UAE the Global Village

UAE the Global Village

It is estimated that about 240 different cultures live in the UAE today. This means that almost all the cultures in the world are represented in the UAE making it a Global Village. The paper focuses on the question: How has globalization impacted the culture of the UAE? The paper compares the effectiveness and impact of globalization on UAE's economy and culture. Lastly, this paper also examines globalization and its impact on UAE and points out the positive and negative impacts of globalization.

Impact of globalization on UAE has been mixed with both negative and positive implications of global integration.

The population of Saudi Arabia is about 27.6 million people, whereas the neighbouring country of UAE (United Arab Emirate) although has the population of approximately 4.5 million, is considered a very good example of global village in the world. UAE has attracted the international community by undertaking remarkable development initiatives and adopting many innovative policies which has led it to become a global city (Abdullah, 2010).

It has become a glory with the towering sky scrapers and beautiful architectures. In this literature review, the social and economic challenges faced by UAE for successful globalization are discussed (Abdullah, 2010).

UAE comprises of seven states after becoming an independent country on 2nd December, 1971. The states representing UAE are: Abu-Dhabi, Sharjah, Dubai, Umm al-Qaiwan, Ajman, Ras-ul-Khaimah, and Fujairah (Abdullah, 2010).

Since 1820, United Arab Emirates was under the British control bound by a chain of treaties of which the General Treaty of Maritime is considered to be an important treaty, up until 1971 when it became independent (Abdullah, 2010).

Before independence, it was known as a trucial state because of that treaty. The region was very sensibly integrated by the British Empire without facing any responsibilities and administrative expenses which were then transferred to the tribal leaders of the region. Thus, the Empire obtained maximum financial benefits (Abdullah, 2010).

The founding leader of UAE was Sheikh Zayed Bin Sultan Al-Nahyan. In his tenure, UAE established the most, in terms of political stability and public policies enhancement. UAE flourished economically during the last thirty seven years which was unimaginable. As per the Human Development Report of UNDP (2007-2008), the UAE's per capita GDP rate is about $25,574. This rate is considered of a very high income economy as reported in the World Bank Report of 2008. This economic boom was because of the continuously increasing oil prices all over the world (Abdullah, 2010).

According to the Human Development Report (2007-2008) of UNDP, UAE was ranked at the 39th position among 177 countries like Slovakia and Chile. UAE was also rated as one of the least corrupt country of that region by Berlin-based Transparency International. According to the World Bank report, UAE scored 8.3 which is the highest governance rank in that region (Abdullah, 2010).

Thesis Claims and Arguments

Impact Global Village on UAE

Globalization enhances the interconnectedness among the countries especially in the areas of economics, cultures and politics. But studies are being conducted on the positive and negative impacts of globalization that whether globalization is beneficial for the countries or not. In this review, the focus is on the issues that how globalization has been beneficial to UAE and in which particular field.

By looking at the overall development of UAE, the researchers have observed that the globalization has turned UAE in a highly developed country in almost every field like education, infrastructure, technology and media etc. Overall globalization affected UAE positively in all possible aspects (Domluke, 2010).

The positive effects of globalization on UAE's economy have remarkably increased the foreign investment and free trade between UAE and other large economies. Domestic investments have also been encouraged (Domluke, 2010).

Globalization has brought an economic boom in UAE in the form of foreign investments. UAE achieved a record of about U.S.$10 million which was nearly 34% of overall foreign investment done in the Arab countries, as recorded in a survey report conducted in the year 2005 (United Arab Emirates 2007, p.76). The main reason behind this achievement is the political stability in UAE. The working rights of all business related people are preserved by giving them complete authority of buying and selling without imposing various taxes on their revenues and products. A total of 170 licenses were issued in the previous year in UAE to accept branches of different foreign firms, which was about 20% more than the number of licenses issued in the year 2005. According to James Bennett (2007, para3), 24 British companies, 13 German companies, 11 British Virgin Islands companies, 10 Indian companies, and 8 American companies were allotted these licenses respectively.. The economic virtues offered by UAE are acknowledged by businessmen worldwide, making it a hub for foreign investment. It is usually argued that foreign investment takes money out of the company and usually benefits the investors (Mankiw, 2004), UAE's capital stock has increased tremendously over the past few years on account of these investments which have in turn, resulted in an gradual increase in current capability of the UAE to produce ever increasing commodities and services alongside increasing the standards of living of its people.

There has been a considerable boost in the UAE domestic investment due to globalization. UAE is an active participant in many global markets through many investment institutions that include the Abu Dhabi Investment Council, the Dubai Port, Abu Dhabi's International Petroleum Investment Co., and the Dubai Holding, (United Arab Emirates 2007, 2007, p.76). Through globalization, UAE has been increasingly able to deal with already established countries such as the United Kingdom and the United States which help it understand the link between savings and a faster rate of growth utilized by other developed countries. Though, increasing the investments decreases the number of commodities available to the average consumer today, it is bound to largely enhance the same number in the distant future by many folds. There seems to be an existent trade-off between the present and the future consumption which is dependent upon aggregate savings and gross investment. To achieve a higher SOL in the near future, the global village will have to currently save more (Mankiw, 2004). Abu Dhabi plans on investing a total of Dh555 billion in the upcoming 5 years, of which, Dh320 billion will be allocated to construction, Dh120 to the development of the tourism industry, and a total of Dh80 billion on seeking to expand the natural resource sector. Furthermore, investments on hydrocarbon industries have increased as it seeks to create alternative revenues from sources independent of these natural reserves (United Arab Emirates 2007, 2007, p.81). The investment by UAE might cause some consumption hurdles at present, it is a long-term measure that is likely to lead to a brighter future for its citizens.

Free trade is being promoted between other countries and the global village of UAE because of rapid globalization. This trade has enabled UAE to invest goods from abroad that are much cheaper than those produced at home. Though foreign goods, or imports, hurt domestic producers as demand for their products fall and they are likely to lay off workers, thus increasing the rate of unemployment (Mankiw, 2004), it is also possible that it creates more job opportunities in other profitable industries of UAE such as those of oil and those of gas. A total of 170 licenses were issued in the previous year in UAE to accept branches of different foreign firms, which was about 20% more than the number of licenses issued in the year 2005. According to James Bennett (2007, para3), 24 British companies, 13 German companies, 11 British Virgin Islands companies, 10 Indian companies, and 8 American companies were allotted these licenses respectively.). The economic virtues offered by UAE are acknowledged by businessmen worldwide, making it a hub for foreign investment. It is usually argued that foreign investment takes money out of the company and usually benefits the investors (Mankiw, 2004), UAE's capital stock has increased tremendously over the past few years on account of these investments which have in turn, resulted in an gradual increase in current capability of the UAE to produce ever increasing commodities and services alongside increasing the standards of living of its people.

There has been a considerable boost in the UAE domestic investment due to globalization. UAE is an active participant in many global markets through many investment institutions that include the Abu Dhabi Investment Council, the Dubai Port, Abu Dhabi's International Petroleum Investment Co., and the Dubai Holding, (United Arab Emirates 2007, 2007, p.76). Through globalization, UAE has been increasingly able to deal with already established countries such as the United Kingdom and the United States which help it understand the link between savings and a faster rate of growth utilized by other developed countries. Though, increasing the investments decreases the number of commodities available to the average consumer today, it is bound to largely enhance the same number in the distant future by many folds. There seems to be an existent trade-off between the present and the future consumption which is dependent upon aggregate savings and gross investment. To achieve a higher SOL in the near future, the global village will have to currently save more (Mankiw, 2004). Abu Dhabi plans on investing a total of Dh555 billion in the upcoming 5 years, of which, Dh320 billion will be allocated to construction, Dh120 to the development of the tourism industry, and a total of Dh80 billion on seeking to expand the natural resource sector. Furthermore, investments on hydrocarbon industries have increased as it seeks to create alternative revenues from sources independent of these natural reserves (United Arab Emirates 2007, 2007, p.81). The investment by UAE might cause some consumption hurdles at present, it is a long-term measure that is likely to lead to a brighter future for its citizens.

Free trade is being promoted between other countries and the global village of UAE because of rapid globalization. This trade has enabled UAE to invest goods from abroad that are much cheaper than those produced at home. Though foreign goods, or imports, hurt domestic producers as demand for their products fall and they are likely to lay off workers, thus increasing the rate of unemployment (Mankiw, 2004), it is also possible that it creates more job opportunities in other profitable industries of UAE such as those of oil and those of gas.

Global factors of Globalization and their local impact on UAE

Following are some of the factors of globalization seen all over the world. Influence of these factors on UAE has also been documented by a number of scholars (Domluke, 2010).

Spread of Technical Know-How

It is generally said that innovative and technical inventions are only made in the Western developed countries. If, the concept of globalization or global village does not exist then these inventions can only be used in the countries where they were invented. The spread of these inventions not only enhance the life style of people in developing countries but also make people aware about the political and economic conditions of neighbouring as well as western developed countries. A very good example of spreading useful knowledge is the usage of Yoga and Ayurveda medicines in the western countries, which are Indian traditional practices used for curing many diseases. The Western antibiotic medicines are easily available in India, which have improved the common man's life quality (Domluke, 2010).

Spread of Culture

No civilization can be perfect in all aspects. Civilizations are made when people belonging to different cultures unite and live together at one place. Normally if people are receptive they find drawbacks of their own culture and try to adopt other cultural norms which they found to be devoid of those flaws with time. In this way societies get larger because people of different cultures and civilizations merge with one another and generate an entire new culture of that particular society. Globalization has brought people of different countries closer by spreading customs, languages, cooking and clothing styles all over the world. Different famous art forms like music, movies, and theatres have greatly influenced the cultures of different countries (Hussain, 2010).

Spread of Education

The world has now become a global village and media has reduced the distances. In this global village people belonging to different cultures have come closer in many ways. Spread of education throughout the world is one of the major positive effects of globalization. Now people can go anywhere for higher studies without facing any problem of cast, colour and creed. One can move from U.S. To other continent for his field of interest which is not found in his own country. People can go for specialization in their fields to different countries and then serve their own country by using that speciality. Here an example of American managers can be quoted that they went to Japan for specialization in mass production and then used their education to enhance their country's product units (Zoi, 2010).

Legal and Ethical Effects

There was a time when it was difficult to punish the criminals because of the limited jurisdiction. One more benefit of globalization is that, now criminals cannot get asylum in other countries because of international courts for justice and they can be punished then and there in any part of the world. Globalization has brought many countries closer by having relations between security agencies of two or more countries who work together against terrorism. Thus, now criminals cannot find shelter in any country (Khazraji, 2009).

Negative Effects of Globalization

There are certain drawbacks of globalization also. Like many organizations of developed countries have outsourced their business of manufacturing or white-collar jobs to the people of developing Third-World countries such as China, India and UAE to reduce the cost of labour which is very high in their own countries. The most common and prominent jobs are related to the field of customer services. As in the developing countries people are fluent in speaking English and ready to do these jobs at only one-fifth of that a person does in developed country and calls it a low pay job. However, this situation is not favoured by the people of developed countries as they have accused the companies of taking their jobs and giving to other people. Americans also have problems with the quality of customer services they usually get that is why they are against the outsourcing phenomenon (Abdullah, 2009).

Many schools of thought claim that globalization has enhanced the problem of child labour, where companies can easily bribe officials in such countries where government rules and regulations are not severe or firmly intact. This contributes to the overall percentage of illegal activities. Though globalization has led to a highly competitive market, it has also resulted in increased unethical practices (Abdullah, 2009).