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UAE Economy Set To Lead the Middle East in 2011

UAE : 19 December 2010

Eurasia Group stated that the UAE is set to retain its position as the “most dynamic” economic force in the MENA (Middle East and North Africa) region next year.  Significant capital inflow and rising energy prices will be of major benefit to the Emirates’ economy.

Although the financial issues in Dubai have not totally disappeared, both the UAE’s political and economic situations have experienced stability and improvements are expected in 2011, according to an electronically-delivered report by the Eurasia Group.

The report stated that growth will be driven by energy investments, as well as further investing in petrochemicals, real estate, education and infrastructure.

The IMF (International Monetary Fund) stated back at the beginning of October that expansion of 3.2 percent was forecasted for 2011 in the UAE economy, which controls around 8 percent of global oil reserves.

After a four-year low was seen in December of 2008, the price of crude is more than twice as high and trading above $88 per barrel this week.

Eurasia Group noted that should Dubai have a need to sell its assets and put the proceeds towards debt reduction, this will not occur in 2011.  An announcement by Dubai World in October stated changes to the terms of the $24.9 billion in debt were approved by the group’s creditors.  Dubai World is one out of three holding companies controlled by the UAE.

The largest emirate in the state, owning 90 percent of UAE oil, is Abu Dhabi.  Eurasia Group stated that Abu Dhabi should see benefits from the development of the Khalifa Industrial Zone where foreign investors are now entitled to 100 percent ownership.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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