Economic Freedom in the UAE

Counter to popular belief, the UAE ranks highly for economic freedom & is very much open for business

This week we shine the spotlight on the topic of economic freedom in the Middle East and in particular the UAE. A common perception from outside the region is that for all the very obvious signs of vast wealth and fast growth, actually doing business is fraught with difficulty with antiquated customs meshed with lax anti money laundering controls. We contend that such opinions are out of date & in no way appropriate.

But don’t just take our word for it! Let’s turn to some definitions & factual content to help build our case;

We subscribe to the work done over the last 30 years by the Washington DC based organisation; Heritage Foundation who carry out a strand of economic analysis in over 180 countries termed ‘economic freedom’.  

We can define economic freedom as the fundamental right of every human to control his or her labour and property. In an economically free society, individuals are free to work, produce, consume & invest how they please. Similarly, governments allow capital, labour & goods to move freely & refrain from coercion or constraint of liberty beyond the extent necessary to protect liberty itself.     

And we can measure economic freedom across 4 groups & by 12 discrete indicators which are equally weighted & lead to an overall score which is then easily compared country to country. These groups & indicators are:

Groups

Rule of Law

Government Size

Regulatory Efficiency

Open Markets

Indicators

Property Rights

Judicial Effectiveness

Government Integrity

Business Freedom

Labour Freedom

Monetary Freedom

Tax Burden

Government Spending  

Fiscal Health  

Trade Freedom

Investment Freedom

Financial Freedom

N.B. A score of 1 indicates a country with no economic freedom and at the other end of the spectrum 100 would be the highest score achievable.

Taking account of these measurements, let’s turn back now to where the UAE sits both regionally and globally:

  • It’s overall score for 2023 is 70.9 out of 100
  • It’s #1 out of 14 countries in the Middle East and North Africa
  • It’s #24 globally out of 184 countries  
  • It’s ahead of both the USA at #25 and UK at #28
  • The current #1 most economically free nation on earth is Singapore followed by Switzerland, Ireland & Taiwan   

By any judgment, these statistics demonstrate the extraordinary achievements by the UAE in the 51 years since it’s foundation in December 1971. All seven emirates making up the union (Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah & Umm al-Qaiwain) have collaborated to create an open culture with high per capita income & a sizeable annual trade surplus. Of course, there is much work still to do underpinned by the publicly announced UAE 2050 plan and G33 initiatives. We would not be surprised to see the UAE reach the top 15 within 5 years. Whilst writing, we also note that many other countries in the region place well to include Israel, Bahrain & Jordan.  

To sum up, it is a privilege to live & work in such a vibrant progressive business culture that has a clear aspiration & brand to challenge the world’s old guard in finance, hospitality, healthcare & industry whilst diversifying away from oil & gas. For those of you who might not have visited for a while, we invite you to come & visit us, smell the coffee for yourself & be prepared to be awed by the freedoms and opportunities across the entire region.