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The UAE is located in Middle East. It is basically a association of seven emirates, such as Dubai, Abu Dhabi, Sharjah, Ajman, Umm al-Quwain, Ras Al Khaimah and Fujairah. The UAE occupies a geographical space of approximately 83,600 square kilometers. Despite the dry weather that the country faces, it has emerged as one of the most developed countries of the 21st Century. The country has exploited its natural resources especially oil and gas, and its income level can now be compared to that of industrialized nations. The UAE has embraced Resource based on industries as its main development strategy. I am going to discuss in detail the various sectors of the country that have undergone development and the factors that contributed to its growth as a nation.

Political and social stability

One of the factors that has contributed greatly to development of the UAE is the high levels of political stability that it enjoys. The country has put in place political structures that suit UAE’s tribal society. The country’s huge oil reserves have been distributed in the form of social and economic infrastructure. This has greatly improved the living standards of the country’s citizens therefore reducing the likelihood of internal social and political unrest. It is also worth mentioning that the country upholds human rights, this has in turn promoted political as well as social stability. UAE is also an active member of many international and regional associations which include; the Non-Aligned Movement, the United Nations, Arab League and the Arab Gulf Cooperation Council just to name a few. UAE also has liberal trade policies that contributed to foreign investment.

Energy sector

The energy sector has emerged as UAE greatest source of revenue. The country boasts access to some of the world largest oil and gas reserves. It is estimated that the oil reserves in the country is about 98 billion barrels, this translates to about 10% of the world’s proven oil reserves. Proven gas reserves on the other hand were estimated to be about 6 trillion cubic meters as of 2000; this translates to about 4% of the world’s known gas. It is claimed that the gas reserves are expected to last for the next 60 years. UAE possesses huge reserves for both oil and gas capable of sustaining the country’s long term economic growth. Other mineral resources that the country has include; rocks, sands, soils and metal. The massive oil revenues have enabled the nation to achieve economic development over a short duration of time (Shihab pg. 56).

Agriculture sector

UAE is not known for its agricultural endeavors. In fact, it is estimated that about 1.5% of the country’s total land is under agriculture and forestry. Agriculture therefore makes a very small contribution to the country’s GDP. However, UAE’s government has laid down strategies and incentives in an attempt to boost the agricultural sector. Some of the incentives include; any UAE citizen can be granted with agricultural plots.

The land is also prepared and leveled mechanically at no expense. Production inputs are provided to the farmers at half their cost. Water wells and reserves are drilled for the public for free. A market for the farmers produce is also secured as a result of government intervention. However, it is important to note that despite the fact that UAE is crippled in the agricultural sector this has not in any way hindered its economic development (Clark, 1984, pg. 13). Agricultural production at UAE has increased tremendously by more than fourfold from 1975-1998, with an annual growth rate of about 12% per annum. This increase has been attributed to the government’s effort to improve the agricultural sector.

Population and labor force

UAE’S population is small. However, as a result of discovery of oil and other exports the country has experienced high population growth rates due to massive inward migration of expatriates and also as a result of high natural rates of increase among the country’s indigenous people. These expatriates provide skilled labor that aids in growth of the country’s economy. The service sector which consists of; restaurants’, trade, hotels, transport, communication, storage, real estate and many others ranks the highest (about 58%)in terms of providing employment opportunities. It is claimed that the service sector is the second largest value added in the Country’s GDP after the oil sector (Yousef, 2004, pg. 78). The labor force in the country consists of about 2.5 million employees. 86.5 per cent composes of males whereas 13.5 per cent are females. The labor market in the country based on a sponsorship system commonly referred to as the Kafala system, whereby each employee must have a sponsor (Shah, pg. 67).

Industrialization

Industrialization has played a major role in contributing to the country’s development. Industrialization creates employment opportunities for the youth, resulting in decrease in social evils such as crime. UAE as most developing countries has for a long time been dependent on the export of one primary product that is oil. However, the country has now diversified into industrialization so as to have multiple sources of national income. Industrialization in the UAE has been facilitated by the existence of competitive low labor, favorable tax policies and political stability (Masoor, Segi,, pg. 245).

The main factors have hindered development of industrialization at UAE include; limited raw material and existence of a small domestic market. On the other hand the following factors have contributed to growth of the industrialization process include; presence of abundant mineral resources, existence of a ready market for products, availability of financial capital, existence of a well-established infrastructure, existence of cheap labor, availability of cheap energy among many other factors. However, it is important to note that industrialization in UAE has not reduced the economy’s reliance on oil (Shihab , pg. 34).

Education sector

According to Foray (2004), knowledge is considered to be a public good. The education sector in the UAE has also experienced massive growth and development over the years. The curriculums in schools in the country have been improved overtime to ensure that they encourage innovation, invention and creativity. This is done so that students are able to develop new ideas that will benefit the country in terms of economic growth. The UAE government provides free education to all UAE citizens in an attempt to improve the literacy levels in the country. Education institutions in the country consist of both the private and public sector.

There also exist vocational training centers and military schools where individuals can enroll. The country’s educational system was set up in the early 1970’s and comprises of a four tier system covering a period of 14 years. For higher education, the country’s citizens are given the option of studying in the Emirates University or studying abroad via a generous sponsorship system. The staff to students’ ratio in these institutions is approximately 1:15. This is an adequate and reasonable number ensuing that attention is provided to all individuals. Behrman and Birdsall (1983), claim that it is the quality of education that best explains differential earnings.

According to Schultz (1961), education can be viewed as a means of accumulating capital which could in turn increase workers’ productivity. Furthermore Chatterji (1994) indicated that the skill level of a country’s workforce in any given economy is a factor that has an important economic bearing on economic performance. Carnoy (1967), concluded by stating that education and income are highly correlated at both individual as well as social levels. The UAE government is still string to improve the quality of education by providing better facilities to its citizens. According to Behrman and Birdsall (1983), the quality of education is the factor that best explains differential in earnings.

The country also ensures that it embraces current modernized technology in its industries. Technology is known to be dynamic in nature therefore UAE ensures that it keeps abreast with the dynamism in the IT field. According to Helpman (2004), technological change is a crucial factor that boosts the total factor productivity (TPF).

Health sector

Another sector that has experienced major improvements over the years is the health sector. Expenditure on health has been termed as investment in human capital (Mushkin, 1962, pg. 23). Better health conditions in a given state tend to improve economic conditions of the country. Health is one of the citizens’ basic needs at UAE. The country thus strives to provide better health facilities for its population.

UAE’s government has laid down health policies with the aim of improving the level of health services and health education. Medical programs such as “mother and child health care”, vaccinations and health education programs have been set up by the government in an attempt to reduce mortality rates.

The country’s ministry of health provides school children with special medical centers within their learning institutions. These health units comprises of well trained nurses and first aid kits. Health facilities in the UAE are evenly distributed. There also exist a large number of private health facilities in the UAE. This makes a significant contribution to the provision of better health services across the nation. It is important to note that the number of private clinics is the nation is higher compared to that of public clinics.

Other medical facilities present in the country include hospitals, clinics, pharmacies and medical complexes. The number of doctors in these health facilities has also increased tremendously over the years. As a result the death rates have reduced in the country. The life expectancy in the country rose from 53 years in the 1960’s to 65 years in the 1970’s and it is now at roughly 75 years. Malnutrition has now become a vocabulary for the nation. Epidemics have been eliminated and diseases curbed. The country’s high health standards have improved the productivity of its citizens’.

Conclusion

The UAE is an extremely wealth nation, mainly as a result of it is not really big population size, and it has huge oil and gas reserves. Progress in the country is evident in form of social as well as economic development. The country has successfully implemented the human development policy and this has gone hand in hand with urbanization, industrialization and modernization. UAE is an example of a nation that has successfully used income from its huge natural resources for its long term development in a very short duration of time. We can safely deduce that the country has achieved improvements in many social as well as economic development indicators over the past three decades. The country must continue to put its foot forward to become even a better nation. There is always room for improvement.

REFERENCES

Foray D. (2004). The Economics of Knowledge, Cambridge (MA), MIT Press.

Helpman E. (2004). The Mystery of Economic Growth, Cambridge (MA), The Belknap Press of Harvard University Press.

Masood O., Sergi B. S. (2008). Quantitative Measurement of Economic Sectors Effect on the NonOil GDP in United Arab Emirates, International Journal of Trade and Global Markets, 1(3), pp.239-258.

Shah N.M. (2006). Restrictive Labour Immigration Policies in the Oil-Rich Gulf: Effectiveness and Implications for Sending Asian Countries, UN/POP/EGM/2006/03, United Nations.

Shihab M. (2001). Economic Development in the UAE, in I. Alabed, P. Hellyer (eds.), United Arab Emirates: A New Perspective, Trident Press Ltd. 16

Schultz T.W. (1960). Capital Formation by Education, Journal of Political Economy, 68(6), pp. 571583.

Yousef T.M. (2004). Development, Growth and Policy Reform in the Middle East and North Africa since 1950, Journal of Economic Perspectives, 18 (3), pp. 91–116.