UAE’s manufacturing sector: small industry, significant potential

Abstract

This policy report on the United Arab Emirates’ (UAE) industrial sector is the sixth in a series of reports aimed at identifying strategic options Arab countries have in undertaking structural transformation. Using the product space methodology, this report analyzes existing capabilities of selected economies by identifying products they currently export and determining which path they should follow to produce more sophisticated and strategic products. A study of the UAE’s product space reveals the country’s future path for development should focus on new opportunities in the chemical and foodstuff clusters. This reports calls for what is termed parsimonious industrial policy or industrial policy ‘in the small’, entailing a focus on providing support and public inputs (such as infrastructure, regulation, etc.) to existing industries with the aim of improving their productivity and ability to jump to nearby opportunities.