GCC Economics and OPEC Research Paper Example | Topics and Well Written Essays - 2000 words

GCC Economics and OPEC - Research Paper ExampleThe common market agreement among the GCC countries took effect from 1 January 2008. The members of nerve of Petroleum Exporting Countries (OPEC) is an association of developing countries, which include Venezuela, unify Arab Emirates, Saudi-Arabian Arabia, Qatar, Nigeria, Libya, Kuwait, Iraq, Iran, Ecuador, Angola and Algeria. OPEC was formed to help market oil and stabilize oil prices in the world. United Arab Emirates United Arab Emirates whose capital city is Abu Dhabi, Dubai covers an area of 82,880 Km2 and the land is predominantly desert with few pockets of agricultural areas. It is a member of OPEC. The country has an opened and highly veritable economy, which is among the fastest growing in the world. The rate of inflation in United Arab Emirates is low and was 0.9 per centum and 1.6 percent in 2010 and 2009 respectively. To boost softwood, a free trade zone for manufacturing and distribution purposes. Presence of a deep-wat er port has also promoted international trade. The rate of interest charged by commercial banks was also press down at 6.2 percent and 5.9 percent in 2010 and 2009 respectively. Figure 1 GDP growth rate There was a sharp decline in the genuinely GDP growth from 3.2 percent in 2008 to -3.2 in 2009. Sharp decline is attributed to the global financial turmoil. However, there was a strong growth in sure GDP growth rate to 5.3 percent in 2010 due to recovering economy and increasing oil prices. OPEC Quotas in United Arab Emirates is 2.3 million pose free-and-easy but its capacity is 2.8 million barrels daily. According to CIA (2011), United Arab Emirates reserves are estimated to be 97.8 billion barrels. Non- oil sectors include agriculture that produce alter fish, dates, watermelons, vegetables, eggs, poultry and dairy products (Department of State 2011). Non-oil sector covers tourism and international finance. United Arab Emirates produces cement, aluminum, fertilizers, boat buil ding, commercial ship repair, textiles and handicrafts. Major trade partners include Japan, India, China, United States, Germany, Iran, southwestward Korea and Thailand Saudi Arabia Kingdom of Saudi Arabia whose capital is Riyadh also referred to as Saudi Arabia covers an area of 2,149,690 km2 with arid climate. It is a member of OPEC. It has a command economy, where government activity controls major economic activities and depends heavily on oil exports. The GDP of Saudi Arabia was $623 billion in 2010. Inflation rate is slightly lower at 5.4 percent and 5.1 percent in 2010 and 2009 respectively. The unemployment rate in Saudi Arabia was 10.8 percent, 10.5 percent and 9.8 percent in 2010, 2009 and 2008 respectively. High unemployment rates are among the highest rates in the gulf region. commercial message bank interest rates were 7.3 percent and 7.2 percent in 2010 and 2009 respectively. The countrys proven oil reserves are 262.6 billion barrels (Sfakianakis 2011). Saudi Arabia has the largest oil reserves with and is the world top oil exporter. Oil generates 75 percent of the total budget revenues and comprises about 90 percent of total exports. plus in oil prices caused by increasing demand has improved the economy of Saudi Arabia. The current quota for Saudi Arabia as set by OPEC is 9.4 million barrels daily. However, the country can produce up to 10.52 millions barrels daily. The non-oil sector real GDP growth r