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PESTLE analysis
Political analysis
Overview
The UAE government is considered to have a consistent policy-making agenda. The country is also one of the first Gulf countries to have conducted partial elections in the region. However, the absence of democratic institutions and fragile relations with Iran now pose problems for the government.
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PESTLE analysis
ensures that power is mostly concentrated within the large ruling families, inter-family relations are sometimes fractious. Furthermore, there is no formal or recognized legal structure for determining family seniority or claims on power. Although there was much talk about extending the FNC's powers and moving towards universal suffrage, there has been no tangible progress on realizing these goals, in part because of a negative perception of the more advanced parliamentary system in Kuwait, which is quite fractious and has developed a strong Islamist bloc.
PESTLE analysis
Economic analysis
Overview
The state budget surpluses that the UAE enjoys have been driven by high oil prices; two-thirds of the UAEs fiscal revenues are accrued from oil and gas sales. The government's high degree of dependence on exports of these resources for its revenues makes it vulnerable to oil price movements, and it has realized that in the long term more dependable sources of tax revenues will be required.
Current strengths High per capita income Strong trade surplus High quality infrastructure Future prospects Improving economic ties Emirates Development Bank
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High-quality infrastructure
The UAE has been ranked sixth in the world for the quality of its infrastructure according to the World Economic Forum (WEF). The country has advanced infrastructure in public premises, roads, ports, aviation and electricity. Moreover, Burj Khalifa, a skyscraper in Dubai, was opened in January 2010. It is considered to be one of the tallest man-made structures
PESTLE analysis
at 828 meters. The building is part of the flagship development called Downtown Dubai. This development is expected to attract investment and generate employment opportunities in the near term.
PESTLE analysis
plan for Emirates Development Bank. The Emirates Development Bank is expected to invest in infrastructure and housing projects in 2010. With the establishment of EDB, the government aims to develop and support various sectors in the country, and also bridge the gap between the industrial sectors and the government.
PESTLE analysis
Social analysis
Overview
The country has a low level of unemployment and an abundance of semi-skilled youth workers for its labor markets. However, low literacy and a lack of proper facilities for education are dogging the social system. Furthermore, the government's expenditure on schooling is low.
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PESTLE analysis
5 4.5 4 3.5
2.5
Percentage (%)
$ billion
3 2.5 2 1.5 1 0.5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year
Education expenditure Education expenditure as % of GDP
1.5
0.5
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PESTLE analysis
clinical supplies departments. Nurses and physicians will also use these programs to manage and document patient care through online order entry, and results notification and viewing. The HIT-enabled systems are expected to streamline the medical system and document healthcare activity across the country, increasing accountability.
PESTLE analysis
Technological analysis
Overview
The country has a strong telecommunication network with state-of-the-art technologies. As a result, it is attracting entrants to its IT market at a rapidly increasing pace. However, poor science education and a lack of R&D facilities are a hindrance to technological development.
Future prospects Dubai Silicon Oasis Growing market for information technology
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PESTLE analysis
restricted the enrollment of UAE students into technologically intensive industries. Moreover, the firms operating in the UAE have to rely on expatriates to meet their need for technical staff, which proves to be more expensive.
PESTLE analysis
Legal analysis
Overview
The UAE is one of the few tax-free zones in the world, with virtually no tax laws in the country, and the country has also improved its policy towards the industrial sector. However, the federations company ownership laws still act as a hurdle to foreign direct investment (FDI) flows and continuous government interference in business affairs can stifle the performance of businesses in the country. Table 7: Analysis of the UAEs legal landscape
Current strengths Low tax legislation Favorable judiciary Current challenges Compliance to local ownership laws
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Favorable judiciary
The court systems are highly organized and efficiently run in the country. The judicial structure is being reformed to improve the level of services and facilitate transactions for better efficiency. Each emirate has the option of participating in the federal legal system or retaining its own. Five of the seven emirates have joined the central system under a unified set of procedures and rules. The UAE's establishment of civil and criminal courts has resulted in a diminished role of their Islamic equivalents. These new courts have been crucial in the establishment of Western corporations and foreign investment.
PESTLE analysis
ownership, except for those within the free trade zones. While the purpose of this legislation was to encourage entrepreneurship and business innovation among the Emirati population, it is expected to be amended in the near future to bring policy in line with WTO norms. However, there have been no changes yet in the law, resulting in continued restrictions on foreign investment.
PESTLE analysis
Environmental analysis
Overview
The country has a strong integrated environmental development program, with supporting economic policies. Its ecological procedures are integrated with the Environmental Impact Assessment (EIA) program, which is part of business practice in the UAE. However, the increasing level of emissions is still a concern, with the country being one of the largest producers of oil in the world. Table 8: Analysis of the UAEs environmental landscape
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PESTLE analysis
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