The United Arab Emirates (UAE) is in the eastern region of the Arabian Peninsula. It extends from the Gulf of Oman to the Persian Gulf southern coast. The president of the country is Sheikh Khalifa bin Zayed Al-Nahyan, and the prime minister is Sheikh Muhammad bin Rashid Al-Maktoum. The neighboring countries are Oman to the east, Qatar to the north, and Saudi Arabia to the south and west. The land is sandy and barren. Abu Dhabi is the nation's capital city. The country’s total area is approximately 83,600 square kilometers. In 2015, the total population of the UAE was about 5,779,760 people (Al-Tamimi & Abdulla, 2003). The largest city is Dubai. The official language is Arabic. Other languages used in the country include English, Hindi, Urdu, and Persian. About 76% of people are Muslims, 9% Christians, and 5% Buddhists and Hindus. The gross domestic product (GDP) is about $269.8 billion, per capita of $29,900 and a growth rate of 4% in 2013 (Fox, Mourtada-Sabbah, & Al-Mutawa, 2006). The rate of unemployment is about 2.4%. The arable land in the country is about 0.61%. The people practice agriculture where they plant vegetables, dates, and watermelons. Also, they produce dairy products, fish, eggs, and practice poultry farming. The labor force has about 4,588,000 million individuals. The primary industries in the country include aluminum, fishing, fertilizers, commercial ship repair, construction materials, boat building, petroleum, and petrochemicals. The natural resources in UAE are the natural gas and oil. The UAE exports goods worth $368.9 billion and import $249.6 billion (Hashmi, 2007). Its trading partners include China, Germany, Iran, Singapore, United States, South Korea, Japan, Thailand, and India. The political system of the nation is the hereditary monarchies federation. The Federal Supreme Council rules the country. It comprises of the seven emirates that include Fujairah, Abu Dhabi, Sharjah, Ajman, Dubai, Umm Al-Qaiwain, and Ras Al-Khaimah. This paper will focus on how the globalization affects the UAE’s banks, trade, climate, topography, people, economy, and trade laws.
The globalization refers to the unification of the political systems, cultures, and economies of different nations. It involves the global exchange of goods and services, capital, and finance that build economic linkages among countries (Hollis, 2000). The UAE economy heavily depends on oil products. The globalization significantly contribute to the UAE having a blended culture. The country attracts people from other cultural backgrounds who go to offer services there. The economy of UAE is open, which permits people from other nations to trade their products and services. Consequently, the foreign investors who open businesses in the country create jobs for the residents. Besides, there is a reduction in the unemployment rate (DeGregorio & Gudotti, 1995). Since many people are working, they have good living standards. The long-term effect of improved lifestyle is the economic growth. The political system of UAE promotes trade liberalization and enable free movement of goods and services across the border. It is due to globalization that UAE is not currently dependent on the petroleum products. The globalization has enhanced prosperous real estate market and the industrial developments in the country. Also, it has led to the adoption of technology that further allows integration of economies, particularly through regular communication over the internet. Nevertheless, globalization results in native people forgetting their cultural beliefs and norms.
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The banking industry, trade laws, economy, and foreign investment in UAE plays a significant role in promoting globalization. The UAE banking sector comprises of both domestic and foreign banks. The banking institutions in Dubai and Abu Dhabi have about 90% of the UAE’s local assets (Godwin, 2006). The Abu Dhabi Commercial Bank (ADCB) is the leading financial institution in offering the personal loan with about 25% of the total market share. Therefore, both the local and foreign investors do not encounter challenges when closing business deals. The trade laws allow other countries to provide goods and services to the UAE market, which promotes the local products. Moreover, the federal government does not restrict the foreign investors from establishing businesses. Consequently, the UAE citizens get jobs, which lead to economic growth (BBC News, 2016). It is evident that UAE exports more products than it imports, which show that the economy is healthy. The country reaps more benefits from globalization, especially because it is no longer dependent on the petroleum products.
The globalization has effects on the UAE’s climate, topography, people, and financial status. The UAE terrain involves highways, valleys, plains, water bodies, and railroads. The primary transportation models used in UAE are land and water. In most cases, people use roads and water to transport goods and services (Central Intelligence Agency, 2017). Many people are migrating to the nation to search for employment opportunities due to the growth of the economy. Consequently, many organizations are employing a diverse workforce that comprises of individuals from different cultural background. Therefore, many people are earning income that enables them to have good living standards. It means that a vast majority of people can access the necessities such as food, clothes, and shelter. Also, they can manage to pay for their medical insurance, which promotes the welfare of the workforce (Mahasneh, 2004). Thus, globalization in UAE improves the financial status of the country. Besides, the state does not rely on one source of revenue as it used to do.
The globalization of the United Arab Emirates, as explained before, is the unification of the political system, cultural aspects, and economies of the different emirates. As expected, this globalization has come with numerous effects on the country both positive and negative to some aspects. This research will aim to find out the effects of globalization on the United Arab Emirates and their effects.
Economically, globalization has allowed the UAE to expand its markets. Now, the Emirates are represented as one unit, so killing the restrictions between the Emirates. The trade between the Emirates is now considered, as more of domestic, meaning taxes are not paid on the items sold in between the Emirates. This is a beautiful thing, because markets are now wider, meaning more sales with less taxation and ultimately more profits. This is a direct contribution to the country`s GPD.
Previously the economy of the UAE was dependent on natural resources, oil, being the primary support. However, with the emergence of globalization, the UAE found that it had many more sources of foreign income because all the Emirates brought something spectacularly unique about them. Presently, the UAE has more sources of revenue including, real estate, tourism, and international finances. This has significantly boosted the UAE`s economic might by contributing to the increase in foreign exchange and the overall country `s GDP.
A big success in the economy of the UAE about globalization is that there is now the introduction of the latest technological advances. With all the money they make, they are now able to invest research on current market preferences and buy machines that roll out so much more regarding the produce for export and import. This has contributed to the increasing economic might of the UAE.
Globalization of the UAE has allowed an increase in the overseas export market. The Emirates now export what they produce as a single entity. This cuts back on taxes to be incurred in the country they are doing business in and even increases the capacity for export as more and more countries are involved in their trading program. Its main exports are 0il, in the form of crude petroleum, natural gas and dried fish. The countries they import to include Japan, South Korea, Thailand, and India among others.
The import market has also not been ignored as now as a unit has; the taxes have been cut, therefore effectively lowering the prices of imports. It has also permitted the growing of a large import market in the UAE because of the one entity mentality. The main imports are equipment and chemicals for their industries from countries like Japan, Germany, The United States and The United Kingdom.
Culturally, globalization has had serious repercussions, whether these are positive or negative is debatable, but it is clear that a lot has had to change to accommodate and include other Emirates as well as to flex and allow for ease in the tourism sector.
More than half the population of the UAE is constituted of Muslims. This means that Muslim traditions and cultures were significantly entrenched in the day-to-day activities of the Emirates. With the coming of globalization, there has had to be some changes; an example is the place of women in society. There is now more effort taken in the formal education of the girl child. This is a big step especially for advocates of gender equality.
The UAE seems to have embraced a more westernized way of doing things, running cooperation’s and inclusive of the day-to-day activities. This is very thoughtful in making the UAE an international hub and directly leads to increase in revenue. This is evident in the large and growing number of western number countries national expatriates who have shaped many reforms and run many of the industrial boards.
It cannot be ignored that there have been changes in the settlement designs of the people of the UAE. Previously, it was desert villages. However, this has changed with the upcoming architectural changes on the ground. Tall skyscrapers dominate the landscape and consequently a rise in the urban population; malls, shopping complexes, recreational places, family outings, penthouse settlements are now a familiar figure in the UAE. This, the research notes, has had numerous effects and increased westernization in the Gulf competing with the previous mostly Muslim culture that was predominant lately.
On the lower side, globalization has come at a cost about the emirate`s cultural values. Previously the Emirates who were mainly Muslim had their values, but with their unification, they have had to interact with other cultures with practices that the Muslim community frowns on. This has no doubt created a conflict of interests, but, the research is happy to point out, the situation has not gone out of hand, the people of the Emirates have apparently been able to relate with the necessary evils of globalization while taking full advantages of its benefits in relation to culture and its effects.
Some aspects of culture have not been changed, observes SayyidHurreiz, such as the private details of childbirth, death, burial and marriage. This, he observes, has largely remained traditionally intact and has not changed as they are not on the periphery but are crucial points in determining the particular culture under discussion. This Hurreiz observes, if were changed or were influenced, the culture previously seen would seize to exist and efficiently another culture in the making.
There has an increase in dependency on commercial products, and a commercialized lifestyle where money has become the center of day-to-day activities, this phenomenon was not as a present before the globalization of the UAE. Commercial products are the new rave in town, mainly because the import market has considerably expanded creating an influx of more ready-made products; this is a sharp positive change in the culture of these people.
SulaymanKhalaf, in his article, the evolution of the Gulf City Type, Oil, and Globalization, observes that there is an increase in nationalism, as the people in the UAE feel significantly threatened by the increased global presence in their society. This is mainly seen by the way numerous local governments have begun to put up heritage sites in different parts of their cities, apparently in a bid to encouraging an understanding of the culture of the original people of the Emirates
This research notes that the people of the UAE have observed the influences to their culture and how drastically it has had to face changes dealing with globalization, but they hold on to some core aspects. Taking the influences they find good and rejecting those they do not agree with, but they are caving under pressure mainly to westernization, a little at a time.
As expected, there have been numerous political changes with the advent of globalization. This cannot be underrated. The people of the UAE have had to change their lifestyles and their political set ups to build a unified front of a United Arad Emirates; this political unity is mostly responsible for all other benefits enjoyed by the globalization. The fact that the political agreement stood firm is a definite pillar to all other parts including culture and economy; all other aspects draw strength from the political unity exhibited by the UAE.
The UAE currently consists of 7 smaller Emirates; which include, Abu Dhabi, Dubai, Raps Al-Kamiah, Sharman, Ajman, Umm Al-Taiwan, and Fujairah. Its form of government is considered autocratic, as one person possesses all the power over all the other emirates. The UAE has a foreign policy of not interfering in the affairs of the other countries; this has made it exceptionally peaceful with its neighbors because of this policy.
The UAE `s decision to have a supreme ruler over all the other emirates should be lauded. It has prevented many power wrangles that might have incurred in the fight for supremacy; this is a direct benefit because it leads to peace. The fact that peace is prevalent in the UAE allows investors to consider it as an investment location; it gives a united front globally and is an encouragement that when done properly, globalization holds many benefits.
Regarding policies, the UAE makes policies that favor the original people of the UAE to work in their company. An example is in the banking sector where it is a law that in their annual recruits, 4% have to be citizens. This is a bright move, which was expected to increase employment levels of their people but did not quite take off because most people are leaving this sector to look for greener pastures in different places. Their policy of no interference in matters of other countries is a bonus; it has allowed them to have external peace with its neighbors. This has allowed development opportunities and economic growth
So far, it is evident that there have been great steps taken by The United Arab Emirates in globalization, it has come with significant benefits to them including;
Peace between the Emirates, as they are now one entity, internal conflict is addressed immediately and sorted before things get out of hand. The Emirates consider themselves part of one country, so picking fights with other emirates is not common, and whenever disputes arise, they are solved amicably.
It has allowed for increased trade opportunities, which have had a direct effect on the economy of the UAE. It is now one of the richest countries in the world because of globalization. They can export their goods to other nations as a unit, import as a unit reach more and more markets and ultimately raise its GDP.
Active cultural changes cannot be ignored. We see women getting educated, more mixing of people of different races, people interacting freely, a greater understanding of different cultures all over the world and ultimately peace. This is a plus for globalization.
Globalization has greatly benefited the people of The UAE by uplifting their living standards, most of the people are middle class, meaning they can live in relative comfort to most people in other areas all around the world, they are optimistic of the peace and the economic, social am the political stability of their country.
On the other side, it has come with some disadvantages as having been mentioned below;
Cultural erosion of the original inhabitants of the UAE, the different mixing of people has led to culture being eroded as newer, more westernised culture takes root, they have tried to combat this situation by building centres to show their people about their original culture, but surely, one day at a time, their culture is becoming outpaced.
Because of the sudden influx of companies, there is concern about the environmental pollution taking place in the UAE; more industries are releasing their waste products to the atmosphere without a care in the world. There are queries since the manufacturers do not seem to be controlled by their government. This as pollution is at its highest in a long time.
The economic difference between the wealthy and the have-nots his evident because of globalization, the rich get richer while the poor remain poor while they are exploited by the various industries as labor. This, unfortunately, is a price that exists to be paid for globalization.
Overall, the embracement of globalization by the UAE was a smart move; it has helped them accomplish a lot as outlined above but has also had some effects. This, unfortunately, is the price to be paid for globalization. This research has also noted that the people of the UAE have warmly embraced globalization, and it is now at the forefront, and an example to other countries bent on taking the same route.
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