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The Economy of the United Arab Emirate
The United Arab Emirates is amongst one of the most successful countries in the Gulf and the Middle East. It is made up of seven emirates. It lies within the Arabian Desert and covers an area of 83650 Km2 with a population of 10 million people, inclusive of all the immigrants. The United Arab Emirates is an Islamic state that strongly adheres to Islamic cultural practices in all domains of life. The capital city of the United Arabs Emirates is Abu Dhabi which is also the wealthiest city in the country. The countrys economic performance is one of the best performing economies globally. However, there are various factors and forces that affect their economic performance.
The demand and supply chain structure of the United Arab Emirate is very diversified in that it involves a variety of sectors. An economy with a variety of sectors is exposed to high risk due to the high number of risks available in the different domains (Vittori & Page, 2020). This implies that the demand and supply chain problems that affect one sector will negatively impact the countrys economic performance. The United Arab Emirates is also made up of different emirates headed by different leaders who possess different leadership skills. When one region is faced with supply chain dilemmas, there will be a negative impact on the performance nations economy.
The supply and demand chain of the United Arabs Emirates is made up of both local and foreign organizations which contribute to the nations economy. The government has enacted various policies that regulate the operations within the demand and supply chain within the nation (Abouraia, 2016). However, there are some policies that do not favor foreign investors within the nations supply and demand chain. Most policies only favor the local traders because they are in advantageous positions compared to the foreign organizations, which have to use more resources in the demand and supply market in the country.
Some sectors within the demand and supply domain within the United Arab emirate have also failed to meet the demand in the market. For example, the real estate and housing sector that aims to provide affordable housing for the nation has failed to meet the housing demand in the country (Consumer Prices Growth Moderates, 2021). Affordable housing has been a major setback for the people of the United Arab Emirates since it is expensive to rent houses in various regions in the Arab nation. When one sector within a nations economy is poorly performing, there will be a negative impact on the countrys economic performance and the nations gross domestic product.
Unemployment in the United Arab Emirates
The labor market of the United Arabs Emirates is also flooded by foreign workers who come into their nation to look for greener pastures. The local citizens have not been motivated to take up various employment opportunities in various sectors in the nation. The labor laws in the nation majorly favor foreign workers so as to motivate them to increase the quality of their productivity in various domains in the United Arab Emirates. Most organizations and companies in the United Arab Emirates opt to hire or import foreign workers since they provide cheap sources of labor in the labor supply and demand market. However, the dominance of imported workers in the labor market encourages the exportation of financial resources to other nations. Most individuals who work in the United Arab Emirates job market invest their income in their home countries, which negatively impacts the nations economy. Financial resources taken out of one economy to another bring about a negative performance in the gross domestic product of the nation where the resource was gotten from.
However, the United Arab Emirates is one of the countries across the world that have the lowest unemployment rates due to the low population of the nation. The economy of the United Arab Emirates is greatly reliant on the oil economy, while it neglects the productivity of the native citizens of the nation. The country has one of the best performing Gross Domestic Product due to the high amounts of resources and the low population of the native citizens.
Inflation in the United Arabs Emirates
The inflation rate within an economy is the rate at which a country raises the prices of commodities within the demand and supply chain. Inflation has a significant impact on the economic performance of a nation since it greatly relies on the power of the citizens to acquire various goods and services (Consumer Prices Growth Moderates, 2021). The United Arab Emirates operates under an open economy whereby local factors contribute to the economic growth of a nation and the collaboration with other countries to enhance productivity (Consumer Prices Growth Moderates, 2021). Therefore, inflation within the United Arab emirate affects the economy of the nation. It will also have a devastating impact on the economies of other countries that are affiliated with it economically.
The United Arab Emirates has extensively relied on the oil economy to finance most of its activities within the economic domain. Inflation has enabled effective diversification of the economy of the United Arab Emirates, where more sectors are being strengthened to effectively add up to the nations gross domestic product (Consumer Prices Growth Moderates, 2021). Inflation aims at directing more financial resources to different sectors to enhance and strengthen the performance of other domains such as the housing sector, the healthcare sector, and the hospitality sector. Enhancing effectivity in another sector would help in increasing the gross domestic product of the United Arab Emirates.
However, increased inflation has also brought about a negative outcome in different sectors in the nation. Higher inflation leads to a lower purchasing power of the nations currency. The market value of Dirham, which is also the national currency of the United Arab Emirates, will depreciate in the international markets (Varghese, 2021). When the value of the nations currency decreases, the local organizations are affected in the international supply and demand chain, such as in the import and export sector. Individuals living under fixed incomes are the most affected when inflation is increased since the prices of various commodities increase, whereas the income of the individuals remains constant.
This research is vital for an individual who is willing to explore the job market in the United Arab Emirates since it provides positive insights into the favorable working environment for foreign workers. Most organizations operating within the economy of the United Arab Emirates acquire their human resource from the international markets. This research also enables an individual to understand various monetary policies that enable a foreign investor to be successful in the market.
References
Abouraia, M. K. (2016). Determinants of High and Continuous Inflation Rates in the United Arab Emirates: A Managerial Point of View. Business Management and Strategy, 7(2), 68. Web.
Consumer Prices Growth Moderates. (2021). FocusEconomics | Economic Forecasts from the Worlds Leading Economists. Web.
Varghese, J. (2021). UAE: How does inflation or deflation make a difference in daily living and your expenses? Gulfnews.com. Web.
Vittori, J. V., Matthew T., & Page, M. T. (2020). Challenges and recommendations Dubais role in facilitating corruption and global illicit financial flows. Carnegie endowment for international peace. Web.
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