Environmental Analysis in the UAE

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Table of Contents

Demographic Environment
Economic Environment
Natural Environment
Technological Environment
Political Environment
Cultural Environment
References

Demographic Environment

The UAE has a high number of expatriate labourers currently working in the country. From the national census carried out in 2005, it was indicated that the expatriate labour force accounts for about 78.1% of the population. It was estimated that the male and female population accounted for about 67.6% and 32.4% respectively.

The report suggests that most of the population is located in the Emirates of Dubai and Abu Dhabi. The UAE has one of the highest increase rates of female workers among its workforce in the region. This is creating a huge demand for both essential and luxury commodities (Ministry of Economy UAE, 2005).

Economic Environment

The UAE runs an open economy, which is soundly anchored on the robust monetary and fiscal policies, a burgeoning yearly surplus, favourable import/export duties, and tax laws. Dubai serves as a business hub. The CIA World Factbook (2008) report states that the UAE attained a GDP of about $192.6 billion and a GDP per capita of $37,300 during the year 2007.

The IMF (2007) ranked the UAE as the nation with second highest GDP within the Cooperation Council for the Arab States of the Gulf (CCASG) nations. However, just like other gulf states, the prosperity of the UAE is mainly dependent on its oil wealth.

Natural Environment

The UAE is endowed with vast oil and natural gas resources, which make up the backbone of its economy. Most of the government revenue is obtained from the sale of oil and natural gas. The UAE also has a vast coastline with exquisite beaches that have enhanced its appeal as an international tourist destination. Through encouraging foreign investment, UAE has been able to attract investors who have invested in multibillion hotels along its coastline (Department of Tourism & Commerce Marketing UAE, 2006).

Technological Environment

The oil boom in the UAE changed the technological environment equation. With revenue from the export of oil, the UAE gained access to modern technology and the capacity to make significant changes to their environment.

For example, they have reclaimed land from the desert through irrigation using desalinated water to make the soil productive. There is also the extensive use of air conditioning equipment in motor vehicles, homes, and public buildings. This has made it comfortable to live in Dubai, a place where temperatures get as high as 110°F (43°C) (Cultures of the world, 2008).

Political Environment

Kaufmann, Kraay, and Mastruzzi (2008) argue that Dubai ranks among the top quartile positions with regard to government effectiveness and management of corruption, rule of law, and regulatory quality. However, with regard to political stability, it is ranked in the second quartile. The UAE’s government is formed by a presidential monarchy. The premiership and the presidency are hereditary to the Al Maktoum and Al Nahyan clans of Dubai and Abu Dhabi Emirates respectively (Business Monitor International, 2006).

Cultural Environment

The language mostly spoken in the United Arab Emirates is Arabic, which is also the official language. However, in relation to most business transactions, the commonly used language is English. The other regional languages such as Urdu, Hindi, and Persian are also spoken in the UAE. Most of the population subscribes to the Islamic faith.

Despite the presence of the Islamic and Arabic cultural influence, western culture is also evident within the UAE. The western culture plays an essential role such that the UAE business practices are closely similar to those exhibited in Great Britain and the United States (Cultures of the world, 2008).

References

Business Monitor International. (2006). UAE – A Regional Leader. Web.

CIA World Factbook. (2008). United Arab Emirates. Web.

Cultures of the world. (2008). New York: Marshall Cavendish Benchmark.

Department of Tourism & Commerce Marketing, UAE. (2006). Dubai Business Handbook 2006. Web.

IMF (International Monetary Fund). (2007). World Economic Outlook:Spillovers and Cycles in the Global Economy. Web.

Kaufmann D., Kraay, A. & Mastruzzi, M. (2008). Governance MattersVII:Governance Indicators for 1996-2007. Web.

Ministry of Economy UAE. (2005). Preliminary Results of Population, Housing and Establishments Census 2005. Web.

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