When The Desert Speaks: Part-1

Today I would like to write about UAE, the land which has a diverse and multicultural society with large expatriate population. In my 3 months of tenure at Dubai I have seen variety of things like Skyscraper, belly dancing, malls, auto fests and sand storm.......which has invigorate me to write about UAE.

Some of Key findings of UAE:

• Full name: United Arab Emirates
• Population: 4.8 million (UN, 2010)
• Government Type: Federation with specified powers delegated to the UAE federal government and other powers reserved to member emirates
• Head of state: President Khalifa bin Zayed Al-Nuhayyan
• Head of government: Prime Minister Muhammad Bin Rashid Al-Maktum
• Capital: Abu Dhabi
• Largest city: Dubai
• Per capita GDP: $38,900
• Population: 19%Emiratis, 81% Foreigner
• Major Export: crude oil(45%), natural gas, dried fish and dates
• Major Imports: Machinery and transport equipment, chemicals and food.
• Area: 77,700 sq km (30,000 sq miles)
• Major language: Arabic
• Major religion: Islam. 95% muslims, 5% others
• Life expectancy: 77 years (men), 79 years (women)
• Internet domain: .ae
• International dialling code: +971
• Border: Sharing land borders of 867 km with Oman and Saudi Arabia
• Sea Border: Sharing sea borders of 1318Km with Iraq, Kuwait, Bahrain, Qatar and Iran
• States: It consists of seven emirates, which are Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Quwain
• Unemployment rate: 4.2%
• Inflation : 3.9%

Political Analysis:

• Strong implementation of policies, but relations with Iran over disputed Gulf islands, remain problematic.
• Nuclear deal with the US.
• Improving foreign relationship will increase growth in business.
• Absence of democracy may become an issue.

Economy & Business:

• The UAE economy contracted by 0.7% in 2009. The economy is expected to expand by 1.3% in 2010. Bilateral trade between UAE and china can give further growth opportunity to UAE. As per prediction two country will trade around $100billion by 2015.

• The UAE has high quality infrastructure; however, restrictions remain for foreign investors.

UAE has present itself as business friendly nation and it does not levied any tax on capital gain or salaries and corporate has shown immense interest for corporate relocation and investment. Free trade zones have also been legalized in multiple locations to reduce trade laws and allow new markets to take hold. However, foreign investors do not receive the same treatment as national companies. Complete foreign ownership is restricted under the country’s laws. At least 51% of a business must be owned by a UAE national, and projects must be managed by a UAE national or have a board of directors with a majority of UAE nationals. This restrictions affects the FDI Inflow of country.


While the country has a strong market for telecom related services, its poor level of science education is a problem.

The UAE has a high mobile penetration rate of more than 212 mobiles for 100 people. Till 2008, Etisalat is the only player and there was a monopoly in the market. Du just entered in 2008 and in a year it has market of 15%. Even though having high penetration of mobiles the level of education system is hinders the growth of mobile segment. Due to liberalized labor policies, the country has a skilled workforce from all parts of the globe. Dubai has seen a major rise in the influx of foreign labor due to the growth opportunity in UAE.

In 1^st part of “when The Desert Speaks” I have touched some of the aspect of UAE. In my second part I will do the PESTEL analysis of UAE to find more about mysterious desert land. C