Skip to main content
SpringerLink
Log in

Policy Implications of the UAE’s Economic Diversification Strategy: Prioritizing National Objectives

  • Chapter
  • First Online:
Economic Diversification in the Gulf Region, Volume II

Part of the book series: The Political Economy of the Middle East ((PEME))

Abstract

Since the 1980s, the UAE has pursued an economic diversification strategy to decrease its economy’s dependence on oil. While some emirates have diversified quicker than others, this diversification strategy has come at the cost of other important national objectives such as preserving the national identity and Emiratization. This chapter describes and analyzes the policy implications of the UAE’s economic diversification strategy and discusses trade-offs to pursuing economic diversification in its trade, manufacturing, finance, services, tourism and the defense industry sectors. The chapter concludes that success of the UAE economic diversification strategy relies on the government’s ability to incentivize Emiratis to leave the public sector and increase labor productivity in the private sector.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Institutional subscriptions

References

  • Al-Maktoum, H. H. S. M. B. R. (2012). My Vision: Challenges in the Race for Excellence. Dubai: Motivate Publishing, Chapter 2: The Vision.

    Google Scholar 

  • Al-Noaimi, A. R., & Omelaniuk, I. (Eds.). (2013). Labor Mobility: An Enabler for Sustainable Development. Abu Dhabi: The Emirates Center for Strategic Studies and Research.

    Google Scholar 

  • Badr, A. (2015, August 9). Developing Leadership Skills Among Emirati Nationals. Abu Dhabi: The National.

    Google Scholar 

  • Blom, M., Castellacci, F., & Fevolden, A. M. (2013). The Trade-off Between Innovation and Defense Industrial Policy: A Simulation Model Analysis of the Norwegian Defense Industry (pp. 1579–1592). Amsterdam: Technological Forecasting & Social Change/Elsevier 80.

    Google Scholar 

  • Bloomberg News. (2014, October 19). IBM Agrees to Pay Global Foundries 1.5 Billion to Take Chip Unit. New York: Bloomberg.

    Google Scholar 

  • Bouyamourn, A. (2015, February 26). Idex 2015: UAE Defense Industry Helps to Diversify the Economy. Abu Dhabi: The National.

    Google Scholar 

  • Carvalho, S., & Kasolowsky, R. (2013, February 19). UAE Leads Gulf Arab Push to Build Up Domestic Defense Industry. London: Reuters.

    Google Scholar 

  • Deibel, T. L. (2007). Foreign Affairs Strategy: Logic for American Statecraft. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • El Anshasy, A., & Katsaiti, M.-S. (2013). Natural Resources and Fiscal Performance: Does Good Governance Matter? Journal of Macroeconomics, 37, 285–298.

    Article  Google Scholar 

  • Elhiraika, A. B., & Hamed, A. H. (2006). Explaining Growth in the Oil-Dependent Economy: The Case of the United Arab Emirates. In J. Nugent & H. Pesaran (Eds.), Explaining Growth in the Middle East (pp. 359–383). Syracuse, NY: North Holland/Elsevier.

    Chapter  Google Scholar 

  • Forstenlechner, I., Madi, M. T., Selim, H. M., & Rutledge, E. J. (2012). Emiratisation: Determining the Factors that Influence the Recruitment Decisions of Employers in the UAE. The International Journal of Human Resource Management, 23(2).

    Google Scholar 

  • Forstenlechner, I., & Rutledge, E. (2010, Summer). Unemployment in the Gulf: Time to Update the ‘Social Contract,’. Middle East Policy, XVII.

    Google Scholar 

  • Forstenlechner, I., & Rutledge, E. J. (2011, Winter). The GCC’s Demographic Imbalance: Perceptions, Realities and Policy Options. Middle East Policy, XVIII(4).

    Google Scholar 

  • George, J. (2013, November 29). UAE to Be a Global Tech Hub. Abu Dhabi: Emirates 24/7.

    Google Scholar 

  • Haouas, I., & Soto, R. (2012). Has the UAE Escaped the Oil Curse? Instituto de economia, Pontificia Universidad Catolica de Chile, Documento de trabajo n. 412. Santiago, Chile: ISSN.

    Google Scholar 

  • Hertog, S. (2015, May 11). LSE Alumni Presentation at the Ritz Carlton. Dubai.

    Google Scholar 

  • Hoauas, I., & Heshmati, A. (2014). Can the UAE Avoid the Oil Curse by Economic Diversification? IZA Discussion Paper No 8003. Bonn, Germany: IZA, p. 5.

    Google Scholar 

  • IHS Global Defense Budget Report. (2014, December). Englewood, CO: Jane’s.

    Google Scholar 

  • Nazzal, N. (2014, April 22). Working Hours a Challenge for Emiratisation. Dubai: Gulf News.

    Google Scholar 

  • Pennington, R. (2016, August 29). Sweeping Reforms in UAE Schools Overhaul. Abu Dhabi: The National.

    Google Scholar 

  • Raddawi, R., & Meslem, D. (2015, December). Loss of Arabic in the UAE: Is Bilingual Education the Solution? Bahrain: International Journal of Bilingual & Multilingual Teachers of English. ISSN 2210-1829.

    Google Scholar 

  • Robehmed, N. (2014, June 4). How Dubai Became One of the Most Important Aviation Hubs in the World. New York: Forbes.

    Google Scholar 

  • Ryan, J. (2014, September 7). Unique Challenges Facing Emiratisation in the Private Sector. Abu Dhabi: The National.

    Google Scholar 

  • Salama, S. (2013, December 3). Emiratisation Quotas Won’t Work, Warns Academic. Dubai: Gulf News.

    Google Scholar 

  • Sophia, M. (2014, March 30). UAE’s IT Spending to Top $4.6bn in 2014. Dubai: Gulf Business.

    Google Scholar 

  • Stallings, B., & Studart, R. (2006). Finance for Development: Latin America in Comparative Perspective. Washington, DC: Brookings Institution Press.

    Google Scholar 

  • The National. (2015a, January 8). New Khalifa Fund Initiative to Support UAE SMEs. Abu Dhabi: The National.

    Google Scholar 

  • The National. (2015b, February 10). Sheikh Mohammad Bin Zayed’s Inspirational Speech for a Post-oil UAE. Abu Dhabi: The National.

    Google Scholar 

  • UAE Federal Customs Authority. (2014, December 21). Free Zones Trade Bulletin, 21st Issue. Abu Dhabi: UAE Government.

    Google Scholar 

  • UAE Government. (2010). UAE Government Strategy 2011–2013. Abu Dhabi: UAE Government. Retrieved December 23, 2015, from https://www.moca.gov.ae/?wpfb_dl=4

  • UAE Ministry of Economy. (2014). Annual Economic Report 2013. Dubai: UAE Ministry of Economy.

    Google Scholar 

  • UAE Ministry of Economy. (2015). Trade, Economy and Investment Report. Foreign Trade Division, Foreign Trade Policy Department. Dubai: UAE Ministry of Economy. (2nd Quarter 2015).

    Google Scholar 

  • US Energy Information Agency. (2012, September 5). Strait of Hormuz Is Chokepoint for 20% of World’s Oil. Washington, DC: US Energy Information Agency.

    Google Scholar 

  • Young, K. (2014). Political Economy of Energy, Finance and Security in the UAE (p. 43). London: Palgrave.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. National Defense College, Abu Dhabi, UAE

    Sterling Jensen

Authors
  1. Sterling Jensen
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. Institute of Middle Eastern Studies, King’s College London, London, United Kingdom

    Ashraf Mishrif

  2. Supreme Council for Planning, Muscat, Oman

    Yousuf Al Balushi

Rights and permissions

Reprints and permissions

Copyright information

© 2018 Gulf Research Centre Cambridge

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Jensen, S. (2018). Policy Implications of the UAE’s Economic Diversification Strategy: Prioritizing National Objectives. In: Mishrif, A., Al Balushi, Y. (eds) Economic Diversification in the Gulf Region, Volume II. The Political Economy of the Middle East. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-5786-1_4

Download citation

Publish with us

Policies and ethics

Search

Navigation