section_path: Economy/Business and finance
section_name: Business and finance
paragraph_text: Business and finance
  
  The UAE offers businesses a strong enabling environment: stable political and macroeconomic conditions, a future-oriented government, good general infrastructure and ICT infrastructure. Moreover, the country has made continuous and convincing improvements to its regulatory environment and is ranked as the 26th best country in the world for doing business by the Doing Business 2017 Report published by the World Bank Group. The UAE are in the top ranks of several other global indices, such as the World Economic Forum 's (WEF), Global Competitiveness Index (GCI), the World Happiness Report (WHR) and 31st in the Global Innovation Index in 2023. The Economist Intelligence Unit (EIU), for example, assigns the UAE rank two regionally in terms of business environment and 22 worldwide. From the 2018 Arab Youth Survey the UAE emerges as the top Arab country in areas such as living, safety and security, economic opportunities, and starting a business, and as an example for other states to emulate.
  
  The weaker points remain the level of education across the UAE population, limitations in the financial and labour markets, barriers to trade and some regulations that hinder business dynamism. The major challenge for the country, though, remains translating investments and strong enabling conditions into innovation and creative outputs.
  
  UAE law does not allow trade unions to exist. The right to collective bargaining and the right to strike are not recognised, and the Ministry of Labour has the power to force workers to go back to work. Migrant workers who participate in a strike can have their work permits cancelled and be deported. Consequently, there are very few anti-discrimination laws in relation to labour issues, with Emiratis – and other GCC Arabs – getting preference in public sector jobs despite lesser credentials than competitors and lower motivation. In fact, just over eighty per cent of Emirati workers hold government posts, with many of the rest taking part in state-owned enterprises such as Emirates airlines and Dubai Properties. Western states, including the United Kingdom, were also warned by the Emirati Trade Minister, Thani bin Ahmed Al Zeyoudi, to keep politics separate from trade and the economy, as it dilutes the agreements' main objectives. In 2023, Al Zeyoudi indicated that these countries should "tone down" the human and workers' rights provisions in the trade deals, in order to gain greater market access and business opportunities.
  
  The UAE's monetary policy stresses stability and predictability. The Central Bank of the UAE (CBUAE) keeps a peg to the US Dollar (USD) and moves interest rates close to the Federal Funds Rate.
  
  According to Fitch Ratings, the decline in property sector follows risks of progressively worsening the quality of assets in possession with UAE banks, leading the economy to rougher times ahead. Even though as compared to retail and property, UAE banks fared well. The higher US interest rates followed since 2016 – which the UAE currency complies to – have boosted profitability. However, the likelihood of plunging interest rates and increasing provisioning costs on bad loans, point to difficult times ahead for the economy.
  
  Since 2015, economic growth has been more mixed due to a number of factors impacting both demand and supply. In 2017 and 2018 growth has been positive but on a low level of 0.8 and 1.4%, respectively. To support the economy the government is currently following an expansionary fiscal policy. However, the effects of this policy are partially offset by monetary policy, which has been contractionary. If not for the fiscal stimulus in 2018, the UAE economy would probably have contracted in that year. One of the factors responsible for slower growth has been a credit crunch, which is due to, among other factors, higher interest rates. Government debt has remained on a low level, despite high deficits in a few recent years. Risks related to government debt remain low. Inflation has been picking up in 2017 and 2018. Contributing factors were the introduction of a value added tax (VAT) of 5% in 2018 as well as higher commodity prices. Despite the government's expansionary fiscal policy and a growing economy in 2018 and at the beginning of 2019, prices have been dropping in late 2018 and 2019 owing to oversupply in some sectors of importance to consumer prices.
  
  The UAE has an attractive tax system for companies and wealthy individuals, making it a preferred destination for companies seeking tax avoidance. The NGO Tax Justice Network places them in 2021 in the group of the ten largest tax havens. In 2023, the UAE's legal system fell under international scrutiny, as the members of the British Parliament opened an inquiry into how the foreign business executives are treated in the country, in case of accusations of breaking the law.
  
  2024 will be the third consecutive year that the UAE holds first place as the world's leading wealth magnet, as 6,700 wealthy migrants are set to move to the country.