Page 46 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.76, # 2, 2019, pp. 46-55

STUDYING THE CASE OF THE UAE IN ECONOMIC
DIVERSIFICATION AND NON-OIL EXPORT GROWTH:
PUBLIC POLICY LESSONS FOR AZERBAIJAN

BAHRUZ BABAYEV 1

1 Azerbaijan State University of Economics (UNEC)
Email: [email protected]; Tel: (+994 55) 981 06 15

Received 15 February 2019; accepted 24 May 2019; published online 27 December 2019

ABSTRACT
This paper aims to study the experience of the UAE to achieve economic
diversification and non-oil export growth for offering public policy
recommendations for Azerbaijan based on the following structure. Firstly, it presents
the case of the UAE and its success story. Then, it proposes policy recommendations
for Azerbaijan. The main finding of this paper is to explain the role of holistic state
policies of the UEA in economic success. Along with oil revenues, the economic
success in the UAE has been achieved due to economic model chosen by the
government of the UAE and public investments in the non-oil sector. It discusses if
the same economic policies can bolster non-oil export growth in Azerbaijan. In
conclusion, the paper summarizes the main findings.

Key words: Economic diversification, non-oil export, UAE, development, policies,
growth.

JEL classification: F00, F01, F55, 038.

INTRODUCTION
Located in the Arabian Peninsula on the Persian Gulf, the UAE is one of the
wealthiest and the most economically diversified countries in the world. It is a
federation of seven small Gulf States which include Abu Dhabi, Dubai, Fujairah,
Ras Al Khaimah, Sharjah and Umm Al Quwain. The country received its
independence from the British Protectorate in 1971. Before the discovery of oil in
1958, located on the dessert, the Emirates was a disadvantaged country with limited
resources (Elhiraika and Hamed, 2002: 2). Traditionally, people in the UAE were
engaged in fishing, small trading, pearling extraction and agriculture even though
overseas trading was controlled when the country was a part of the British Empire
(Elhiraika and Hamed, 2002: 2). As a result, thanks to oil exports, the government of

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