Political Risk Assessment of the Business Environment of the United Arab Emirates

3813 WordsApr 16, 200916 Pages
United Arab Emirates Business Environment Shell Analysis by Trever Morley 1. Introduction and Disclaimer In our group’s effort to match our enthusiasm for this class with our love for engineering marvels and innovative ideas, the country of choice for us was the United Arab Emirates. Thanks mostly to the recent oil boom and spikes in demand for petroleum based products, the UAE and most other Oil and Petroleum Exporting Countries are now finding themselves in a position of power and are noticing a lot more revenue flowing into their country. I think what mostly attracted our team to the UAE is the way that they have reinvested their profits into the country to bolster their tourism using state-of-the-art designs and…show more content…
The SOEs in the UAE have been viewed differently, as the Forbes.com video listed in my bibliography suggests. There exists many SOEs in the manufacturing and services industries, but they are able to stay more separate from bureaucracy and be run more efficiently than standard State-Owned-Enterprises. [3] High energy costs present another possible risk area. The Middle East as a region has above average energy consumption, and thanks to developing financial and tourism projects the UAE has one of the largest demands for power within the region. The UAE is ranked 9th in the world in power consumption per capita, trailing only its comparative country Qatar in the region, who is ranked 4th in the world and Kuwait who is ranked 6th in the world in that category. [10] One final note to make is that any company looking to invest anywhere in the Middle East needs to be aware of corruption. According to Transparency International, if a country is ranked at a 5.0 or below, there is serious corruption within that country. Now the UAE received a ranking of 5.7, which would indicate that UAE is slightly above being considered corrupt. The Middle East as region received a ranking of 3.7, which means that there is corruption abound in other countries of the region with whom the UAE is a business partner. This is
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