Running Head: Economic policies and tools
The United Arab Emirates is made up of seven states namely: Abu Dhabi, Ajman, Dubai, Fujairah, Ras al khaiman, Sharjah and Umm al Qaiwan, governed by a supreme council of rulers, usually comprising of the seven emirs, who in turn appoint the cabinet and a prime minister (Peters, 2004). The cabinet and the prime minister of the united Arab emirates has been able to come up with various goals, policies and also set tools that would ensure the sustainable development of both the people and the economy as a whole. The following are the goals set to be established by the government in the United Arab Emirates.
One of the major goals was to achieve better economic incentives and institutional regimes (Abed, 2001). This meant that trade incentives would be rationalized to encourage business and investments, in a bid to ensure that this goal was met, the government of the United Arab Emirates came up with various economic polices over the last 12 months just to ensure that it is able to comfortably provide the basic minimum needs of its nationals (Almezaini,2012). Among them was to set out a long term strategic development program that revolved around diversification of the economy to ensure that growth not related to oil is able to improve and even overtake the earnings obtained from oil. This program was dubbed Abu Dhabi Economic vision 2030.This is in the sense that the government seeks to create a sustainable oil related economy with other sectors accounting for about 64% of the G.D.P not inclusive of the G.D.P earned from oil.
Another goal was to achieve sustainable and balanced development in all regions of the state. In this case, a policy to promote equitable and sustainable development across all the regions was developed. The economy majorly depended on fishing and the pearling industry but this changed with the discovery of oil in 1962 (Peters, 2004).Through implementation of the diversification policy, there was an influx realized through the number of foreigners visiting the U.A.E and thus furthered the incorporation of foreign expatriates. This has consequently led to a boom in the business sector particularly the tourist industry which has in turn helped to develop the construction industry through the construction of many schemes, with the Dubai business center standing out. U.A.E’S largest state Abu Dhabi holds most of the country’s reserves in terms of oil and gas reserves, and most especially also standing out in the world with the second largest oil reserves after Saudi Arabia (Oxford Business Group, 2007).
Another goal was to provide the best standers of living to all the UAE nationals’ .This goal has so far been sustainably met through the implementation of the education and human resources policy, knowledge and empowerment was able to be boosted. The main objective of this policy was to ensure that the society was well versed with the necessary skills with major creative capabilities presented with various opportunities for quality education in relation to self employment and employment capacities (United Arab Emirates, 2011).In the long run, this would lead to the development of the country in the major aspects. It is also noted that there are efforts to improve the current education system in the country in order to create better outcomes. The U.A.E is also making up business links to partner with the leading link in the world so as to strengthen the education system. This way, a first rate education system would be fostered and the people would be in a better position to alleviate their living standards.
Creating Sustainable Environment and Infrastructure was another major goal for the government. This was to be done through the implementation of policy aimed, in the strengthening of the innovation system. This was in a bid to help create knowledge economies so as to make better use of the available assets and the various capabilities in areas where there were weaker links. In order to foster this link, there have been various indicators in relation to royalty and license fees and patent grants by the U.S patent offices among others. This goal was also met through the establishment of a dynamic information and communications structure in order to facilitate effective communication.
The need to create a strong global standing in relation to foreign matters was also deemed very paramount. Thus the foreign policy was able to come in handy. Its main was to ensure that diplomacy and negotiation with other foreign nations is maintained (Salloum, 2001). It was meant to promote coexistence with other international countries in regards to peace stabilti8y and national security. To ensure that this goal was met and achieved, the government established channels through which dialogue and meaningful partnerships have been promoted and the government has in turn achieved the role of a good global citizen (Busch, n.d). This has in turn led to a shift in their diplomacy levels with international consulates being opened in the regions of Africa, central and South America, and also in central Asia (Masson, 2004).
It was also the goal of the country to ensure an increase in the imports levels and investment levels. Through the realignment of its foreign exchange policies by pegging the dirham with the U.S dollar, stronger monetary value was created as well as a good monetary policy came into being. This way, there was an increase in the number of imports and foreign influx in the country increased through the foreign investments done (United Arab Emirates, 2011).
The various policies stated above were able to improve the economic and institutional framework in order to develop an atmosphere of macroeconomic and political stability coupled with fair policies through the various regulatory policies that would enable the growth and development of the entrepreneurship atmosphere in the country (Rabi, 2007). This way, many people would be empowered in the establishment of their own business ventures and thus help to reduce unemployment incidences in the country by also employing other people.
The fiscal policy of the country according to the international monetary fund, was contractionary especially in the period 2010,which was mainly due to the contraction of the non-hydrocarbon fiscal deficit by 35.2 % in the period 2010 as compared to 44% which was earned in the period 2009 (United Arab Emirates,2011).This contraction was mainly attributed to the fact that the government of Abu-Dhabi failed to implement the projects it had been allocated at the desired pace ,either through entities led by the government and through low transfers that were submitted to the Dubai Government related entities (Badr-el-din,2007). However, the central bank in the country has also adopted a monetary policy that is able to accommodate while sustainably supporting the economy. This has been particularly important in curbing high inflationary tendencies in the country despite the global financial crisis that started in 2008.The debt crisis is also an issue of considerable interest in the region despite the fact that there has been a fall especially in the cost of living in relation to the cost of housing despite an increase in other areas of the market.
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