The United Arab Emirates Case of Economic Success

Figure 4. Rostow's (1990) five stages of economic development 
Source: Rai, 2013

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34 
Delving deeper into the argument of Abed and Hellyer (2001) it is possible to 
relate it to Rostow’s (1990) description of a society of high mass-consumption: 
«The third possible direction opened up by the achievement of maturity was the expansion of 
consumption levels beyond basic food, shelter, and clothing, not only to better food, shelter, 
and clothing but into the range of mass consumption of durable consumers’ goods and 
services…»
Furthermore, Rostow (1990) also advances the idea that a society of high mass-
consumption increases its interests in the «…national pursuit of external power 
and influence…». An idea also shared by Abed and Hellyer (2001) when 
mentioning the significant role played by the UAE within the global community 
of nations. 
Undoubtedly, hydrocarbon revenues allowed the UAE to fasten the process of 
increasing national savings and capital accumulation needed to foster economic 
development. As Pinto (2014) suggests «…most countries catch up by growing 
the old-fashioned way, by increasing national savings and investment, and by 
increasing exports.». The UAE was able to do this, but in an impressive short 
period of time. The sudden rise in oil production and export activities during the 
1970’s and early 1980’s coupled with the boom in oil prices during this decade, 
allowed the country to have the necessary capital to invest in the development of 
the economy. As Kjöllerström and Dallto (2007) argue: 
«…while in many countries the discovery of natural resources has led to conflicts, and/or very 
little of the significant rents have been used to invest in people or infrastructure, elsewhere 
the same discovery has been a “blessing” rather than a curse, as economies have flourished 
building on the income generated by natural resource exports.». 

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35 
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
70,00%
80,00%
2000
2003
2006
2009
2012
2015
Oil Export revenues to Total Export revenues
2000 - 2015
0,00%
10,00%
20,00%
30,00%
40,00%
50,00%
60,00%
70,00%
Oil Sector contribution to GDP
1975 - 2014
Oil Sector
The duality presented by Kjöllerström and Dallto (2007) leads us to the 
understanding of resource-based economies, one of the five main features of the 
UAE’s economy (Omaira, 2001). According to Ahrend (2006) «Resource-based 
economies are often defined as economies where natural resources account for 
more than 10 per cent of GDP and 40 per cent of exports [revenues].».