Tourism and Economic Growth in the United Arab Emirates: A Granger Causality Approach
Journal Title: IOSR journal of Business and Management - Year 2018, Vol 20, Issue 4
Abstract
In the recent years, non-oil GDP growth has become one of the most prominent targets of oil exporting Arab countries, more specifically the Gulf Cooperation Council countries. Non-oil exports, FDI inflows and Tourism are the major source of non-oil income and key strand of economic diversification. The United Arab Emirates is regarded as the most successfully diversified GCC country. However, among the 7 emirates in the UAE, only Dubai has transited itself into a diversified Emirate owing to the existence of increasing FDI inflows and a well-developed international travel and tourism sector. The main objective of this study is to examine the relationship between the travel and tourism sector and economic diversification in the United Arab Emirates. For this purpose, Grangers Causality Test approach has been employed by using data on real GDP per capita growth and travel and tourism contribution to the GDP to test whether it has made a positive impact on the UAE government’s efforts toward the diversification of its economy. Focus has been put in line with the currently prevalent core economic issues such as the Dutch disease, rentier state, oil price volatilities, non-oil growth and economic diversification as the need of the hour to understand the rationale behind the UAE government’s strategy of transforming the economy from a traditional oil-based (rentier) economy into a major hub for global investments, trade and most importantly tourism. Data has been derived from secondary sources such as online official reports prepared by various international organizations, official websites, academic papers and publications and other internet sources. To sum up, among the major diversification policies, it has been showed that tourism plays a major role in the UAE’s structural transformation and economic growth.
Authors and Affiliations
Saima Shadab
Keywords
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- EP ID EP410198
- DOI 10.9790/487X-2004030106.
- Views 56
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