Introduction
Since the beginning of the millennium until 2008, UAE’s expansionary economic policies had led its GDP to grow exponentially from $104billion in the year 2000 to $314billion in the year 2008 with an impressive average real inflation rate of 12% per annum. This three fold increase was mostly due to its the then booming real estate and construction industry that allowed UAE to achieve the title of being the only nation in the world to have achieved such remarkable growth.
However in 2009, soon after the 2008 Great Recession in the USA, the economy of the UAE plummeted as the GDP dropped to $270billion. Amongst all sectors, the construction and the real estate sector were the greatest contributors to the decline of the economy, as their growth rates plunged to -20% in 2009. In addition, UAE, chiefly the emirates of Dubai and Abu Dhabi, had developed their housing and construction industries with leveraged tall towers, houses and hotels creating a massive real-estate bubble. The 2008 Great Recession, believed to have begun in the US chiefly after the Lehman Brothers’ demise, greatly impacted the UAE economy as the USA was a major trading partner and many construction projects were financed by US based financial institutions.
Although the 2008 Great Recession had a grave impact on UAE’s economy, all of its industries recovered from the recession by 2010 except the construction and housing industry. For nearly 4 years, from 2009 till May 2013, the construction and real estate industries underwent a period of economic stagnation and deflation that caused UAE to have a low average inflation rate of 0.9% in 2009-2013. Hence through this investigation, I wish to explore the reasons why the economic policies of the UAE were ineffective in recovering the construction and real-estate industry.
Thus my research question: To what extent have the economic policies, which have been adopted in the UAE during 2009-2013, helped recovering its construction and real-estate industry from recession?
Therefore, I would be grateful if you could spare a few minutes to kindly fill out this quick survey to the best of your knowledge.
Shailesh Patro
A Grade 11 student currently pursuing the IB diploma at the American Embassy School
This research (IB Extended Essay) is being conducted for the partial fulfillment of the International Baccalaureate diploma