UNIVERSITY OF KUALA LUMPUR – BUSINESS SCHOOL

SEMESTER/ YEAR: SEPTEMBER 2020 (1)

EIB10203 : PRINCIPLES OF ECONOMIC

Submitted to:

SIR MOHD HANAFIA BIN HURIDI

Prepared by:

NUR IQHMA ASYQEM BINTI ABDUL AZIZ (62216120006)

INTRODUCTION

First of all, the word economy is Greek and means "household management." Economics as
an area of study was touched on by philosophers in ancient Greece, notably Aristotle, but the
modern study of economics began in 18th century Europe, particularly in Scotland and
France. An economy includes all activities in a region related to the production, use and
exchange of goods and services. In some combination of market transactions and collective
or hierarchical decision making, these decisions are made. This mechanism includes
everyone from individuals to organizations such as families, companies and governments.
Among other factors, the economy of a specific region or nation is controlled by its culture,
rules, history, and geography. Two major types of economics are microeconomics, which
focuses on the behaviour of individual consumers and producers and macroeconomics, which
examine overall economies on a regional, national, or international scale. Capitalism,
socialism and communism are types of economic systems. Our group has chose United Arab
Emirates. The UAE is known for being heavily manipulated by Arab and Islamic traditions
because of its rich cultural heritage. In particular, UNESCO has recognised the Emirate of
Sharjah as a fascinating Emirate that has taken steps to preserve the rich cultural heritage of
the Arabs. A classic example is the anchoring of cultural ideals that are local and
conventional at the Dubai Shopping Festival. It should be remembered that the festival's main
goal is to draw visitors from all over the world. Globalization has since forced all the other
Emirates to take initiatives towards protecting all features of the Arabian culture.
Globalization can be defined as a radical movement to extend social and economic relations
through the spread of multinational institutions and the ideology of capitalism that is
shrinking the world from an economic perspective. Globalization is a phenomenon in three
major areas that typically affects a world. These fields include social, cultural and economic
problems.
CHARACTERISTICS

UAE has the second-largest economy in the Arab world (after Saudi Arabia), with a gross
domestic product (GDP) of US$414 billion (AED 1.52 trillion) in 2018. A third of the GDP
is from oil revenues. The UAE economy is one of the most open-minded in the world, and its
economic history stretches back to the times when ships sailed as far south as Mozambique to
India, along the Swahili coast. According to AT Kearney, the UAE is ranked in the top 20 in
the worldwide service sector, in the top 30 in the WEF "most-networked nations" and in the
top quarter as the least corrupt country according to the corruption index of the TI. In an
effort to cope with and rebound from economic shocks following months-long coronavirus
lockdowns, the Government of the United Arab Emirates declared a large restructuring and
integration of more than 50 percent of its federal agencies, including ministries and
departments. With 1.5 billion people in the neighbouring areas, the Middle East and the Gulf,
America, Africa and Europe, Dubai’s market is very big. The economy has grown at a
phenomenal rate of 11 percent to date, following liberalisation. The sector is diversified and
caters to both emerging and existing firms. Extensive and cheap energy is available in terms
of raw materials and product supply, and important agricultural export commodities are also
readily available. Dubai has a wide variety of export products courtesy rapidly expanding
manufacturing sector. Dubai’s GDP is no longer generated exclusively from the petroleum
and petrochemical sectors, and the booming industry is a manufacturing sector that gives
export business momentum. Some of the manufactured foods that are exported from Dubai
include aluminium, metal products, garments and accessories, gold and other jewellery,
textiles, household goods , electronics, food products, and non-metallic mineral products.

IMPORTANCE
Economic growth are important in every country in order to makes their economy stable.
Countries with positive rates of economic growth will create a virtuous cycle. Economic
growth will encourage inward investment as firms seek to benefit from rising demand .Higher
growth leads to improved tax revenues which can be spent on long-term public sector works,
such as improved transport and communication. This helps long-term growth. Higher growth
encourages firms to take risks - innovate and invest in future products and productive
capacity. In addition, WAM states that during its transformation to a digital economy since
2013, the UAE has achieved major achievements. According to indexes released by
international organisations, including the World Economic Forum, which rated the UAE as
the leading Arab and regional e-commerce centre in 2017, these achievements have helped to
improve the competitiveness of the UAE's national economy. Other than that, the importance
of economic growth is can the average incomes can be increased. Economic growth allows
consumers to buy more goods and services and to enjoy a better standard of living. Economic
prosperity in the twentieth century was a significant factor in the reduction of absolute
poverty levels and the increase in life expectancy. Next, can decreased he numbers of
unemployment in that country. With higher production and positive economic growth,
companies seek to hire more employees to generate more jobs. Lower government borrowing
rates. Economic prosperity produces higher tax revenues and there is less need to spend
money on programmes such as unemployment benefits. Economic development, therefore,
tends to reduce government borrowing. Economic growth also plays a part in reducing the
debt-to - GDP ratio. The last importance of economic growth is can improved the public
services. Higher economic growth leads to higher tax revenues, allowing the government to
spend more on public services, such as health care and education, etc. This can lead to higher
living standards, such as increased life expectancy, higher literacy rates and a better
understanding of civic and political issues.

ADVANTAGES

Globalization brings the convergence of markets with it, which is made possible by a variety
of variables. It is clear that the economy of the UAE relies heavily on oil. Oil is a resource
that is against the clock, without any doubt. If the UAE were to run out of oil today, they
would not have to worry about their economy, thanks to globalisation, which would help their
economic development by creating new employment and opportunities. In addition, the UAE
has an open economy. This indicates that, in the modern past, they have imported a wide
variety of cultural goods and services. It is clear that these goods and services have
influenced the population's lifestyles. This arises after new cultures and influences have been
added, making the UAE more of a mixed society. Online connectivity is also one of the
guiding forces for economic integration, as it goes hand in hand with communication
networks and worldwide Internet access. Relevant examples of the development of
international cooperation are the presence of many trade blocs, such as the EU and NAFTA.
Globalization also marks the end of an age of 'communism' and, however, it is a clear step
towards the UAE's free trade flow. The nation has the advantages that some of the countries
wish to have had in the possession of some decisive and essential strengths in the sense of
globalisation. The ties that are established by the country, which happen to be intertwined
between some of the highest markets; Asia and Europe, serve well. (The State Assembly,
2010). Globalization has also enriched the UAE in that it has the ability to locate capital and
labour anywhere in the world, besides being able to buy and sell within every nation in the
universe. While globalisation has made the UAE dependent on other nations ' economies, it is
undoubtedly a catalyst for trade that has many more benefits. First of all, it has meant that
stock markets are now accessible from every place in the world. It is also an environment that
makes more job opportunities open, as mentioned earlier, and amplifies the prosperity of
many countries, which essentially means that the UAE enjoys all the qualities that go hand in
hand with globalisation and thus boosts trade. Other positive qualities that go hand in hand
with trade include amplified choice for the population. There is a wide variety of items that
have become available on the market and the population of the UAE enjoys a wide range of
goods and services, thereby giving them the benefit of increased choice. Other positive
qualities that go hand in hand with trade include amplified choice for the population. There is
a wide variety of items that have become available on the market and the population of the
UAE enjoys a wide range of goods and services, thereby giving them the benefit of increased
choice. In addition, trade has intensified the growth potential of the UAE, thus ensuring that
its growth potential is also amplified. At the end of the day, trade is always the puppet master
behind the colossal increase of wealth within a country. The UAE is not an exception to this
phenomenon. One segment that cannot be ignored is that globalisation inevitably contributes
to corporate dominance. This can be proven by the fact that some of the UAE companies,
such as the Emirates, are becoming more famous. It also enables UAE to easily procure raw
materials for its industries, as well as to take care of key supplies and processing. There is
also a chance that the UAE will completely accept globalisation in order to monitor supplies.
This is usually the primary reason behind global expansion. Some of the facilities and
cultural products of the UAE are also of global interest, as they can easily be used for cultural
enrichment in any part of the world. This can be proven by the fact that some of the UAE
companies, such as the Emirates, are becoming more famous. It also enables UAE to easily
procure raw materials for its industries, as well as to take care of key supplies and processing.
There is also a chance that the UAE will completely accept globalisation in order to monitor
supplies. This is generally the primary factor behind global expansion. Some of the facilities
and cultural products of the UAE are also of global interest, as they can easily be used for
cultural enrichment in any part of the world.

DISAVANTAGES
As normal, anything that has a positive side to it still has a negative side to it. Globalization
brings with it many drawbacks, problems and obstacles that need to be tackled in order to
make it easily appropriate. The greatest downside of globalization is that it contributes greatly
to the deterioration of people's culture. Globalization has been shown to be a primary area of
study that has been carried out in a number of cultural contexts (Pothukuchi et al, 2002).
Globalization has also been shown to have a significant influence in the Arab world as it has
had a tremendous impact on corporate practices and management styles. However, what may
have been considered a detrimental impact of globalization on the UAE has been effectively
curbed. This is because the UAE has managed to preserve natural culture and traditions by
careful policy growth. This can be done because Dubai Media City is dedicated to the value
structure and the dogmatic scaffolding of the Gulf Cooperation Council (GCC countries).
After that move, the UAE managed to preserve their order of culture. Globalization has given
rise to many other areas of concern. Sustainability has become a concern in the recent past, as
world resources are being exhausted at a very rapid pace. Concerns have been raised about
environmental pollution in the UAE and many other countries that are welcoming
globalization. The majority of the world’s population hold the view that globalization is
progressing in the negative directions of the G8 summit demonstrations, insecurity and
solution. The UAE is also facing difficulties in its attempts to eliminate barriers to trade, and
concerns about the ethical obligations and transparency of its companies are posed. The
faction of analysts also confirms that globalization results in exploitation of labor, non-
renewable resources and potential weakening of the economy, although there has not yet been
evidence of their ties with the UAE.

CONCLUSION
All in all, the global economy is evolving every day. With political instability in various
countries, it is difficult to foresee the future of every economy. The above report
demonstrates how the economy of Dubai was poor and gradually changed. As the recession
struck the economy, inflation became slower and higher. But since Dubai has shifted its focus
from the oil sector to other sectors of the economy. The economy is facing a boom and is
dropping. Dubai was struck hard by the recession. Building and real-estate industries are
offering much-needed economic assistance. The coast of Dubai is still under construction.
Once developed, both GDP and the economy will make a significant contribution. Right now,
Dubai is looking at a very uncertain future. With the world economy evolving every day, it
has become difficult to foresee what Dubai will face in the future. There is a lot of criticism
in the market that Dubai focuses too much on three major sectors, namely tourism,
construction and housing. Last year wasn't a good year for Dubai. Next, Growth has slowed
so much that it has become impossible to keep people working. A lot of people had lost their
jobs and had to travel out of the country. Although some sectors of the economy are still
showing stability, many companies are still waiting to invest in Dubai next year once the
construction projects have been completed. The explanation is that the economy around the
world is uncertain and people are afraid to invest. These days, the property is on the rise in
Dubai. Its prices fell in 2010. Hundreds of new businesses were launched every week at one
stage in Dubai. When the recession struck the entire scenario, it changed. Up until now,
Dubai has not been able to return to his former place even though he took the hard hit and
survived. 2010 will bring more optimism to Dubai as new projects are completed and the
state has a chance of restoration (Martin, 2010). The recommendation for UAE in order to
grow their economy are, UAE Companies law must be changed in such a way as to boost the
competitiveness of the economy and the efficiency of the market environment in the country
and enhance the security of shareholders, increase transparency and the disclosure of
financial data. Next, all UAE government services must be smart and, lastly, main investment
sectors must include petrochemicals, renewable energy, transport and infrastructure,
manufacturing, health and education, defense and aerospace, real estate and construction,
tourism, agriculture and water.
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