Is the UAE Successfully Diversifying it’s Economy?

18 May 2018

Lab Chat

For decades, a number of countries have relied on their natural oil and gas resources to keep their economy running smoothly. However, it seems most of them are looking to move away from oil and diversity. A perfect example is the United Arab Emirates (UAE) which has spent several years planning and taking strides to diversify its economy. Read on as we look at how successful these attempts have been. .

Why are they changing?

The first question on most people’s minds is why are countries diversifying. If they have spent decades relying on oil, what’s the problem? There are actually multiple contributing factors. First of all is the fluctuating price of oil. With so many countries producing oil, it’s easy for the price to fluctuate and – for the past few years – it hasn’t been having the best of times. Periods of low oil prices are hardly ideal for countries that rely on it as their main export.

Secondly there’s the environment. As well as high emissions contributing to climate change, oil is never far from headlines regarding spills and damage to wildlife. With global awareness of climate change constantly growing, it’s the ideal time for typically ‘oil-reliant’ countries to move away from the fossil fuel. .

This leads us naturally onto another factor. Oil is a fossil fuel and, as such, is a finite resource. While many countries have benefitted – and still benefit – from huge sources of oil, these sources are naturally depleting and won’t last forever. It may be many decades in the future when oil finally runs out, but it’s certainly worth preparing for. .

Diversifying the economy

While the UAE has far from an easy job on its hands, it’s had plenty of success so far according to a UN representative. “The Emirates is an amazing success story in terms of development,” said Erik Solheim, UN Environment Executive Director. “It’s true that they have led to high emissions and environmental problems – as everywhere else undergoing development - however I am confident the government is now attacking this in a very determined way.”.

So, what exactly has the UAE changed to make progress? As well as controlling emissions, improving energy efficiency and reducing natural gas flaring, the Dubai Electricity and Water Authority (DEWA) has begun installing solar carports at government buildings.

Last year also saw plans confirmed for the world’s largest solar power project in Dubai, which will generate 700 megawatts of power. To put that into context, one megawatt can power 164 homes with average Dubai sunlight levels. Looks like the future really could be bright for the UAE, especially in environmental term

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