Differences in the effect of globalization on UAE society between 1980-1990 and 2000-2020
Introduction
Globalisation is one of the complex as well as dynamic phenomenon that have changed the entire face of societies across the world. Various contradictory justifications regarding its origin exist and different viewpoints defining the occurrence have been put forth by scholars and researchers. It would be plausible to claim that globalisation is the result of historical development. In the past, due to the occurrence of ground-breaking events, globalisation has occurred. Notably, globalisation has taken shape in different eras. Due to globalisation, different processes has interacted and integrated and these mainly include people, companies and governments. The process of globalisation in UAE has been triggered by investment as well as international trade. Moreover, information technology has an important role to play in the globalisation process.
Impact of globalisation on UAE (1980-1990)
In the late 90s, the Middle East region has witnessed changes due to globalisation. The region is already economically diverse and the presence of natural resources has led to the diversity in UAE society (Lane, 2017). However, the economic performance of the country in that era was not high. In other words, the overall economic performance was weak when measured in terms of growth rate and compared with the global economy. Moreover, the rate of employment generation was low as well and at that time, quick or urgent reforms were the need of the hour.
Macroeconomic impact
UAE was an oil-dependent country and the legacy of being regarded as the oil-rich nation has contributed towards the development of the region. At that time, the country has been benefitted economically only due to rise in oil prices. Moreover, an explosion occurred due to rapid investment as well as rising association with oil-exporting countries. Consequently, worker remittances increased along with a sharp rise in capital flows and trade. Following that, the sharp rise in GDP has been noticed, and this, in turn, has enhanced the basic living standards of the UAE population (Kolodko, 2018). The corporations in the nation started accumulating enough financial assets. On the other hand, research also suggests that from 1980-1990, economic performance was affected or weakened due to a decline in the growth rate. The nation also failed to generate enough employment opportunities because the labour force in the nation rapidly expanded.
During mid 1980s- 1990s, economic deterioration led to the implementation of new economic reforms. For instance, the fiscal reform known as VAT or value-added tax was introduced forcefully. Although it has improved management related to public expenditure. Again, a change in the monetary policy has also strengthened the condition of the society as it has introduced instruments of indirect monetary policy. Moreover, liberalization of trade regimes also occurred and FDI or Foreign Direct Investment was also encouraged (Albassam, 2015). Moreover, flexibility in the exchange rates occurred as well. Hence, the macroeconomic outcomes due to globalization were moderately positive during that era. For instance, during most of the late 90s, inflation was not high. Moreover, since 1980s, despite the persistence of fiscal deficits, it has also narrowed down in the UAE region. Again, the domestic as well as the external debt was low at that time when measured by international standards and on a positive side; the debt service was low as well.
Failure in sustaining growth
Despite the achievement of macroeconomic stability in the UAE society, generating a high income and ensuring the continuance of growth rates has not become a reality. The UAE region consistently underperformed. Moreover, the nation failed to reap all the benefits of globalisation. Hence, initiating growth and development was easy at that time, but sustaining it became a challenge. Moreover, full integration into the global economy has not been done properly. As a result, the growth potential was below average. In most parts of UAE, the rise of chronic unemployment has been witnessed as well (Laabas, 2017). In order to succeed in offering meaningful employment and meet the demands of the labour force, it would have been necessary to focus on full integration with the global economy.
Changes due to commercialism
Globalisation has introduced the culture of commercialism in the late 90s. Earlier, the society was defined by its tribal traditions. A sense of Emirati and Arabic identity was prevalent. The decision-making process was also influenced by that identity. However, despite the cultural changes brought about by globalisation, the status of women in the nation remains unchanged. Despite the changes brought about by the age of consumerism and wave of modernization, the cultural industry in UAE has not witnessed much change. Interestingly, other areas have witnessed relative change and it is evident from the rapid progress of women. They have gained new opportunities and received formal education (Samier, 2015). A collective push has been witnessed in the Emirati society and regional hub for fine arts and entertainment has began to emerge rapidly due to the impact of globalisation.
Adaptation of westernized approach
Moreover, a westernised approach has been prioritised in the UAE society to deal with business management issues. Consistent efforts have been made to promote the effectiveness and efficiency of expatriate workers as well. Rapid changes in the infrastructure programs have continued to occur and it has been done to ensure the security and stability of the UAE region. At that time, an enormous number of workers from other developing countries were looking for employment opportunities and globalisation has made this a reality. The Emirati society managed to create a balance between commercialism brought about by globalisation and traditionalism that was ingrained in the society (Al-Ammari & Romanowski, 2016). It has neither hold the status quo too strongly nor has it focussed on complete modification of societal norms and values. The Emiratis completely acknowledged and accepted the new realties brought about by global culture. Hence, the society can be regarded as “traditional yet progressive.”
Changes due to globalisation from 2000-2020
In the early 20s, major economic, political and social reforms have occurred because the UAE society has continued to seek modern, innovative and progressive ideas. On one hand, cultural heritage has been sustained, while, on the other hand, a slow but steady progress has been made towards technological adaptation. Today’s Middle East and yesterday’s Persian Gulf nation has significant differences. Mainly exploitation of oil has transformed the entire image of the Middle East (Grinin, Korotayev & Tausch, 2018). The society is now referred as “glamorous” or “innovative” instead of “traditional.” Now, Dubai has become a global icon and it represents commercialism, modernity and internationalism. By the mid-20s, UAE has entered into the global marketplace. It has managed to position itself as one of the economic powerhouses. It is now compared with nations such as Hong Kong, Singapore, New York and London.
Diversification in the population
Globalisation has led to the creation of a diversified population in UAE. Approximately, 80% of the population in UAE holds foreign citizenship. Most of the residents comprising the nation have their origin in Europe, South-East Asia and the Middle East. Moreover, a diversified population has been created because globalization has opened a new trade route for large multinational corporations such as Exxon-Mobil, Boeing and the Microsoft Corporation. The tax regulations in UAE were favourable for these emerging businesses. Moreover, the strategic location of UAE has enhanced the possibility of creating new regional offices across the nation. In recent years, sudden boom has been witnessed in the tourism industry. Almost 20% of the GDP of UAE is derived from the travel and tourism industry (Almuhrzi, Alriyami & Scott, 2017). The city of Dubai has become one of the favourite tourist hotspots due to the existence of the famous seven star hotels and sky slope situated at the edge of desert. Tourist influx has increased as the city of Dubai has managed to become one of the most desirable tourist spots.
Major lifestyle and cultural changes
The consistent need of globalization has influenced the major cultural industries within the nation. In this case, the term “cultural industry” refers to media organisations, multimedia sector, performing arts, cultural tourism, plastic arts, audiovisual sphere and the film production sphere as well. Moreover, globalisation led to the creation of an open economy. It has paved the path for import of cultural products. Additionally, services from various parts of the globe have also garnered attention. More and more import of goods and services led to the modification of the existing lifestyle of people. Moreover, the open economy has led to the development of the Dubai Media City (Kalliny, Ghanem & Kalliny, 2018). More than 500 organizations in the media sphere including CNN Reuters, Sony Broadcast, McGraw Hill Publishing and others established itself in the city. Similarly, companies operating under the telecommunications industry have been affected due to globalisation.
Rapid technological advancements
The need for communication and networking has increased at a rising rate. The rise of flow of information has also contributed towards technological improvement. Major changes have been witnessed due to advancement in satellite systems and rapid expansion of the internet services. Notably, in the city of Dubai, internet services have rapidly evolved so that the telecommunication firms can gain a competitive advantage. The speed of communication has fastened. Earlier, the services were available at 3mbps, however, now the services are available at 21mbps (Khalil & Kraidy, 2017). Moreover, the nation has benefitted due to its complete reliance on technological tools. New ideas have been encouraged and transfer of information has been possible from one level to another level. The information flow has become progressive in the society. Business firms in the city have devised effective business management methods and this in turn, has reduced the costs of production and increased the profit margins. The sales volume has increased as well.
Excessive reliance on different industries
On one hand, the UAE region has managed to transform its image from Persian Gulf region with traditional people to one of the most innovative and progressive society of Emirates. However, on the negative side, globalisation has increased the need for dependency of UAE on several other economies. For example, in 2015, Dubai’s economy was completely dependent on fuel and due to excessive dependency, complete exhaustion has taken place. Moreover, excessive dependence on tourism industry has proved counter-effective because the industry is subjected to seasonal changes. The tourism industry is directly affected as soon as the economy slows down (Telfer & Sharpley, 2015). Hence, attracting the interests of tourists and meeting their demands has been challenging for the UAE-based tourism sector. Moreover, at the time of Great Recession (2008), the sector has been severely affected. There was sudden fall in the number of average annual tourists and it was a sudden blow to the economy of the nation.
Cultural changes and women empowerment
The mid-2000 has witnessed rapid changes in the culture of the Emiratis. However, one of the striking differences between the changes brought about by globalisation in the 90s and the mid-2000 is the changes in the people’s mentality. Earlier, a balance has been created between the traditional and modernized lifestyle. However, gradually, this cultural balance has been disrupted. Firstly, the people from the Islam culture has started to change their mentality. Sudden traditional alterations have become visible. It is evident in the way modern marketplaces in UAE have brought a massive cultural change. Modernization has led to the empowerment of Saudi women. Their attitude and beliefs towards marriage has changed. Studies shows that, about 45% of Saudi women over the age of 30 years are opting to remain single (The National, 2020). This has been possible due to the level of financial dependence brought about by globalisation in the Emirati society.
Conclusion
The research paper is based on identifying the different effects of globalisation on UAE in two different time period. At the beginning of the paper, brief introduction about globalisation as a dynamic phenomenon has been stated. Thereafter, the time period, 1980-1990 has been considered so that the impact of globalisation can be clearly identified. The macroeconomic effect, effect of commercialism, failed growth and adaptation to western ideas was prevalent at that time. Following that, the time period, 2000 to 2020, has been considered and other changes such as population diversification, life changes, technological advancements and women empowerment has occurred.