On what will the economy of the United Arab Emirates be based after the termination of oil resources?
Among the independent states in the region of Persian Gulf, there are many countries which have achieved essential economics success, using the resource factor in their development. The Federation of the United Arab Emirates is considerably the best one. Owing to the richest oil deposits and the competent policy of using the given natural resources, it took them only 30 years to become one of the richest states in the world and reach the income level comparable with the highly developed countries. However, what will be the base of the UAE’s economy, when the world runs out of oil supplies? Before the discovery of oil and gas sources the Trucial States (which today form the UAE) had limited resources and its economy depended mainly on agriculture and the trade in pears, that is why that period reflected the state of a simple subsistence economy. Since 1970 the situation began to change. December 2, 1971 six of the seven emirates (the emirate Ras-al-Khaimah joined in 1972) announced the creation of the federation called the United Arab Emirates. This event coincided with a massive increase in oil production, followed by a further sharp rising of oil prices. This course of events allowed the UAE to achieve the economic prosperity. At the same time, the ruling Sheikh Zayed Bin Sultan Al Nahyan, realizing that oil is a finite resource, commissioned to work out a plan which could reduce the dependence of the state on oil. The state budget revenue in 1980 was fully formed with the profits from oil and gas. However, it was decided to develop a plan of the diversification of economy. Trade and tourism were chosen as the general directions. From year to year, the dependence on petrol production in the state is increasing: in 1980 oil took about 80% of GDP, but today, according to a number of sources oil takes about 30 % of GDP. The reduction of oil industry is...
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