Dubai is adjudged as leading emirate in the field of trade

DUBAI — The World Economic Forum has adjudged UAE, and Dubai being the leading Emirate in the field of trade, as excelling many advanced economies of the world in the essential features that constitute the criteria for fast economic development, this was stated in World Economic Forum's Global Competitiveness Report 2004 - 2005.

By Staff Reporter

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Published: Sat 4 Jun 2005, 10:54 AM

Last updated: Thu 2 Apr 2015, 4:44 PM

The various aspects of the economy such as macroeconomic environment, public institutions, technology, quality of national business environment, sophistication of company operations and strategy have come under their study. Focusing on the performance of UAE in general and Dubai in particular would be interesting to examine business impact of customs procedures, openness of customs regime, efficiency of customs procedures, organized efforts to improve competitiveness, trade barriers, imports, exports, interest rate spread, inflation 2003 etc. as against similar performance in some advanced and industrial countries. Taking each factor and finding UAE 's rank in it against other countries of the world, UAE, especially Dubai, which is the international business hub, is judged holding higher ranks in many crucial factors, even surpassing them. Regarding business impact of customs procedures, UAE has been rated 4th, whereas advanced countries like Germany and Australia have been ranked 10th and 13th respectively. It indeed reflects credit on the authorities as well as the employees of UAE Customs to be evaluated so high on the impact of customs procedures on business.

As for efficiency of customs procedures, UAE has been rated as holding the 3rd rank as against advanced countries like UK, Australia and US ranking 14th, 18th and 17th respectively. It is a matter of credit for UAE that the customs procedures followed are far more efficient than that of either UK, US or Australia, all of which are economically much advanced countries. The openness of customs regime is considered, UAE retains its 3rd rank while Australia is ranked 21st, US 19th and UK 12th. UAE can pride itself on being 3rd, while other developed countries like Australia, UK and US are placed in the 13th, 17th and 20th ranks. It proves that in the UAE, markets are far more competitive and prices much more stable than in these highly developed economies. As a result, the inflationary tendencies are much less in UAE, lending stability to economic growth.

When inflation in UAE is considered, UAE has been estimated to have an inflationary rate of 2.8 per cent as computed by percentage change in consumer price index. When compared with advanced economies like Germany at 1.1 per cent, Switzerland 0.6 per cent and UK at 1.4 per cent. On the tax burden on enterprises, UAE stands second with 1.6 per cent only to Bahrain having 1.5 per cent tax burden. All other countries in the world have been estimated to have higher percentage of tax burden on their enterprises. The lower the tax burden, the higher and the brighter the business prospects.

As for interest rate spread, the average interest rate spread as difference between typical lending and deposit rates, UAE is estimated to have 4.49 per cent, while New Zealand, Singapore and Australia have 4.7 per cent, 4.8 per cent and 5.1 per cent respectively. The rate is comparatively low in UAE mainly due to the high liquidity of banks and financial institutions, easy and hassle-free availability of loans and affordable installment schemes for reimbursement of loans.

The report further states that imports of goods and services as a percentage of GDP (Gross Domestic Product), UAE accounted for 59.2 per cent of its GDP during 2003, which is more than half the total monetary value of goods and services produced over the period whereas countries like Australia, UK, and Italy have recorded imports at 21.2 per cent , 28.1 per cent, and 24.8 per cent respectively. Exports are also registered as a percentage of GDP. Exports from UAE during 2003 amount to 76.0 per cent of its GDP, while US records 9.5 per cent, Australia 18.1 per cent, and Germany 35.7 per cent. As regards exports too, UAE holds a rank much higher than the highly developed countries.

On the other hand, a world economic report focusing on the macroeconomic environment in the Arab world, UAE has been rated the first place in different field including business impact of customs procedures and efficiency of customs procedures and the 2nd place in relation to tax burden. In conclusion, the report states that efficiency and progress of business operations of UAE with Dubai holding the center-stage have been ranked much higher than the world's most developed nations.

The Tax burden and interest rate following a low trend are highly conducive to capital formation and investment.

The MEI (Marginal Efficiency of Investment) in UAE is high and, combined with low rate of interest, it will stimulate investment, leading to higher volume of domestic as well as foreign trade.

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