Global Strategy and Competitiveness

 Global Strategy and Competitiveness
EMBA 635
 
United Arab Emirates 


 
Image Source: WorldAtlas.com
EXECUTIVE SUMMARY

This report consists of environmental analysis of the United Arab Emirates to examine its attractiveness to foreign investment. It builds up a country profile of United Arab Emirates focusing on one emirate Dubai by examining factors such as economics, political, legal, finance, socio-cultural, and Foreign Direct Investment (FDI) to determine the stability and growth and also to analyze the government support and intervention to foreign direct investment. It evaluates the current scenario and projects possible forecasts for the near future.

Emirates Computers specializes in Risk management, Information Technology (IT) and Recruitment within the IT industry. With the advancement of modernization in UAE, IT is a very attractive business sector there. Also the different initiatives and policies set up by the Dubai government make Dubai a very promising place to set up a business in. 

In summarization, UAE in general and Dubai in particular has had a very good economic growth and there is a lot of potential for further development although the current global financial crisis may slow it down a bit. Hence it is a good market for Emirates to enter but not at the moment, it should consider the possible outcomes of this economic downturn and then plan and proceed accordingly.









Table of Contents






















I.	ECONOMIC STATISTICS AND ACTIVITY
A. Gross national product
1. Total
The Gross Domestic Product has seen a steady increase in the last 5 years and economists predict it to rise in the future (Department of Foreign Affairs and Trade, 2009).


 



2.	Growth Rate 
The rate of growth was growing at constant levels till 2008 but has gone down in 2009.

 


B. Personal income per capita
Like Real GDP Growth Personal income per capita increased till 2008 and fell in 2009 as shown in the recent economic indicators figure above (Department of Foreign Affairs and Trade, 2009).
 

C. Average family income
The average monthly income for national households is AED 36,438.10 and expenditure is AED22,989, while non-national household income is AED15,074.30 and expenditure is AED9645.40 (Bundhun, 2009).
D. Distribution of Wealth
1. Income classes
The average monthly income for national households and non-national households is AED 36, 438.10 and AED 15,074.30, while the expenditure is AED 22,989 and AED 9645.40 respectively. (Bundhun, 2009)
2. Proportion of the population in each class
 
                                

Majority of the population falls in the category of annual incomes of over US$ 75000. The country’s standard of living is one of the highest in the world. On a per capita basis, disposable income exceeds US$20,000 per year (Euromonitor, 2009).

3.	Is the distribution distorted?
Country’s richest 10% of households accounted for 29.1% of household disposable income in 2008 showing that distribution is distorted (Euromonitor, 2009).  

E. Minerals and Resources
Natural gas and Oil are the primary natural resources along with petroleum production being the most important industry. The economy of UAE is dominated by gas and oil sector. The Supreme Petroleum Council, which is headed by the crown prince of Abu Dhabi controls energy policies (Library of Congress, 2007).
 

F. Surface transportation
1. Modes
The main modes of transport include Roads (total: 4,080 km paved: 4,080 km (includes 253 km of expressways), Ports, Inland Waterways, Civil Aviation and Airports an d Pipelines. (Library of Congress, 2007) (Middle East directory, 2008).
2.	Availability
The planned US$20.4 billion investment in airport infrastructure over the next 20 years could increase passenger traffic exponentially (Library of Congress, 2007). 
3.	Usage Rates
Table 1	Transportation Sales by Sector: Value 2002-2007

AED million
	2002	2003	2004	2005	2006	2007

Airline seats sold	27,700.0	28,800.6	37,600.8	39,801.5	43,201.8	49,003.0
- Schedule	26,000.0	27,000.0	35,000.0	37,000.0	40,000.0	45,000.0
- Charter	1,700.0	1,800.0	2,600.0	2,800.0	3,200.0	4,000.0
- Low cost carriers	-	0.6	0.8	1.5	1.8	3.0
Other transportation	141.3	161.7	203.7	239.9	266.1	294.9
- Bus/coach	75.0	92.0	131.0	165.0	171.5	188.7
- Chauffeur-driven car	66.3	69.7	72.7	74.9	89.7	100.5
- Cruise	-	-	-	-	2.6	3.2
- Ferry	-	-	-	-	2.2	2.5
- Rail	-	-	-	-	-	-
Transportation	27,841.3	28,962.3	37,804.5	40,041.4	43,467.9	49,297.9
Source:	Euromonitor International


4.	Ports
In addition to the two major facilities in Dubai, Jebel Ali and Port Rashid, Sharjah city has a port and the emirate has another in its Khor Fakkan enclave on