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8/10/2019 Pestel UAE

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PESTEL ANALYSIS OF UNITED ARAB EMIRATES

Chetan Somashekar

Rushikesh Guruji

Sudharshan Sekhar

15thof October 2014


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About UAE

UAE is a federation of 7 emiratesAbu Dhabi, Dubai, Sharjah, Ajman,

Umm AlQuwain, Ras Al Khaimah and Al Fujairah.

The capital beingAbu Dhabi.

The gulf countries gained its independence from the British in 1966 and the

countries united in the year 1971.

The first president being the king Zayed bin Sultan Al Nahyan.

From 17441891 the gulf region was under the Saudi rule.


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Video on UAE


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Outlook of PESTEL

S

PESTEL

Political

Economic

Social

Technical

Envirnoment

Law


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UAE is a non-democraticcountry and absolutehereditary monarchies.

Borders shared with Oman tothe east and Saudi Arabia to

the south. Sea borders are shared with

Qatarand Iran.

Total Population 9,205,651(Rank : 93) with 84.8% ofpopulation living in Abu Dhabi,Dubai and Sharjah.

With Immigrants comprising of86% of population.

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Political Analysis - UAE

14%

64%

9%15%

Emiratis

South Asians

Westerners

Other


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Political Analysis - UAE

The 7 Emirs (King) of each Emirate form the pillars Federal Supreme Council(FSC).

The FSC meet 4 times a year & decide the general policy, agenda of the country.

The FSC includes the President, Cabinet, Judiciary and Federal bodies.

Responsibilities are granted to the national govt. but can be over-ruled by the FSC.

With the consent of Islamic law all proposal, recommendations and approvals are

processed.

Political Analysis with respect to Automotive Plant :

Every venture in UAE requires to be joint collaboration with the UAE national as a

partner.

Conservative and tedious political structure make it stringent for business operations.


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Economic Analysis - UAE

Facts

GDP :$377 Billion

Export :$360 Billion

Labour Force:3.705 million

Labour Distribution

Agriculture Industry Services

Positive Aspects

The country has Free Trade Zonesand Industrial Areas where they attract

investment with schemes like zero percent taxes and co-operation from govt.

UAE is a member of the Gulf Co-operation Council(GCC), where in all the Gulf

countries participate in Technological, Finance and Investment strategies. Focus

being reducing the Imports and increasing the Exports.


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Economic Analysis UAE

Negative Aspects

The global financial crisis, increasing international credit and deflated asset

prices in 2009 showed that the economy was not stable in testing times. Due to this crisis Dubai prompted a global concern about its solvency. Hence, to overcome this crisis it received a $10 billion loan from the Emirate of

Abu Dhabi. The entire debt of UAE at present is $109 billion. The main challenges for UAE - Dependency on oil

- Vulnerable Real Estate prices.

29 26 15 5 5 4 16

Imports

Metals & Pearls Machinary Automobiles Chemicals Base Metals & Articles Textiles Others


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UAE strategic plan for the coming years focuses on diversification of economy

such that a major part of their income comes from non-oil sectors.

UAE s collaboration with developed countries like France, UK and USA has

boosted its economy esp. with China with a strong potential of $100 billion.


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Social Analysis UAE

UAE has a long History of Islam into itssociety.

Islam plays a large role not only in religionbut also in govt. And business activities.

Its strict and stringent laws make it difficultfor people from different ethnicbackgrounds (Non-Muslims).

UAE has a low literacy rate with womenbeing least educated.

76%

15%

9%

Religion

Islam Christianity Other Religions

Blue Collar Labour Abuse

A very common practice for managers and employers in UAE is to hold theemployees passport during the tenure of the employment contract.

Human Rights Commission has criticised this practice on UAE. But, thegovernment has given no heed to it.


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Technological Analysis UAE

UAE society is symbolic driven and status oriented. The youth of Dubai has embraced consumer technologyand always try to

innovatemore in this sector Though UAE does not have any home grown technological advancement but still

they import the latest technology keeping itself in pace with the world.Ex: RFID, Driverless metros

A gradual trend has revealed that there is a shift with the increase in investors forIT Companiesand Technologies against the traditional Real Estate.

The concept of R&D is some thing out in the middle east is just simply notunderstood. Their thinking is why not just buy it from US/China.


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International brands have adopted the city as a place to experiment newideas and designs aimed exclusively at Arab market.


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Environmental Analysis UAE

UAE has strong environmental policies in syncwith its economy.

Federal Environment Agency (FEA) is a directgovernmental body enforcing environmentalstandards and pollution control in UAE.

The Environmental Impact Assessment (EIA)program is part of all business practices in UAE.

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Current Strengths

Strong integrated environmental development.

Current Challenges

Increasing emission levels, with the country being one of the largest producers of oilin the world. Climatic condition affect tourism also.

Future Prospects

Waste water recycling the Oasis project and Solar clean energy.


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Major oil companies like ADNOC, SHELL are bound by rigid safety andenvironment standards and are working towards reducing emission and zerooperation flaring.


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Legal Analysis UAE

The UAE is one of the few tax-free zones, with virtually no taxes in thecountry.

However, the countrys company ownership laws still act as a hurdle toforeign direct investment flows and continuous government interference inbusiness affairs can stifle the performance of business in the country.

Current Strengths Current Challenges

Low tax legislation Favourable judicial laws

Compliance to local ownershiplaws

Future Prospects Future Risks

Improved policy towardsmanufacturing sector

Government interference inbusiness


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OUR Conclusion

UNSTABLE ; Reason- absence of democracy and need for thepeople to be democratic can emerge at any point.

RISK; Reason- Currently stable but due to dependency on oil andspan of 20-25 years things go vary.

Large % of Immigrant work force and with no residence permit andunequal laws for citizens and expatriates esp. Labour Laws

Hi-tech technology easily present but exported and nothing in-builtand hence being dependent.

Living conditions are harsh and strict environmental laws make itdifficult to open an manufacturing unit.

Very adamant Islamic laws make it difficult immigrants to work

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Shukran

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