United Arab Emirates - Economic development

The discovery of oil opened the way for the UAE into the industrial age. The federation, formed in 1971, used its vast oil wealth during the 1970s to transform the national economy through expansion of roads, ports, airports, communications facilities, electric power plants, and water desalination facilities, as well as construction of huge oil-processing complexes. With the completion of major infrastructural projects by the early 1980s, the focus of development shifted to diversifying the economy by establishing capital-intensive industries based on oil and gas resources.

The country's major industrial projects are the Jabal 'Ali industrial zone in Dubai and the refinery complex at Ar-Ruwais in Abu Dhabi. Jabal 'Ali includes the Dubai Aluminum Co. smelter, a natural gas liquefaction plant, a cable factory, and a desalination plant that is one of the world's largest, with an output of about 25 million gallons of water daily. In mid-1995, 822 companies were operating in the Jabal 'Ali Free Zone. by 2002, this number had risen to about 2000, representing investments from over 100 countries. The United Arab Emirates now hosts 11 free trade zones including the innovative Dubai Internet City, launched in 2000, the world's first e-commerce free trade zone. and Dubai Multi-Media City, established in 2001. In 2002 three new specialized free zones were founded: the Dubai International Financial Centre, the Dubai Metals and Commodities Centre, and the Mohammed bin Rashid Technology Park.

In 1997 the Industrial Loan Fund was set up to provide finance through the Gulf Industrial Corporation (GIC) established in 1979 in Abu Dhabi. The GIC now owns a large number of industries which produce a wide variety products, including cement blocks, fodder, flour, PVC pipes, mineral waters , and aluminum.

In relation to GNP, the UAE is one of the world's major aid donors; the principal vehicle for bilateral aid has been the Abu Dhabi Fund for Arab Economic Development. The UAE makes regular annual payments to Syria, Jordan, Lebanon, and the PLO. Responding to Iraq's invasion of Kuwait in 1990, the UAE made significant financial contributions to assist the frontline states and to share the cost of the foreign military forces.