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Effects of Globalization in the UAE Research Paper


The role of globalization in UAE based firms

“Globalization is defined a process of interaction and integration between governments, companies and people of different countries” (“What is Globalization?” n.d). This process is usually triggered by international trade and investment; and is made faster by information technology.

Generally, globalization has numerous effects on a country’s operation. In the United Arabs Emirates (UAE), this has not been any different since many areas of the economy have felt the impact.

As a matter of fact, UAE based firms have been affected by globalization resulting to various measures being undertaken by such firms so as to remain in competitive business. Therefore, the role of globalization on UAE based firms shall be discussed briefly in the paragraphs that follow.

Firstly, open trade and investment policies triggered by the need for globalization have greatly influenced cultural Industries in the UAE. “Cultural industries include media organizations, film production, audiovisual sphere, the print output, multimedia sector, architecture, performing arts, plastic arts, and cultural tourism” (UNESCO, 2000).

The open economy in the UAE has paved way for an increased importation of cultural products and services from across the globe. The results of such imports are the changing lifestyles of people in the region. Also, the establishment of Dubai Media City came as a result of the open economy. The city has paved way for the establishment of almost 550 media organizations such as Sony Broadcast and Professional, CNN Reuters, and McGraw Hill Publishing (UNESCO, 2000).

Secondly, telecommunication companies have also been impacted by globalization due to the rising need of networking and communication. Globalization has led to significant technological improvement in information flow; and in particular, the advent of fiber optic, satellites and improved telephone and internet services.

Recently, telecommunication firms in Dubai have started upgrading their internet speeds from 3mbps to 21mbps in order to maintain a competitive edge. This is taking place due to the urgent need for faster communication and internet speeds that matches the current development rate.

Lastly, globalization in the UAE has led to creation of numerous job opportunities which has attracted expatriates into the country. Expatriates come from other countries with various cultural practices and behavior as compared to the strict Arab culture. This scenario has led to cultural diversity in the work place.

Through multicultural corporations, people of a diverse culture meet and work together to realize benefits for host countries. The necessity of expatriates to fill job opportunities makes UAE firms spend much more on salaries than they would spend on their local professionals. However, this gives the firms an opportunity to experience different styles of leadership, planning, decision making and e.t.c

The Pros and Cons of Globalization in the UAE Markets

Positive Impacts

Despite the fact that globalization brings the much needed change in the economy of a country, it also triggers some unwanted issues in the country. In this section, the positive and negative impacts of globalization in the UAE are discussed with examples mainly from the City of Dubai.

Technological Advancement and Productivity Expansion

Globalization in the United Arabs Emirates has led to the application of the latest technologies in their systems. As a matter of fact, the market relies on compliance with modernization since new knowledge greatly defines productivity levels.

The benefits of new ideas are all-round, for example, management can devise methods that lower costs and increase profits while increased production increases the volume of sales. The increased transfer of information from one are to another has taken communication to a different level.

Globalization has led to significant technological improvements in information flow and in particular, the advent of fiber optic, satellites and improved telephone and internet services.

Recently in Dubai, internet speeds have been increased from the normal 3mbps to 21mbps. This is expected to improve the rate of information transfer via phones, telephone, and internet, thereby, encouraging online commerce.

Economic Growth

Effects of globalization in the UAE have been felt globally especially as depicted in Dubai. Dubai has received a substantial economic boost from the massive investment in iconic structures that have attracted millions of tourists in the region. “An example iconic structure is the Burj Al-Arab (Tower of the Arabs) hotel, a seven star hotel that has become the symbol of Dubai” (“The Effects of Globalization on Dubai’s Economic Development,” n.d.).

“Another structure is the Palm Jumeirah, intended to be the largest man-made island in the Arabian Gulf with exclusive hotels, residences, shops and entertainment facilities” (“The Effects of Globalization on Dubai’s Economic Development,” n.d.).

In addition to that, globalization has led to development of massive sporting complexes such as the Nad-alSheba Racecourse that provides hosting accommodation for Dubai World Cup. These developments have created several employment opportunities both for locals and expatriates; thus, it helps to keep the economy growing.

General, globalization has played a very important role in transforming Dubai’s economy from a small fishing village into a global center for trade and commerce.

Negative Impacts

In real life situation, there is a constant struggle by developing countries to compete with developed nations. According to research, it has been established that developed countries generally enjoy the benefits of free trade. Economists argue that industries located in developing countries have to be protected from free trade in order to develop.

To some extent, this argument might be true considering the kind of competition such industries may be exposed to by presence of multinational companies in their vicinity. Below are some of the negative impacts of globalization in the UAE.

Cultural Pollution/Changing Lifestyles

In the UAE, globalization is fast changing the unique Islam culture and mentality of the host people. Alterations of the Islam culture and traditions lead to significant changes in the cultural market, hence, the cultural goods.

This effect is evident in Dubai where the need to attract tourists for foreign exchange has led to the increased demand and diversity in cultural goods. This scenario results in increased importation of such goods leading to changing lifestyles and a blended culture.

Dependency on other Economies

Despite the massive economic growth of Dubai to become a tourist destination city, there are other risks associated with it. At one time, Dubai’s economy depended on its fuel which, unfortunately, is forecasted to be exhausted by 2015.

This is the reason for the massive developments that make it a tourist destination. In future, Dubai’s economy will fully depend on tourism. This means that region will be depending on other economies; thus, when such economies go down Dubai’s economy goes down as well. This phenomenon equally applies to the entire United Arabs Emirates states.

References

The Effects of Globalization on Dubai’s Economic Development. (n.d). Web.

UNESCO (2000). International Flows of Selected Cultural Good 1980-98: United Nations Educational, Scientific and Cultural Organization. Paris, France.

What is Globalization? (n.d). Retrieved from the Levin Institute Globalization101.

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IvyPanda. "Effects of Globalization in the UAE." May 8, 2019. https://ivypanda.com/essays/effects-of-globalization-in-the-uae/.

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IvyPanda. 2019. "Effects of Globalization in the UAE." May 8, 2019. https://ivypanda.com/essays/effects-of-globalization-in-the-uae/.

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IvyPanda. (2019) 'Effects of Globalization in the UAE'. 8 May.

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