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The Effects of Oil in the Development of the UAE: Digging for the Gold Mine Essay

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Updated: May 25th, 2020

Nowadays one of the most successful companies in the entire world, the United Arab Emirates has faced a number of complexities on its way to the realm of prosperity and wealth.

Tracking its peculiar development and understanding the social, economical and financial challenges that the country had to encounter, as well as the specific tactics used by the governors of the country to make the maximum use of its natural resources, one can draw certain valuable conclusions concerning the wisest way to use the values of nature that the state has at its disposal.

Therefore, it will be a useful experience to trace the specific pattern of the UAE development and the role which its main natural resource, that is, oil, played in the progress made by the UAE.

In the proposed study we seek to examine the general development of the UAE, comment on the landmarks of the country’s progress, clarifying the reasons for the shifts in the country’s state and the outcomes of the events, and examine the role of the UAE’s main natural resource, that is, oil, in the country’s incredible progress and the impressive rise.

Knowing what predetermined the UAE fast and successful development, understanding the country’s strategies that led to the economical rebuff, and assessing the role of the natural resources in the state’s development, one can obtain valuable experience and also generate the prognosis for the further progress of the country.

Hence, the given research offering a detailed analysis of the role oil played in the UAE development seeks to explore the historical development of the country together with the economical progress and the use of oil.

Basing on a number of sources concerning both the history of the UAE and its current economical and political position, the given research considers five main sources. With help of these papers, the research can provide a versatile analysis of the UAE development and the role of oil in it. Therefore, the sources in question provide the data on both the current UAE economics and the strategy used over centuries in the country.

With help of the data provided by Potts, the research can embrace the entire history of the UAE economical development starting from the time when the state was in its embryo. In addition, Potts offers the information concerning the “rules of history” (25) that predetermined the specific way the state developed.

With El Malakh’s contribution, one can see distinctly the general development of the state, its political and cultural rebuffs, as well as the periods of decay, thus, providing the sufficient background for the plausible factors that affected the UAE economics and the oil production, trade and consummation at a particular period of the state history.

Another essential source that adds to the general information about the UAE and its history and yet emphasizes the importance of the oil production and trade for the country’s financial and economical wealth is the book by Abed.

Making a general overview of the role of oil production in the history of the state, the author still emphasizes the importance of the product in the XXI century, when the world economy is often threatened by a number of various crises.

It is also important to mark that the change taking place in the UAE society is also somewhat enhanced by the current economic policy, which is aimed at oil production. Thus, the data offered by Rostin, are of great use for the given research.

The last, but not the least is the research conducted by King. Outlining the main stages of the state development, the author considers carefully the place UAE take in the modern market, providing the most up-to-date information for the given research paper.

Even though the researches mentioned above seem to cover all existing topics concerning the economics of the UAE and the development of the oil trade, the given researches still do not outline clearly enough the importance of the oil industry in the development of the country.

Making certain connections between the given phenomena, the authors of the researches do not offer a detailed explanation of the way the oil industry development enhanced the progress in the country.

In contrast to what might be expected, the authors of the researches miss the link between the country’s well-being and the oil industry that helps people thrive and prosper in the UAE. Therefore, the information gap must be somehow filled.

It is also essential to mark that the economical development of the UAE has never been considered before incorporating the entire history of the state and the oil industry, which also contributed to the novelty of the research.

It must be admitted that the effects of the oil resource use in the UAE have been completely astonishing, if comparing the life standards in the country before and after the oil discovery, which means that the given natural resource has played a vast role in achieving the country’s current prolific state.

Hence, in the given essay, the interconnections between the current economical state of the country and the oil resources, oil industry and oil trade are going to be considered. Providing an analysis of the oil industry impact on the state, one can see certain links between the two elements. Thus, the effect of oil in development of the UAE will be fully considered. In addition, the risks concerning the oil investments must be taken into account:

Key Risks to Exporters and Investors.

Key Risks to Exporters and Investors. Image © Efic

According to the recent researches, the effects of the oil industry development on the progress of the UAE economical and political state have not been researched well enough. First of all, it is essential to mark that the positive effects of the oil industry development on the state’s situation have been considered in rather nonchalant fashion.

In addition, only the positive effects of oil development have been considered so far (Rostin), while the less favorable aftermaths have been left unnoticed. Therefore, the positive and negative effects of the oil development on the state of the UAE must be observed and analyzed in the given paper.

To outline the problem of the paper, one must realize that the effect of the oil industry development on the progress of the state has not been stated yet, which means that the absence of the formula that could describe the UAE path to the progress and prosperity the state is witnessing now must be compensated.

Filling the gap in the description of the UAE history, one can contribute greatly to the further understanding of the history and policy of the country, as well as realize the reasons that stand behind a certain political move made by the country authorities.

Thus, the gap in the information concerning how the vast recourses of oil helped the country to elevate above the rest of the African states and become one of the richest and the most prolific state of the world must be filled.

With help of the knowledge obtained, one can not only provide the prognoses for the further development of the UAE, but also help to offer a flexible policy for the other countries that have certain oil resources in disposal. Hence, the given paper researches the problem of the positive and the negative effects that the oil industry had on the development of the UAE.

It is important to emphasize that the paper deals with the problem that has been essential for the UAE since the state started using the oil resources and is still topical for the country. Thus, the problem proves to be incredibly important for the modern UAE society. In addition, the results obtained will hopefully outline the prospects of the further economical development of the UAE.

Considering the objectives of the given paper, one must mention that the research is supposed to deal with the factors that were triggered by the upheaval of the oil industry development and caused certain changes to the economical, financial or political state of the UAE throughout the state development.

It is crucial to mark that the paper deals with both the positive and the negative effects of boosting the oil industry development, if any are found, for the paper to be most objective and not to exaggerate the role of oil industry in the history of the UAE. Therefore, the given paper is restricted by the topic of the effects of the oil industry development in the UAE.

To outline the limitations of the paper, it is necessary to admit that the current state of the UAE well-being will be quite problematic to trace, since the economic development, like any other form of progress, is continuous and unstoppable. Hence, the research offers the data that is topical for the year 2011 in general.

Figure 2. OPEC. Crude oil.

OPEC, Crude Oil, Lease Condensate and NGL Supplies.

OPEC, Crude Oil, Lease Condensate and NGL Supplies. Image © Business Insider

Another important limitation that must be kept in mind is the impossibility to conduct the analysis taking into consideration every single economical, political and social factor of every single epoch in the state development. However, picking the landmarks of each epoch and analyzing each carefully, one can reach the desirable effect and provide a close analysis of the UAE state progress rather precisely.

Offering the plausible hypotheses for the given research, one must mark that the development of the UAE was quite complicated and tangled (King), which allows a lot of suppositions and theories concerning the role of the oil production in it to be created.

However, it goes without saying that the effect of the oil industry was of crucial importance for the UAE, and the country obtained considerable profit from the oil trade. On the one hand, the aspects of the oil trade that had the positive effects on the UAE development are obvious and indubitable; on the other hand, the country did face certain obstacles that appeared when exploring the industry that brought the state its wealth.

To prove the existing dual nature of the effects that oil had on the UAE development, one can drive a number of examples of the decay in the UAE economics when the other countries started producing and exporting oil; for instance, King drives the example of the 1980s:

In the 1980s there was a glut of oil on the world market, and the prices of petroleum products dropped sharply. This jolted the economy of the UAE, as well as other oil rich Gulf countries. The UAE found itself, like other countries of the world, building up a sizable national debt. (52)

Therefore, there are considerable reasons to think that the oil industry had not only the most positive, but also quite deplorable effects on the UAE development and its state within the country, as well as in the sphere of foreign affairs. Boosting the oil industry, the country could also have neglected certain issues that needed attention, which could have also had its effect on the UAE state.

However, the positive results that the oil industry brought to the state are also to be mentioned in the research paper, Since the UAE owes a lot of its wealth to the national resources it possesses, each of the positive results are to be marked. As it turns out, the country is built basically on the efficient work of the oil industry, yet the latter has both the positive and the negative effect on the country.

Thus, it is obvious that the given research offers important and original hypotheses concerning the problems and the positive outcomes of the oil industry work that have their impact on the UAE development, political, economical and social.

Solving the issues concerning the aforementioned problem, one can predict with considerable credibility probable prospects of the state’s further development, which is quite essential. Therefore, the problem stated above needs thorough researching.

Another element of immense significance for the given research is the method used to investigate the problem under the consideration. The basic method of the research is the historical one. It is also worth mentioning that the given paper comprises several methods of research for the results to be as objective as possible and provide all-embracing and exhaustive explanations for the phenomena in question.

For the paper to provide an objective observation of the existing facts and introducing them to the audience, the exploratory method is used. To figure out the possible solutions for the problem researched, the given paper exploits the constructive method. It is important to mark that the paper does not involve the empirical research, since the scale of the research does not allow to conduct the one.

Comprising the above-mentioned methods of research, one can come to the most objective results and at the same time create an original hypothesis. Moreover, the methods used help not only to identify the problem, but also to outline a pattern of the country’s development to base the further predictions on.

Another issue that must be outlined is the fact that the given paper offers a secondary research, for the paper is based on a number of additional sources. Without these sources, reaching the objective results would be impossible.

Among the probable data sources for the given paper, one should mention such sources of information as the First Data Sets Regional Office at Dubai, and the resources of the like.

Collecting the data from the most up-to-date sources and providing the information that will reflect the UAE situation as close to the current state of affairs as possible will make the given research paper most objective and provide a more reliable material for analysis.

In addition, the given data source offers a plethora of facts concerning UAE from every possible angle, touching upon the economical, political and financial issues that are relevant for the UAE in the given time period.

Alternatively, the given research can address such data sets as the UAE sites that offer statistics concerning the financial and economical information, which will allow to estimate the country’s outcome per year and draw a comparison between certain stages of the country development.

Using this sort of resources, one can obtain the most useful information and classify it according to the requirements of the given paper. Moreover, predictions for the future changes can be made.

The Economical Forecast for the Future Image.

The Economical Forecast for the Future Image © Risk and Forecast

Moreover, it will be necessary to consider the data sets concerning the UAE oil industry. Offering precise numbers and verified data, such data sets will provide the most precise information on the researches made in the given sphere and the people who have contributed to discovering the peculiarities of the UAE state development.

Hence, the aforementioned data sources will be used in the given research. The data sources that offer academic papers providing detailed information on the existing state of the UAE oil industry and oil trade will be required for the given paper. Thus, the above-mentioned data sources are going to be located and used for the paper writing.

Researching the problem of the link between the UAE economical state and the oil industry in the country, the given paper provides thorough considerations of the UAE historical progress and analyzes its most significant stages. Offering an overview of the UAE establishment and the way the country had to go on the way to its final formation, the research deals with important aspects of the present-day issues of the UAE economics.

In addition, the paper also touches upon the issues of the UAE society, which is quite important for reconsidering the role that the country plays in the modern world.

With help of the thorough analysis of the current position that the UAE possesses in the modern world, one can understand that the current position is predetermined by the economical factors that concern the country’s valuable minerals, namely, one of the most worshipped resource, that is, oil.

It must be also mentioned that the given paper will assess the importance of the oil industry and the positive and negative effects that the oil industry had on the state in rather superficial way. Since it is impossible to consider the revenues of every major enterprise working in the UAE in a certain time period, only the GDP of the given year can be considered to estimate the financial and economical stability of the UAE in a certain year.

In conclusion, it would be reasonable to say that the given paper considers the entire development of the UAE and its oil industry, which means that only the most essential elements of the state progress are taken into account.

Since it is impossible to consider every single peculiarity and the tiniest shift in the economical or financial state of the UAE in the given time period, it is evident that the paper offers only general data on the country productivity. Nevertheless, stating the relations between the oil industry and the pace of the UAE development, one can obtain the information that will help to forecast the plausible changes in the economics of the country.

Works Cited

Abed, Ibrahim Al, and Peter Hellyer. United Arab Emirates: A New Perspective. London, UK: Trident Press Ltd., 2011. Print.

Business Insider. “.” Business Insider. n.d. Web.

EFIC. “Key Risks to Exporters and Investors.” EFIC. n.d. Web.

King, David C. United Arab Emirates. Singapore, SG: Marshall Cavendish, 2008. Print.

Mallakh, Ragaie, El. The Economic Development of the United Aram Emirates. New York, NY: Taylor & Francis, 1981. Print.

Potts, Daniel T., Hasan Al Naboodah, and Peter Hellyer. Archaeology of the United Arab Emirates. London, UK: Trident Press Ltd., 2011. Print.

Risk and Forecast. “.” Risk and Forecast. Web.

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"The Effects of Oil in the Development of the UAE: Digging for the Gold Mine." IvyPanda, 25 May 2020, ivypanda.com/essays/the-effects-of-oil-in-the-development-of-the-uae-digging-for-the-gold-mine-essay/.

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IvyPanda. 2020. "The Effects of Oil in the Development of the UAE: Digging for the Gold Mine." May 25, 2020. https://ivypanda.com/essays/the-effects-of-oil-in-the-development-of-the-uae-digging-for-the-gold-mine-essay/.

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IvyPanda. (2020) 'The Effects of Oil in the Development of the UAE: Digging for the Gold Mine'. 25 May.

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