Chapter 1 Project
Country and Goods
Country: United Arab Emirates
2 goods: Petroleum and Gold
Economic Development - raising the standard of living and well being of people
Land - all natural resources
What do the products tell you about resource allocation? Reflect on for whom the product is produced.
The products are produced for luxury classes of other countries, and because they are luxury goods, the resources used are honed very much towards the production of only luxury goods, rather than focusing on production of other goods for their country.
What do the products tell you about income distribution?
Because he UAE focuses on luxury goods, it is one of the richest countries in the world. This wealth is, however, distributed vastly unequally between different Emirates and among the various population groups. Most of the country’s wealth is concentrated in Abu Dhabi and Dubai. Although most people live relatively well and have access to free public services, such as water, electricity, health care, and social security, large numbers of foreign workers earn low wages or inadequate salaries. As of 2003, 19.5 percent of the country’s population was estimated to be under the poverty line.
Are the resources used to produce the two products publicly owned or privately owned?
Resources are both publicly and privately owned. Foreign businesses that do business with the federal government must comply with public sector rules, which say that they must have a UAE national agent as a representative, they must set up an entity that is majority owned by UAE nationals, and work through a joint participation venture with a locally licensed entity.
Does the public sector or the private sector make the economic decisions in your country?
The public sector makes the economic decisions in the United Arab Emirates. The competitive and modern financial sector provides a full range of services, although the state’s presence remains considerable. Capital markets are open and vibrant, with a number of foreign firms in operation. Because of the mass amount of foreign businesses within the UAE, the public sector must make the economic decisions in order to make businesses comply to certain rules.
How are resources and products rationed in your country?
The UAE focuses mainly on exporting luxury goods such as jewelry, gold, apparel, and footwear. Although Dubai is considered the leading touristic and economic hotspot of the country, Abu Dhabi is making its way and is becoming recognized as an emerging market for high-end tourists and the luxury goods industry alike. The growing mall culture in the UAE also makes the luxury brands more place-oriented with almost no single standing luxury stores available in the country. On the other hand, single brand stores remain the core income generators for the industry. Over time, the prosperous economic future is expected to create a synergy effect on the development of the luxury goods market as well. Coupled with Dubai’s efforts to promote the city as a top shopping destination, and Abu Dhabi’s ambitious new transformative projects, demand for luxury goods is predicted to continue to outperform the entire economic development.
Can you tell whether or not, based on the products produced, your country is experiencing economic growth?
Yes, the UAE is experiencing economic growth, especially from 2014 to 2015. Because crude oil prices have been decreasing, the UAE has seen this as an opportunity to grow economically and push forward, seizing the opportunity of low oil prices to cut subsidies. Also, according to Bloomberg Business, the banks of the UAE are thriving because of a recent slump in crude oil prices. ”The bank is looking to expand in Asia and could open a branch in China along with plans to upgrade its Indian representative office.”
Can you tell whether or not, based on the products produced, your country is experiencing economic development?
Yes, it is very clear that the United Arab Emirates is experiencing economic development. The GDP per capita has been rising steadily, starting at $59,200 in 2012 then growing to $62,200 in 2013 and then to $64,500 in 2014. The number of internet users per 100 people has also increased in the past few years, going from 5 people in 2011 to 8 people in 2012. SImilar to internet access, mobile subscriptions have also increased; in 2011, 50 people per 100 had mobile subscriptions. In 2012, the number grew to 72, and in 2013, 78. The UAE is successfully expanding their economy while also developing very steadily by focusing on the wants and needs of their people.
Can you tell whether or not, based on the products produced, your country is practicing sustainable development?
Yes, the UAE is steadily growing economically and, according to Euromonitor International, it’s population will reach 10.6 million, an increase of 26.9% from 2012. Due to the UAE’s reliance on foreign workers, foreign citizens dominate the population and are estimated to make up 88.2% of the population by 2030. All of the UAE’s main cities will also continue to increase in size, Dubai being the fastest growing. The standard of living for people in the UAE is very high, as there is lots of money to spend and use for economic development, meaning that the population as well as the economy will continue to grow and prosper.
U.A.E. Cuts September Gasoline Prices as Global Oil Falls
““We’re now back at a gasoline price that’s hardly above the old subsidized price,” Robin Mills, a Dubai-based analyst at Manaar Energy Consulting, said by phone. “This vindicates the approach of seizing the opportunity of low oil prices to cut subsidies.””
Banks in U.A.E. Seen Chasing More Deals as Lending Margins Erode
”The bank is looking to expand in Asia and could open a branch in China along with plans to upgrade its Indian representative office.”
““International expansion, organic and inorganic, is a big part of the overall bank philosophy going forward,””
“A slump of more than 50 percent in crude-oil prices in a year has prompted some Gulf companies to “lighten up their assets” and provide a business opportunity for the bank...”
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