This paper is aimed at examining the role of the construction and real estate sector in developing the economy and infrastructure of the United Arab Emirates. One can say that it can contribute to the growth of other sectors such as the hospitality industry, manufacturing, retailing, and so forth by providing infrastructure and office space. Moreover, construction companies can create opportunities for businesses that can act as suppliers or contractors.
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The Role of Construction and Real Estate Sector in the UAE
The government of the United Arab Emirates attempts to diversify the country’s economy and make it less dependent on the oil industry. Much attention should be paid to the role of the real estate and construction sector because it plays an important role in supporting various forms of businesses that may differ greatly in terms of size, structure, or activity. Some of them can benefit from using buildings and infrastructure, while other enterprises can act the suppliers or contractors of construction companies. These are the main questions that should be discussed more closely.
It should be noted that the construction sector plays an important role in promoting the growth of the tourist industry in the country (Oxford Business Group, 2008, p. 171). Various hotels, restaurants, and entertainment parks can be cost-effective only if developers can construct buildings quickly and at a relatively low cost. In turn, the increased inflow of affluent travelers from various regions of the world generates extra revenues for the country and its citizens.
Furthermore, the companies working in this sector contribute to the creation of more affordable office space in the country (IBP, Inc, 2014). This opportunity is critical for many businesses that may represent various sectors of the economy. For instance, one can speak about such organizations as retailers, IT companies, banks, public agencies, and so forth. This is one of the positive effects that should be distinguished.
Moreover, the construction industry is important for developing infrastructure such as roads and telecommunications (Gorgenlinder, 2011, p. 35). At first, this infrastructure is critical for the movements of goods across the country. Thus, manufacturers, distributors, and retailers are able to benefit from the growth of the construction sector. Furthermore, this infrastructure is important for financial transactions that are made by various financial institutions, such as banks and financial institutions. These are the main details that should be distinguished.
Furthermore, one should mention that the real estate and construction sector contributes to the development of different businesses that can be engaged in such areas as sustainable technologies, design, engineering, and so forth. In many cases, they are the suppliers of the construction companies. This is one of the positive impacts that should be identified. Nevertheless, it is important to mention that the construction and real estate sector can contribute to the development of the economy, provided that there is a regulatory framework supporting the activities of various businesses. For instance, one can speak about reduced taxes (Kumar, Agarwal, & Khullar, 2010). Without this legislative environment, investment in the construction industry will not be efficient.
On the whole, this discussion indicates that the construction sector can bring significant improvements to the economy of the UAE. To a great extent, these companies can create opportunities by improving infrastructure and providing office space. Moreover, the real estate sector generates demand for the products and services of many businesses, such as the manufacturers of sustainable technologies. Yet, the government should support these businesses by adopting appropriate regulations. Thus, the positive role of the construction sector should not be overlooked.
Gorgenlinder, V. (2011). A Strategic Analysis of the Construction Industry in the United Arab Emirates: Opportunities and Threats in the Construction Business. New York, NY: Diplomica Verlag.
IBP, Inc. (2014). UAE: How to Invest, Start and Run Profitable Business in the UAE Guide – Practical Information, Opportunities, Contacts. New York, NY: Intel Business Publications.
Kumar, R., Agarwal, A., & Khullar, R. (2010). Real Estate and Construction Sector in the UAE: Growth Strategies. Web.
Oxford Business Group. (2008). The Report: Dubai 2008. New York, NY: Oxford Business Group.