The United Arab Emirates (UAE) is located on the Arabian Peninsula, bordering both the Gulf of Oman and the Persian Gulf, with an area about the size of Austria. The country, first established in 1971, is a loosely connected federation of seven emirates, which include Abu Dhabi, Ajman, Sharjah, Dubai, Fujairah, Ras Al Khaimah, and Umm Al Quwain. Each emirate is run as an independent, hereditary monarchy. Most of the population resides in urban areas close to the Persian Gulf coastline, and a large portion of the country’s interior is uninhabitable desert. By leveraging its valuable oil reserves, the country has radically modernized in just a few decades.¹¹⁴

The UAE has an open economy with a large per capita GDP. The current prosperity in the UAE is largely due to its oil reserves, although significant efforts are under way to diversify the economy. As of 2019, the gas and oil sector accounted for only 30 percent of GDP. Following years of rapid development in the early 2000s, the UAE was hit particularly hard by the global recession in 2009. In the decade since, economic growth has averaged about 4 percent per year. GDP stood at US$411 billion in 2018, with a per capita GDP of US$39,500.¹¹⁵

The UAE is a country of immigrants; of the 10.4 million people living in the country in 2019, nearly 90 percent were foreign-born. Today, ethnic Emeratis constitute only 11 percent of the population. Most of the migration stems from the ongoing construction boom and high demand for labor in Dubai and Abu Dhabi. Indians and Bangladeshis, seeking these higher-paying jobs, now constitute 38 and 10 percent of the population, respectively. Islam is the official religion of the country, and Arabic is the official language. English is also widely spoken. The legal system combines both Islamic and civil law.¹¹⁶

Most domestic power resides with each emirate’s emir (monarch), while foreign affairs and budgeting are decided by the Federal Supreme Council. The Federal Supreme Council consists of the seven emirs, with the emir of Abu Dhabi serving as president and the emir of Dubai serving as prime minister and vice president. An additional legislative body, called the Federal National Council, consists of 40 emirates that function in a largely advisory role. Half of the Federal National Council is chosen by the emirs, while the other half is elected by a limited number of chosen citizens. Both women and men serve on the council.¹¹⁷

Sheikh Khlifa, as he is commonly referred to, succeeded his father as Emir of Abu Dhabi and President of the United Arab Emirates in 2004. As president, he holds the role of Supreme Commander of the UAE Armed Forces. Often referred to by former U.S. Defense Secretary James Mattis as “Little Sparta,” the UAE Armed Forces play a major role in maintaining stability in the region and combating Islamic terror groups. Sheikh Khalifa also controls the Abu Dhabi Investment Authority, the UAE’s sovereign wealth fund with approximately US$800 billion in total assets. It is estimated that Sheikh Khalifa has a personal net worth of US$15 billion.^118,119

Today, the UAE provides nearly universal access to electricity and water to its citizens. The country has invested in modern technological infrastructure and large, state-of-the-art airports to attract foreign investment. Both Dubai and Abu Dhabi have become international destinations for luxury shopping, lively nightlife, and exotic attractions. Despite these advancements, human rights issues still remain a concern for many in the international community. Women are subject to discriminatory laws in both employment and their personal lives, and apostasy from Islam and homosexuality remain punishable by death.¹²⁰

You Be the International Management Consultant

To many travelers, the United Arab Emirates may be most known for its luxury airline, Emirates. The airline is a subsidiary of The Emirates Group, which is wholly owned by the Investment Corporation of Dubai, a state-owned holding company. Emirates has had great success for the last several years; today, the airline is the fourth largest in the world in terms of numbers of international passengers flown. Marketing for the airline entails a variety of highprofile sponsors of European football, rugby, and cricket clubs. Most recently, Arsenal FC, based in London, agreed to a new jersey sponsorship deal with Emirates of more than £20 million per year, lasting until 2024. The airline also attained the naming rights for Arsenal’s relatively new Page 321stadium. These sponsorships, while providing important funds in a competitive sport, are interpreted by many as an attempt by the Emirati government to enhance its image abroad.¹²¹

Questions

1.Given that the country is actively seeking foreign investors and appears to be creating a pro-business atmosphere, what non-oil businesses do you think would be best suited for expanding into the UAE?

2.If you were a foreign investor, what concerns would you have about the country? Would you make an investment in the country?

3.If you were recommending a sponsorship deal for a team, would you advise choosing Emirates over a domestic or nongovernmental bid that may not be as large?

Answer rating: 100% (QA)

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