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Transformation of UAE from Oil Economy to Business Based Economy

The United Arab Emirates is one of the most developed and business-friendly destinations in the world. It is considered one of the most progressive and urban countries in the world. From being a desert region with limited access to the outside world, the United Arab Emirates has transformed itself into an economically stable region. Till around two decades ago the list of UAE businesses had oil and natural gas as the main components of its economy. However, the past two decades have seen an enormous transformation of Dubai from an oil-dependent economy to a business-driven economy.

Factors contributing to the Economic diversification of United Arab Emirates
1. Less dependence on Petroleum:

The ruling family of the United Arab Emirates, slowly and steadily brought about the development in other sectors to ease out the dependence of Petroleum. The United Arab Emirates was once known just a desert city with oil reserves. The royal family has painstakingly pushed the other sectors like tourism, manufacturing, electronics and real estate to bloom thus cutting down on the dependence on Petroleum. According to Wikipedia, the revenue now from Petroleum and natural gas is less than 20% of the gross domestic product. There is however a steady list of oil companies in the United Arab Emirates.

2. Tourism:

Tourism has been instrumental in generating revenue in the United Arab Emirates. The government has recognized the potential of tourism and has developed its cities like Dubai, Sharjah and Abu Dhabi. There is more influx of tourists into Dubai each year than it is seen in any of the Muslim cities in the world. The UAE database is brimming with an ever-growing list of travel companies. The United Arab Emirates has also provided an impetus to tourism with state of the art airport, easy visa formalities and loads of hotels and shopping options. The UAE business directory boasts of a number of world-class hotel and restaurant chains that have come up in the country. Besides this, the government also has relaxed norms by allowing a vibrant nightlife, low crime rates, and a liberal outlook to attract tourists in the country.

3. Well Developed Infrastructure:

 The United Arab Emirates has state of the art infrastructure that can rival any developed county in the world. With an aim to augmenting international business, Dubai has dedicated business parks, Convention Centres and major international hotel chains. State of the art hospitals, shopping centres and recreational facilities coupled with good residential accommodation facilities make it an economically viable city for investment. Besides Dubai other cities like Abu Dhabi and Sharjah have also seen rapid development when it comes to infrastructure, hospitals and education systems. 

4. Foreign Direct Investment:

 The United Arab Emirates has the highest number of foreign direct investments for an Islamic nation. The government encourages maximum foreign investment by means of attractive tax rebates, subsidies and other facilities. There is a growing list of manufacturing companies in UAE that have benefited from the subsidies provided by the government.

5. Real Estate Boom:

The United Arab Emirates has seen substantial development in real estate sector. With the change in the law, the United Arab Emirates now allows foreign nationals to own properties in their name. This has led to a boost in foreign nationals buying properties in the country, especially in Dubai. There is an extensive list of companies in UAE with an Email address that has thrived post the surge in the real estate market.

6. Digital Marketing:

The United Arab Emirates is one of the most advanced countries in terms of technology. The United Arab Emirates has a liberal view when it comes to social media and as such digital marketing is used in full force. Many gulf regions have restrictions on the use of internet and this force a lot of companies to rethink about investing in such countries. For Eg In some Middle Eastern countries, the use of Skype is not allowed. In today’s world, this can be more of a hindrance. The United Arab Emirates does not have such restrictions. It is relatively accepting to ways of digital marketing. You can easily use texts and email marketing in UAE to reach your target audience. This has improved the efficiency of a lot of companies as they can now increase their marketing activities and thereby generate higher sales.

7. Information Technology Hub:

The potential of information technology was rightly foreseen by the authorities when they commissioned the building of the Dubai Internet City. The Dubai Internet City is a free economic zone and a strategic base for companies targeting regional emerging markets. A free zone is basically made to attract maximum foreign investment. The Dubai Internet City allows for 100% foreign ownership, no minimum capital investment, no corporate or personal law and importantly no need for a local partner. Dubai Internet City is the largest technology business community in the region. There is an ever-growing list of companies in USA City. Dubai Internet City is home to multinational companies like IBM, Cisco, Oracle, Dell, Microsoft etc. Besides these, there are a number of local companies as well that are based in the Dubai Internet City.
Dubai Internet City and Dubai Media City are also responsible for the United Arab Emirates not facing the full wrath of the economic meltdown in 2009.

Business Foresight:

The United Arab Emirates was quick to realize that only being dependent on oil and natural gas could lead to a boiling point when any fluctuations in the prices of oil would mean a crumbling economy. For this very purpose, United Arab Emirates choose to invest heavily in infrastructure and encouraged foreign direct investment. It realized the potential of tourism and information technology well in time to lead the race in the Middle Eastern region. Unlike many oil rich countries like Saudi Arabia which are stuck with over dependency on oil revenue, the United Arab Emirates choose to venture into developing other fields that will in the longer run sustain the economy.