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Factba.se: Australia DFAT Country Briefs - United Arab Emirates
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COUNTRY BRIEFS


GENERAL INFORMATION

The United Arab Emirates (UAE) is a federation situated in the southeast of the Arabian Peninsula in Southwest Asia on the Arabian Gulf, bordering Oman and Saudi Arabia while Pakistan and Iran lie to the north on the Arabian Sea. In December 1971, the UAE became a federation of six emirates — Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Quwain, and Fujairah, while the emirate of Ras Al Khaimah joined the federation in 1972. The capital city is Abu Dhabi, located in the largest of the seven emirates. Abu Dhabi is investing heavily in educational institutions, such as the Sorbonne and New York University campuses, and cultural and sporting attractions such as the Formula One racing track, Ferrari theme park, Louvre Gallery and Guggenheim museum to diversify the economy away from oil and encourage tourism.

Before 1971, the UAE was known as the Trucial States or Trucial Oman, in reference to a 19th century truce between the United Kingdom and several Arab Sheikhs. The name 'Pirate Coast' was also used in reference to the area's emirates from the 18th to the early 20th century.

Since 1971, the UAE has developed rapidly into a nation with modern infrastructure (particularly in Abu Dhabi and Dubai) and one of the highest per capita incomes in the world.

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POLITICAL OVERVIEW

The President of the UAE is HH Sheikh Khalifa bin Zayed Al-Nahyan, who is also Ruler of Abu Dhabi Emirate. The Ruler of Dubai Emirate, HH Sheikh Mohammed bin Rashid Al-Maktoum, is the Vice-President, Prime Minister and Defence Minister.

The UAE federal structure includes a Federal Supreme Council (comprising the Rulers of each Emirate), a Council of Ministers, a semi-appointed Federal National Council with an advisory role. Each Emirate is nevertheless still governed by its own Ruler and has its own local government.

The UAE is a member of the Gulf Cooperation Council (GCC), which also includes Saudi Arabia, Kuwait, Oman, Bahrain and Qatar. It is a member of the Arab League, the Organization of the Islamic Conference, the United Nations and the World Trade Organisation. The International Renewable Energy Agency, officially established in 2009, has its headquarters in Abu Dhabi.

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ECONOMIC OVERVIEW

The UAE has the world's sixth largest crude oil reserves and natural gas reserves and is a major player in world energy markets. These reserves are overwhelmingly located in Abu Dhabi Emirate. The UAE is the Middle East's second largest economy after Saudi Arabia.

In the medium term, the UAE economy will continue to rely on its huge oil and gas reserves — which account for around a third of GDP, over two thirds of exports, and the bulk of government revenue — to underpin its economic development. Investment income is also substantial and provides a further element to economic activity.

Extensive efforts are being made particularly by the Abu Dhabi and Dubai emirates to diversify their economies and deliver long-term development and employment opportunities. Abu Dhabi has made significant investments into the establishment of aerospace, nuclear power, defence, information technology (microprocessing), petrochemical and clean tech industries — the latter most obviously represented by the multibillion dollar initiative to establish 'Masdar City', a low-carbon city outside Abu Dhabi.

Dubai Emirate has diversified into the tourism, exhibitions, ICT, re-export and financial sectors. Taking advantage of its position near the head of the Gulf, it has consolidated its historical reputation as a regional entrepot. Dubai has developed prestige hotels, massive port facilities (including Jebel Ali Port which hosts more US navy ships than any other port outside the US) and a range of free trade zones to attract both manufacturing and services industries. Dubai's ambitious economic development suffered a setback in 2009 due to the global financial crisis which Dubai government and business entities are addressing through the restructure of significant outstanding debts.

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BILATERAL RELATIONSHIP

Bilateral relations between Australia and the UAE are warm, multi-faceted and growing rapidly. They are underpinned by extensive trade relations as well as people-to-people contacts arising from the strong growth of direct air links, including 91 flights per week from the UAE to Australia, and a large population of approximately 12,000 to 15,000 expatriate Australians living and working in the UAE.

The UAE and Australia also share a strong interest in a stable and secure Middle East and Gulf region, and have a shared strategic view on regional security. The Australian Government values high-level dialogue with UAE leaders.

The UAE has hosted a number of high-level Australian visitors in recent years, including the former and current Governor-General (in 2008, 2009 and 2010); the former Prime Minister; and Ministers for Defence; Foreign Affairs; Trade; Agriculture, Fisheries and Forestry; Innovation and Industry and several state Premiers and Ministers. The Assistant Treasurer, Senator Sherry, visited the UAE in April 2010 and the Minister for Innovation and Industry, Senator Carr, visited in May 2010. The most recent bilateral visit by the Foreign Minister, Stephen Smith, was in March 2009. The former Trade Minister, Simon Crean, visited in November 2008.

The most recent high-level visit from the UAE to Australia was by the UAE Foreign Minister, His Highness Sheikh Abdullah bin Zayed Al-Nahyan from 30 January to 5 February 2010 (see the media release (http://www.foreignminister.gov.au/releases/2010/fa-s100204.html) ). Mr Smith and Sheikh Abdullah issued a joint statement (http://www.foreignminister.gov.au/releases/2010/fa-s100205.html) and signed a Memorandum of Understanding on the establishment of a Joint Committee on Consular Affairs. Other high-level Emirate visitors to Australia over the past few years include His Highness Sheikh Mohammed bin Zayed Al-Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and Her Excellency Sheikha Lubna bint Khaled Al-Qasimi, Minister of Foreign Trade.

In 2009, the Lowy Institute for International Policy launched the inaugural Australia-UAE Dialogue held in Abu Dhabi and attended by Sheikh Abdullah and Foreign Minister, Stephen Smith. The second Australia-UAE Dialogue was held in February 2010 in the Blue Mountains and was attended by Sheikh Abdullah and Mr Smith. The Dialogue brings together senior opinion leaders from the UAE and Australia with business, government, and academic to develop strategic approaches to the bilateral relationship and encourage cooperation and investment. See Lowy Institute: 2010 Australia-UAE Dialogue 8 February 2010 (http://www.lowyinstitute.org/NewsRoomItem.asp?pid=3299)

The Council for Australian-Arab Relations (http://www.dfat.gov.au/caar/index.html) (CAAR) is working to broaden and deepen relations with Arab countries, including the UAE.

The Australian Ambassador to the UAE and Qatar is based at the Australian Embassy in Abu Dhabi (http://www.uae.embassy.gov.au/abud/aboutus.html) while the Australian Consulate-General is in Dubai (http://www.dfat.gov.au/missions/countries/aedu.html). Five State Government offices representing New South Wales, Queensland, Western Australia, South Australia and Victoria are also based in the UAE.

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BILATERAL TRADE RELATIONSHIP

The bilateral relationship continues to have a strong commercial focus. In 2009 two-way merchandise trade between Australia and the UAE was worth over A$4.25 billion. Of this, Australian exports to the UAE were A$2.14 billion, while imports were A$2.11 billion, including crude petroleum imports worth A$1.91 billion.

Australia's exports have undergone diversification away from a primary product base to one based on elaborately transformed manufactures (ETMs). ETMs now constitute over 20 per cent of Australia's total exports to the UAE. This trend gathered pace with the start of passenger motor vehicle (PMV) exports in 1996. In 2009, PMVs were one of Australia's largest major exports to the UAE, worth A$115 million, making the UAE Australia's third largest market for PMV in the Middle East. Other notable ETM exports in 2009 included processed iron and steel, mechanical handling equipment, general industrial machinery and office machineries. Gold, wheat, zinc, dairy products, meat, live animals, dairy products, fruit and nuts, and vegetables were the lead primary product exports.

The Australian Embassy in Abu Dhabi estimates there are around 12,000–15,000 Australian nationals and over 300 Australian companies based in the UAE. In 2009-10, approximately eleven per cent of all Middle East tourists to Australia were from the UAE. UAE nationals have access to online tourist visa applications. This significantly improves visa processing times and access to visa services in the UAE.

While overall numbers are modest compared to some other countries, the number of UAE nationals studying in Australia continues to grow, with the UAE being Australia's third-largest education market in the Middle East with 1,700 students in 2009. As at April 2010, there were over 1,200 Emirati students in Australia.

Austrade manages the Consulate-General in Dubai (headed by the Consul-General and Senior Trade Commissioner) and including Australian officers representing the Department of Immigration and Citizenship, the Australian Federal Police and the Department of Agriculture, Fisheries and Forestry.

Bilateral free trade agreement negotiations between Australia and the UAE began in 2005 and made substantial progress, but were subsumed into broader GCC-wide negotiations (http://www.dfat.gov.au/fta/agccfta/index.html) in 2006 following a change in GCC policy. Four rounds of negotiations have been held, the most recent in June 2009. Australia remains committed to resuming mutually beneficial FTA negotiations with the GCC.

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FUTURE PROSPECTS

The UAE is Australia's largest market in the Gulf, with excellent growth prospects. It has a sound economy, a fast-growing and youthful population, low barriers to entry, a well-managed banking system, excellent infrastructure, and a sophisticated business community familiar with Western practices. It is an intensely competitive market.

Australia's profile in the UAE is high. There is increasing recognition of Australian companies, institutions and capabilities. The rapid increase of UAE visitors to Australia, of students studying in Australia, and of expatriate Australians living and working in the UAE are also prime drivers in this new business engagement.

The activities of Australian companies in the UAE include steel trading, building, construction and financial services, banking services, materials and equipment, agricultural supplies and services, industrial minerals, dairy products, marine manufacturing, education and training services, sports and recreation, health services, livestock, oil field supplies, courier and freight services. Many use Dubai as a regional base in view of its world-class transport, financial and communications infrastructure. Growing attention is also being paid to Abu Dhabi's similarly impressive infrastructure and services on offer.

Highly complementary economies produce a good fit. Australia's advanced engineering capability is ideal for the UAE's huge infrastructure programs. Australian small-and medium-sized enterprises offer world class services that can be readily adopted by the UAE government and private sector.

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Last Updated: August 2010

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