UAE and Singapore

Comparison between the Economies of UAE and Singapore

The report will demonstrate a brief comparison of 4 economic indicators between the economies of the United Arab Emirates and the Republic of Singapore. The economic indicators are:

-       GDP per Capita

-       Unemployment Rate

-       Human Development Index (“HDI”)

-       Exports of goods and services (% of GDP)

Both countries have declared independence in almost the same decade; Singapore announced its separation from Malaysia in 1965 and the seven emirates, which form the UAE, joined hands in 1971. Ras Al Khaimah joined in 1972. As such, the report will benchmark the growth of the two jurisdictions and will illustrate the various factors which contributed to their growth, either positively or negatively.

GDP per Capita

In 1980, the GDP per Capita of Singapore was $4,913 which is relatively low and the standards of living were not on par with the developed world at this stage of time. On the other hand, the UAE’s GDP per Capita was $42,903 with a population of 300,000 at the time. Although the figure seems high, the population must be factored as well as the fact that the UAE is an oil based economy. At that point of time, however not much less today, the only major income for the UAE was the export of oil and Singapore had a mixed income economy. The UAE started increasingly naturalizing citizens which lead to a steep fall to its GDP/capita by almost 50% to $22,514; whilst Singapore increased by more than 100% to $8,890. Today, Singapore’s GDP/capita steadily grew to $34,465 with a multi-mixed income economy and the UAE is at $50,727 noting that the gulf state had tripled its oil exports as of 1980.

Unemployment Rate

The employment opportunities in both countries are considerably high as both are seen by the modern world to be regional bridges to wealth and business ventures. Again, in 1980, Singapore’s unemployment rate was at 3.0% and UAE’s was 1.6%. The South-Eastern hub enforces a more lenient labour law to that of the UAE as expatriate residents are not permitted to remain in the country if they do not hold employment. In contrast, Singapore applies similar laws to residents and citizens together which make it a more attractive place to live. Investments in education are also major elements that contributed to UAE’s low unemployment rate back then. Currently both countries are at a 4.0% unemployment rate.

HDI

Both countries are classified as “Very High HDI”, among the highest in the world in-fact. The UAE is at the 30^th position globally with an HDI of 0.846 and Singapore is higher at 26^th with a 0.866. Both governments are highly invested in the quality of life in the country; as they share a similar vision that positive growth comes from the quality of the people.

Exports of goods and services (% of GDP)

Between the years 1980 and 2011, Singapore’s exports remain the highest form of income for the country. Exports of goods and services (% of GDP) varied steadily between 203% in 1980 and 290% in 2011 with a GDP of $240 Billion. Revenues from the export/import business in Singapore are all used to invest in the country’s economy to create more ventures and diversify the economy even further; which will create more employment opportunities and foreign investment in the economy. The UAE however has 78% worth of its exports which contribute to its GDP of $360 Billion 2011. The type of exports are not proportionate as it would be ideally as more than 90% is oil and the other 10% are consumables, dates and marine wealth.