 years the UAE wasn’t stopping looking for more sources of income and that’s why the total GDP of the country is rising in a high percentage.
GDP growth Rate in the UAE in 2010:
There are many points of view about the percentage of the whole GDP growth in the UAE in 2010. Most of the analysts recognized that the UAE gross domestic product is going to grow with a percentage between 3% and 3.2%, but few of them was saying that the total GDP growth will not reach to more than 2.5% in the year of 2010.
The analysis was telling that the main reason for this low expectation was the financial crises that happened to the UAE’s economy and stock market that reduced the amount of production and the per capita income for everyone which led to a very slow growth in the GDP rate. And especially in Dubai:
Dubai is one of the UAE’s seven emirates and it was the best city that accompanied the development that happened in the country. Dubai was trying to be the first city in production and development and it has achieved the hoped goal. Since the discovery of oil and gas, Dubai was growing in a very high percentage in everything. It could have the authority to be the first city in the whole UAE.
But after the financial downturn that happened in 2009, Dubai faced a very huge decrease in the total GDP growth Rate that had reached to 0.6 %. Most of the companies were delaying on the stocks that they were buying and selling in the stock market in order to finish a project or open a business. But after that everything was damaged and Dubai was just trying to pay the debts that it has been implicated in it. They are having a GDP growth rate of 0-1% in the current year and expecting to get out of this problem in the next months and being able to get back to have a very high GDP growth rate in the future.
Summary
UAE has been famous for its trade in copper, oil, and pearls. About 60 percent of UAE’s crude oil and gas is exported to Japan, until it became the third most important re-exporter; its population has been increasing in the past years. Dubai’s economy is one of the most remarkable economies in the world. As in the free port duties there are no taxes to be charged for imported goods and as in free zones. The oil Industry has a noticeable share while natural gas and petroleum contributed with less than 6%. In addition Dubai’s banking sector, including government services, hotels, restaurants, were elastic enough during the economies depression. Dubai liberal economic policy and world class facilities helped develop it to be the Arabian Gulf premier business center and to be called the Hub City. Dubai has four different markets, which are Dubai Financial Market, Dubai Tourism Market, Dubai Film Market, Dubai Real Estate Market, and Dubai Real Estate Market. Foreign trade in Dubai is increasing day by day; it includes free zones, customs warehouses. The increasing price of oil is playing a very important role in the field of foreign trade in Dubai. This leads to the increase in government revenues and the consequent public spending on development projects. Construction boom and the tourist and commercial development are key roles in this matter. Gas is becoming more and more important, both for export, and for meeting local demand, from consumers and from power generation and water desalination plants. Increase in the Population and demand both raised the value and amount of imports in UAE. This for sure increased the competition among the Asian countries which has the biggest share of the market and second comes the European countries and third comes the US.
Despite all what Dubai’s economy is going through, India remains Dubai largest partner in both imports and exports, mentioning Iran as the largest export destination through free zone, while china comes to be Dubai’s top import partner.
Conclusion
Dubai had always the advantage of being a time zone bridge to connect Far East and west countries with its strategic location. Its growing population also plays a huge role in growing the average trade by 11% per year and liberalization demand boosting further. While its diversity allowing the accessibility of product suppliers and re-exporters to find their opportunities and generating their import requirements by accommodating them with over 120 shipping lines and via 85 airlines to more than 130 destinations, with no exchange controls nor trade barriers.
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