The United Arab Emirates is a federal country with seven emirates, the biggest being Abu Dhabi and Dubai; Abu Dhabi is also the capital of the country. The Emirates were united in 1971 and there has been substantial development, particularly since the mid-90s in economic and other terms. Foreign policy and defence policy are common for all the emirates, but the individual emirates enjoy substantial independence in their own governance and law.
The economy of the UAE is largely based on oil and other related industries, but there is great variation between the emirates in their dependency on petroleum-based industries, the share in the case of Abu Dhabi being c.85 % while in the case of Dubai it is only 6 %. The national as well as emirate-specific budgets for 2019 have been drawn up using realistic oil prices compared to some of the earlier budgets. As the main trading partners are also oil industry dependent countries, fluctuations in oil and natural gas prices can have a big effect on the economy. The other important industries are cement manufacturing, the porcelain industry, fishing and manufacturing. Naturally, services and particularly financial services are a very important part of the economy. Construction and retail during the past years have had a big effect on the economy in good and bad times.
The GDP of the UAE in 2018 was €350b and the growth estimate for 2019 is 2.5 percent, and in the case of Dubai it is more due to the economic activity around Expo2020. The overall business environment will improve slightly over the next years given the private enterprise policies as well as those for competition and financing. Regulations, such as those concerning the 100% ownership of a mainland company, have been introduced to make it easier to establish and conduct businesses. Nevertheless there might be new taxes coming, although the federal government has promised not to impose new taxes for the next three years.
There is a clear need and desire to turn the economy from a petroleum-based one into a more diversified one. This is highlighted in the nation’s vision as well as in the individual emirates’ visions. Thus, an industry base expanding into knowledge-based industries, assembly and manufacturing is being sought.
These visions and strategies herald a transition to an innovation society, where entrepreneurship and new industries will develop on an innovation platform. This is coupled with a functioning and transparent civil society, the wellbeing and happiness of its citizens, excellent health care, a functioning government and world-class education.
The Expo 2020 World Fair in Dubai is a major event for the region for the coming years as it is the first ever in the MENA region; it is expected that over 200 countries will participate. It will be particularly interesting for Southeast Asia and Eastern Africa, which have tight ties with the UAE and the Middle East. The main theme for the Expo will be Connecting Minds, Creating The Future, with the subthemes Opportunity, Mobility and Sustainability. Estonia will have a pavilion at the Expo.
The other big event is the football World Cup in Qatar in 2022, although right now there are political tensions between Qatar and the other GCC countries.
The UAE vision and the individual emirates’ visions form the base for future developments and the business opportunities created thereby. This creates a base for matching local needs with the Estonian offering.
The biggest opportunities are in the areas of Bioeconomy, Cleantech, Healthcare and ICT solutions and, to some extent, in health food products.
Within the bioeconomy, W2F can be highlighted as well as water management. Correspondingly, renewable energy solutions, energy efficiency in high-rise buildings and in processes generally are areas of interest in cleantech, too.
Geriatrics, fighting life-style diseases and preventive health care are the focus in healthcare.
Healthy life-styles for adults and for children, coupled with a healthy diet is a rising trend, which offers possibilities for nutritional products.
A functioning and efficient civil society and government call for working e-solutions, which are very much in demand in the UAE. Cyber security is and remains at the top of the agenda for the UAE and all the surrounding Gulf countries.
Personal relationships and a local presence through representatives, agents, or establishing a company, together with investing time personally are the prerequisites for success in the UAE. The UAE market is far from easy to get into, but a good one once market entry has succeeded.
Country manager of UAE
Mob: +971 (0) 56 782 9745
EAS Dubai: The H Dubai Office Tower, Level 19, One Sheikh Zayed Road