This article covers Country- Brief: The United Arab Emirates.
Instructions
Econ 305 – Assignment # 1
On this page are the general instructions for the class assignment/paper. It is a Country Brief and is due on the last day of class. LATE PAPERS WILL NOT BE ACCEPTED.
On the second page are the instructions for the first of FIVE parts, since this is basically a guided paper.
I hope you enjoy this assignment.
GENERAL INSTRUCTIONS:
During this semester there will be FIVE ASSIGNMENTS. All you have to do is follow each step and by end of this semester, you should have created a finished document — which you will hand into me as a printed hard copy and be graded on. It is worth 15 % of your final class grade.
End Result – You will produce a Country Brief on the specific country you have selected. However, this is not a report that you will create completely on your own– rather it will be a guided report so that you understand the sort of paper a government official or investor would wish to be presented.
With each assignment, you will :
1. Read/ ( watch)/ review the assigned material, which will be on a specific topic
2. Gather and record the specific data asked for (you do not hand this into me) but keep it in a separate file.
3. Summarize and analyze your country in terms of this data and in a comparative context with the United States and China.
What you write in #3 above each time, will consist of about two to three succinct and informative paragraphs that will be entered into a Word document that you will save, and thus end up with the completed country brief.
So – let’s get started.
STEP ONE — Create a Word document with the following title:
Country Brief – (add the name of your assigned country)
Please use single-space text and double-space between separate (the five in total) sections. Please use Times Roman #12 font and be sure to save your work. You do not give me your work (unless requested) until the last day of class. We will come back to this. For now, just save this document.
May 11 by 11:59 pm
The country us United Arab Emirates ( UAE )
Solution
Country- Brief: The United Arab Emirates
Introduction and Development
Over the years, the United Arab Emirates has become the regional trading hub for the middle-east. In 1971, six states merged to form the UAE: Al Fujayrah, Umm al Qaywayn, Abu Dhabi, Ash Shariqah, Dubayy, and ‘Ajman. It is an enormously growing business capital that performs well compared to other global players, including the US and China (“Economic Development of the United Arab Emirates (UAE) – 2896 Words | Essay Example”, 2021). Its Gross Domestic Products (GDP) is consistent with that for Western European countries. For many decades, UAE has been the leading oil producer, and together with global finance, has improved the economy.
People and society define a country’s population distinctively. According to United Nations (UN) statistics, the United Arab Emirates has a population of 9,856,612, with immigrants making up 87.9% (Podiotis, 2020). In contrast, the US had a population size of 334,998,398, while China has 1,397,897,720 as of July 2021. Population growth rate for UAE is estimated at 0.62%, US at 0.7% and China with 0.26%. Likewise, the total fertility rate for UAE is 1.65 children born/woman while China is 1.6 children born/woman and 1.84 in the US. The median age in UAE is 38.4 years; 40.4% for males and 31.5% for females, while in the US, it is 38.5%; 37.2% for males, and 39.8% for females. Similarly, the median age in China is 38.4%; 37.5% for males and 39.4% for males.
The life expectancy at birth in UAE is 79.37 years for the total population, 78.04 years for males, and 80.78 years for females. In the US, life expectancy for the total population is set at 80.43 years, 78.18 years for males, and 82.65 years for females, while in China, life expectancy is 76.31 years for the total population 74.23 years for males, and 78.62 years for females (“United Arab Emirates Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption”, 2021). The real GDP per capita was $67,119 in 2019 for UAE, $62,530 for the US, and $16,117 for China. The Gini index coefficient that defines the distribution of family income was at 38.5 in 2016 in China and 41.1 for the US. In 2014, UAE recorded a Gini Index coefficient of 32.5. In 2019, the human development index for China was 0.761, 0.890 for UAE, and 0.926 for the US.
Trade and openness to the world
The United Arab Emirates trades openly with its partners in its exports and imports. In 2017, the GDP composition by end-use was distinctively highlighted in the percentage of exports: household consumption was at 34.9%, government consumption 12.3%, investment in fixed capital 23%, investment in inventories 1.8%, export of goods and services 1…4%, and imports of goods and services -72.4% (“United Arab Emirates Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption”, 2021).
In 2017, the total export estimate was $308.5 billion and $229.2 billion for imports while the GDP was set at $421.077 billion. Therefore, the Index of Openness is calculated as;
Index of Openness = Exports + Imports / GDP
= $308.5 billion + $229.2 billion / $421.077
= 1.27
Contrastingly, the US’s Index of Openness of: = $2.31 trillion + $3.054 trillion / $21.433 trillion
= 0.25
For China, the Index of Openness = $2.216 trillion + $1.74 trillion / $14.327 trillion
= 0.27
UAE’s export partners are India, Japan, Saudi Arabia, Switzerland, China, and Iraq. The most common commodities exported to these countries include refined petroleum, crude petroleum, gold, jewelry, and broadcasting equipment. Major imports are diamonds, gold, refined petroleum, broadcasting equipment, and jewelry, with source countries being China, India, and the United States. As of 2017, UAE had a budget deficit of -0.2% of the GDP, with the current account balance at $26.47 billion. Likewise, the US had a budget deficit of -3.4%, while China had a deficit of -3.8% of GDP (“| countryeconomy.com”, 2021).
Macroeconomic Policy
GDP composition is determined by the sector of origin and by the end-user. In UAE, the sector of origin constitutes input from agriculture, industry, and services while end-use by consumption, investments, export, and import of goods and services. The composition by end-use is calculated as C + I + G + X – M
= (34.9 + 12.3 + 23 +1.8 + 100.4 – (-72.4)) %
= 244.8%
In the US = (68.4 + 17.3 + 17.2 + 0.1 + 12.1 – (-15)) %
= 130.1%
Lastly, China has a GDP composition of’
= (39.1 + 14.5 + 42.7 + 1.7 +20.4 – (-18.4)) %
= 116.4%
As of 2017, UAE had a fiscal deficit of -0.2% of GDP, an inflation rate of 1.9%, a corruption index score of 71 indicating perception of less corrupt, and fiscal debt of 26.83%. Likewise, the US had a fiscal deficit of -3.4%, inflation rate at 2.1%, corruption index score of 75, and fiscal debt of 108.19% (“| countryeconomy.com”, 2021). China recorded a fiscal deficit of -3.8%, an inflation rate of 6.92%, a corruption index score of 41 indicating more corruption, and fiscal debt of 57.05%.
Although the current financial situation in the UAE is not as dire as in China and the US, the government should mainstream revenues and expenditures. The rate of corruption is at an all-time low, with a constant score of between 70-71 since 2017. Regarding the monetary policy, UAE’s ministry of finance has set interest rates at record lows to attract investors and individuals seeking loans. This policy applies to oil production and water desalinization companies.
Balance of Payments Consequences
The United Arab Emirates facilitates the import and export of goods and services to bolster global presence and maintain a competitive advantage over other nations. The trade balance of a country is the summation of its imports and exports without considering factors such as investments, financial transfers, and other miscellaneous finance-related aspects (Chaker et al., 2019). When the trade balance is positive, it means a country registers a surplus, and the value of exports surpasses imports. If the trade balance is negative, a deficit is recorded, and a situation occurs where the value of imports exceeds that of exports. In the case of UAE, it recorded -0.2% of GDP, indicating a deficit. Likewise, the United States and China had a trade balance of -3.4% and -3.8% of GDP (“United Arab Emirates Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption,” 2021). As much as all countries had the value of their imports exceeding exports, UAE was better positioned to recover from the event.
As you continue, thestudycorp.com has the top and most qualified writers to help with any of your assignments. All you need to do is place an order with us. (Country- Brief: The United Arab Emirates)(Country- Brief: The United Arab Emirates)
Current account balance refers to a country’s records for international transactions between in-country residents and external participants. It is measured in percentage of the Gross Domestic Product and million USD indicating operations in capital markets, services, goods, and current transfers. In 2017, UAE had a current account balance of $26.47 billion and can act as a net creditor to other countries (Kordos & Vojtovic, 2016). In comparison, the US recorded a current account balance of -$449.694 billion, reflecting a deficit and an economy with a net debtor. China had a surplus with its account balance at $25.499 billion.
Debts occur when spending exceeds revenue or income. Governments accrue national debts at the national level that arise when there are deficits that accumulate annually and strive to avert them using loans and reduce spending. In 2017, UAE had a public debt of 19.7% of GDP and an external debt of $237.6 billion (Mosteanu & Alghaddaf, 2019). The US had a public debt of 78.8% of GDP and an external debt of 20.3 trillion. Lastly, during the same year, China’s public debt was 47% of GDP, and external debt of $2.03 trillion (Podiotis, 2020). The size of public debts tells a lot about a country’s fiscal deficits and the reasons for issuing bonds to foreigners. High deficits compel governments to look for alternative revenue sources to fund their operations. For instance, it can raise cash by issuing debt in its currency, an initiative that presents varying ramifications. It could erode foreign investor’s earnings through devaluation.
Summary and Conclusion
Over the years, UAE has grown from a desert nation to a formidable player in global trade. This is due to its rich resource base of oil resources and global finance. Although many factors contributed to UAE’s growth and development, internal coordination and merger with six of its states played a significant role. Today, it is the leading oil producer and exporter globally, and the government-initiated policies promote investor involvement, resident or non-resident. UAE’s resident population constitutes a small portion of the total population. Most people are foreigners accounting for more than 87.9% and with a relatively high population growth rate compared to China and the US.
A significant strength of UAE’s economy is the high degree of support from the government. Through legislation, there are no foreign-exchange controls and trade barriers. These conditions encourage investments from residents and non-residents; thus, economy-building is on another level and expected to bloom in the next few decades. Also, it is essential to note that the United Arab Emirates was initially a desert, and with the rising infrastructural developments, the country was already an established tourist hub. However, some shortcomings hinder progression, including external business factors that regulate global trade. This factor can influence its predisposition as the world’s third-largest rough oil exporter.
References
| countryeconomy.com. (2021). Retrieved 12 May 2021, from https://countryeconomy.com/
Chaker, M., Sabah, A., & Al Homsi, F. (2019). Impact of foreign direct investment on economic growth: a case study from the UAE. J. For Global Business Advancement, 12(6), 746. doi: 10.1504/jgba.2019.10029969
Economic Development of the United Arab Emirates (UAE) – 2896 Words | Essay Example. (2021). Retrieved 12 May 2021, from https://ivypanda.com/essays/economic-development-of-the-united-arab-emirates-uae-essay/
Kordos, M., & Vojtovic, S. (2016). Transnational corporations in the global world economic environment. Procedia-Social and Behavioral Sciences, 230, 150-158.
Mohaddes, K., & Pesaran, M. (2016). Country-specific oil supply shocks and the global economy: A counterfactual analysis. Energy Economics, 59, 382-399. doi: 10.1016/j.eneco.2016.08.007
Mosteanu, N. R., & Alghaddaf, C. (2019). Smart economic development by Using Foreign Direct Investments–UAE case study. Journal of Information Systems & Operations Management, 9-20.
Podiotis, P. (2020). Sentiment Analysis of the CIA World Factbook. SSRN Electronic Journal. doi: 10.2139/ssrn.3721400
United Arab Emirates Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. (2021). Retrieved 12 May 2021, from https://www.heritage.org/index/country/unitedarabemirates
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