A STUDY ON THE IMPACT OF TRANSPORT AND POWER INFRASTRUCTURE DEVELOPMENT ON THE ECONOMIC GROWTH OF UNITED ARAB EMIRATES (UAE)

UAE as an autonomous country got constituted during the year 1971 by joining together seven different autonomous and independent emirates. Through meticulous planning and farsightedness, the country has set a development trend which is unique in the Arabian Peninsula as well as to the entire world. The wealth and richness of the country can be mainly attributed to the inflow of petrol income coupled with the farsightedness and vision of the founding fathers of the nation in deploying the income towards proper avenues of investment. Ever since its formation, the country has been giving core attention to the development of infrastructure in the form of transportation, construction and power generation. Now the country is equipped with world class infrastructure and is the focal place of attention of other countries of the world. Since the prime source of revenue is the petrol income, the performance of UAE economy fluctuates from time to time due to the high volatility in oil prices and its demand globally. Hence, the country has started laying the foundation for a total restructuring by focusing on the development of infrastructure and other diversified portfolios in business so that the primary dependence on petrol could be reduced. Since 1990's the country has been investing heavily in building up infrastructure so as to attract foreign capital for its development. Even though there occurred uncertainties in petrol income during the last two decades, the country could manage its GDP growth rate through development in infrastructure and other related industries. The country has gained appreciable improvement in formation of gross fixed capital through infrastructure development, which in fact acted as a cushion of growth during periods of uncertainties caused by fluctuations in petrol price. This study is an effort to find out the relationship between development of infrastructure and its impact on the economic development of UAE by considering various elements in infrastructure such as transportation, power generation and construction. From the study, it is found that there exists strong relationship between the economic growth of a country like UAE and its infrastructure development.