Economic and Social Development of the UAE

Subject: Sciences
Pages: 21
Words: 5541
Reading time:
19 min
Study level: College

The economy and the demographics of the United Arab Emirates

The United Arab Emirates came into existence in the year 1971. In the same year, it joined the league of Arab states and the United Nations. Since then, it has joined various organizations, which include the Gulf Cooperation Council, and other international organizations. The approximate population of the UAE is around 8 million, with more than half of the population being men (Khalifa, 1979). Similarly, over half of the population is composed of young people, and the average life expectancy is as high as 79 years. The economy of the country is mainly driven by oil and natural gas, and this has seen the country undergo a profound transformation from a poor region to a modern state with a high standard of living.

The country has also managed to maintain a zero maternal mortality ratio through the provision of quality health care. HIV/ aids infection is considered one of the leading killers in most countries in the world. However, according to the World health organization, the country, and others that neighbor it reports the lowest number of HIV/aids Case in the world (Marshall Cavendish Corporation 2006). This has been due to the cultural, social, and behavioral norms that prevail in the country, coupled with the AIDS control program, which is the first of its kind in the region. Similarly, the number of reported sexually transmitted diseases cases is also very low. The leading cause of death in the country is said to be non-communicable diseases such as cancer, diabetes, and cardiovascular diseases as well as accidents.

Most of the population of the United Arab Emirates is composed of foreigners because the country relies on people from other countries to provide a workforce for the growing economy. The locals-only make up around 20% of the population and the rest of the population consists of expatriates from other countries of the Middle East, India, and Pakistan (Khalifa, 1979). There are also other people from the Far East, and most of the population resides in Abu Dhabi, which is the capital city of Saudi Arabia, in addition to other cities of al-Ain, Dubai, and Sharjah.

These expatriates are young people who are employed mainly to work as construction workers or laborers. To be given residency permits in the country, foreigners should fulfill certain conditions, which include presenting a medical fitness certificate from the department of preventive medical medicine. This has kept the rate of infection with communicable diseases, and more, so HIV/ aids are kept under control. Arabic is the official language in the country; however, due to the fact that the population is composed of people from various nations, other languages like English, Hindi, Urdu, and Persian are also spoken (Khalifa, 1979).

Comparison of UAE today and 70 years ago

Today, the United Arab Emirates is a very developed country. It has witnessed a lot of changes over the last seven decades, which has led it to be the richest state per head of population (Utaybah, 1977). Seventy years ago, the country was not as it is right now in terms of development. It did not have the required social amenities and public facilities, and its citizens were living in poverty. During that time, there was no electricity in the country, meaning that it could not manufacture and export its own goods. Exports earn a country’s foreign exchange, which assists in their development. Electricity is one major factor that determines the development of any given country. Without it, such a country would lag behind in all sorts of developments. In addition to that, the country did not have public schools meaning that most of its population was illiterate.

There were also no public hospitals, and that translated into general poor health and high mortality rates (Utaybah, 1977). When proper health care services are not provided, many children will die at a tender age, and many mothers lose their lives during pregnancy, birth, or soon after they gave birth. This is what was happening in the United Arab Emirates before the beginning of oil exploration. The country did not also have a good transport and communication network, and that hindered the ability of its people to conduct business. The roads did not have bridges, and therefore it was difficult to connect areas that were separated by rivers. The number of vehicles in the country at that particular time was also very small, meaning that very few people were able to cover large distances within a short time.

All that is described above gives a good picture of how life was for the citizens of what was to become the UAE. However, the situation has since changed with the starting of oil exploration and the formation of the United Arab Emirates. Very many development projects have taken place and resulted in worldwide recognition of the country. Over 85% of the population is now literate, and the life expectancy has increased to 73% owing to the increased medical facilities and care (Utaybah, 1977). Health care in the United Arab Emirates is considered one of the best in the world. Out of the six authorities that deliver health service, five of them are run and managed by the government.

That means that the private sector plays a minor role in the provision of health care in the country. The country is greatly recognized for its efforts to abolish illiteracy amongst its citizens, including the old. Unlike earlier, when there was no plumbing, the country has now been able to provide clean and safe water for drinking to all its citizens. It has also provided them with the required sanitation facilities and electricity. The transport and communication sector has received a lot of funding from the government, and thus the state of the roads is one of the best in the world.

The cost of transport has gone down, and people are able to move from one place to another within the shorted time possible. On top of that, the country has now become the commercial hub of the Middle East, and all this has strengthened its economy. Investors from all over the world are also ending in that direction. There are well-organized policies and regulations that provide the best investment climate, which is characterized by eased controls and improved banking sector and foreign exchange (Marshall Cavendish Corporation 2006).

The importance of analyzing the factors that led to economic and social development in the United Arab Emirates

It is important to analyze the factors that led to the economic and social development in the United Arab Emirates in order to understand how a country can be able to grow fast in terms of development. Today the citizens of the UAE live under very good conditions, which was not the case seventy years ago. There are good education and health care services, the transport, communication system is one of the best in the world, and the country is a center of business for people from all over the world (Utaybah, 1977). People need to know all the factors that lead to this, as this will make them appreciate the role played by different authorities in the process. Different countries have come and have taken quite a long time to develop.

Others are still developing, and it is not known when they will become developed. However, the United Arab Emirates has taken quite a remarkably short time to register developments in various fields and achieve the developed status. The country has developed within a period of less than half a century, and its citizens need to understand where it has come from and what facilitated the fast growth. The economy received a major boost in the year 1973 and the following eight years when the oil prices were very high (Marshall Cavendish Corporation 2006). Understanding all these will make people able to know, understand, and appreciate their heritage.

The sections of the project

This project has analyzed the economic and social development in the United Arab Emirates that is a leading economy in the Middle East. The country has developed at a very fast rate, and this project has looked at the stages of the development and the historical events that accompanied them. The impacts of those events and their differences and similarities with those of other countries in the Gulf region have also been talked about. Keen interest has been paid on the factors that have led to those developments and their importance. Towards the end, the role played by the west in shaping these factors is the major point of focus. The project ends with a conclusion, which has a summary of all the issues to do with economic and social development and an outlook. I have provided my expectations on the UAE’s future at the economic and social levels.

Stages of the economic and social development in the United Arabs Emirates

Poor standards of living once prevailed in the region occupied by the UEA, but this is not the case today. The economy was poor, and people lived under poor standards of living. Many of them lived in houses that were made of palm fronds or mud. The people mainly depended on agriculture, nomadic animal husbandry pearls extraction, and some simple forms of trade (Marshall Cavendish Corporation 2006). They did not grow cash crops but rather grew crops for their own consumption. The country has grown from relatively nothing up to where it is now economically within a very short time. In fact, the country has taken the shortest time to develop, having taken just a half a century to become a fully developed country.

The country did not go through the hypothetical development stages that other developed countries underwent. It owes this to its large oil revenues, which have enabled it to skip many of the stages up to that of high mass consumption. Through the revenues, the country was able to shorten the usually lengthy and difficult stage of saving and accumulating the capital that is required for economic development (Marshall Cavendish Corporation 2006). Education is one key area that the government has invested in. Within three decades, the country developed a public national education system, which is similar to those established by western countries in more than a century (Utaybah, 1977).

The discovery of oil in what is today referred to as the United Arab Emirates in the year 1958 was the first step towards the transformation of the region. The exploration of this precious commodity started around sixty years ago, after which mining started systematically until the country was in a position to supply oil to different other countries. This is one of the countries throughout the globe whose economy has been noted to increase at a fast rate. It is a high-income country with rich natural resources in terms of oil and natural gas, which bring into the country a lot of foreign exchange. It is considered the fourth-largest oil producer in the whole world. Research shows that oil trade accounts for about 25% of the gross domestic product in the country (Marshall Cavendish Corporation 2006).

The first paved road in the country was built after the discovery of oil in the year 1961. This is a clear indication that the country was really in a poor state before the discovery of oil. Another step that boosted the economy of this region is the formation of the United Arab Emirates in the year 1971. It was formed from the seven tribal organized peninsula sheikdoms, which existed along the Persian Gulf and the Gulf of Oman (Marshall Cavendish Corporation 2006). For quite a long time, these sheikhdoms had been involved in dynastic disputes and engaged in sea hostilities. Therefore, major developments could not have taken place during that particular time.

Though oil and natural gas has been the main driver of the economy, the UAE has engaged in diversification in the 21st century. Dubai, one of its emirates, has taken a major step towards this (Marshall Cavendish Corporation 2006). In the year 1997, it legalized the sale of the property to all local citizens, and by the year 2002, foreigners were able to make some purchases too. As a result, many investors were attracted to the city, and that gave rise to posh shopping centers, condominium towers, and hotels. However, it was affected by the 2008 worldwide slump in trading; the city is today a travel destination for many people from around the world. It was helped out financially by the Abu Dhabi emirates through the purchase of its $10billion dollars five-year bonds. Most of the people who head in that direction are wealthy tourists and businesspersons.

Due to the fall in oil prices over the second half of 2008, the country started investing in the manufacturing sector. This was another step towards diversification of the economy, and this is mainly done in the capital city. The country will no longer have to rely on oil and natural gases to run its economy. In case of a fall in the oil prices, the little effect will be felt as; there will be other sources of income.

Historical events that accompanied the developments

The formation of the United Arab Emirates in the year 1971 is one of the major historical events that have accompanied the economic and social developments that have taken place in the country. Were it not for its formation; maybe the country could not be where it is right now in terms of developments. Originally, this area had been marked by a series of disputes amongst the people who lived there. The people also engaged in piracy, which mainly targeted Indian traders, and the area came to be given the name the pirate coast. However, all this changed when six of the sheikhdoms agreed to come together and form the United Arab Emirates. The seventh of it came to join later in the year 1972, making the country even stronger (Khalifa, 1979). Credit goes to the United Kingdom, giving the region independence and assisting in the formation of the UEA.

The period between 1973 and 1982 was marked by relatively high oil prices, and this worked to the advantage of the United Arab Emirates as it greatly boosted its economic development. The region has since joined many regional and international associations and enjoyed political and social stability. Some of the associations that it has joined include the Arab League, the United Nations, the nonaligned movement, the Arab gulf cooperation council, and the organization of Islamic conferences (Marshall Cavendish Corporation 2006). The country has also been able to maintain good relationships with other states, and this has paved the way for international investments.

In the year 2004, the United Arab Emirates first leader Zayed bin Sultan Al Nahyan died, and the rule of the country was taken over by its two sons. One of them became the president, and the other one named the crown prince of Abu Dhabi. With an education from Britain’s Sandhurst military academy, Sheikh Mohamed, the prince is considered the most westernized of the UAE leaders (Khalifa, 1979). Since the two sons took over, citizens have been allowed to sell property, and foreigners have been allowed to buy properties in certain areas of the country. A new airline was added to Abu Dhabi, and the new palatial hotel was built. These are some of the significant changes that have taken place in the country after the death of its first leader, Zayed bin Sultan.

The impacts of the historical events in other countries in the Gulf region

The discovery of oil in Saudi Arabia and other neighboring states had the same impacts as it was in the United Arab Emirates as it quickened their economic development rate too. However, the state of the union in the UAE and its political and social organization has enabled it to grow at a faster rate. The period of high oil prices also gave these countries a great boost in their development. Today, Saudi Arabia is the leading producer of oil in the whole world, followed by the United Arab Emirates (Marshall Cavendish Corporation 2006). As a result, these countries have registered massive economic growth, and they continue to develop further.

Factors behind the Economic and Social Development of the UAE

The United Arab Emirates is a nation that has experienced vast development in matters concerning the economy and social wellbeing of the country. Around 30 years ago, the country was one of the least developed nations in the world. Its economy was poor, and the social welfare of the citizens of the nation was lagging far much behind many other nations of the world. As per today, there has been a great improvement in the economic and social development of the United Arab Emirates. Actually, it is a country, which is experiencing much improvement in its economy. This has been seen to achieve a high level of income that can easily be compared to that of the industrialized nations. This is to means that the country is almost achieving the developed stage due to its big industrialization improvements. There are several factors, which have greatly contributed to the economic and social development in the country. These factors are fully discussed below.

Oil and mineral resources

Oil is a mineral that is widely used by many people in many nations for different purposes. There is no single nation in the world that does not depend on oil for some of its activities. There are many uses of oil, including cooking, lighting, and moving of different technological and technical equipment and facilities such as vehicles. Although there are other sources that can be used to serve the same purposes, oil remains to be the most reliable source and convenient to use due to its availability. Countries that do produce oil have experienced great improvements in their economies due to the high revenues associated with oil. When we look at the United Arab Emirates, we find that it is a country that has a wide reserve of oil.

Oil is usually produced and extracted in its crude form. After extraction, it is then purified and graded into different oil products such as petrol, paraffin, diesel, among others. In its extraction, other products are also obtained from the mine. Those include gas, which can be harnessed and used for domestic and industrial use. Since the 1970s, the phenomenal economic growth in the United Arab Emirates has largely depended on the discovery and intensive exploitation of oil reserves in the nation. There are oil and gas industries located in different parts of the country to help in the easy and convenient processing of oil and gas products. These industries are well managed, and the use of high and recent technological techniques has seen to it that the development of those industries and the outcomes of these industries grow and benefit the entire nation (Abed & Hellyer, 2001).

The United Arab Emirates nation also has a ministry that deals with management and evaluation of the emerging issues in the petroleum and mineral resources sector. Records show that the average production capacity of oil in the United Arab Emirates per day is approximately 3 million barrels. This places the United Arab Emirates in the third position of the world’s largest oil-producing nations, the first two nations being Iraq and Saudi Arabia. Studies have also been conducted on the oil reserves in the United Arab Emirates. The research has shown that the oil reserves will last for at least 122 years to come. By the time this happens, maybe more reserves will have been discovered, and the country will have moved to high heights in matters concerning economic development.

The oil reserves found in the United Arab Emirates have been estimated to be over 10% of the overall world’s reserves, while the gas reserves have an estimate of 4% of the world’s natural gas. Besides oil and natural gas, there are also other mineral sources in the United Arab Emirates. Those include rocks, sand, and soil, which are widely used for construction. Oil and minerals in the United Arab Emirates have proved to be of great importance to the continued development of the nation. This is because much of the revenue obtained by the country largely comes from minerals, and especially oil. The extraction and processing of all minerals provide job opportunities to many citizens of the nation, a condition that ensures that the wellbeing of citizens is well catered for. The availability of oil reserves in the nation also ensures that the citizens of the nation obtain the oil for their domestic use at far much-reduced costs. This improves the social welfare of citizens (Abed & Hellyer, 2001).

A major obstacle that has been sufficiently dealt with was the efforts of the west to control the resources of the Middle East. This includes oil production in the United Arab Emirates. The oil-producing nations of the Middle East have an organization by the name organization of petroleum exporting countries. In the recent past, the United States and a few other European nations were posing a challenge to the oil exportation and the revenue earned by those countries from oil. This is because; they wanted to control the oil reserves of these countries. The organization of petroleum exporting countries laid down the policies that were to govern the exportation of oil to other nations, and since 1960 each, the oil-producing nation has been able to manage and control oil exportation in its country. This depends far much on the fact that the economies of the oil-producing nations have improved and do not need great support from the western nations.


Another factor that has led to the great improvement in the economic and social development of the United Arab Emirates is the education system and the benefits it renders to all the graduates of the country. Education is a key factor that contributes greatly to a nation’s development. This is because it is through education that people are able to acquire skills and knowledge, which are useful in the day-to-day undertakings that lead to development. The United Arab Emirates is a nation that has heavily invested in the education sector for the benefit of the entire nation. The belief of the nation that education too young citizens is the key to future development has enabled the nation to concentrate on education and ensure that all young people obtain a quality education. The education system of the United Arab Emirates is one that encourages educating women.

This is evident from the recent reports that show that the United Arab Emirates is among the first nations of the world, which have a high percentage of women who are well educated. The country provides free education facilities to many of its schools so that students can have the quality education required without difficulties. The primary and secondary levels of education are entirely free and compulsory for everyone. This has ensured that every citizen of the United Arab Emirates has some level of education, which can help them, in their lives, a condition that improves the social wellbeing of all citizens. In higher institutions of learning, arts, and science courses are the most encouraging courses since they offer students with skills and innovative strategies to employ in their lives (Abed & Hellyer, 2001).

In addition, an organization rewards top achievers and provides scholarships to them despite their nationalities. It also offers scholarships to children who have special needs. This encourages many to put more effort into their studies. This organization, The Sheikha Latifa Childhood Creativity Awards, has been into existence since 1988 and has rewarded more than 2000 students since then. The United Arab Emirates is one of the nations that produce more female graduates than male. This shows that education in the nation is for all and not majorly for men.

There are several universities in the nation, which offer different courses to different students. The major university, the UAE University, has many colleges throughout the republic of the United Arab Emirates to ensure that the secondary school graduates get chances of pursuing their education to higher levels. Since the year 1988, a system of other colleges has also been introduced to offer courses that are more technical to students. Online education is also available to students in the United Arab Emirates. The United Arab Emirates has been found to be the leading country in e-learning. This shows that the technology of the country is improving day after the other and that most of its citizens are computer literate (El, 1981).

This system of education has enabled the United Arab Emirates to produce many graduates who possess the required skills and knowledge in different sectors of the economy. This ensures that graduates have skills and knowledge for different work jobs available in the country. When proper skills are employed in the job market of a certain nation, not only do the citizens of the nation improve their social welfare and conditions of living, but the country benefits as a whole since the right things are done using the appropriate skills. Thus, the United Arab Emirates does not require experts from other nations to work in their industries, since their own citizens can perform the available work using the skills and knowledge obtained from their studies.

This helps to reduce the amount of capital flowing out of the country, a condition that improves the development of any particular nation. The United Arab Emirates is currently offering education to the elderly who missed education during their early stages of life. This has seen the United Arab Emirates achieve a high level of literate people. The west has had a little influence on the education system of the United Arab Emirates with the major influence arising from the online education sector. E-learning started earlier in the west; the United Kingdom than in the United Arab Emirates and some of the early e-learning education in the United Arab Emirates was obtained from the worldwide UK e-Universities. As per today, the United Arab Emirates has its own system of e-learning (United Arab Emirates yearbook 2004, 2004).

Welfare associations

The development of a country does not only entail economic development alone. It also consists of the social welfare of all citizens. In many nations of the world, only a small fraction of the entire nation is socially developed while the rest of the population lags behind in matters concerning their social wellbeing. This is a factor that was well considered in the United Arab Emirates, and the improvements that were made have led to the country’s social development. There is a certain percentage of people in every nation who are unable to participate in the major activities of a nation for their living. In the United Arab Emirates, the vulnerable and less advantaged have greatly been considered, and their social welfare has greatly improved over the recent past. The country has been able to achieve this through the establishment of social welfare associations.

There are both governmental and non-governmental social welfare associations, which assist those in need. Towards achieving social welfare, the United Arab Emirates implemented a law in the year 1999, which entitled and regulated the social security benefits to the vulnerable groups of people. Those include the widows, orphans, the handicapped, divorced women, people whose sole breadwinners had been jailed, the aged, amongst others. All those people are currently entitled to a monthly social security benefit. The ministry of labor and social affairs in the United Arab Emirates has a department that deals with the social wellbeing of the minority groups in the country. Every year, a certain amount of money is allocated to this department for distribution to the minority groups of people (United Arab Emirates yearbook 2004, 2004).

The social security associations have enabled the entire nation to achieve a high level of citizens’ welfare since those who are unable to cater for themselves are catered for. This ensures that all citizens of the country are socially satisfied, unlike in some nations where the minority groups are easily overlooked. This is why the country ranks among the first in social development since social development is measured by looking at the social wellbeing of all citizens of a country, and not just a fraction of them. All the effort that has been applied in improving the social welfare of the nation depends on the country’s interest to innovate and achieve social development. No external nations have influenced those efforts. The United Arab Emirates might have had in mind the social development in the western countries such as the United Kingdom, but all the plans that have been undertaken so far are solely from and by the country (El, 1981).


Industrialization is usually considered a crucial factor that leads to the economic development of nations. In the actual sense, the intensity of a country’s economic development is largely associated with the level of industrialization that the country has achieved. The United Arab Emirates has had a continued rise in the level of industrialization. Industrialization does not only look at the available industries in a nation, but also the outcome of all the industries. The major industries in the United Arab Emirates deal with oil extraction and processing. Since there are many reservoirs of oil in the United Arab Emirates, great strides have been made in improving the technology used in those industries to ensure safe and easy extraction and processing of oil. Apart from oil industries, other mineral industries have also contributed to industrialization in the United Arab Emirates.

Those include gas industries, limestone, and other important stones industries as well as agricultural industries (Kubursi, 1984). Although the agricultural sector does not contribute much to the industrialization of the United Arab Emirates, it has improved in the recent past. This has been achieved through the effort of the government. The government has started issuing free plots for agricultural purposes to citizens, in which the land is prepared mechanically by the government freely. This has encouraged many citizens to engage in agricultural activities. Drilling of water wells, provisions of production inputs, as well as the provision of technical services, are provided by the government freely.

All these factors have contributed to the increase in the farm produce of the United Arab Emirates. Factories and industries have also been set up to ensure quick processing of the perishable farm produce. The good infrastructure has also enabled an improvement in the agricultural sector. In general, industrialization has provided jobs to the citizens of the United Arab Emirates and has reduced the dependency of the nation on oil exports. The west has had little influence on the industrialization of the United Arab Emirates, which the only small percentage is arising in the oil industries. The country has, however, incorporated policies that prevent it from external exploitation (Kubursi, 1984).


From the above report, it can, therefore, be concluded that despite the fact that the United Arab Emirates is a small federal nation, which was formed through the coming together of several emirates, it has undergone several stages of development as it has been discussed above. These are some of the crucial stages that a nation has to undergo in order to achieve economic development as well as social development. There are many factors, which have led to the economic and social development of the United Arab Emirates. Some of those have been discussed above, while others have not. Those include the good system used to provide employment to all citizens, the improved health care facilities, and personnel, among others.

Although the United Arab Emirates has made great strides towards economic and social development, there is still a lot to be done. It is a nation that is looking forward to higher and greater levels of development than it has achieved now. I believe the United Arab Emirates can be the most developed country in around ten years to come. This will be achieved if the nation is ready to put more effort into bringing up other sectors of the economy to the level it has achieved in the oil exploitation. For example, being a country that has a considerable diversity of water bodies, it can intensify on fisheries. These do not only provide food for the local people but can be used as a source of exports. This will also increase the baseline of industrialization in the country. The extraction of pearls can also be intensified since it has been somehow neglected since the discovery of oil reserves. Incorporation of those factors, together with continued peaceful and democratic governance, will ensure a very high level of development in the United Arab Emirates (El, 1981).

Finally, economic and social development is a factor that needs to be reconsidered by many nations of the world. Although most nations are achieving economic development, social development seems to lag behind. It is the responsibility of all the governments of the different countries of the world to ensure that, as they strive hard to achieve economic growth and development, the social wellbeing of each citizen is considered. This will lead to fruitful and stable economies.

Reference List

Abed, I., & Hellyer, P. (2001). United Arab Emirates: A new perspective. London: Trident Press.

El, M. R. (1981). The economic development of the United Arab Emirates. London: Croom Helm.

Khalifa, A. M. (1979). The United Arab Emirates: Unity in fragmentation. Boulder, Colo: Westview Press.

Kubursi, A. A. (1984). Oil, industrialization [and] development in the Arab Gulf States. London: Croom Helm.

Marshall Cavendish Corporation. (2006). World and its peoples: Middle East, western Asia and northern Africa. New York: Marshall Cavendish.

United Arab Emirates yearbook 2004. (2004). London: Trident.

Utaybah, M. S. (1977). Petroleum and the economy of the United Arab Emirates. London: Croom Helm.