On February 13, 2006, The Gulf News (Dubai) announced that the United Arab Emirates (UAE) GDP was at an all-time high in 2005 (us$111-billion). The International Monetary Fund (IMF) said that growth of GDP for 2005 was 5.6 percent and that 2006 GDP will grow another 4.2 percent.
UAE GDP growth has been good recently reaching a high of 11.3 percent in 2003. But not all of the UAE's citizens are participating in the country's growing prosperity.
As the graph above clearly shows, per capita income has been in decline every year since 2000 with the exception of 2003 when the annual percentage growth (yellow line) poked unspectacularly (1.2 percent) above zero.
Yet, as shown in the graph, annual percentage growth in consumer spending (private consumption) was well above the zero line every year since 1998 with the exception of 2005 when it slipped just below the zero line (negative 1.4 percent). For 2006, private consumption is likely to show strong growth of 12.1 percent.
The first question that comes to mind is: Who is doing all of the spending? It is obviously not the average citizen.
The answer is that the UAE has a relatively high proportion of wealthy individuals living in the country, particularly in Dubai.
In November 2005 AC Nielsen conducted its annual Global Online Consumer Confidence Survey and included the UAE for the first time. The UAE results were reported on January 22, 2006 by AMEinfo.com (Dubai City).
Because the Nielsen survey was conducted on the Internet, it tends to skew toward the upper income segments of a population. And it is, therefore, no surprise that the UAE's consumer confidence score ranked in the top ten among the 41 countries studied by Nielsen.
The website said that the UAE scored ahead of Singapore, the United States (US)...