The branding policy of the UAE has been in a phase of constant transformation and evolution in terms of its constructive elements. The aim of this chapter is to assess the UAE's evolution from a state whose branding was based upon soft power elements, namely the use of traditional economic tools and global marketing, towards hard power elements, including strengthening its geopolitical and international economic relations perspective through strategic-oriented initiatives. Making full use of its Sovereign Fund's capability and opportunity to invest on strategic economic sectors of third countries (e.g., the USA and the EU member states) as well as enhancing the perception of UAE as a global tourism, logistics, and transportation centre, UAE tends to move beyond the traditional marketing tools initially employed.
Top2. An Evaluation Of Uae Economy
In this section of our analysis, we are going to evaluate critical aspects of the economy of the UAE. Firstly, we will analyse the UAE’s macroeconomic indicators from 2010 until 2020, in order to understand the macroeconomic path of the last decade after the manifestation of the world economic crisis of 2007-2009, as well as the implications of the COVID-19 pandemic. Then, we will analyse the Logistics Performance Index for the same period on the basis of the available data, in order to understand the role of UAE as a centre of world trade. In parallel, we will examine the impact of the tourism sector on the economy of the country. Finally, in this section we will study the role of SWFs as a tool for strengthening the economic prospects of the country.
In Table 1, we analyse the main macroeconomic indicators of the United Arab Emirates. GDP at current prices has been increasing almost for all the years under review, the only exception being 2020, when UAE is facing the negative impacts of the COVID-19 pandemic. As we can see, real GDP growth is positive from 2010 until 2019, following the UAE’s negative growth of -5.2% in 2009 (IMF, 2021a). In 2020, the UAE faced negative growth rates for the first time since the 2009 and the world economic crisis of 2007-2009. The negative growth rate of 2020 is higher in comparison with the negative growth rate of 2009. Moreover the inflation rate is low for the entire period under review, the exception being 2015, when the inflation rate stood at 4.1%. One negative aspect of the inflation rate is the negative values for 2019 and 2020, which indicate that before the manifestation of the economic crisis as a result of COVID-19 pandemic, consumption was low.
According to trading economics, the unemployment rate is at low level in all the years under study and is facing a diminishing path. For 2020, there are not yet any available data regarding the implications of the COVID-19 pandemic. UAE has taken certain fiscal measures to confront the negative economic impacts of the COVID-19 pandemic. The IMF has developed the policy tracker, in order to study the policy responses to COVID-19. More specifically, the UAE has adopted the following fiscal measures:
The authorities have so far announced about AED 32 billion ($ 8.7 billion or 2.8 percent of GDP) in various fiscal measures. These include: (i.) AED 16 billion ($4.4 billion) approved by the federal government to support the private sector by reducing various government fees, labor and other charges, refunding 50% of bank and financial guarantees to some establishments, and accelerating existing infrastructure projects; (ii.) AED 1.5 billion ($0.4 billion) in measures by the government of Dubai to reduce government fees, provide additional water and electricity subsidies, and simplify business procedures; and (iii.) AED 9 billion ($2.5 billion) announced by the government of Abu Dhabi as part of the ongoing “Ghadan-21” fiscal stimulus program. (IMF, 2021b).