A Country Review of United Arab Emirates - Case Study Example

Country United Arab Emirates Flag Map Retrieved from http wwp.greenwichmeantime.com/time-zone/asia/united-arab-emirates/map.htm. Student No. 12345 UNITED ARAB EMIRATES A COUNTRY REVIEW Professor: ABC University of XYZ Department of LMN 06 March, 2010 Table of Contents Contents Page No Introduction 04 Historical Background 06 Institutional Features 07 (a) Executive 08 (b) Legislature 08 (c) Judiciary 09 (d) Local Government and Economy 09 Political Culture 10 Conclusion 12 Works Cited 14 Student Name Modern World Governments University XYZ 06 March, 2010 Introduction The UAE, formerly known as Trucial States, is a confederation established in 1971, consisting of seven individual emirates i.e. Dubai, Abu Dhabi, Sharjah, Ras al-Khaimah, Fujairah, Umm al-Qaiwain and Ajman each has its own Emir. By the establishment of this federation along with the discovery of crude oil, UAE entered in a new era of development. The UAE contains world’s 5th largest reserves of crude oil and 4th largest of natural gas (OPEC, 2004). The UAE officials believe that these natural reserves are enough for the country’s need for almost 100 years at existing production rates. Tourists from the whole world go to Dubai for its exciting buzz and widespread appeal. Abu Dhabi, capital of The UAE and one of the most modern cities of the world, is most well off because of huge natural oil reserves and gas but the best-known emirate is Dubai as a global hub for tourism and trade. The other emirates i.e. Ajman, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Qaiwan, are comparatively less well known. These emirates depend on shared trade of light manufacturing goods as well as financial assistance from Abu Dhabi, Dubai and the Federal Government. The country maintains a liberal attitude toward other cultures and beliefs. In the space of less than 50 years the UAE has become a land of glittering cities, with towering skyscrapers, luxury hotels and beach resorts, magnificent shopping malls, and one of the highest living standards in the world (King, 2008) There are three unique feature of The UAE due to which I have selected it for a country review. One of the most significant natural features of The United Arab Emirates is its well positioned geography i.e. a doorway from Asia to Europe. The buoyant economic growth of recent past is mainly due to the fact of its geography. The UAE is situated along the south-eastern tip of Persian Gulf. Saudi Arabia is at the southern side of UAE as well as it shares the western border along with Qatar. Sultanate of Oman is in the north and east of UAE. Another unique aspect of UAE profile is the composition of its population. In 2008, the total population of the country was 4.4 million. Only 15 – 20 % of the total population is UAE citizens while majority of rest of the population consists of other Arabs, Pakistanis, Indians, Afghans, Iranians, and west Europeans etc. Actually at the outset, confederation launched attractive policies for foreigners to gain valuable labor force for the development of the country. The 3rd unique feature of the country is its political system which is distinctively a great combination of modern and traditional practices. No political party system and democracy in the country yet the people have granted with full human rights. This paper is basically about the political review of The UAE. In order to highlight a clear political picture of the country, the paper has been distributed in short segments. The first section of the paper discusses some historical events which have great influence on the political and economical environment. This section is followed by a closer look at some key institutional features and political environment of the country like Federal Supreme Council, judiciary and legislative and local governments etc. The government structure will not only provide the information to the reader but also enable the reader to understand the whole political review of The UAE. Historical Background Sheikhdoms, organized tribes of Arabian Peninsula, formed UAE along the south-eastern coast of the Arabian Gulf and the northeast of Gulf of Oman. Islam was highly embraced during the 17th century in areas of The UAE. From 17th to 19th century, the area became well-known as the Pirate Coast (Morsy, 1978). In order to keep the Indian trade safe from raiders along the harbors at Ras al-Khaimah, early British expeditions led an operation along the coast in 1819. In 1820, a general peace treaty was signed by all the principal sheikhs. Occasional raids continued until 1835 while in 1853, another treaty was signed with the United Kingdom under which the tribes agreed to refer their disputes to the United Kingdom for settlement. The 3rd agreement was signed by the sheikhs and the British in 1892 according to which sheikhs agreed not to make any foreign relations except United Kingdom. In return, British were supposed to protect them from all aggression as well as from any land attack (Kjeilen, 2007). Requirement of a federal state as stated by Sheikh Mana bin Hashar Al Maktoum in Al Bahrain in June 1939 was based on the need of a unified educational system, a unified postal service, common nationality for ease of travel among the member states, and unification of the judiciary and legislative systems (Helleyer et. al. 2001). In 1955, United Kingdom supported Abu Dhabi in the dispute against Saudi Arabia regarding the Buraimi Oasis and other southern territory. This dispute is yet to be ratified by the UAE government. A new development era started in UAE during 1960s. It was the time when initial surveys were carried to discover the crude oil. After the successful experiments, huge reserves were discovered and export of this crude oil started in 1962. The trade of crude oil really changed the economic graph of UAE (El Mallakh, 1981 & Federal Research Division, 2004). Dubai project was launched in late 60s by construction of multi story building, parks, hotels and hospitals. Due to internal economic crisis, UK announced in March 1971 to end of its treaty relationship with Trucial Sheikhdoms. Two distinct events led to the formal establishment of the UAE on 02 December 1971. First was the end of the British Imperialistic Era through abolition of the treaty relationship between the British government and the seven states which had existed between them since the early 19th century; second was the establishment of an independent federal state through the union of the six states i.e. Dubai, Abu Dhabi, Sharjah, Fujairah, Umm al-Qaiwain and Ajman. Under the treaty relationship, Bahrain and Qatar were under UK protection. The 09 Trucial Sheikhdoms tried to form up a union but by June 1971, they could not settle on the terms and conditions of the union. As a result, Bahrain in August and Qatar in September became independent states. The treaty between the UK and the Trucial Sheikhdoms expired on 01 December 1971; therefore, on the next day 06 of Trucial Sheikhdoms formed a confederation called United Arab Emirates. In the next year, Ras al-Khaimah joined the union as the 7th state. During the Gulf War-I, UAE sent its forces to assist the Kuwait. During different scenarios, UAE also actively arranged peacekeeping missions to Kuwait, Albania, Kosovo, and Somalia. Institutional Features Each of the seven member emirates of the UAE had an independent federal status and prevailing institutions of government until 1971, when they decided to develop a distinct national identity through the union of their federal status, which ultimately resulted in high level of political stability. Therefore, the rulers drew up a provisional constitution. There was no referendum on the issue but the rulers settled on it through mutual consensus, dialogue and understanding. The federal institutions developed thereafter were allocated powers by the newly-drawn provisional constitution. Structure of the new federal system of government is a unique combination of modern and traditional practices. The system is based on three pillars i.e. the executive, legislature and the judiciary. (a) Executive It consists of the President, Vice President, Prime Minister, Federal Supreme Council, and Council of Ministers i.e. cabinet. The top policy-making body in the new state is the Federal Supreme Council which consists of the emirs of 07 emirates. During the process of federation, the seven emirates agreed to allocate a representative member to the Supreme Council. They mutually elected a President and a Vice-President to serve the country for a period of five years. Historically, the President and Vice President have been from the two most influential emirates, and traditionally, succession in leadership is determined on blood lines. (b) Legislature The Federal National Council (FNC) is half-appointed by the Supreme Council and half-elected. It comprises 40 members selected from the member emirates, with 08 from Abu Dhabi and Dubai each, 06 from Sharjah and Ras al-Khaimah each, and 04 each from Fujairah, Umm al-Qaiwain and Ajman. Representation of the emirates in the FNC in terms of the number of members corresponds to their individual populations. Presided over by a Speaker, or either of 02 Deputy Speakers, elected from amongst their number, the Federal National Council is responsible under the Constitution for examining, and, if it wishes, amending, all proposed federal legislation, and is empowered to summon and to question any federal minister about the performance of ministry. The Federal National Council discusses the annual budget. Specialized sub-committees and a Research and Studies Unit have been formed to assist the members of Federal National Council to cope with the increasing demands of modern government. The Federal National Council has power to review only and not change or even veto any legislation that passes through its offices. (c) Judiciary The federal judiciary is composed of the Federal Supreme Court and the Court of First Assistance. The Supreme Council of Rulers elects 05 judges for the Federal Supreme Court, who decide on the constitutionality of federal laws and arbitrate on intra-emirate disputes and disputes between the federal government and the emirates. There are independent and separate courts to deal the cases under their own secular and Islamic laws. (d) Local Government and Economy Along with the Federal institutions, each of the 07 emirates also has a local government. The UAE has an open and liberal economy with no taxes on profits or incomes, complete freedom of capital movement, and 100% foreign ownership allowed within free zones. In UAE, the oil and gas accounts for about 30% of the GDP, which stood at $98.1 billion in 2005, with the GDP growth rate standing high at 8.8% per annum. The non-oil sector has shown exponential growth, reaching 70% of the nation’s GDP. That is why the UAE’s economy proved to be less affected by the fluctuating oil prices in comparison to other Middle Eastern countries. Political Culture UAE is a federation comprising seven independent states. This federation is ruled by the local Emirs. UAE’s political system is a unique combination of the traditional and modern approach. It is designed in such a way that preserves the old traditional culture through its incorporation into the modern administrative structure of the country. There is no democracy in the country, yet the citizens have a freedom of expressing views, though generally they do not speak about political issues. It means the political environment has both the pictures of past and present. Like past, the country still has no political party system. There is no concept of general election but at the same time the political system fulfils the demand of current era. It encounters the importance of human liberty and basic rights. The main reason that the UAE has no democracy is that only 15 to 20% of the total 4.4 million populations are real citizen of the country while rest of the population i.e. about 80 to 85% belongs to other nations. That’s why the political system is not based on democracy. The normal attitude of majority of the public is not politics oriented. The fast commercial life of UAE does not create a wide room for people of other nations to think or talk about the local or global politics. The seven emirates fall into a natural hierarchy economically in the federal system. Economy of the individual emirates has always had a great influence on the positions of the president, vice president and the prime minister. Presently, president of the UAE federal government is from Abu Dhabi, the chief oil-producing emirate of the UAE. The vice president and the prime minister of the UAE are from Dubai, the main port, commerce center and industrial hub of the UAE. Emirates having representatives in these positions have a great influence on the other emirates because of the importance of these positions to the fundamental structure of the federal government, which has complete hold over the UAE. Small size of the UAE’s federal government aids in quick implementation of newly formulated laws in the entire UAE. Theoretically, the Supreme Council is authorized to vote for the positions of the president, vice president and prime minister, and anybody can stand for the positions, but practically, the Supreme Council has re-elected the same politician, or someone with a blood relation to him, whenever an executive branch election has been carried out. Thus the selection can be termed as hereditary-based, which has provided Dubai and Abu Dhabi with an edge over the other emirates to control the UAE’s policies. The UAE Dirham has been pegged to the United States dollar for valuation reasons, since November, 1997. During times of rising valuation of the U.S. dollar, this association favors UAE. However, the worldwide credit crunch that has taken hold of global markets lately, and the general decline in the value of the U.S. dollar, has led to an inflation rate of 14% within the UAE. The UAE has been facing economic crisis since 2009. The economic crisis started when Dubai World, Inc. asked for another six months to pay its debt of $59 billion dollars. New York Times published about Dubai, At 38, the brashest, and best-known, of the seven emirates is facing something of a midlife crisis (Thomas, 2009). As a result, the Dubai economy has affected several countries, such as Germany and France (BBC Arabic News, 2010). Moreover, $582 billion dollars worth of unfinished projects in the UAE have been either put on hold or cancelled, due to the unstable market in Dubai (Lewis, 2010). Under these circumstances, the capital city of Emirates, Abu Dhabi has decided to take action regarding the economic crisis in Dubai. Mourkogiannis implies that the reason behind Abu Dhabi intervention was the historical relationship between Abu Dhabi and Dubai. As a result, on Monday, December 14th, 2009, Abu Dhabi declared its Islamic loan of $10 billion to Dubai as the first step in Dubai’s economic recovery. Dubai is not obligated to pay back any interest to Abu Dhabi, due to the Islamic law system. The loan is mainly to help Dubai World, Inc. to pay back its investors, and reach its economic stability (BBC News, 2009). Conclusions The United Arab Emirates has been established as an independent state, possessing sovereignty and strength of seven states. It has been blessed with natural resources. The concept of a federal state has worked successfully for the UAE. The business profile in the UAE has a direct impact on the economy of the rest of the world. UAE has always maintained a balanced foreign policy. It is part of the greater Middle East. It aims at maintaining its independence, sovereignty, security and stability against any attack on its entity or on the entity of any of its member emirates. It also seeks to protect the freedoms and rights of its people and to maintain trust and collaboration among the emirates for the common good. Among its aims, in addition to the purposes described above, is to work for the sake of the progress of the country on all dimensions, for the sake of providing a better life for its citizens, to give assistance and support to Arab causes and interests, and to support the charter of the United Nations and international morals. The impact of the current global financial crisis on the national economy of the United Arab Emirates has been misunderstood and exaggerated to some degree. Currently, the government of the UAE is leaving no stone unturned to find the best available solutions to overcome the crisis. The UAE economy is protected by sound and stable financial and economic institutions. The concerned financial and economic authorities in the UAE are strong enough to come up with a remedy that would maintain UAE’s regional and international image and render its position in the global map as a highly credible oasis for investments. Works Cited BBC Arabic. Dubai World, Inc. Crisis Shakes the Globe. Printed 26 Nov. 2009. Accessed 1 Feb. 2010. BBC News. Abu Dhabi gives Dubai $10bn to Help Pay Debts. BBC News. Posted 14 Dec. 2009. Accessed 1 Feb. 2010. El Mallakh, Ragaei (1981). The Economic Development of the United Arab Emirates. New York: St. Martins Federal Research Division. United Arab Emirates: A Country Study. Washington: Kessinger Publishing, 2004. P. 87 Hellyer, Peter, et. al (2004). United Arab Emirates: A New Perspective. London: Trident Press Ltd., P. 36. King, David C. (2008). United Arab Emirates. New York: Marshall Cavendish, P. 5 Lewis, Paul. Dubais Six-Year Building Boom Grinds to Halt as Financial Crisis Takes Kjeilen, Tore (2007). Trucial States. Morsy, Abdullah, Muhammad (1978). The United Arab Emirates: A Modern History. New York: Barnes and Noble, 1978. Thomas, Puugh Claudia P. Dubai Grows Up. The New York Times Opinion Section. Posted 20 Dec. 2001. Accessed 2009 from http://www.nytimes.com/2009/12/14/opinion/14pughthomas.html?_r=1. Read More