Impact of Globalization on the United Arab Emirates - Example

Full name of the academic institution; The author’s/authors’ name(s) (in an alphabetical order), the study form (day time, evening or correspondence), study year and group number; The title of the paper (in the language it was written); The programme subject on which the paper is written; Location (city) and date (year). THE IMPACT OF GLOBALIZATION ON THE ECONOMY AND CULTURE OF THE UNITED ARAB EMIRATES TABLE OF CONTENTS Executive Summary 3 Introduction 4 Infrastructure 8 Illegal Trade 9 Legislation 10 Cultural Implications 10 Language 11 Cultural Practise 11 Religion 11 Human Resource 13 Cultural Backwardness 13 Conclusion 13 Executive Summary Globalization has brought the world together in terms of trade, communication, education, and culture. We all now live in global village. Globalization has had very many positive and negative effects on different nations, as they interact with people, organisations, or other nations on a global level. One such country that has benefited immensely and also been affected adversely is the UAE. The UAE is a conglomeration of seven Islamic independent states. It rose from the third world to become amongst the most successful nations in the world. In a region that is largely avoided due to Islamic extremism and violent political upheavals, the UAE has remained a peaceful nation, attracting millions of investors of all cultures and religions. This influx of expatriates and investors has earned the UAE phenomenal economic success and a fair share of challenges. This paper explores those success and challenges. Introduction The world is becoming smaller every day, at least not physically. A few years back, within the backdrop of our geographical locations and socio-cultural existence, only a spin of the school or office table globe gave most people an opportunity to experience being part of the larger world. We were mostly confined both physically and in mindset, to our immediate environment, or at least nationally. Even with the decades-old availability of sea and air transport, it has been a challenge for many human beings to view and experience the world as a place where we all belong, as one. The closest we came to learning about and experiencing other people and their countries was through historical and political news. Everything seemed so far away. The last twenty years has seen such a breath-taking change. Technology has grown at such a phenomenal pace, making it possible for people to access any part of the world within seconds. With the advent of speed jets, speed boats and speed trains, physical travelling to another country or continent is an affordable yet speedy affair accomplished within a few hours. Modern telecommunication systems enable people to make instant telephone calls cheaply, even free, to any part of the world. The Internet has transformed the world in the most mind-boggling ways. A group of people scattered in distant locations around the world can have a real conversation through teleconferencing as though they were in the same room. Teleconferencing has expanded to include video cameras that enable people to see each other on computer screens as they talk to each other using headsets in video-conferencing. According to National Geographic (2014), telephones are no longer house fixtures. People can now walk around with mobile phones in their pockets making calls, sending messages, surfing the Internet, engaging in trade, and connecting with other people on social media. Information today flies around the world within a fraction of a second, through the use of e-mails, chats, social media, and so on, sometimes costing the sender and the receiver nothing. You can visit any part of the world virtually, and get to meet new people, learn their language and culture, interact with them, do business, get medical assistance, attend school, and so many other activities right in the comfort of your room. The Internet has made the world a ‘global village’. This technological advancement has given strength and practicability to the concept of globalisation. Perhaps the simplest yet the most complete definition of globalisation is outlined by National Geographic (2014) which states that globalisation is the inter-connection of almost all parts of the world especially through transport and telecommunications, enabling people, their knowledge, their goods and services to move easily and fast across the globe. This has resulted to global interaction of cultures, business operations, political and economic activities so much that many people around the world continue to go through similar life experiences. The economies of many countries and socio-cultural practices have been most affected. Globalization has brought about cohesion that detractors could not have imagined. Jeffery (2002) asserts that protests against globalisation dating as far back as the 1960s claimed that its proponents intended to control peoples’ lives, give economic power to corporations, and oppress poor nations. This did not turn out as the detractors envisaged. The United Arab Emirates (UAE) is a perfect example of this scenario. According to the CIA (2014), the UAE, a harsh desert-climate conglomeration of seven independent states namely Abu Dhabi, Dubai, Ajman, Fujairah, Ras al Khaimah, Sharjah and Umm al Qaiwain, emerged from severe poverty to become an enviable model of modern development with high living standards through the allocation of free trade zones to international traders and corporations. Interestingly, the UAE, a predominantly Arab and Muslim state has managed to evade political unrest, religious extremism and segregation, and terrorism, thereby attracting a huge number of investors and tourists from all over the world to its tax-free, full-foreign-ownership trade zones. Emirates.org (2014) describes UAE as the world’s fastest growing tourist destination, despite the fact that 80% of UAE is a desert. The other interesting facts, relative to globalization according to the CIA (2014), is the UAE’s overreliance on a large expatriate labour force and oil exports, and its over-exposure to the global depression of real-estate prices. The following map from Emirated.org (2014) depicts the real picture of UAE; Figure 1 : Map of the UAE UAE’s Economic Foundation and Growth The BBC (2013) informs that UAE became a state in 1971 after receiving its independence from the British. Seven states came together to form the UAE whose political leadership is made up of 7 Emirs, a prime minister and the cabinet. This is the Supreme Council. Interestingly, the seven states maintain autonomy despite this fact. Prior to the 1950s, UAE’s economy was sustained by trade in pearls and fishing. The UAE was a not a vibrant economy, in fact it was on the decline as a result of the deteriorating trade in pearls. However, after the discovery of oil, its fortunes began to change tremendously. The genesis of prosperity in the UAE began with the Sheikh Zayed the ruler of Abu Dhabi. He channelled the larger percentage of the income from oil into education, health care system, and national infrastructure which saw the population and other aspects of the economy begin to reap immensely from these investments. This began to project the UAE as a focused state on the fast lane to prosperity. The UAE’s greatest strength is its foreign policy. There are many oil-rich states in the Arab world such as Saudi Arabia, yet they do not attract large numbers of investors like the way the UAE has. UAE’s foreign policy embraces globalization. We can confirm this from BBC (2013) which informs that the oil industry and the thriving economy became an attraction for many foreign investors and workers. Instead of imposing restrictions like many countries normally do, the UAE opened its doors wide to investors and expatriates by providing tax free business havens, and job opportunities in the civil service and private sector. More importantly, the BBC (2013) asserts that the UAE despite being a conservative Muslim state presents itself as liberal and open-minded, harmoniously co-existing with people of different cultures and beliefs. Furthermore, the UAE is authoritarian politically, so strict that it crushes dissident political opinion, and at some point it restricts social media in order to deny Islamist a forum to engage in anti-government initiatives. The restriction may be a hindrance to the globalisation process. However, it has resulted in calm political environment again favourable for the global investor. Furthermore, social media is just one of the many methods of communication. As a result, the influx of foreigners has been so huge that about 67% (BBC, 2013) of the current UAE population is made up of foreigners. The net effect of this influx was booming business in all sectors of the economy, and especially retail trade. This injected billions of dollars into the economy giving the UAE authorities the much-needed financing to diversify the economy to include tourism and construction. According to the BBC (2013), the UAE did this in order to reduce the nation’s total dependence on oil. Although some states in the UAE remained conservative in their approach to globalisation such as Abu Dhabi, others especially Dubai chose a more global approach, and the positive effects reverberated in the whole UAE region. The greatest boost came into the construction industry as more wealthy investors injected more billions of dollars into an already vibrant economy. The two most notable constructions are the Burj Khalifa skyscraper which is currently the world’s tallest building, and the Palm Islands which is an artificial island that UAE reclaimed from the sea in the Arabian Gulf. The following two images of the Burj Khalifa and the Palm Islands (GetYourGuide, 2014) depict the economic wonders of the UAE; Figure 2 : The Burj Khalifa Skyscraper Figure 3 : The Palm City Islands Even in the face of the global economic meltdown of 2009, which dealt a severe blow to its property and construction industry, the UAE economy has remained vibrant. The BBC (2013) argues that this is because the international trade, tourism, and the retail businesses have continued to enjoy global support as a result of the UAE’s tax-free incentives that it has extended to all investors. Infrastructure Globalization has favoured the UAE so much that it has developed an impressive infrastructure to serve the country, the expatriated, and the business community. According to the CIA (2014), by 2013 the UAE had 43 airports, and 5 heliports. They have 533KM of pipeline for the transport of condensate, 3277km gas pipeline, 300km liquid paraffin gas (LPG) pipeline, 3287km oil pipeline, 218km refined products pipeline, and 99km water pipeline. Again, they had 4080km worth of smooth roadways, 253km of which were expressways. For water transport, by 2013, the UAE had 61 merchant marine carriers which include bulk carriers, chemical carriers, petroleum tankers, passenger, and so on. In addition, by 2013 the UAE had 6 major seaport which include Mina' Saqr, Al Fujayrah, , Khor Fakkan, Mubarraz Island, Mina' Rashid and Mina' Jabal 'Ali, and two container port namely the Dubai Port and the Khor Fakkan port. There is no country that can engage in such massive and expensive construction unless it expects to raise reasonable income from the same. The fact that the UAE has invested so heavily on transport and infrastructure is proof that the UAE is undoubtedly a global business hub minting trillions of dollars for both the UAE and the investors. The huge number of airports, helipads, and water carriers prove that there is a lot of international human traffic into and out of the UAE. In addition to the airports, the bulk marine carriers are clear evidence of extensive trade, both imports and exports, of a huge and diverse number of products in the UAE. There is however a negative aspect of this rapid growth and globalization-friendly policy of the UAE. The tax free trade zones and facility for owning property has resulted to massive influx of both people and products into the UAE. This provides the perfect environment for trade in contraband goods and illegal products. The CIA (2014) has identified the UAE as a major transit point for illicit drugs and money-laundering activities. This is especially so because of its proximity to the drug-producing countries of the South-East Asia. Illegal Trade Again, ports within the UAE and especially Dubai have become transit points for international trade in illegal arms. Issa (2011) exposes the largest illegal arms haul of 16,000 firearms and ammunition seized by the Dubai police. These arms which originated from a gun factory in Turkey, were destined for the town of Sa’dah, Northern Yemen to assist anti-government movements achieve their objectives through violence. Issa (2011) while quoting the head of Dubai police explains that Yemeni violence proponents intended to use the huge arms catchment to either hurt demonstrators or to arm political groups to fight the government. In other incidences, Issa (2011) exposes the use of UAE ports for arms shipments. In 2009, the Dubai police captured a ship carried nuclear weapons to Iran from North Korea. The Abu Dhabi authorities captured another shipment of over 68,000 firearms and weapons materials in the same year. According to the UAE Embassy in Washington DC (2009), other serious crimes facilitated by the money-laundering activities in the UAE include terror financing, extremism, and the proliferation of weapons of mass destruction. Globalization has exposed the UAE to the high-profile criminal activity, while making its transport system facilitates insecurity and political instability in the region. The UAE is a money-spinning hub and the sheer numbers and complexity of financial transactions literally overwhelm government supervision. The UAE does not have the capacity to fully control and monitor the banking sector. This makes it a haven for criminal activity and especially money-laundering. Legislation However, these challenges resulting from globalisation have forced the UAE to develop laws, rules and regulations to counter illegal activities. It has even agreed to participate in Western-driven sanctions, for example, shipping sanctions to Iran for lack of transparency in Iran’s nuclear program. This really is an ideological effect where the UAE ceased to tow the Arabian line on political matters, and instead chose to support Western ideologies. The UAE Embassy in Washington DC (2009) asserts that the UAE has implemented both legislation and counter measures as follows; a) Supports and Enforces UN resolutions on shipment of sensitive materials to Iran. b) Federal Law Number 13 of 2007 outlaws diversion of controlled shipments. c) Export Law was amended to toughen it in 2008. d) The Import and Export Control Committee reporting directly to the president was formed in April 2009. e) Over 24 companies involved in money-laundering and illegal shipments shut down. f) Known terrorists accounts frozen, and so on. Cultural Implications The foreign population has thoroughly diluted the indigenous population of the UAE so much that over 80% comprises of foreigners. According to 1982 statistics presented by the CIA (2014), the ethnic distribution in the UAE was 19% Emirati, 23% non-UAE Arabs and Iranians, 50% South Asian, 8% East Asian and Western Expatriates. Less than 20% of the whole population are UAE citizens. Going by the ever-growing interest of many traders globally especially in Dubai, we expect that the number of foreigners can only grow in the same rate or even higher. Language The same statistics indicate that the most common languages used in the UAE are Arabic, Persian, English, Hindi and Urdu. The traditional languages in the UAE are Urdu and Arabic. An interview conducted by Al-Shamsi (2009) through the Emirates Center for Strategic Studies and Research (ECSSR) revealed a growing concern about the loss of national identity in the UAE. Language is both a unifying factor and an identity tool. He explains that the use of the traditional language is declining fast in the UAE and especially because the Emiratis progressively become the minority in their own nation, a fact that makes them feel alienated. He further asserts that the now entrenched business culture has overshadowed the community spirit, causing the nationals to adopt a materialistic approach to life. This is further compounded by the adoption of the Western culture as foreigners keep growing in the UAE, something that has the effect of diluting the Arabic-Islamic culture. Cultural Practise Of even more significance is the now obliterated traditional dressing, housing, family values, and cultural norms that existed before globalisation took its effect on the UAE. Al-Khazraji (2009) laments that the UAE youth and the business communities have abandoned their traditional dress code and replaced it with Western code. Again, the traditional houses have now been replaced by the architectural wonders visible in such buildings as the Burj Khalifa. Students attending schools and colleges have adopted western dressing, music, and mannerisms. The youth and the business community have all adopted technology as a basic way of life such as the use of mobile phones, tablets, and so on. Religion On religion, Islam is the official religion and takes the lion’s share with 76% Muslim, 9% Christian, 5% Hindu and Buddhist, and the rest such as Dawoodi Bohra Muslim, Jewish, Parsi, Baha'i, and so on take up a paltry 5%. The most interesting aspect of this religious distribution is the tolerance to the Christian religion. Most Arab countries embrace Islam totally and will not allow any other religion, and especially Christianity to take root. A study conducted by the BBC (2011) revealed that Christian populations in the Middle East have declined drastically despite the Middle East being the origin of Christianity. In countries like Iran and Yemen, the Christian population is around 1% of the population. Immediate neighbours to the UAE namely Oman and Saudi Arabia have about 5% Christians whose numbers allegedly keep falling. However, there is one exception; Dubai. Thomas (2009) supports these sentiments saying that Christians face daily persecution in the Arab countries and even in the UAE. Surprisingly, Dubai, despite being a member state of the UAE, has decided to apply a totally different approach to religion. According to Thomas (2009), the Dubai authorities have extended unusual favours to Christians by giving the land on which to build churches, allowing them to hold Christian gatherings and services, and even preaching in outreach initiatives. In fact, the biggest Evangelical Church in the whole of the Middle East is in Dubai. This church, the King’s Revival Church International boasts of a 7000-strong membership shepherded by 24 pastors. This church has 14 services in a week, 4 conducted in English and the rest in seven different languages in order to meet the needs of its diverse international membership. Despite the fact that the UAE is 76% Muslim, Thomas (2009) asserts that there are over 31 different churches spread across the region. Nobody could have imagined Christianity taking root to such a scale in an Arab country. If we take into account the fact that over 80% of the population of the UAE are foreigners, then we can only expect the number of Christians and churches to grow tremendous in the future. The authorities have established some serious restrictions though; Gospel material cannot be printed in the UAE, and churches cannot evangelise to Muslims. The restrictions also target the Muslims because there are some very harsh penalties for Muslims who convert to Christianity or at least any other religion. However, even in the midst of these restrictions, the ever-increasing population of foreigners and the growing Christianity fraternity will have an indelible effect on the population. The BBC (2011) while citing the UN World Christian Database 2011 put the total population of the UAE to about 4.7million persons. Amazingly, the Christian pollution was 944,000 persons which constitute about 12.6% of the entire population. Human Resource Al-Shamsi (2009) brings out another effect of globalisation on the human resource in the UAE. From an academic point of view, he argues that the qualitive value of the human resource in the UAE has declined drastically. The only visible improvement is material gain. He laments that the original intent of the founders of the UAE was to develop the human resource to produce a cultured and skilled workforce, a well-balanced and competitive individual. However, the entrepreneurial successes have only succeeded in producing wealthy but unskilled citizens, who do not attach much value to their already diluted cultural values or heritage. Cultural Backwardness He however praises globalisation especially in the context of social media arguing that it helps to overcome cultural backwardness. This is an Arab-world phenomenon exacerbated by denial of freedom of expression, and the lack of an active civil society. The social media provides a forum where many Arabs can voice opinion and thus release the pent-up emotion inside them. The BBC (2013) informs that sometimes the UAE authorities have shut down social media for the purposes of denying the organisers of anti-government protests a chance to mobile protestors and engage the government. The social media is a tool for globalisation which has therefore provided the forum for the oppressed Arab voice a forum for expression thus helping them to overcome cultural backwardness. Conclusion The UAE faces unique challenges. The traditional population who form the citizenry is very low, forming below 20% of the entire population, so they need the foreigners to provide the expertise at both business and professional levels. The country is rich in oil and gas deposits yet as previously discussed, over-reliance on them places the country at a disadvantaged point. So again, they need the foreigners to provide the much-needed investment especially in construction and retail trade. To facilitate trade and growth, the UAE has adopted and implemented the latest technologies in Information Technology, telecommunications, transport, and so on. Obviously, the country has benefited immensely from the efforts of the foreigners, although the price it has paid for it is in the loss of cultural identity. Any attempt to discourage more foreign influx of people, finances, services and goods would have a huge detrimental effect on the UAE. So, they must co-exist with foreigners. Al-Shamsi (2009) suggestions seem realistic and practical. He suggests that the UAE should give citizenship to more Arabic foreigners because they identify with the Arab-Islamic culture of the local Emiratis. This would help them to grow the minority population and also preserve their culture. He also suggests that the UAE rulers must not crush dissenting voices or attempt to muzzle the social media because this could result to a negative political climate in the future that could work against the economy. Instead, they should entrench freedom of expression, empower both men and women through education, and develop manpower by enriching their culture and skills. References Al-Khazraji, N. (2009, July 16). The Culture of Commercialism: Globalization in the UAE. Retrieved 15 April 2014, from, https://repository.library.georgetown.edu/bitstream/handle/10822/553278/ alkhazrajinathan.pdf?sequence=1 Al-Shamsi, N.A. (2009, February 8). Challenges to the National Identity in the UAE. 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Retrieved 9 April 2014, from, http://www.emirates.org/the_country.html GetYourGuide. (2014). Burj Khalifa: Popular Tours and Things to do. Retrieved 12 April 2014, from http://www.getyourguide.com/burj-khalifa- l2703/?partner_id=FDBE4&cmp=ga&gclid=CPPW46CE4L0CFSUUwwodG6YAbQ Issa, W. (2011, March 24). 16,000 Pistols Bound for Yemen Seized in Dubai. The National. Retrieved 10 April 2014, from, http://www.thenational.ae/news/uae-news/16-000- pistols-bound-for-yemen-seized-in-dubai Jeffery, S. (2002, October 31). What is Globalisation? The Guardian. Retrieved 8 April 2014, from, http://www.theguardian.com/world/2002/oct/31/globalisation.simonjeffery National Geographic Society. (2014). Globalization. National Geographic Education. Retrieved 7 April 2014, from, http://education.nationalgeographic.com/education/encyclopedia/globalization/ ?ar_a=1 Thomas, G. (2009, December 9). Dubai: A Spiritual Oasis. CBN News World. Retrieved 15 April 2014, from, http://www.cbn.com/cbnnews/world/2009/May/Dubai-A-Spiritual- Oasis-/ Read More