Passage 2

Smooth Ride on the Road to success

It is the good fortune of the United Arab Emirates(UAE) that the country and its economy are enjoying a much softer ride. The federation is functioning smoothly with few obvious obstacles on the path ahead. A lot of the multinational companies have chosen Dubai to target their markets. They recognize that here they can have the international exposure, the services and access to the storage and distribution networks. They are looking at Dubai as a distribution and management center for the whole of the Middle East.

The range of economic activity remains one of the UAE's great strengths in combating the peri-odic downturns in the oil market. Nevertheless, it is widely acknowledged that the oil price continued to have a disproportionate bearing on the economy's well-being and that further diversification is required. Strong emphasis is being attached to the development of non-oil activity, whether it be through joint stock investment companies or government agencies. However other aspects of econom ic reform have hardly got onto political agenda. There has been no privatization and still there isn't a stock exchange. Next year may see some action. The review of the draft stock exchange rules is nearing completion and that 1996 should see the publication of a stock exchange law. Yet, few expect a sea-change in economic policy. The trend is towards economic reform, but it won't be rushed. There is still enough money around to satisfy most people's expectation. A similar assessment was made in a recent study by the Emirates Industrial Bank on the possibility of greater private involvement in infrastructure projects.“ For the UAE although these are not pressing policy concerns, it might be worthwhile to start looking at the best institutional arrangements from a medium to long term perspective for managing the infrastructure," it said.

A stock exchange will never be allowed in UAE.