The term rags to riches are well suited for the Arab emirates, the UAE emirates were founded in 1971. In the early decades, emirate countries were dependent on fishing, agriculture, and into other natural resources. But they struggled to land income because these natural resources are difficult to grow or survive on Arab soil.
However, Since the federation of the united Arab emirates countries, the emirates rapidly developed into one of the most attractive places in the world, which is now well known for its modern infrastructures, hosting international events from conferences to sports and games.
What Is The Reason For This Rapid Increase?
The rapid economic development is due to the oil reserves. When emirate countries discovered oil on land and water, they focused on oil and moved away from other natural resources. Tourism also plays an important role in the GDP of some of the emirate countries such as Dubai, Qatar, etc.
Tourism projects remain the long-term strategy for building up the economy, though the economy of UAE is built up on the back of the oil industry. The oil industry helps UAE countries to change tremendously in the past 50 years.
This massive development throughout the years has been showing a significant rise in total revenue in the last few years.
In the last year, the UAE witnessed a total state revenue of AED 463.9 billion from AED 367.9 billion, which rose by 26%.
The social contributions from the public and private sectors of the UAE also increased by 5% which is AED 13.5 billion from AED 12.9 billion in the fiscal year 2021, the value of other revenues also spiked by 24% from AED 203.80 billion to 251.8 billion in the last year. The other revenues include interests, rents, sales of goods and services, fines, penalties, and more.
Compared with revenues, expenditures and expenses raised very low. The expenditures went by only 1% to AED 402.4 billion compared to 2020’s expenditure which is AED 399.5 billion.
On the other side a downfall in capital expenditures by 57% from AED 46.5 billion in 2020 to AED 20 billion in 2021.
Nevertheless, current expenses raised by 8% the total current expense was valued at AED 382.4 billion from AED 353 billion in 2020.
The net lending and borrowing revenue also had a significant rise at the federal level from AED 31.7 billion to AED 61.5 billion in 2021. The Net borrowing and lending indicate the UAE government’s ability to lend and borrow which is a financial impact on the economy.
This finance data for the year 2021 was released by the UAE Ministry of Finance (MoF) in relation to the government finance statistics manual published by International Monetary Fund, this data aligns with the open data policy set by the UAE
This significant rise in revenue eventually impacts the GDP of Arab countries. This whopping revenue is not only from the oil industry but also from other inland activities. This enormous growth in revenue indicates the population growth in UAE as well as frequent translation per customer and raising prices in goods and services
The UAE emirates do not rely on taxes from its citizens but they do from petroleum and gas. The UAE’s economy was built on oil reeves, and in recent years booming infrastructures are helping to generate other service sectors in Arab soil, many experts believe that Arab countries are following the example of Dubai by moving away from oil reserves and encouraging tourism, technologies, finance and information technologies.
Tourism played an important role in driving the GDP of Dubai. And now the COP28 is planning held in the expo city of Dubai in November 2023.