The Economic Complexity of the UAE: Diversification into Goods and Services

Jorge Tapia, Sebastian Bustos (), Nidhi Rao, Jesus Daboin Pacheco, Clement Brenot, Pankhuri Prasad, Douglas Barrios () and Ricardo Hausmann
Additional contact information
Jorge Tapia: Center for International Development at Harvard University
Sebastian Bustos: Center for International Development at Harvard University
Clement Brenot: Center for International Development at Harvard University
Pankhuri Prasad: Center for International Development at Harvard University
Douglas Barrios: Center for International Development at Harvard University

No 254, Growth Lab Working Papers from Harvard's Growth Lab

Abstract: The UAE has achieved significant economic diversification over the past two decades, with non-oil goods exports growing 7.7% annually (2005-19) and services exports expanding by a factor of 3.5, driven primarily by transport, logistics, tourism, and stone/metals products. However, the current export matrix remains energy-intensive and exhibits relatively low economic complexity compared to aspirational peers, indicating limited accumulation of sophisticated productive know-how and suggesting constraints on future growth potential. This report applies economic complexity theory to identify a country-specific diversification roadmap, using density measures to assess feasibility based on the UAE’s existing capabilities and prioritizing opportunities with high complexity and growing global demand. Through this systematic sector identification process, we identify 63 products and 18 service industries organized into ten diversification themes: five in goods (food, metals, chemicals, plastics, and machinery) and five in services (ICT, financial services, business services, healthcare, and creative industries). Given the UAE’s relatively low Complexity Outlook Index, achieving further structural transformation will require active policies to accumulate productive capacities, execute well-targeted capability jumps, and strengthen state capacity to address market failures inherent in the self-discovery process.

Keywords: UAE; Economic Complexity (search for similar items in EconPapers)
Date: 2023-03
References: Add references at CitEc
Citations:

Downloads: (external link)
https://growthlab.hks.harvard.edu/wp-content/uploa ... omplexity-report.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:glh:wpfacu:254

Access Statistics for this paper

More papers in Growth Lab Working Papers from Harvard's Growth Lab
Bibliographic data for series maintained by Chuck McKenney ().