Globalization

in the
United Arab Emirates

Jack McKeoughn Cone

Senior Thesis
April 21, 2015

Professor Stephen Tallman

The University of Richmond
Robins School of Business

Abstract
In this paper I will explain how the United Arab Emirates has seen great success due to
globalization and its willingness to interact politically on the international playing field.
Furthermore, I will also elaborate on why and how in the coming decades the UAE will continue
to attract large sums of foreign investment, ranging across a diverse set of business sectors while
also appealing to tourists who are seeking to visit one of the worlds most rapidly developing and
diverse countries.
The UAE provides an extremely safe and progressive environment for any international investor
to conduct their business in. The countrys economic measures and population size have grown
exponentially over the past 30 years and will continue on this trajectory for the foreseeable
future. (Figure 6: GDP in UAE over last 35 years & Figure 7: UAE Population Growth over
last 35 years (Millions of People)).
Originally funded by massive oil and natural gas reserves, the UAEs leaders have demonstrated
a superb knowledge and invested interest in taking their economy to even higher and diverse
levels to continue to compete and succeed on the global scale. Positioned in an easily accessible
and central location, as a connector for the East and the West, while also offering a tax free
business environment, the UAE is arguably the most appealing hub to move an office or branch
of ones business to in the entire Middle East North African region.

Executive Summary
The United Arab Emirates, located on the Persian Gulf, finds itself in a region constantly
plagued by war and cultural and religious strife. Additionally, within the countrys borders there
is the constant struggle of the new versus the old and the governments attempt at balancing the
recent achieved levels of extreme wealth that have come as a result of globalization against the
traditional aspects of land and religious preservation. The seven emirates that form the UAE
include Abu Dhabi, which serves as the capital, Ajman, Dubai, Fujairah, Ras alKhaimah, Sharjah, and Umm al-Quwain. Although there are minor differences from each
emirate to another, the differences are minute in comparison to that of the UAE as a whole
versus many other Arab countries. The UAE has achieved both high levels of quality of life and
wealth for its citizens. The UAE has made a continued effort to improve its speed of
globalization by focusing on opening their borders for trade of commerce and travel with the
West.
In addition to the countrys own great successes since the turn of the millennium, the
UAE now also serves as a roadmap for other Arab countries who want to progress and compete
on the global scale. The UAE, like other Arab nations, and specifically its Gulf neighbors, ought
to accredit its early financial growth to its vast oil and natural gas reserves. But, in recent years
the countrys economy, led by its absolute monarchy governed by the Al-Nahyan family, has
successfully transitioned away from its oil dependency and diversified into sectors such as
tourism, banking, technology, education, medicine, infrastructure and business process
outsourcing. Not only has the UAE adopted and applied cultural, educational, technological and
professional concepts and ideas from the West, but it has become a global leader in infrastructure
and now serves as a primary travel hub for the world. The UAE claims home to two of the fastest
growing cities and economies in the modern era: Abu Dhabi and Dubai. If other countries,
particularly those in the Middle East North African region desire to be economically prosperous,
they should analyze these two cities in particular, as examples of how they should try to develop
their respective cities. Additionally, the UAE has strategically aligned itself with many of the
most powerful and influential governments in the world. Their military and air force frequently
train alongside and perform missions with soldiers from the Kingdom of Saudi Arabia, Egypt,
and Jordan. The UAE is also an ally of the United States of America and home to both naval and
air bases.
All that said, despite its economic and military success the UAE has experienced its
handful of delicate issues. Ranging from domestic unhappiness to calls for government reform to
rampant complaints of human rights issues, it is clear the UAE has a few internal issues.
Currently, the emirate is trying to find a balance between the Western perception it hopes to
project while still maintaining some level of truth and obligation in preserving the countrys
history and deep rooted traditions. The country is heavily reliant on importing nearly everything
that runs its economy. From raw building materials to labor workers to professional business
men, nearly the entire working population is comprised of expatriates.

In a region that is war ridden and despondently flooded with religious extremist groups,
secular countries like the UAE may find it difficult to attract foreign investment and international
visitors while still maintaining strong ties with their Arab and Muslim brothers. The UAE is
currently a contributing member to the Gulf Cooperation Council along with Bahrain, Kuwait,
Oman, Qatar and Saudi Arabia, which all signed to positively affect coordination, cooperation
and integration between all member states (GCC-SG Website). Within the GCC, there have been
internal conflicts that have tested relations between the governments of the KSA and UAE
against Qatar and partially Bahrain. These issues are rooted in the desire to progress financially
and powerfully while the countries debate on democratization issues including freedom of
speech and freedom of religion and the political views on radical Islam. The UAE fully
appreciates the importance they have in trying to maintain regional stability for the sake of their
countrys well-being. They are constantly trying to find ways to quell the spread of terrorism that
is unfortunately incubated within the region.
Although the country has seen great financial growth, this has not come without a few
small setbacks. The UAE was affected during the most recent global economic crash, where it
experienced its own property bubble burst in 2008-2009. Major cities like Dubai saw such high
levels of growth in the early 2000s that builders and contracting investors completely saturated
the market and overestimated truthfully how much office space and apartment buildings would
be needed. But, as construction slowed and the population number continued to rise, the vacant
spaces started to fill. Similarly, the UAE has been negatively affected by the recent drop in oil
prices over the last year. Although the country has slowly diversified its economy away from the
oil industry, still over one third of its GDP is directly based on oil and gas output (OPEC
website); thus the country could face economic recessions in the fiscal year 2015. Despite the
bumps along its economic road, the UAE and its economies have consistently proved resilient
and bounced back stronger; and they will follow this upward trend going forward.
Economically centered primarily in Abu Dhabi and Dubai, the UAE has demonstrated
some of the most impressive and advanced infrastructure projects the world has seen. In just
Dubai there is Dubai Media City, Dubai Internet City, Dubai International Financial Center,
Dubai Port World and Dubai World Central. Additionally, the small emirate is home to some of
the most luxurious and grand hotels, including the Burj Al-Arab, the only 7 star hotel in the
world and the Atlantis Palm located on the manmade palm islands. Additionally, the UAE is
home to the worlds tallest building, the Burj Khalifa and two of the most lavish and largest
malls in the world. As an example of the encouraging international recognition the UAE has
received as of late, Dubai was chosen to host the 2020 World Expo. Along with these buildings
have come businessmen and guests to fill them. Dubai International Airport recently surpassed
London Heathrow for the most international travelers in the world in 2014. All things
considered, Dubai, Abu Dhabi and the UAE as a whole serve as a spectacular place for any
foreigner to take their wildest business aspirations and most luxurious travel desires.

Table of Contents

Abstract

Executive Summary

Introduction

History of the UAE

11

Government
Ruling Family
Demographics
The 7 Emirates
Economy
Oil Production
Diversification
Globalization

16

What is Globalization?
Thomas Friedman: Lexus and the Olive Tree
Economy, Citizens and International Relations & Politics
The Old versus the New
The UAE as a Roadmap for Other Regional Countries

19
25

Gulf Cooperation Council (GCC)

OPEC

Infrastructure and Real Estate

29

Hotels
Banks
Real Estate Bubble
Infrastructure
Technology

34

Internal Issues

36

Human Rights Laws

Demographic Classes: Local vs. Labor vs Business
Monarchy Rule
5

Oil Price Drops

The Arab Spring and Regional Conflict

44

How did UAE avoid Arab Spring?

Regional Conflict
Spread of Terror

47

International Relations: Governments and Politics

48

Conclusion

55

Figures

58

Works Cited

73

Introduction:

This thesis explores, explains and analyzes the cultural conflict and institutional strife
that can be found in one of the fastest economically growing and ethnically diverse countries in
the world: the United Arab Emirates (UAE). Composed of seven separate emirates, the UAE
struggles with the vast difference between the modern, consisting of unprecedented wealth,
extravagant spending and a successful implementation of globalization and the traditional, which
is rooted in the ancient lands, oil money and governed under an absolute monarchy. While other
countries in the region have actually taken strides backwards in regards to international relations
and internal growth, the UAE is an anomaly in the fact that the country has produced
unparalleled levels of growth and economic success over recent years.
The UAE serves as a successful road map that other countries in the region should strive
to emulate. Plagued by high levels of unemployment, religious and cultural conflict, and a spread
of terrorist organizations, many countries in the Middle East North African region have
experienced a challenging time maintaining internal stability and avoiding conflict, let alone
moving up in the global ranks. While the actions of governments, self-appointed leaders and, as
of recent, extremist groups, have removed their countries from the global economy in order to
preserve desired levels of Islamic purification, the UAE has democratized its economy by
opening themselves to cross border trade while establishing economic zones that encourage
foreign investment and an influx of expatriate workers. Originally built on oil and gas wealth, the
UAE has successfully diversified its economies in recent years in order to assure a high level of
growth trajectory into the foreseeable future.

The country, led by the cities of Abu Dhabi and Dubai has expanded its exposure into
different professional sectors including, but not limited to; tourism, banking, technology,
education, medicine, infrastructure development and business process outsourcing. Over the
course of my research I analyzed numerous different sources originating from both inside the
UAE and external bases in order to get an accurate representation and grasp of the country on the
domestic, regional and global scale. I searched for credible information from an array of
publications such as the media, online newspapers and magazines, texts, journals, first person
narratives and even conducting in person interviews. During the process of researching for this
paper I found a few reoccurring themes about the UAE:
Firstly, the UAE as a whole serves as a success story to all countries and governments
around the world, demonstrating that globalization can have positive effects on the economies,
citizens and international relations of a given country. Secondly, the UAE serves as a reason for
hope to other regional countries as a result of its widespread prosperity and economic success.
This success is not only limited to the UAE, but many of the other Arabian Gulf countries have
also demonstrated positive levels of economic success in recent years; although it can be argued
that this monetary success is due to the direct assistances from oil. Thirdly, if a given country can
successfully distribute its wealth among the local citizens, the more likely the government (in
this case the ruling king) will be to maintain their power. In a region that recently underwent an
astounding number of governmental reforms and overthrows of longstanding leaders, coined the
Arab Spring, a top priority of any leader within the region should be to maintain stability and
control; and, evidence shows this can be accomplished through handouts and monetary benefits.
The UAE and Khalifa bin Zayed Al Nahyan the President have for the most part been successful
at quelling any animosity towards the state from its citizens.

One of the main sources I refer to through this essay is The Lexus and the Olive Tree by
Thomas Friedman. Many of his revolutionary concepts and ideas, although based in the 1980s,
are relevant to the UAE and Middle East region today. One instance where Friedmans text can
be applied to the UAE is where he explains the powers behind globalization. The driving idea
behind globalization is free-market capitalism the more you let market forces rule and the more
you open your economy to free trade and competition, the more efficient and flourishing your
economy will be (Friedman, Pg. 9). When analyzed, this sentence helps explain how the UAE
has had such great success and why Dubai and Abu Dhabi have surpassed nearly all other Arab
cities and most of the worlds capitals as diverse, booming economies.
Although extremely successful when analyzed on many measurable economic and
demographic factors like GDP rate, foreign investment, population growth and fostering a
positive relationship in international policy with other world leaders, the UAE has and does deal
with its own internal issues. The government and large companies are frequently accused of
breaking human rights laws. Given the fact that the most popular cities like Dubai and Abu
Dhabi have been built from the ground up in just under a few decades, the construction
demanded tens of thousands of workers, the majority of whom are immigrants from South Asian
countries. Many international humanitarian organizations have been critical of the UAE and
other emirate countries in recent years in response to the lifestyles of the immigrant workers. In
addition to the foreign labor force, just as international is the demographic of the professional
working class. The men and women who run the banks, hotels, oil refineries and finance or
technology centers are non-domestic workers. Instead, they are more often than not foreign
workers who have come over on working visas and are looking to get rich in the fantasy lands
located on a tiny emirate in the Persian Gulf.

The huge number of foreign workers can cause other issues for the government of the
UAE. There is a great divide between the three clusters of people; the locals, the immigrant labor
workers and the professional expatriates. In 2013, the UAE census bureau estimated that
immigrants accounted for 83.75 percent of the entire UAE population. And, in the economic
hubs like Dubai and Abu Dhabi, locals only made up as little as 5 percent 44. Furthermore, there
have been instances where the labor class has spoken out and risen up against the government
and big corporations expressing that the wages they are paid and living conditions they are
provided equate to modern day slavery. This has caught attention on the international scale but
also evoked minor setbacks like fines and monetary restrictions imposed on the UAE. Lastly, the
UAE, an Islamic country with Arabic as its national language, constantly sees its Western and
Eastern worlds collide when trying to balance the enforcement of extreme limitations on freedom
of speech, the disavowal to gather or protest the government and the ongoing confrontations in
regards to basic human rights of foreign workers while still trying to attract a Western workforce.
Although appreciated as an exemplary model for any international country to admire and
attempt to emulate, the UAE is also not invisible to external issues. The UAE, just like the
majority of the world was hit by the economic crisis of 2007 through 2010. Dubais real estate
market in particular was brought to a screeching halt. Additionally, the country and government
has not completely avoided all the expected repercussions from the spread of war and fear that
comes with the territory. Instability in places like Yemen, Syria and Iraq make foreign investors
question the legitimacy of taking their money and companies to countries not far from crisis.
Lastly, the UAEs economy and in particular the Dubai Stock Exchange experienced losses
during the recent drop in oil prices.

10

All in all, the UAE has demonstrated spectacular levels of growth on economic and
cultural fronts. Growth has been not only on a regional but also on a global scale; cities like
Dubai and Abu Dhabi serve as two of the most prosperous business centers that continue to offer
year in and year out positive returns. The country has attracted both foreign investors and visitors
for the past couple decades and will continue to do so as the investment, banking, infrastructure
and hospitality sectors continue to thrive and expand. The UAE greatly benefits from its positive
relations with Western countries like the United States and United Kingdom and Middle Eastern
countries like Turkey, Jordan and Egypt. Closer to home, they also are protected economically
and politically through their allegiance with the Gulf Cooperation Council (GCC), a political and
economic union consisting of six of the Arab states located on the Persian Gulf.
The primary goal of this paper is to enlighten the reader on the main reasons why the
UAE is the most safe and progressive country in the Arab region. Due to its recent transition into
a diversified economy while simultaneously transitioning its society into a globalized culture, the
UAE and its citizens benefit from both its traditional, historical roots and its fruitful, progressive
economy. When taking into account all of the above factors, the UAE is a real attractive
prospect for any progressive minded investor looking to diversify their portfolio and or savvy
traveler looking to visit the newest wonder of the world.

History of the Government:

Today more than ever, the traditional boundaries between politics, culture, technology,
finance, national security and ecology are disappearing (Friedman, Pg. 20). This was said 20
years ago, but is even truer today. The United Arab Emirates, (which I will refer to throughout

11

this paper as the UAE), is at the forefront of the most recent countries to come on the
international scene and help break down boundaries of trade, communication and culture. The
UAE is very progressive when it comes to embracing outside cultures. This can be seen in
religion, education, cuisine, and entertainment. But, there is still the divide of the political
monarchy and then everything else foreign that makes up its societies and economies.
The current government situation in the UAE follows the norm for the region. Monarchies
rule and hold onto their power until their dying day; only to pass the baton onto a blood related
male member. Politics have been corrupt for centuries across the Middle East; for instance the
results of almost all elections and voting in the Arab world typically produced a 99% support in
favor of the ruler! 1. That being said, in many instances the leaders are idealized, and in
countries like Jordan, with His Majesty King Abdullah II and Saudi Arabia, with Salman bin
Abdulaziz Al Saud, the kings are believed to be direct lineage of the Prophet Mohammad.
There is little opportunity to see any tangible movements in government figures or structure
across most of the region, and the UAE is no exception. In the most recent election in 2011,
voting on the country parliament, the UAE reported a turnout of 28% of eligible voters. Compare
this to the United States, where the past four elections have averaged a turnout rate of 56.6% 8.
The United Arab Emirates is a hereditary monarchy led by Khalifa bin Zayed bin Sultan
Al Nahyan who also serves as the President of the country, the Emir of Abu Dhabi and the
commander of the Union Defense Force. Anthony Harris, a former U.K. ambassador to the UAE
expressed his findings; The social contract is that you get given things by the sheikh and in
return you give the sheikh your allegiance 3. This methodology of rule has proven relatively
successful for kingdoms like UAE and the Kingdom of Saudi Arabia, (which I will refer to as the
KSA), because the governments have the luxury of excess wealth to pay off their citizens in
12

order to quell any serious levels of animosity. The idea of buying the support of citizens may
seem obscure to Westerners, but when your countrys local population is so small, it is an
educated investment made by the leaders in order to maintain stability and popularity. According
to Bloomberg, in 2007 citizens made up less than a fifth of the UAEs 4.3 million residents;
based on the countrys census report. Currently the World Bank estimates the total population is
9.346 million people. (Figure 3. Total Population of UAE vs. Neighboring Countries (1960
2013)). The Emirati citizens only account for 3% of the Dubai population. Unlike the UAE, not
so fortunate countries like Jordan, Syria and Lebanon do not have the luxury of massive reserves
of natural resources and have to find other ways of rule to satisfy their citizens.
The UAE is undeniably very fortunate to be so oil rich. But, the government has also done a
superb job managing its wealth, and diversifying its investments as to not be overly dependent on
this one commodity. As stated by Matthew Brown in his Bloomberg article on the UAEs drive
to have its economies be both more Emirati run and diversified, he explains the economy has
made the shift away from oil into finance, real estate and tourism 3. Since the start of the
century, the UAEs Central Bank has amassed a huge amount of wealth; now reaching close to
350 billion AED. (Figure 8. UAE Central Bank Balance Sheet).
The UAE has done a superb job opening its borders to both domestic and foreign companies
to help bring in investment and increase their domestic economy; if you can even call it that
given the fact that close to 88 percent of the countrys population is comprised of foreign
expatriates 79. But, as a result of lowering their borders, the country makes themselves more
appealing to customers. As the economy has grown, the country has seen a massive boom in
hospitality and tourism. (Figure 15. Dubai Hotel Sector (2009 2013)). Not only can Dubai
claim fame to the tallest building in the world, but they are also home to the worlds tallest and
13

most expensive hotel, the Burj al-Arab. This 7-star hotel costs on average over $1000 a night per
room and also has a heli-pad for easy access to the worlds most rich and famous 39.
Additionally, guests can explore the Atlantis hotel, built on the manmade palm islands. If staying
in a hotel is not luxurious enough for big spenders, one can even invest in their own country
within the manmade World Islands. (Figure 13. The World Islands (Dubai, UAE)). As
foreigners are deterred from visiting more traditional tourist destinations like Damascus, Syria or
Cairo, Egypt, in response to lingering effects of the Arab spring, the money is being moved to
the booming cities of Abu Dhabi and Dubai, where hotel companies like Kerzner International,
owners and managers of the Atlantis Palm and One and Only resorts, work tirelessly to uphold
the company motto to blow away the customer 38.
All seven emirates that make up the federation of the UAE each add their own individual
way of life and business that make the country truly unique. Each emirate has individual borders
that separate them, in addition to individual legal systems and governing bodies 76. As I will
elaborate throughout this paper, Dubai and Abu Dhabi are accepted and appreciated as the
largest, most popular and most wealthy of the seven emirates. But, the Emirate of Sharjah is
regarded as the Cultural Capital of UAE 76. Whereas the Emirate of Umm Al Quwain is the
smallest and least developed of the states. This Emirate in juxtaposition to the others offers a
quaint area for locals and visitors alike to enjoy the nature and wildlife of the Persian Gulf.
All that said, through this paper I will focus the majority of my time, research and analysis on
the two Emirates of Abu Dhabi and Dubai. As the country moves away from oil dependency, it
is crucial for investors to understand where the investment and wealth is shifted to. The place of
choice has been the city of Dubai, as seen by (Figure 17. Dubais Share in the UAEs non-oil
trade) which year in and year out averages as high as 75% of the countrys non-oil trade. As
14

Thomas Friedman explained, Each successful company or country will recognize its center a
little bit differently, depending on its marketplace, geography, population and level of
development (Friedman, Pg. 86). The UAE has done a great job finding its unique niche in the
Persian Gulf and in respect to the timeline of history, has created a real life oasis overnight;
establishing its economic and infrastructure hubs in its two main Emirates. The marketplace and
population have been on a steady upward trajectory over the past decade, while the country has
exploited its location in the war-ridden Middle East, to instead turn this geographic positioning
into a positive by intriguing travelers and wealthy individuals from other Middle Eastern
countries, Europe and North America who desire a vacation in the historically rich region.
The UAE have been very fortunate of the discovery of oil in their country. The country has
approximately 10 percent of the total world supply of proven crude oil reserves 60 and
approximately 40 percent of the countrys gross domestic product (GDP) is directly based on oil
and gas 61.
After the 2008 global financial crisis, cities like Dubai were negatively hurt, particularly its
construction and real estate sectors. But, overall, cities like Abu Dhabi that have plenty of oil in
the ground were able to stay afloat. As a writer for Forbes magazine explained, It is always
important to separate Dubai from the rest of the UAE, and in particular from Abu Dhabi; Abu
Dhabi will never run into financial trouble so long as there is oil in the ground, whereas Dubai,
which doesnt have access to those oil fields, must instead build an economy based on business,
tourism and real estate 70. Dubai and other emirates with less exposure to oil have still done a
remarkable job surviving since the 2007-2009 down fall by diversifying their economy and
investing the countrys savings in other industries like transportation, infrastructure, technology,
tourism and financials.
15

Globalization:

The UAE has been extremely successful in globalizing its country and separate economies in
recent years. As Friedman explained, globalization operates at its own pleasure, Globalization
has its own set of economic rules rules that revolve around opening, deregulating and
privatizing your economy, in order to make it more competitive and attractive to foreign
investment (Friedman, Pg. 9); which the UAE has done, demonstrated by its numerous tax free
zones and easy to access open market system. The country has seen a great increase in foreign
investment over recent years (Figure 16. Evolution of Foreign Direct Investment (FDI) in Dubai
(2005-2010)).
As it was in the past and still is today, the most important measurement of how
globalized a given country is, is how fast they react and adapt to the fast changing world. The
systems speed, speed of commerce, travel, communication and innovation are all important
measure sticks to demonstrate how the country is performing overall (Friedman, Pg. 10). The
UAE has theoretically and literally flown past the competition in regards to how fast they are
able to trade with the global merchants and consumer markets. A home to 10 airports and 7
aquatic ports, the country is arguably the most easily accessible location and hub connecting all
of the Middle East, Southeast Asia and North Africa. As Mr. Haytham El Maayergi, head of
transaction banking in the UAE for Standard Chartered Bank said Dubai will act as the reexport hub for consumer goods, especially autos 5. Not only will the country be importing and
re-exporting cars, this indication also represents how Dubais banking center is so sophisticated
and extensive that it now competes with other popular offshore centers. For years countries like
the Bahamas, Bermuda and Australia have been the home of choice for the wealthy individuals
and companies to hide away their cash and reserves; but quickly the UAE and in particular the
16

Dubai International Financial Center (DIFC), with its newly established free trade zone, one of
30 in the country, and zero tax policy, has been thrilled to watch the massive checks rapidly
arrive on their shores.
In addition to enticing huge amounts of wealth from Western and Eastern companies
alike, in the past decade the UAE has greatly increased its trade with Africa. The trade with the
African nations is not only increasing the two countries imports and exports, but Dubai
International also serves as a hub for all investors and commuters coming into and out of the
African nations to the rest of the world. Paul Griffiths, the chief executive of Dubai Airports
stated We can sustain services to remote locations, allowing people to come to Dubai and fan
out to 260 destinations 5.
If a country wants to compete on the global financial market they have to be up to speed
on both international communication and connection as these are two of the key factors to
exporting and importing of products. Intelligently the UAE has improved both its overall
infrastructure, including roads and train systems, and telecommunication and internet
connections so that both citizens and companies are able to interact with the rest of the world. As
Friedman mentions the democratization of technology means that the potential for wealth
creation becomes geographically dispersed (Friedman, Pg. 51). The United Arab Emirates is
esteemed as one of the technological leaders of the Arab world, with its infamous Dubai Media
City and Dubai Internet City. A very large portion of the UAEs population approximately 75%,
have access to the internet. That being said, although a large percentage of Emirati citizens own
cell phones or computers, the population still finds itself electronically restricted and Under
Surveillance according to a report published by Reporters without Borders 12. For 5 consecutive
years ranging from 2008-2013, and then again from 2014 - Present the country was criticized for
17

its electronic censorship and put back on the list 13. (This issue of online discrimination and
censorship will be discussed in greater depth later, along with a few of the other human rights
issues that have occurred in the UAE.)
The UAE is significantly more open to outside information than many other Arab
counterparts. Thus, it makes its economy more appealing to outside investment and just as
importantly, educating its citizens to make them global contributors. As Friedman states, this
democratization of information means that the days when governments could isolate their people
from understanding what life was like beyond the borders or even beyond their village are over
(Friedman, Pg. 67). Religious leaders around the region have sheltered their populations for
decades in order to maintain complete control; but finally the younger generations are standing
up and speaking out for their rights and they are eager to have access to the outside world.
Ultimately, boundaries between domestic, international, political and technological affairs are
all collapsing 5. Instead of fighting this factual statement like other Arab nations have, the UAE
has embraced opening the boundaries between all the listed affairs.
In addition to engaging on the global economy, the UAE has also made other necessary
strides to take their economy to the highest possible levels. As author Stephen Tallman mentions
in his book, Global Strategy; Business strategy as the twenty-first century dawns is global
strategy. Much is made of global markets, but competition, innovation and organization are
equally global 89. The countrys investment into research centers and think tanks will help the
motivated minds transition the UAE away from the distant past, into the fast paced future.

18

The Old versus the New

One of the constant issues the UAE faces is the debate of the new way of life that has fully
engulfed the major cities and many of the metropolitan areas in complete contrast to the
traditional, religious, nomadic way of life that has been the norm since the days of the Prophet
Mohammad trekking across the Arabian Desert. Although there is not a literal battle going on
between the traditional elders and the expats who have infiltrated the country and entrenched
their foreign morals and way of life, there definitely is a clear cut contrast between the two. Even
more challenging is the issue of the younger generation of Emiratis who have little allegiance to
their cultures history and traditional ways and have instead been clearly attracted to and
influenced by the Western ways of life that are now overwhelming the entire country. From the
traditional Emirati food dishes like maqluba, a rice, lamb or chicken and yogurt dish has been
replaced by Macarabia, (McDonalds Arabia), sandwiches. And from the traditional extra strong
Turkish coffees have been replaced by Starbucks lattes. And the traditional dress has shifted
from the Gotra (a white head scarf), and Bisht (a long, usually black garment) for men and a
Shilah (a black or white scarf that covers the hair) and Abaya (long black cloak) for women have
now transitioned to fashionable name brands like Polo Ralph Lauren button downs and Versace
high heels. And most noticeably the modes of transportation have changed from camel back to
two door Ferraris. In her senior thesis paper, author Maria Zabaneh effectively describes the
importance that image and reputation hold in the materialistic state of the UAE. The reality of
Dubai is not what matters; the image of Dubai is what does. As long as Dubai is able to maintain
the image of a capitalist utopia, it can continue to attract foreigners and investment and build on
its existing system 94. It is fascinating to observe the vast contrast between consumer states like
the UAE and other Gulf nations in comparison to impoverished countries like Egypt.

19

For the past century, many Arab country leaders have had blinders on, in order to protect
themselves, BUT instead they have sheltered themselves and their citizens from reality. As a
consequence, many citizens across the Middle East North African region have been denied the
right to a more advanced life that is offered in Westernized countries. But, as wealth has grown
in many gulf countries, this has led to an expansion of education and travel; providing outlets for
the fortunate to be exposed to the opportunities that the world has to offer. Once these more
worldly and cultured individuals finally return to their respective countries, it is only a matter of
time that other citizens see they have been denied the many opportunities offered in other
countries. As Thomas Friedman eloquently explained about the power behind information, Put
all of this democratization and information together and what it means is that the days when
governments could isolate their people from understanding what life was like beyond their
borders or even beyond their village are over (Friedman, Pg. 67). One issue that some countries
are now battling to overcome is the brain drain, where students at the high school and college
level ages go to the West to receive higher levels of education, and then decide not to return to
their respective countries. This issue can have devastating effects on a country because the youth
are the future, and if large numbers of well to do, educated citizens are leaving for better
business and personal opportunities; there will be a lower probability for internal growth and
success. To try and combat this issue, some progressive Arab countries are trying to improve the
educational opportunities at home; because realistically this generation will one day rule the
nation.
One example of a forward thinking approach to secondary education in the Middle East is the
establishment of the Kings Academy, an independent, co-educational private day and boarding
school for students in grades 9 through 12. Founded in 2007, on the outskirts of Amman, Jordan,

20

the Kings Academy looked to emulate and build upon many of the traditions and goals of an
American preparatory school, Deerfield Academy in Deerfield, Massachusetts. His Majesty King
Abdullah II is an alumnus of Deerfield Academy, class of 1979, and after being educated in the
US and then attending the Royal Military Academy Sandhurst in the UK, he returned to Jordan
to begin the transition into his position as ruling King. His Majesty understands the pronounced
importance of education in order to keep his country on a path of competitive success, and in
2006 he expressed his vision to produce a new generation of enlightened and creative minds 80.
Jordan, a country with limited natural resources has to do their best to rely on, provide for and
improve their most valuable resource; educated and open minded citizens.
Like the King of Jordan, the President of the UAE, Khalifa bin Zayed Al Nahyan has also
made big investments and efforts to improve the quality of overall education in his country. After
the discovery of petroleum, the country decided to invest massive amounts of money into
technological resources: laptops and iPads for students, offering higher wages to teachers to
entice top quality professors from the West and an overall improvement in educational
infrastructure. According to a government funded website, in 1962 when oil production first
started in Abu Dhabi there were just 20 schools for less than 4000 students. But, once oil was
discovered, the current ruling King of the UAE declared, Youth is the real wealth of the nation
and he wanted to develop academically and technically qualified citizens men and women
able to serve their country in its future progress 48.To fulfill these missions, the UAE provides
free education for nationals in governmental schools, universities and colleges. For expats and
locals who desire private education, this is also a viable option and this sector incorporates
approximately 40% of the student population.

21

In addition to educational improvements the UAEs government is also putting an emphasis

on improving youth activities; through social, scientific, arts and cultural clubs, according to the
Embassy of the UAE in Washington, DC. Unlike some Arab states, the UAE has both
demonstrated and been vocal about a progressive country wide mentality in establishing social,
scientific and educational backgrounds.
In addition to providing ample opportunities for the newest generation, the UAE also has
looked to invest in and improve their adults education levels. Two specific examples include the
efforts to increase female participation in education (at all levels) and also to improve overall
adult literacy. In 1998 the first all-womens school, Zayed University was opened, and soon after
womens participation levels in the education sector rose dramatically. As a result, the
percentage of women participating in the labor market also rose. In 2010 statistics gathered by
the World Bank, a United Nations international financial institution showed that the UAE had
the second highest female labor market participation rate across the Arab World (Figure 19.
Female Labor Market Participation Rates in 2010). In 1999, for the third straight year, female
students outperformed male students on the General Secondary School Certificate exam. In
addition to improving womens education levels, the country has seen the literacy rate improve
from 42.6% in 1975 to 77.9% in 2012 48. In 1975 literacy rates of men were 54.2 % and literacy
rates for women were 30.9% which for the population averaged 42.6% 49.
To be innovative means to change, transform or create a new method or idea on how to
approach something. It is widely respected that the Middle East region and Arabic script where
home to many of the first influential mathematical and scientific discoveries. For instance the
Hindu-Arabic numeral system that is still in use today. Centuries later came the period known as
the Islamic Golden Age, when Muslim scholars, or caliphs, ruled and expanded across much of
22

the Middle East & North Africa region (Figure2. Muslim Conquests: Map of Expansion of
Caliphate). During this time civilization saw great strides in the record keeping and collection of
information due to the improvement of a formal writing system and the invention of paper. There
were similarly great strides and discoveries within the scientific world. Ibn al-Haytham was an
Arab, Muslim scholar from the Buyid Dynasty, which spanned most of todays Iran, Iraq,
Kuwait and Syria, in addition to parts of Oman, the UAE, Afghanistan and Pakistan (Figure 2.
Muslim Conquests: Map of Expansion of Caliphate). Al-Haytham is accredited for being one of
the first practitioners of the scientific method.
Al-Haytham among other Muslims were at the forefront of math and science. Another
scholar to originate from the House of Wisdom, in Baghdad, was Muhammad ibn Musa alKhwarizmi (780-850). He is accredited to be one of the founders and applicators of early
algebra. But, since the Islamic Golden Age, sadly the Arab region for the most part has taken a
back seat in the world of innovation and progression when it comes to academics. Finally the
world is seeing a resurgence of curiosity and growth in the Arab school systems, which is being
led by investments made by forward thinking governments like that of the UAE. Now the
attention and admiration of the entire world has been drawn back to the Middle East, to countries
like Kuwait, Qatar, Bahrain and the UAE. According to World Atlas, the UAE is the third richest
country in the world and the second largest economy in the Arab world after KSA 29. It is no
surprise that the UAE has not only caught up, but has blown by the international competition on
the technologically innovative playing field. As Freidman explains, What this democratization
of technology means is that the potential for wealth creation becomes geographically dispersed,
giving all kinds of previously disconnected people the chance to access and apply knowledge

23

(Freidman, Pg. 51). With the development of centers like Dubai Media City and Dubai Internet
City, it comes as no surprise that Dubai has been chosen to host the 2020 World Expo.
According to the World Expo website, also referred to as the World Fair, is a key
meeting point for the global community to share innovations and make progress on issues of
international importance such as the global economy, sustainable development and improved
quality of life for the worlds population 69. The Expo in Dubai, which will be the first one ever
held in the Middle East, North Africa and South Asia (MENASA) region will take part under the
theme Connecting Minds, Creating the Future. The Expo is expected to attract 25 million visits,
70 per cent of which will come from overseas 30.
Ultimately, one of the few criticisms an outsider can have of the UAE is to ask yourself
whether the country has lost all sense of identity. Has the country sold its soul to the extravagant
consumerism devil? Friedmans idea of protecting your identity and forefathers history can be
accurately applied to the quick rich oil Gulf countries. The challenge in this era of globalization
for countries and individuals - is to find a healthy balance between preserving a sense of
identity, home and community and doing what it takes to survive within the globalization
system (Friedman, Pg. 42). It seems that the majority of Arab countries are at one extreme end
or the other, when measuring if they are trying to progress away from the traditional religious
past, or hold onto the strict laws of Islamic life. The KSA, which is very traditional and old
school, is deeply rooted in literal and extreme interpretations of the Quran. Then there are
countries like UAE, Qatar and Kuwait who are trying to find a balance between religious
preservation and a consumer driven luxury economy. In a culture now built upon material goods,
where impressions and alluring foreign eyes dominate the social scene, have the leaders of the
UAE given up on their morally religious roots? Globalization, Westernization and
24

Americanization are all excuses that jihadist leaders and even in some instances, radical
governments, use as reasons and justification for internal failure, civil war, or the spread of local
terror.
The majority of Emiratis, are happy with their quality of life and the recent globalized
boom of their different cities; but the government does need to be aware that many individuals
and tribes across the region dont like the drastic change that is spreading; as countries move
away from the old to embrace and be engulfed by the new. As Friedman said, if a countrys shift
to globalization comes at the price of a countrys identity, if individuals feel their olive tree
roots crushed, or washed out, by this global system, those olive tree roots will rebel (Friedman,
Pg. 42). When applying this internal rebellion theory to the UAE, although the possibility of
protest needs to be considered, it should be looked at lightly because as we know the country is
only made up of a small percentage of locals who have little interest to revolt or pose much of a
threat to the governing power. For the most part the population is made of those in the
professional and labor work forces, who are only temporarily living in the Emirate; thus limiting
the probability of a nationwide protest. So, instead of the locals rebelling as we saw in other
Arab states like Tunisia, Libya and Egypt, in the UAE the unhappiness for the most part is
limited to foreign immigrant workers who are trying to fight for their basic rights. I will discuss
this topic of labor issues in more depth later in the paper.

UAE as a Roadmap for Other Regional Countries:

The United Arab Emirates as a whole serves as a good example that many country leaders
should try to emulate. This quote applies very well to the MENA region, where Many world
25

(for this essays case, Middle East) markets are only recently freed, governed for the first time by
the emotions of the people rather than the fists of the state (Friedman, Pg. XVI). The United
Arab Emirates have made a partial transition away from state dependence and opened up the
economies of Dubai and Abu Dhabi to international business led by the people. But, the
economic industry leaders are not the local Emiratis, instead they are international investors.
Since the Information Revolution many more people act globally, communicate globally, travel
globally and sell globally it flowered into a global power structure that encouraged and
enhanced all these trends and made it very costly for any country that tried to buck them
(Friedman, Pg. XIX). The United Arab Emirates has not only recognized, but has embraced and
promoted the global mindset. This can be seen in all aspects of life, food, culture, art, business
and entertainment.
Francis Fukuyama, an American political scientist, political economist and author explains in
his works how the triumph of liberalism and free-market capitalism is the most effective way to
organize a society. This theory could not be seen any more clearly than in the Middle East
region; where the widespread lack of freedom, primarily political, has fostered great levels of
resentment and concern towards the respective governments. Towards the East of the MENA one
sees countries like the United Arab Emirates, Qatar and Kuwait progressing both economically
and socially. There is little unrest and dissatisfaction amongst their populations compared to the
rest of the region. But then one looks towards the West and sees countries like Egypt, Syria and
Tunisia that were run under complete dictatorships for the past decades, only to end in complete
unrest and utter chaos. The United Arab Emirates, led by its government figures has opened its
borders to international trade and foreign investment which has launched the country
economically into the stratosphere.

26

The Middle East is not particularly renowned for its efficiency or emphasis on punctuality.
Stores open and close at the whim of a snowflake, workdays are constantly put to halt so workers
can perform the typical daily prayer, (Salat, that occurs five times a day), and students from a
young age are not reprimanded for showing up late to class, or skipping school all together.
These cultural norms may not cause an enormous issue on a day to day basis in the Middle East,
but to an outsider this can come as a negative surprise. Particularly, if an investor is looking to
diversify their portfolio and allocate funds towards a project in the Middle East, you want
employees and managers to uphold the expectations of your home country. As the UAE has
started to entice more foreign attention and investment, they have grabbed the baton and run with
it. Instead of disappointing Western investors like Syria, Lebanon and Egypt have done in recent
years; the UAE has embraced the challenge and instead made enormous investments and strides
to improve the overall efficiency of their economies. Like the tallest building in the world, the
Burj Khalifa, the economy has to be built from the ground up, and the backbone of a major
metropolitan center needs to be constantly improved and supported by a reliable infrastructure
system. Chris Wright, a reporter for Forbes Magazine recently traveled to Dubai and was pleased
at the changes he had noticed since his last trip; One, the relative lack of traffic jams; two, the
greatly improved efficiency of the airport; and three, a sense that the good times are coming
back 14. Dubai had slipped into a bit of a slump just like the rest of the world, during the 20082009 financial crisis, but they were particularly hit hard in the overextended real estate sector.
After a slow down of building and a restructuring of mortgages the city and country has gotten
back on its feet and is standing tall.
The United Arab Emirates has found a solid middle ground between running its economy
like that of a developing country that focuses itself on export-led growth, while also operating

27

like a Western country that focus in on regulated trade. A tremendous amount of the countrys
revenue comes from its exportation of oil and gases. But, on that note the UAE imports an
astonishing amount of luxury goods; including, race cars, boats, teachers and clothes; paying top
dollar for all of it.
A lot can be deciphered about a country by analyzing their trade with other countries. The
UAE is at the forefront of Arab nations when it comes to global trade. In Figure 10, UAE
Balance of Trade versus Libya (2000-Present), one can see how the UAE compares to another
MENA country. From approximately 2009 until today, Libyas balance of trade has completely
plummeted; in liaison with the Libyan Crisis that included a civil war that has been off and on
since 2011; resulting in the ousting and eventual death of their corrupt leader Muammar Gaddafi.
But, for the past decade and a half, the UAEs balance of trade has continued to rise and has
more than doubled. Now that the UAE has recovered from the real estate bubble that burst 2008,
I forecast that economic measurements such as trade, both imports and exports, will continue to
rise. Another factor that makes Tax Free Dubai such an easy place to conduct international
business is the country expedites both work and travel visas in as quick as 3 business days;
making themselves significantly more attractive versus other Arab nation competitors.
The UAE benefits politically, economically and militarily from being a signed partner in the
Gulf Cooperation Council (which I will refer to as the GCC) union. The GCC is a regional
intergovernmental union of Arab states including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia
and the United Arab Emirates. All of the partners look to benefit from each other through nontaxed trade creating one common market: launched on January 1, 2008. The GCC as a whole has
found success undeniably due to its production of oil. But, unlike Saudi Arabia who in recent
years is still producing well over 10% of the worlds oil, the UAE is producing a much smaller
28

percentage, approximately 3.6% as of 2011. (Figure 14. MENA Oil Production by Country). It
is projected that the UAEs oil production will continue to decrease as it depletes its reserves,
following the downward trend that we have seen since its production peak in 2006 (Figure 18.
UAE Oil Forecasts).
The GCC member states all benefitted from the discovery of gas and oil reserves. Due to
these natural resources, the governments have been able to provide generous quantities of
handouts in the forms of money stipends and food subsidies. In 2014, the UAE provided
subsidies to energy, water, and oil, despite efforts by capital cities like Abu Dhabi who were
trying to cut consumption levels 81. Although the UAE citizens are reliant on stipends and
handouts from their government, that make up only a very small percentage of inhabitants of the
country (approximately less than 15%) 79. So the rest of the country and nearly all of the
inhabitants in the big market economies of Dubai and Abu Dhabi compete to survive and
succeed like any other developed countrys economy. Many GCC countries keep peace and
satisfaction with their locals by handing out large quantities of money; generally in alignment
with the passing of a new law or price hike that may disrupt or dissatisfy the population.

Infrastructure and Real Estate:

One of the United Arab Emirates biggest advantages that it has over other countries,
particularly in the South East Asian Gulf region is its enormous and efficient new airport. Last
year, Dubai International Airport (DXB) surpassed London Heathrow Airport for
accommodating travel to the most international flyers in the entire world 42. For a country to
compete on the global transportation scale, they need to accommodate to all the labor force that

29

run its economy. Now that the UAE is at the forefront of air transportation, DXB has quickly
become one of the busiest airports in the world connecting the East and the West and
legitimizing Dubai as one of the epicenters for the global economy with the likes of New York,
London and Beijing. Additionally, the UAE is also home to one of the most recognizable and
successful airlines in the globe; Emirates Airways. As Friedman notes in his The Lexus and the
Olive Tree, in the past people got around faster due to the invention of the railroad, steamship
and automobile. Now, the UAE is pushing the limitations of air travel and enhancing the
experience for the luxury traveling class. Dubai is also home to the biggest port in the Middle
East, Jebel Port in Dubai. Many other Arab countries have little to no usable or accessible water
across the Middle East North African territories; let alone seven ports like the UAE that enhance
its 1,318 kilometer coastline along the Persian Gulf and Gulf of Oman. (Figure 5. List of Ports in
the United Arab Emirates).
In addition to the top rated banks, magnificent malls and manmade islands, the UAE may be
most legendary for its dominant control over a niche portion of the Middle East hotel and
tourism industry. When talking about luxury, extravagance and a surrealistic way of life, jet
setters have to look no further than the UAE. Dubai and Abu Dhabi have become the destination
of choice for investment groups to go and build grand and magnificent hotels and sites to entice
foreigners to travel to, which then creates more wealth as people go and pump money directly
into the souks, malls and restaurants; boosting the overall economy. It is a win-win relationship
as both the foreign companies and the local economies both mutually benefit. In addition to the
numerous locals and foreign investors who are made rich from the high price tags that are
attached to a stay at any of the hundreds of hotels that incorporate the country, the hotel industry
employees tens of thousands of locals and immigrants. From cab drivers, to hotel managers, to

30

the most desirable chefs on the planet, the UAE tourist market has a major impact on the
economy of many residents.
The young adults in the UAE not only have the luxury but also the expectation to have the
entire world at their fingertips. If one wants to experience the thrill of an expensive sports car,
look no further than Ferrari World Abu Dhabi, located on Yas Island. The complex is the worlds
largest indoor theme park, hosting race tracks, roller coasters and product show rooms. If one
wants to play in the sun, look no further than Aquaventure Waterpark at Atlantis, The Palm hotel
resort located on the apex of the Palm Jumeirah, in Dubai. The resort is home to over 65,000
marine animals in the onsite aquariums in addition to waterslides, river rides and an opportunity
to cool down in the desert heat. In juxtaposition, if a local Emirati or tourist wants to get a little
taste of a true winter, one is able to go skiing, snowboarding or ice skating at Ski Dubai, the
Middle Easts first indoor ski center located in the Mall of the Emirates.
Friedman wrote about how globalization shrank the world from Large to Medium and
how this information boom has recently shrunk it again to a size small. But, the UAE has taken
the global scale to a whole new level by building their own World; an archipelago of manmade
islands. In addition to The World islands, the UAE is also home to Palm Jabel Ali, Palm
Jumeirah and Palm Deira (Figure 20. Man Made islands). Adding to the topic of the world, it is
important to visualize that The world has become an increasingly interwoven place, and today,
whether you are a company or a country, your threats and opportunities increasingly derive from
who you are connected to (Friedman, Pg. 8). That is why it is so impressive and influential that
a country that is as geographically small as the United Arab Emirates has ten major airports (3
Domestic & 7 International): Dubai International Airport, Abu Dhabi International Airport,
Dubai World Center Al Maktoum International Airport, Al Ain International Airport, Dalma
31

Airport, Al Bateen Airport, Minhad AB, Dubai Airshow, Bayanat Airports Engineering and
Supplies and JCDecaux Middle East. (Figure 21. United Arab Emirates Airports). In addition to
opportunities to travel by air, The United Arab Emirates are also connected to the world by
water. Port Rashid and Jebel Ali Port, both located in Dubai, are the two largest manmade ports
in the world. Jebel Port is considered the worlds largest manmade harbor in addition to DP
World, based out of Dubai, which is one of the he largest marine terminal operators in the world.
In just ten years since its founding the company has grown to have 65 marine terminals, across 6
countries with over 36,000 employees 82.
In addition to internal infrastructural projects and capabilities, the UAE also opens its
borders to serve as a home to many foreign companies and countries economic projects. For
example, four of Chinas largest banks have set up branches within the UAE. In 2014, Emirates
NBD (the largest bank in the UAE) reported its first quarter net profits were up 25% year-onyear, which is a good representation of prosperous times within the country 14. The major
investment centers within the UAE not only generate astounding returns for investors, but they
also give back to society. Dubai International Financial Centre, Dubai Investments Park and
Sharjah Investment Center all are at the forefront of investing in education, healthcare, business
and technology; so they can teach their citizens, how to communicate, how to invest and how to
learn about the world, all important qualities for citizens of any developing country to master
(Friedman, Pg. 45).
Another instance where the UAE has looked to diversify its economy away from oil
dependency, and has found great success and growth has been in the airline business. During the
2013 Dubai Air Show, only four carriers originating from the UAE and Qatar put in airplane
orders totaling over $100 billion for just 2014. The 342 independent plane orders are just one
32

demonstration of the sheer success and spending power and expansion efforts of the Middle
Easts Gulf Arab carriers 19. The UAE is exploiting its strategic location to serve as a
connection layover hub for traffic from Asia, Europe, Africa and the Americas. In addition to
importing great quantities of foreign wealth by shipping business men and tourists in and out at
unprecedented rates on a daily basis, the different carriers, Etihad, Qatar Airways, Emirates and
FlyDubai also serve as massive employers for local workers. These different sectors of the
economy like hospitality and aviation are huge employers of local workers and are crucial for
maintaining internal peace as many Arab countries have depressingly high rates of
unemployment which leads to domestic unrest. Not only was the impressive values of money
spent by these airlines a good indicator of the small emirates aviation growth, but the fact that a
world renown five day aviation show was hosted at the new Dubai World Central airports
grounds is also very promising for growth. Dubai is in the process of building a new airport that
aspires to be the largest and most frequently traveled hub in the world.
In addition to hosting the five-day aviation trade show in 2013 and then the three-day
OAPEC summit in 2014, Dubai won the bid to host the 2020 World Expo. All of these summits
bring massive amount of attention and wealth to the host cities.
Despite the fact that the UAE has seen unparalleled levels of construction in the last few
decades, it did have a setback in 2008 when the real estate bubbles in cities like Dubai, burst.
According to Gulf News, in 2006 Dubai had a quarter of all the construction cranes in the entire
world; about 30,000 of the total 125,000 58. According to Bloomberg notes, Dubai suffered the
worlds steepest property slump in the global recession, with home prices dropping 50 percent
from their 2008 peak as reported by Deutsche Bank AG 59. Although Hundreds of billions of
dollars worth of building projects were delayed 83, according to CBC notes, the city rebounded
33

nicely and revamped its economy and construction plans in 2010 by establishing a trading
infrastructure; reliant on both its water and air ports.
As recent as January of this year, there has been a dramatic new expansion of resorts and
hotels into the UAE. Although this is a good sign that the economy is doing well and that
investors feel confident moving forward with planned building and projects, there is always the
worry that the real estate bubble could burst again.
According to the Jones Lang Lasalles (JLL) recently-published article, Dubai Real
Estate Market Overview, the new expansions in the hospitality industry (new hotels) may have a
bit of a negative effect when analyzing competition against suppliers, specifically the percentage
of vacancy rates in rooms. JLL the real estate firm projected the completion of 4700 additional
keys in 2015, which contributed to the growth of total supply to 64,200 keys by the end of the
year 28. This increase in supply coupled with a stagnant rate of demand due to oil price
fluctuations may lead to a lower occupancy rate of hotel rooms than years past.
Technology
The UAE has made a conceded effort to improve technology across all sectors of the
economy and country. The Ministry of Education and Youth has established a 20 year plan to
develop and improve the education in the UAE and one of the major concerns is to enhance
technological opportunities. One of the stated goals of the new development plan is to provide
one computer for every 10 kids in kindergarten, every 5 pupils in primary school, every 2
students in preparatory school and one computer per student in universities 48. In year 2000,
Sheikh Al Maktoum launched his IT Education Project in Dubai; and expressed his goals to have
it spread across all 7 of the emirates. The UAE leaders have done not only themselves but all of

34

the citizens a favor by promoting technology versus fighting it like some other Arab states
including Iraq, Iran and Syria. Friedman helped explain the importance that technology has on
economies across the globe. Market economies have thrived over centuries by brutally killing
off those firms that are less efficient, less able to adapt to new technologies and less able to
remain in touch with the changing demands of consumers and to meet those demands with the
minimum use of labor and capital (Freidman, Pg. 77). The UAEs consumer driven economy
has become very efficient. Whether ethically correct or not they have built one of the most
glamorous and impressive cities at the hands of inexpensive man power. This labor working
class of immigrants, who come particularly from India, Bangladesh, and Pakistan, comprising
over 90 percent of the country's private workforce have put the city on their back for the past
two decades 84. The immigrants rarely ever interact with or utilize the finished products of places
they build like Dubai Internet City, the Middle East and North Africas largest ICT hub, Dubai
Technology Entrepreneurship Center, Dubai Silicon Oasis, Microsoft Technology Center or tech
campuses like Haward Technology Training Center and Institutes.
In The New Ecology of Leadership text by David Hurst, the author references a powerful
quote by James Surowiecki, the business columnist for Slate magazine, who summarized the
relationship of globalized economies; Innovation replaces tradition. The present or perhaps
the future replaces the past (Hurst, Pg. 229). The UAE has been ahead of the transformation
curve using technology and infrastructure to propel itself forward. In the fast moving and
competitive global economy, only the strong will survive. Additionally, Friedman states that
The system of globalization has come upon us far faster than our ability to retrain ourselves to
see and comprehend it (Friedman, Pg. 15); this incompetence to realize the rapid rate of change
proves deadly for many countries.

35

Internal Issues:
Despite its impressive financial successes and world renowned physical and economic
growth of its major cities, like any other country the UAE has its own internal issues. As
Friedman said in his text, in the Middle East your culture is pretty much defined by your
politics, and although this statement is from the past, it is still just as true in this day and age
(Friedman, Pg. 20). Although the political influence is seen more dramatically in places like
Palestine and Israel, the UAE still technically considers itself a Muslim country and enforces
aspects of Sharia law into everyday life. Internal issues, in regards to political and social
situations and instances are sometimes truly oppressive and at other times are over exaggerated
and or over analyzed by the media. Certain situations are put under a under a microscope
because the country is still governed by an absolute monarchy; which traditionally are viewed as
more oppressive and strict in comparison to Westernized democracies.
The UAE is notorious for constantly imposing censorship of its citizens electronic
platforms: computers, phones, emails and online accounts. As Reporters without Borders
explains in an annually published report, there is a strict electronic and online filtering system
monitored by the kingdom 12. Some of the websites or topics monitored include, anything that
has to do with pornographic content, topics discussing opinions or views that criticize or expose
negatives of the government or royal family and expressions of view against or in contrast with
the rules of Islam and in general any criticisms of society. Although many of these laws may be
extreme or seem obscene to us in the West, possibly some good can come from a limitation of
anything and everything that people want to post on public forums. For example, nothing good
comes from individuals criticizing the national religion of Islam; instead people should write
about their choice of religion, instead of berating the choice of others. There are no laws with
36

reference to the promotion of Christianity or Judaism online (currently). As a whole, online

censorship and decision making is made by the Telecommunication Regulation Authority (TRA)
and the Ministry of Communications. The two Internet Service Providers include Etisalat and
Du.
Sometimes outsiders perceive the UAE as a Western society, with similar rules and
restrictions, but in many instances that is not the case. Although there may be more freedom of
press when compared to other Arab countries like Syria or Saudi Arabia, the UAE is heavily
monitored when compared on the global scale. In a recent survey published by Khaleej Time,
95.5% of respondents are opposed to the present filtering system. But, since the release of those
results, the monitoring has only become more restrictive 41.
Despite the substantial online restrictions imposed on citizens, savvy internet users have
found ways around the censors to discuss controversial topics such as human rights, the
harassment and jailing of activists, freedom of expression, political reforms, corruption and even
WikiLeaks 12. If convicted of any of the listed online actions, individuals can find themselves
put in jail for undetermined lengths of time; while frequently not being granted bail or a trial. For
Example, a sequence of online campaigns launched by UAZhewar.net and a famous lawyer
Abdul Hameed Al Kumaiti have led to mass mobilizations on matters such as torture and
corruption.
Also documented and released by Reporters without Borders was an incident from 2010
in the midst of the Arab Spring. Like in many other countries across the region, individuals from
the UAE were taking to the internet and social media to speak out against their governments.
Although to a lesser scale, Emiratis too resorted to the likes of Twitter and Facebook to criticize
issues like government corruption or employee exploitation. One example is a case of an 18 year
37

old, Badr Ali Saiwad Al Dhohori, who attempted to use his BlackBerry mobile device to
organize a protest against gasoline price increases. He was arrested but eventually released. Even
just cases of public slandering is enough to earn country wide online repression and censorship
13

. Since 2008, the country has employed Cyber police to monitor the web and keep an eye on

the netizens (internet citizens). Popular websites like Facebook, Twitter and YouTube are
regularly monitored 13.
In the previous section I spoke extensively regarding the impressive strides the UAE has
taken to improve its technology sector. And although still true, some international investors must
be displeased that the government has gone against its word and imposed restrictions and
filtering systems on the new media cities, like Dubai Media City and Dubai Internet city just to
name a couple. This does not help encourage the open market scene that the country is trying to
portray.
For example, in 2013 an American man from Minnesota was arrested in Dubai and put in
maximum security prison for making a satirical video that joked about the Emirates youth
culture. Shezanne Cassim, a Sri-Lankan born American was imprisoned and charged with
endangering state security. The parody video that mimicked Emirati students in a school play
fighting led to the arrest of many foreigners who participated in the video. In response to
international outcry the authorities said that the video was liable to endanger state security and
its higher interests or infringe on public order 86. Cassim was continually denied bail and
sentenced a fine of up to $272,000. Similarly, not long after Cassim was detained, another
foreign man was arrested for filming and uploading a video of an Emirati man beating an Indian
bus driver. When Emirati police were questioned on the law of why this second man was
arrested, they responded that it was because he shared the video 16. Most recently, BBC news
38

released an article on an American helicopter mechanic, Ryan Pate, who was arrested in Abu
Dhabi due to breaking the countrys strict cyber-slander laws, after insulting his employer on
Facebook. As a result of his slander Pate was arrested and authorities confiscated his passport.
He faces up to five years in prison and a $50,000 fine 87.
In addition to human rights infractions, there are also constant unknown difficulties that
international firms or organizations face when based in the Middle East; the business norms and
expectations are frequently held to lower standards versus other economies across the developed
world. For example, some Muslim employees drop everything they are doing to pray five times a
day. This is one of the expected cultural differences that a firm may face when doing business in
a Muslim country. Additionally, if a business partner or supplier is a devote Muslim, he may
choose to practice in the tradition of Ramadan; the annual observance of the Five Pillars of
Islam, where Muslims worldwide fast for a month. During this period the individual is expected
to refrain from consuming food, liquids or smoking from dawn until sunset. Samar Sunnuqrot, a
Jordanian economist tried to gauge the effect the month long religious practice has on business,
and he found it to be overwhelmingly negative, "The productivity of workers declines in the holy
month by 35-50% as a result of shorter working hours and the change in behavior during this
month" 55. If a companys business is reliant on an individual who is observant of the Ramadan
holiday, it could have an adverse effect on productivity and profits for everyone involved in the
supply chain.
Western countries are not regularly embraced whole heartedly by Arab countries and
communities more often than not because of current political circumstances. One of the key
issues in this situation is the American support, both monetarily and militarily towards the state
of Israel. Hisham Ahmed, a reporter for Solidarity wrote an article in response to the Arab Spring
39

and predicted that Western negation of Palestinian rights to statehood, independence and selfdetermination will further widen the Wests distance from the reconfigured (post Arab Spring)
Arab world 1. The Emirates are fortunate to not be in the heart of constant crisis and turmoil like
countries in the Levant area: Jordan, Syria, Lebanon, western Iraq, Palestine and Israel. The
UAE for the most part is able to remove itself from the ongoing Palestine-Israel crisis; which has
negative effects on many economies, both business and tourism, in the Middle East.
Another reoccurring issue that the UAE is guilty of is their mistreatment and abuse of
immigrant labor. Similar to the Reporters without Borders information, annual reports are
released by Human Rights Watch, an international non-governmental organization that conducts
research and advocacy on human rights. This news company has criticized the kingdom
regularly, particularly in regards to human rights, freedom of speech and expression, and this has
caught negative international attention.
In 2011, large numbers of foreign workers went on strike to demand better working
conditions. Human Rights issues, complaints and charges have been made against the UAE, their
government and construction monopoly companies for years. So, it should come as no surprise
that today, as the real estate market makes another leap, that workers are being exploited behind
the shadows of skyscrapers to keep the work pace accelerating. In an Al-Jazeera article published
only a month ago there were more threats against the necessity of labor reform in the UAE. A
report addressed to Abu Dhabis Tourism Development Company complained of incidents
including the confiscation of passports, withheld wages and filthy, cramped living conditions for
roughly 1000 men and women who work on Saadiyat (Happiness) Island 27. To put this in
perspective, currently there are approximately 5 million migrant workers in the UAE; over half
of the countrys population 27.
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The UAE practices a Kafala system (sponsorship system) where all unskilled laborers in
a given country must have a local sponsor in order to work within the country. This helps ensure
that the Emirati national is constantly in charge and at the top of the business food chain.
According to the Al-Jazeera article on human rights issues, the UAE is the only Gulf Arab
Country that has formally blacklisted any Human Rights Watch workers 27.
Interestingly, we usually see reports discuss the countless number of expatriate laborers
that are imported and abused within the UAE, but according to some recent articles, we see
firsthand that places like Dubai serve as a home to middle men who connect desperate Southeast
Asian laborers with other firms all over the Middle East and possibly around the globe; even to
parties such as the United States military. An Al-Jazeera article reported that US Military bases
were contracting recruitment agencies to connect them with Southeast Asian workers to fill
many of the low level jobs on the bases in countries like Afghanistan. When explaining to
readers the corrupt process that these agencies drag the immigrant workers though the author
compared it to the model used by employers in the oil-rich Gulf countries, which have long
relied on cheap migrant labor from South Asia to build their economies 17. The article went on
to detail an interview conducted by an Al-Jazeera reporter with a recruiter in Dubai, revealing
that he estimated the he has supplied 9,000 third-country nationals for Ecolog and Supreme
contracts in Afghanistan 17.
Even given these particular cases, the UAE has become a safe ground for exiled persons
who have had to flee other overpowering monarchies. For example, Manal al-Sharif, a prominent
womens rights activist who led an outspoken driving campaign against the sexist laws of the
KSA recently found sanctuary in Dubai after she was arrested and then lost her job and the

41

custody of her son after leading the campaign for women to drive as she drove around the
kingdoms cities.
Economically, despite the countrys best efforts to diversify away from oil dependency,
the UAE was still hit hard during this years crash in global oil prices. According to Business
Insider, Dubais stock market fell 8% in just a single trading day during December, 2014 as a
result to the overreaction to the drop in oil 88. The drop which started this past summer was
speculated to be tied to global animosity and fear as ISIS expanded across Iraq; one of the
worlds largest oil manufacturers. As time went on, OPEC, led by Saudi Arabia, announced it
would not slow down its oil production despite the drop in prices and constant pressure from
Russia and Brazil whose economies were negatively affected.
In addition to internal issues like a lack of human rights, strict infringement on personal
privacy, or oil dependence, the most prominent issue that countries, governments, citizens and
businesses face in the Middle East is the constant battle against terrorism. Regretfully, the spread
of global terror has been synonymously associated with the Middle East North African region.
Extremist groups like the Taliban, Al Qaeda, Boko Haram, Hezbollah and now ISIS are
constantly in the news headlines and flashing their small grips of regional influence to garner
global attention. Although the threat of terror is not immediate in the UAE, it still creates high
levels of unease and animosity from Western folk when they consider traveling or working in the
Middle East. Leaders in progressive and moderate countries like the UAE, Bahrain and Kuwait
invest a tremendous amount of time and money to try and combat the spread of evil over their
borders. As Friedman said, The defining anxiety in globalization is fear of rapid change from an
enemy you cant see, touch or feel (Friedman, Pg. 12). This idea can be applied to the spread of
terror, like a disease, from country to country and now infiltrating across continents. A serious
42

worry is that the enemies of jihadist fighters are turning to popular modes of social media to
spread their message and recruit globally. This poses a direct threat to liberal, westernized
countries in the region who flaunt a lifestyle that can be perceived as defying many of the
messages and ways of life that the Islamic Jihadists are preaching and attempting to enforce.
Sadly, at the end of last year there was an attack on an American school teacher in an
Abu Dhabi mall. The arrested suspect stabbed the victim in a bathroom and additionally planted
a makeshift bomb outside of another Egyptian-American doctors home. Instances like this
negatively affect the safe, western accepting imagine that the UAE tries to portray. It deters both
foreign investment due to a lack of security and also scares away tourists who seek out the UAE
as a travel destination. According to the Khaleej Times business sections, the UAEs hospitality
market is geared up to record 67 per cent growth in revenue to $7.5 billion by 2016 43.
Thankfully, instances like this deadly attack are more an anomaly than the norm in the UAE. In
an article by Al-Jazeera in response to the stabbing, the author explains Violent crime and
attacks are rare in the oil-rich country, which is home to a large foreign-born population that far
outnumbers Emirati citizens 24. As an individual who has lived and traveled extensively within
the Middle East, I found that the UAE and particularly Dubai was one of the safest and most
welcoming countries towards Westerners. Sadly, due to instability and unrest it would not be
intelligent for a Westerner to travel to historical cities like Damascus, Aleppo, Cairo or Beirut for
the time being. So, as the UAE continues to market itself as an easily accessible and welcoming
country to visitors, despite the persistent threat of terror across the region, its traveler numbers
should continue to increase. Footprints Recruiting, a Vancouver-based company that found a job
for the victim of the stabbing attack said, We are confident that the UAE in general and Abu
Dhabi in particular remains a safe environment to live and work 24. As someone who is

43

exploring going back to work in the Middle East North African region post-graduation, I assure
my family and friends that I will be just as safe in Dubai or Abu Dhabi as I would be in Chicago
or New York.

The Arab Spring and Regional Conflict:

Some Middle Eastern monarchies have found longstanding success in keeping competition
outside of their countries borders. In the past, Middle Eastern economic or finance ministers who
more often than not were personally appointed by the leaders of respective countries; frequently
constrained cross-border currency flow and trade; causing their countrys economies to operate
at inefficient levels. But, as citizens became more educated and individual complaints grew into
larger and louder dissatisfaction, countries across the MENA region started to see widespread
protests. In lieu of avoiding complete anarchy, many leaders across the region shifted the blame
to these appointed cabinet members for economic or political failures. For example, in 2011 His
Majesty King Abdullah of Jordan sacked Prime Minister Samir Rafai due to a lack of reform and
to quell spreading criticism of the ruling party. Jordan was able to escape the domino effect of
the Arab Spring by promising its citizens political reforms, by offering up more political
freedom to political parties, and by lowering the price of commodities such as bread, water and
oil; but ultimately there were no major changes. The UAE and its government also avoided any
major changes during the Arab Spring, despite some criticism.
Although Emiratis sometimes voice complaints of overwhelming control being imposed on
them by their government, in comparison to many other MENA countries, the UAE is much less
strict. The government has more liberal views on controversial topics such as, the consumption

44

of alcohol, freedom of religion and opportunity to work and travel inside and outside of the
country borders. The country also has very lenient visa laws; encouraging ex-pats and foreigners
to bring their international mindsets and knowledge into the country. This benefits everyone, as
all cultures and businesses can collaborate in one environment to share ideas and produce top
quality goods and services.
Unlike developed Western countries, the UAE government financially supports its
citizens; to the point where it may be acting as too much of a monetary crutch. According to
Matthew Brown of Bloomberg, All 800,000 Emirati citizens get free education and health care,
and subsidized utilities. Emirati men claim free land and no-interest loans to build homes. Other
benefits include a $19,000 payment from the government toward wedding costs 3.
As Thomas Friedman described in a less demanding world, governments were able to
construct social safety nets and engage in policies intended to redistribute income (Freidman,
Pg. 78). The UAE falls in an obscure category when it comes to this theory. By many measures,
some listed above, the leading government does provide unimaginable welfare handouts to the
local Emiratis; but this money is not necessarily from the countrys income. Instead there are
arguably two separate economies and modes of monetary income across the country, and this
applies to the majority of GCC partners: 1) income directly tied to oil wealth and then 2) income
that is a result of growing economies led by banks and foreign investment.
During the tumultuous Arab Spring of 2010-2011, the Emirati regime increased
government salaries (for locals) in an attempt to quell any potential chance of civil unrest.
According to a Gulf News article from 2012, the Ministry of Finance in Abu Dhabi worked to
implement a decision made by the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan
to increase pension plans by 10,000 Dirhams ($2722.53) per month for all citizens 73. Similarly,
45

an annual survey conducted by Aon Hewitt showed that salaries in the UAE are expected to
increase by approximately 4.8 per cent in the year 2015 74. For the most part, the UAE was
successful in buying out their citizens in order to prevent anarchy from spreading. These
remunerations paid off in dividends by keeping the country under control and looking
increasingly like a viable location for wealthy foreigners to place their investments; particularly
in comparison to other less stable Arab countries.
Extremists or Islamists parties like the Muslim Brotherhood dont have much appeal in
countries like the UAE. The Muslim Brotherhood has found more success in places like Egypt,
where they have been able to capitalize on growing conservatism in in rural area, especially due
to the disturbing growth rates of poverty and unemployment 1. Due to its wealth the UAE
doesnt have to allocate too much time or attention towards keeping their citizens satisfied.
The UAE, along with other wealthy GCC countries were able to coast by the 2010
revolutions relatively unharmed. But, it is important to recognize that this maintained level of
stability is a result of the 204,000 Dirhams ($55,000) annual salary that the average male
received annually during the late 2000s.
Those Emiratis who do work, a disproportionate of them are employed directly by the
government. Of the approximate 10% of private sector employees who are Emirati, it is said
many of them were originally hired not based on qualified skill sets but instead simply to fulfill
government employee quota requirements. Traditionally, the majority of business leaders are
Emiratis who have close ties to the leading government. This idea of local employment
protection in both the public and private sector, implemented by the Emirati government is
formally referred to as Emiratisation; a top priority on the UAEs Ministry of Labor list 90.

46

Although the UAE is determined to maintain stability and prevent any threat of terrorism
from crossing its borders, the government also crosses the acceptable international line, when it
suspects any pro-democracy reformists are trying to take action. In an article addressing
Obamas efforts to stop extremism while lacking acceptable human rights safeguards, author
Steven Hawkins explains that although the UAE is doing an acceptable job trying to stop the
Islamic extremism spread, he also condemns them for their responses to peaceful protests.
Recently, the country jailed more than 100 peaceful activists due to vague charges associated
with national-security and cybercrime 26.
Regional Conflicts
Arab leaders for years have suppressed their citizens, keeping quality of life relatively low
while instead investing in personal expenditures at the loss of trust and whole hearted support
from their citizens. But, during the Arab Spring the world finally saw commoners across the
region take to the streets as Arab heads tried to maintain their grip to their diminishing power.
Although the one-party system in the UAE may have levels of corruption, we never saw the
same rampant levels of corruption, fraud and nepotism that were present in other Middle
Eastern countries1.
Due to widespread revolts that occurred in nearby Bahrain, Saudi, Kuwaiti and Emirati
forces went to Bahrain to attempt to regain control and maintain stability between 2011 and
2014. Bahrain, which has been under the rule of the same Sunni family, the Khalifas for
centuries, is a fair representation of what could occur in other Gulf States if the governments
(ruling families) are not careful. Although the Gulf Corporation Council was founded in order to
protect the member states against external threats, it is a methodically intelligent decision for

47

countries like the UAE to step in and quell unhappiness in nearby states so its own citizens dont
rise up in anti-government protests. Although it may not morally seem correct to suppress basic
human rights like freedom of speech or the right to gather in protest; or as formally referred to in
the United States as the Right to Assembly, Kings like Khalifa bin Zayed Al Nahyan of the UAE
and King Salman bin Abdulaziz Al Saud of KSA will go to great lengths to maintain a tight hold
of control on their population 23.

International Relations: Governments and Politics:

One key factor that separates the UAE from almost all other Arab states is their strong
relation, both political and economic, with Western countries. As a committed ally to the USA
and UK, the UAE has benefitted immensely; and in particular the success of an open economy
due to an increase in international trade. When it comes to the question of which system today
is the most effective at generating rising standards of living, the historical debate is over. The
answer is free-market capitalism (Friedman, Pg. 105). Many countries of the East have made
the transition over to globally intertwined economies; for example Malaysia, Indonesia, Turkey
and even more hard lined Muslim countries like KSA. As Dr. Imad-ad-Dean Ahmad of the
Islamic libertarian think tank Minaret of Freedom Institute explains in his educational online
video, The Middle East needs Free Markets, Not Troops 40. The UAE has successfully avoided
war during its countrys history, and therefore as a Muslim ally to the United States and other
Western powers, it has allowed its different cities and economies to prosper.
The UAE has positive diplomatic and military relations with countries like the United States.
Relationships between the two strengthened when the U.S. led the coalition against Iraq during

48

the Gulf War in 1990-1991 in response to the military occupation of Kuwait; one of the UAEs
neighbors located only 1000 KM to the North. As a result of the protection the US Military
provides to the UAE, the countrys ports host more U.S. Navy ships than any other ports outside
of The United States; according to the U.S. Department of State Archive. Similarly, U.S.
presidents and leaders have expressed their support of the Gulf Coast country:

"[T]he military-to-military relationship with the United Arab Emirates is superb. ... They've got
airfields that they allow us to use, and their airspace, their logistics support. They've got a worldclass air-to-air training facility that they let us use and cooperate with them in the training of our
pilots. In everything that we have asked and work with them on, they have proven to be very,
very solid partners." 15
- General Peter Pace, Chairman Of the Joint Chiefs of Staff, 2/21/06

As Jennifer Thea Gordon, reporter for Al-Jazeera explains in her article on US and Arab
political relations, United States regional allies Jordan, Saudi Arabia, Qatar, Bahrain, and the
United Arab Emirates (UAE) are governed by regimes that see Islamism as a dire threat to
their power 25. Therefore, since we are at the front lines of trying to crush the threat and spread
of ISIS across the region, it is fair to expect that these listed countries should uphold American
requests of reforms; both politically and economically. In recent history, Arab governments who
defied American advice have sometimes quickly spiraled out of control. For example, in Iraq
even since the transition from the Nouri al-Maliki government which served from 2006-2014,
there has been little change; as both governments represent the Islamic Dawa Party; the
representative party of Iraqs biggest Shia population. Now look where Iraq finds itself;
overwhelmed by a civil war and with foreign troops again on the ground. As many countries
know, it is important to stay on good terms with Western powers; as they may prove to be the
only forces that can save the region from the extremist spread: ISIL operates in territory that is
49

next door to Jordan and Saudi Arabia and hardly a stones throw from Bahrain, Qatar and the
UAE 25. This potential spread of terror is why countries should put an emphasis on efforts
towards lowering the youth (particularly male) unemployment rates and also looking to lighten
restrictions on freedom of speech and the popular Western way of life. It is not a coincidence that
countries like the UAE and Kuwait were able to avoid widespread demonstrations during the
Arab Spring; while more oppressive countries like Libya, Tunisia and Egypt found their
governments toppling. Countries across the MENA region need to try and mitigate fostering
regional issues like economic, social and political circumstances that make youth vulnerable to
recruitment by armed groups that the US has frequently warned international governments of 26.
In response to that, the UAE has done a good job thus far by providing an acceptable quality of
life and education to the youth of their country.
Unlike the past, as the Arab Spring unfolded and to a similar scale as ISIS has spread
across the Levant region, the United States has taken a back seat to military action demonstrating
that possibly they no longer are willing or able to be the worlds policeman, as analyzed by
German Foreign Minister Joschka Fischer from Project Syndicate 91. The Bush administration
took a lot of scrutiny for the prolonged war in Iraq, ultimately leading to the withdrawal of our
forces; but that led to other insurgent groups like ISIS, Al-Qaeda and the Taliban to surface.
Now, the US should be looking for the aid and leadership from wealthy Gulf countries, like the
UAE and KSA to quell the spread of terror across the region; for everyones sake.
One of the few instances of political disagreement between the two countries was in 2014
when the United States, who considers itself a strong military ally with the UAE expressed
frustration when Emirati pilots conducted airstrikes on Libyan targets, without U.S. consent. As
a result Washington released a statement saying they were caught off guard 77. This lack of
50

communication and teamwork could potentially foreshadow a free-for-all scenario across the
Middle East; as discussed in the Al-Jazeera article later in this section. Despite the fact that this
instance was a onetime occurrence, the US and our other Western allies heavily rely on air bases
located in the UAE. The UAE and other regional militaries and governments see the power
struggle in countries like Libya and Tunisia as very pertinent issues and are cautious of the
potential for spillover effects within the region. This is especially important in respect to the
spread and vast influence of the Muslim Brotherhood which has gained popularity and control in
Egypt; amongst Arab countries such as Palestine, Jordan and Syria. But surprisingly some Arab
countries dont support the brotherhood; but even condemn their ways. As mentioned in an AlJazeera article talking about the Palestinian conflict and the most recent struggle between the
Gaza strip and Israel, even though Arab countries sympathize with the Palestinians Saudi Arabia
and the United Arab Emirates dont support the Muslim Brotherhood 92.
In the aftermath of the Arab Spring that toppled monarchies and governments across the
region, the Muslim Brotherhood emerged as a legitimate presence and power in many countries
including Egypt and Tunisia. In response, the Kingdom of Saudi Arabia and UAE declared the
pan-Arab Islamic group a mortal threat, and both have the group on their published list of
International Terrorist organizations 22. The UAE realizes how big of a threat terrorist groups
pose to their economic well-being. An attack on one of the financial centers in Dubai or Abu
Dhabi could have shocking effects on business operations and future investments.
In an article published by Financial Times online magazine, author Simeon Kerr explains
how Dubai has so quickly become the business center for international trade between the Middle
East and Africa 5. In this article, the author tells the tale of a poor African man who took out a
$5000 loan to buy IT equipment in the UAE 20 years ago. This entrepreneur, Ashish Thakkar
51

opened up his own IT store, and just like the iconized American Dream, was able to turn the
company into a pan-continental conglomerate, spanning different professional sectors like real
estate, glass manufacturing and agriculture while reaching 21 countries and employing 8,000
workers. The emphasis of this article was not focused on the hard work or dedication by the 15
year old school boy who made something out of nothing, but instead about the endless
opportunities for growth and wealth that Dubai has to offer. Thakkar explains that Dubai is a
brilliant transit point that connects Africa so well to Asia and Europe5. The now successful man
estimates that he spends 20 days a month traveling, but accredits this to the ideal location of this
emirate. Dubai remains a show window to the world for traders from Africa, as well as its other
target markets in the Middle East, central and south Asia 5. According to the article, Dubais
trade with Africa grew to $30 billion in 2012, up 27 percent from the previous year. Since 2010,
bilateral trade (with Africa) has risen from 6% to 10% of Dubais overall trade. These exciting
numbers encourage cross continent trade for investors from the Middle East into and from the
North African Region. As Hamad Buamim, Chief Executive of the Dubai Chamber of
Commerce and Industry explains This makes Africa the fastest-growing market as a group for
Dubai 5. Additionally, Dubai also connects the UAE to Asia and this can be seen by the
numerous Chinese companies that are setting up shop in Dubai to serve as a midway point for
their management to set up additional operations and business deals into Africa.
As of late, many of the Gulf Arab nations have been at bad terms with their neighbor
Qatar. In March of 2014 the situation went so poorly that the Saudis, Emiratis and Bahrainis all
withdrew their ambassadors from the capital city of Doha. Although this drastic action greatly
defeats the goals and motives of the Gulf Corporation Council (GCC), the frustrated Gulf nations
were finally fed up with Qatars increased role in Middle Eastern politics, and in particular their

52

open support and assistance to the Muslim Brotherhood. The friendly relations with the Muslim
Brotherhood was just the tip of the iceberg of dissatisfaction other GCC countries had with
Qatar. The countries also disagreed with their support of the Al Khalifa monarchy in Bahrain
despite three years of oppressed riots and protests by desperate Bahrainis. The countries also
disagreed on Qatars support of radical opposition groups in Syria and their attempt at
influencing the Yemen government. Not only limited to the Muslim Brotherhood but Qatar
engages with other organizations like Hamas in Palestine and Hezbollah in Lebanon that
countries like the UAE consider as terrorist groups.
According to the Al-Jazeera article, some Saudi and Emirati commentators expressed
such dissatisfaction with the lack of Qatari change and action toward the collective security
agreement signed in November of 2013, that the countries threatened to eventually close both the
airspace, land and water borders to their neighbor. Drastic actions like this could have long
lasting and terrible effects on Qatars economy and their overall public persona; especially as
they look forward to hosting the 2022 FIFA World Cup.
Sheik Yusuf al-Qaradawi, a highly regarded Islamist and apparently one of the Muslim
Brotherhoods most eminent intellectuals, 18 constantly criticizes the Emirati support of the
ouster of Mohammad Morsi the former Egyptian leader. The protection, funding and promotion
of this regionally televised preacher are just a few more issues that the UAE has with its ally
Qatar. According to the Al-Jazeera article, the countries opposed to Qatar feel that the Muslim
Brotherhood is a fanatical organization bent on destroying stability and progress in the Gulf
region18.
In hopes to realign his country with the policies and goals of the other GCC countries,
Qatars emir Sheikh Tamim has agreed to ensure noninterference in the international affairs of
53

any GCC countries and not to support any party that threatens the security and stability of the
GCC 18.
Despite conflicts with Qatar, the majority of the GCC countries do agree on most
agendas. The UAE, Saudi Arabia and Bahrain have particularly similar mindsets when it comes
to security issues; specifically in regards to Iran, Egypt, Yemen and Syria. It is interesting to note
that a large percentage of US military bases in the Middle East and Gulf region are based in
Qatar. So, one has to wonder if the recent negative relations between a few GCC countries and
Qatar will also affect relations between the UAE and or KSA with the USA?
It is worth noting that Al-Jazeera, a news source I refer to throughout this paper is
headquartered in Doha, Qatar. Arguably the most reputable news agency across the Middle East,
Al-Jazeera English and Arabic are broadcast worldwide via many different platforms. Al-Jazeera
was the main source of news for the globe as the Arab Spring unraveled in 2010 into 2011, and
as Hillary Clinton stated, "Al Jazeera has been the leader in that [they] are literally changing
people's minds and attitudes. And like it or hate it, it is really effective," she said 56. According to
the news station website, the channel aims at "emphasizing news from the developing world,
without an Anglo-American world-view" 56. The success and global influence of this agency is
one example of how Emirate countries are becoming more intertwined in the international
environment.
As the UAE continues to grow, the biggest threat to the countrys well-being is outside
forces trying to infringe on their economic, educational and cultural growth that are closely tied
to the global market. As Secretary of the State John Kerry mentioned at the World Economic
Forum a few months ago; eliminating the terrorists who are creating havoc now is only a part of
the problem; we need to cut out the cancer before it spreads 93. That can only be done by
54

stopping recruitment programs from attracting young adults to sacrifice their lives for these
monstrous groups such as Nigerias Boko haram, Al-Qaeda in Yemen and the Islamic State in
Iraq and Syria. Again, the UAE is at the forefront of Arab countries working to try and stop these
issues. Recently, government funding and construction finished the International Center for
Excellence in Countering Violent Extremism; the first of its kind, in Abu Dhabi.

Conclusion:

Over the process of writing this paper, as I progressed, grew and evolved as a researcher,
writer and scholar on the United Arab Emirates, I tried to take the approach of Ibn al-Haytham.
The famous Arab philosopher is revered for his contributions in the fields of optics, astronomy,
meteorology, visual perception and the scientific method; but most importantly he is famous for
criticizing everything that he read. Al Haytham said,
The duty of the man who investigates the writings of scientists, if learning the truth is
his goal, is to make himself an enemy of all that he reads, and attack it from every side. He
should also suspect himself as he performs his critical examination of it, so that he may avoid
falling into either prejudice or leniency. 47
In this paper I have demonstrated that for many independent and interconnected reasons,
the United Arab Emirates serves as the most promising and advantageous country in the Middle
East for a foreigner to engage with. Due to its diverse culture, developed economy, booming
infrastructure and stable government, the UAE has separated itself from the traditional Arab
norms and instead embraced the opportunities and benefits that the international economy has to
offer.

55

Cities like Dubai and Abu Dhabi are now respected as some of the most impressive and
influential financial centers in the world; on par with the likes of New York, London and
Shanghai. Although the UAE was originally propelled into the wealthy and elite tier by its
discovery of oil and natural gasses, the country and its leaders have lifted their economies to
even higher levels through diversification and globalization. Sectors such as education, aviation,
technological innovation, hospitality tourism and banking have all benefited from the success of
one another; shaping the UAE into one of the most financially successful countries in history.
While entertaining large quantities of investment and visitors alike, the UAE, led
primarily by the Al Nahyan and Al Maktoum monarchies of Abu Dhabi and Dubai, has
maintained a conceded effort to retain important aspects of their traditional history; most obvious
being the Muslim influence on everyday life. Despite the country ruling as an official Islamic
State, the leaders and citizens alike uphold a high level of tolerance towards other nationalities
and religions. These characteristics of acceptance are what help the UAE maintain internal, civil
control. Additionally, with such a small percentage of the population represented by local
Emiratis, the government does not face a difficult task in appeasing the local elites. For the most
part, Emiratis are very satisfied with their quality of life, and thus the absolute government will
continue to provide monetarily for them as long as there is little to no request for major political
changes.
The cultural interconnectedness that one observes in the UAE, made up of Southeast
Asian labor workers, Western professionals and local Emiratis generate a tremendous amount of
diverse investment. This expansive exposure to the globe, combined with an open economy and
a stable society are what make the UAE the quintessential role model for other countries across
the Middle East North African region. Although action plans for less wealthy countries like
56

Jordan, Syria or Palestine may be different than those of Saudi Arabia or Bahrain, leaders across
the region should look at the steps taken by the Emirati government to also achieve success and
maintain control while implementing peaceful resolutions. The UAE has carved out a unique
place in the global society, serving as the destination location of choice for business travelers and
tourists to connect the Orient (the East) and the Occident (the West).
From both my time living internationally, studying in the Robins School of Business and
taking other political science classes at The University of Richmond, I have learned that
generally, politics and economics share an inverse relationship; as political influences reduce in
size and force, the economies of a respective country will positively grow. Looking forward, I
predict the Emirati economy will continue to grow and prosper; especially as it continues to gain
more international exposure and respect. As the government continues to invest money and
support into vital industries like education and transportation, visitors and workers will continue
to flock to the UAE, bringing wealth and stability to the Gulf Region.
Ultimately, I would like to sincerely thank Professor Steven Tallman for his valuable
guidance and support through this culminating educational process. As a result of enrolling in
Professor Tallmans International Business Strategy course in the Fall of 2014 and now
completing my senior thesis in his International Business Management course: The Continuation
of Politics by Other Means: International Strife and International Business, I am taking away
many academic and management skills with me as I embark on my international business career
after graduation. Additionally, I would like to thank my mother, Elly Frymire Cone and my
father James Cone for their dedicated time and assistance through this challenging process. I am
forever indebted that you encouraged me to see this paper through to its entirety.

57

Figures

Figure 1: Middle East & North African Exports by Country

Reuters, Thomson. Top 10 sub - Saharan Africa exports to the Middle East vs. Top 10 Middle
East exports to sub - Saharan Africa. Digital image. Financial Times - Static. Datastream; IMF;
Unctad, 26 Nov. 2013. Web. 24 Feb. 2015.

58

Figure 2: Muslim Conquests: Map of Expansion of Caliphate

Barraclough, Geoffrey. "Muslim Conquests: Map of Expansion of Caliphate." The Times

Concise Atlas of World History. N.p.: Times, n.d. 40-41. Print. Isbn 0-7230-0274-6.

59

Figure 3: Total Population of UAE vs. Neighboring Countries (1960-2013)

"Total Population of UAE vs. Neighboring Countries (1960-2013)." World Bank. N.p.: Google,
2015. N. pag. Print. United Arab Emirates vs Kuwait vs Qatar

60

Figure 4: Progression of Major International Travel Patters (Trade Routes From Dubai)

"Progression of Major International Travel Patters (Trade Routes From Dubai)." Emirates 2007.
N.p.: n.p., 2007. N. pag. Print. Major International Travel Patterns

61

Figure 5: List of Ports in United Arab Emirates

62

Figure 6: GDP in UAE over last 35 years

http://www.tradingeconomics.com/united-arab-emirates/gdp
The gross domestic product (GDP) measures of national income and output for a given
country's economy. The gross domestic product (GDP) is equal to the total expenditures for all
final goods and services produced within the country in a stipulated period of time. This page
provides - United Arab Emirates GDP - actual values, historical data, forecast, chart, statistics,
economic calendar and news. Content for - United Arab Emirates GDP - was last refreshed on
Friday, March 20, 2015.

63

Figure 7: UAE Population Growth over last 35 years (Millions of People)

http://www.tradingeconomics.com/united-arab-emirates/population
Figure 8: UAE Central Bank Balance Sheet

http://www.tradingeconomics.com/united-arab-emirates/central-bank-balance-sheet
64

Figure 9: United Arab Emirates Balance of Trade

http://www.tradingeconomics.com/united-arab-emirates/balance-of-trade
Figure 10: UAE Balance of Trade vs Libya Balance of Trade (2000 Present)

http://www.tradingeconomics.com/united-arab-emirates/balance-of-trade
65

Figure 11: Worlds Tallest Man-Made Structures

http://blog.7ojozat.com/2010/04/01/burj-khalifa-dubai-tallest-structure-in-the-world/

Figure 12: Saudi vs. Russia Oil Production

http://ourfiniteworld.com/2014/07/23/world-oil-production-at-3312014-where-are-we-headed/

66

Figure 13: The World Islands (Dubai, UAE)

http://nadeenculturalstudies.weebly.com/unit-1.html

Figure 14: MENA Oil Production by Country (2011)

http://photos.osmek.com/get/96294.o.jpg

67

Figure 15: Dubai Hotel Sector (2009-2013)

http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/Building-onthe-UAE-s-construction-boom/rp/en/1/1X000000/1X09YW75.htm

68

Figure 16: Evolution of Foreign Direct Investment (FDI) in Dubai (2005-2010)

http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/Dubai-fromsand-dunes-to-glittering-metropolis-to-safe-haven/rp/en/1/1X000000/1X09TI5D.htm

Figure 17: Dubais share in the UAEs non-oil trade

(in US$ billion)
Dubai's non-oil trade
UAE's non-oil trade
Share

2006
86.2
113.3
76.1%

2007
115.9
150.7
76.9%

2008
166.9
215.0
77.7%

2009
133.1
179.9
74.0%

2010
156.9
205.6
76.3%

2011
190.8
252.8
75.5%

Source: Dubai Statistics Centre, UAE National Bureau of Statistics

http://economists-pick-research.hktdc.com/business-news/article/Research-Articles/Dubai-fromsand-dunes-to-glittering-metropolis-to-safe-haven/rp/en/1/1X000000/1X09TI5D.htm
69

Figure 18: UAE Oil Forecasts

http://www.theoildrum.com/node/3623

70

Figure 19: Female Labor Participation Rates in 2010 (Arab World)

http://tahseen.ae/blog/?tag=female-labor-market-participation

Figure 20: Man Made islands in UAE

http://realestate.theemiratesnetwork.com/developments/dubai/palm_islands.php

71

Figure 21. United Arab Emirates Airports

http://www.mapsofworld.com/international-airports/asia/uae.html

72

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34) OPEC Website: UAE
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78

http://www.worldatlas.com/articles/100008-the-10-richest-nations-in-the-world-2014
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44) Immigration #s in UAE

http://www.escwa.un.org/popin/members/uae.pdf
45) 30 Free Zones in the UAE
http://emirabiz.com/uae-dubai-freezone-company-setup/
46) Dubai International Financial Center (DIFC)
http://www.uaefreezones.com/aboutus.html
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http://answersafrica.com/richest-countries-in-africa.html
52) UAE Oil Sources
http://www.theoildrum.com/node/3623
53) Middle East % Global Oil Production By Country
http://photos.osmek.com/get/96294.o.jpg
54) MENA Oil Production
https://sites.google.com/site/kalykassidysproject/oil-production-in-the-middle
63) Saudi vs Russia Oil production
http://ourfiniteworld.com/2014/07/23/world-oil-production-at-3312014-where-are-we-headed/
64) The World Islands Dubai, UAE
http://nadeenculturalstudies.weebly.com/unit-1.html
71) Manmade Islands in UAE
http://realestate.theemiratesnetwork.com/developments/dubai/palm_islands.php
72) United Arab Emirates Airports
http://www.mapsofworld.com/international-airports/asia/uae.html
79

76) Guide 2 Dubai: http://www.guide2dubai.com/

78) Kerzner International
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80) The Kings Academy Jordan
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82) About DP World
http://web.dpworld.com/about-dp-world/

Quotes:
47) Quote by Ibn Haytham
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Retrieved 2 March 2011.
57) Samuel-Azran, Tal (2010). Al-Jazeera and US War Coverage. New York: Peter Lang
Publishing. p. 3. ISBN 978-1433108655.
93) Remarks at the World Economic Forum John Kerry
http://www.state.gov/secretary/remarks/2015/01/236254.htm

80