Economic Cooperation between India and the United Arab Emirates in the 1990s

Abstract

India is a vast country of economic opportunities. Its population and labour force is next only to China's. India has a population of about 1 billion.1 Its labour force is estimated to be 450 million. It has a large resource base and a large skilled labour force. During 1999 India's exports to the world amounted to $39.2 billion whereas its imports from all over the world in 1999 were estimated at $45 billion.2 India's gross international reserves had reached $33.0 billion by 1999. Since the beginning of the 1990s India has embarked on an ambitious and continuous liberalization and reform of its economy. This resulted in its gross domestic product growing at the rate of over 6 per cent annually during the decade of 1990-99. As far as gross national product is concerned, with a $442.2 billion of GNP in 1999, India ranks 11th in the world. During 1998-99 India's GNP grew by about 7 per cent 3. Thus having a large human resource base, a wide market and a growing economy, India offers unlimited opportunities of economic cooperation. Compared with India, the United Arab Emirates (UAE) is a small country in size and population. However, the UAE is an important member of the organization of Gulf Cooperation Council states. Like other members of the council the UAE maintains a high level of per capita income and is counted among the wealthy nations. Also, the size of UAE trade is quite substantial. During 1999 UAE exports amounted to $28.2 billion whereas its imports were over $33.1 billion.4 Much of the prosperity that the UAE enjoys has been from oil exports. The economic policies, since the oil revenue inflow started, were geared for maximum utilization of these revenues for building the UAE as a modern economy. The UAE's reserves of oil and gas amount to be about 10 per cent and 4 per cent of global oil and gas reserves, respectively.5 The UAE has also been an active member of the Organization of Petroleum Exporting Countries (OPEC) and the Organization of Arab Petroleum Exporting Countries (OAPEC). At the present rate of production, the UAE's oil reserves are expected to last for more than 100 years.6 Oil production and exports are the most important