With an estimated GDP of just over $370 billion in 2016, the United Arab Emirates represent, after Saudi Arabia, the second largest economy among the Gulf countries. The average income of the population (9,6 inhabitants of which about 80% are non-native) is over $67.000, placing the UAE among the high-income countries in the world. While the hydrocarbon sector remains crucial, the economy of the Emirates is the most diverse in the region. The main emirates that form the UAE, Abu Dhabi and Dubai, have equipped themselves with an advanced system of infrastructures and services that have made them attractive both for the activities of foreign companies looking at Middle Eastern markets and for tourist, commercial and financial. The growth of the non-hydrocarbon part of the economy has been supported by a series of reforms which have created particularly favorable conditions for foreign investment. In fact, the country ranks 36th in the ranking 2017 Doing Business of the World Bank, e guarantees good protection for minority investors and compliance with contracts. The country is also ranked 16th in the World Economic Forum rankings 2016-17 on competitiveness.
In the last few years the UAE, thanks to the financial flows generated by oil exports, have set aside substantial resources in Sovereign Wealth Funds which at the end of 2016 showed a total capitalization of more than 1.250 billion. This amount of resources, in addition to having contributed to the diversification process by supporting the development of the country's infrastructures, has enabled the acquisition of important shareholdings in listed foreign companies in the most advanced markets. La Central Bank expects non-hydrocarbon growth to accelerate to 2,9% this year and 3,8% in 2018driving the country's overall growth. The economy will also be supported by Dubai's investments, in view of EXPO 2020 and by Abu Dhabi's investment program in transport, generation and water treatment infrastructures and in the development of residential and industrial settlement areas. The planned investments, amounting to 85 billion, are aimed at reducing the economy's dependence on oil and achieving the diversification objectives indicated in the multi-year plan Vision 2030.
The UAE's multilateral trade reached $529 billion last year, slightly recovering (+0,9%) on 2015, which was weighed down by the less favorable hydrocarbon market situation. Exports, amounting to almost 299 billion, fell by 0,6%, while imports, amounting to 230 billion, increased by 2,9%. In this context trade with Italy was around 6,4 billion (-9,5%), of which imports (947 million) mainly consist of metals, refined petroleum products, means of transport, plastic rubber and chemical products. Exports, amounting to approximately 5,4 billion, are given by mechanical machinery, electrical appliances, various manufactured articles (jewellery), textiles, clothing and metals. And in a market where there are about 40 special economic and free trade zones, where tax and bureaucratic benefits are guaranteed to foreign companies, as well as exemptions for establishment and participation in tenders, Italian FDI in 2014 amounted to over 7 billion. There are 175 Italian companies operating in the energy, construction and transport sectors.
In this scenario Omandespite being a member of the Gulf Cooperation Group (GCC), maintains an attitude of neutrality and independence in foreign policy. In the decade 2006-2015 it recorded an average annual growth rate of the economy of 4,8%, in line with the average of the countries of the GCC Group, where the non-hydrocarbon part grew at an average pace of 5,6%more than double that of oil and gas-dependent sectors. According to the data reported by Intesa Sanpaolo Study and Research Centre, gas and oil production recorded a growth of 2.6% in real terms in 2016. At the same time, non-hydrocarbon GDP increased by a modest 0,5%: the growth rate of the entire economy would thus have held back all '1,8%, the lowest rate since 2011. Analysts indicate GDP growth of 1,3% in 2017, thanks to the acceleration of the non-hydrocarbon part (+2,5%) which will offset the expected negative contribution of hydrocarbons (-1%).
Finally Qatar, with an estimated GDP of $157 billion in 2016, it is the third economy of the GCC Group. The native population is small (about 0,4 million) plus 2,2 million immigrants. Per capita income (almost $130.000 in 2016 at purchasing power parity) is among the highest in the world, underlined by the fact that in the last decade Qatar has been one of the countries with the highest economic growth (+12,4% in the period 2006-15). The hydrocarbon component increased on average by +8,8%, thanks to the exploitation of the large gas reserves; during the same period the non-hydrocarbons part grew the most (average of +15,7% in real terms), mainly driven by infrastructure spending. And, as in other GCC countries, the large surpluses in the current part of the Balance of Payments have allowed the accumulation of substantial resources in the Sovereign Wealth Funds whose assets were estimated at 335 billion in February 2017, higher than the entire GDP.
The less favorable situation in the hydrocarbon market has recently led to a substantial slowdown in the growth rate of the economy (+2,7% estimated in 2016 with +3,4% expected for this year). However the non-hydrocarbon component continued to grow at a rapid pace (+8% in the three-year period 2014-16 and again +6,5% estimated in 2016): looking forward, analysts expect it to maintain a still high pace of expansion (over 5% in 2017), thanks to investments in infrastructure planned for the World Cup, in residential (Barwa Workers City and Hilton Panorama), in transport (the completion of the various lines of the Doha Metro is expected between 2016 and 2018) and in services, as indicated in the development plan Vision 2030. The Government expects to spend over 200 billion on these projects by 2022.
The country has special zones to encourage foreign investment through tax breaks and administrative benefits: they are located near the capital and have, among their objectives, the attraction of investments aimed at research and technological development, financial and business activities. Italy's trade exchanges with Qatar in 2016 are still contained at 1,75 billion euros (equal to 0,2% of total Italian trade with the rest of the world): imports (848 million) fell by over 37%, while exports (905 million) recorded a contraction of around 8%. The stock of FDI at the end of 2015 was $33,2 billion, or 14,8% of GDP. Italy has invested over one billion euros in Qatar and is present in the area with 27 companies in the construction and infrastructure sectors. Therefore, the infrastructural investment plans referred to above represent, in this context, an opportunity for a potential development of trade and investment relations between Italy and Qatar.
