Cattle rearing to Lambo drifting ( diving into the factors that lead to the growth of union of small Sheikhdoms)

 

Have you ever dreamed  about getting rich quickly ? Ohh yeah yeah most of us have dreamt of this. What if l tell you that nation made this dream come true.    a union of various small  seven Emirates that includes Abu Dhabi , Dubai , Ajman, Sharjah , Fujairah , Ras Al khaimah and  Umm Al Quwain  that went from Rags to Riches till now you might have guessed it , yes folks it is the United Arab Emirates formed in 1971 with the Population of 1,80,0000 during  its formation time.

There were various reasons that lead to the  formation of this Union of these small emirates  some of the prominent ones were Poverty and socio - economic underdevelopment people residing in this region were mainly Bedouins their main occupations were cattle rearing , pearling ,agriculture and fishing.

But then comes a point when all these different kingdoms way of life  were gonna change forever this was in the late 1960s when Oil was discovered at various kingdoms in various different timeline for eg oil was discovered in Dubai in the year of 1968 and the timeline varies for all the other six kingdoms

After the discovery of Oil the all these different kingdoms received a call up to the OPEC (Organisation of the Petroleum Exporting Countries) till now by the name you might have pretty much figured what this organisation does, yes it controls the whole of the oil supply on our planet earth.

If this organisation decides to stop the export of the oil worldwide the economy,forex market and stock markets on the planet can crash in a day worldwide the inflation will be at the peak , by this we understand how powerful   OPEC is. Being a member of OPEC was a great opportunity for the UAE to export its Oil worldwide.

In 1971 when all these different kingdoms got independence from the British and they decided to integrate their Ruler Sheikh Zayed Bin Sultan Al Nahyan 

Realised this very early that the oil reserves that UAE has been blessed with was quite less in number to the other OPEC nations.

This was an realisation that the Emirati people could not pump up their economy for long with the Oil dollars that they earned  from their export of Oil 

Therefore they started putting the oil money towards the building of Infrastructure their education, their roadways and what we see as those metropolis buildings in the UAE which eventually became tourist attractions. 

In the Initial years of Oil exporting Japan was the biggest importer of UAE’s oil as Japan’s economy was booming with a great pace in the 1970s UAE’s one of the major issues  was the low workforce at their refineries ,infrastructure building i.e mainly the construction work. 

To Counter this UAE made its biggest import since its existence and till now it their biggest import it was the import of labour force from the countries that had immense population and issues of growing unemployment amongst their masses for eg the major import of labour was from the  south asian countries of India and Pakistan which had immense working population.

As of today UAE’s 90 percent population consists of the immigrant workers from outside and only the 10 percent consists of local Arabs or the Emiratis. According to demography experts in UAE there are more people of south Asian origin compared to the local Emirati population of the UAE.

By now we are enlightened by the fact that UAE had been blessed with what we call as black gold but then  what we don’t know is that UAE was also blessed with something referred to in geographical terms as strategic location.

UAE is located in West Asia or the Middle East it is a pathway to Europe , Africa and the North American Continent from South Asia and vice versa. By this we understand  UAE can  become a layover for the people travelling between these countries but this was understood by the first ruler of UAE in the late 70s.

Sheikh Zayed Bin Sultan Al Nahyan of UAE’s then ruler  to make Emirati  as a layover hub for the travellers travelling to Europe or America to South Asia or vice versa he ordered for the constructions of lavish airports and hotels where the tourists could stay during their layovers.

Through this came the idea of an airline known to us today as Emirates was founded in 1985  which would lower the dependency of UAE on the oil dollars. though this was a business which had a high risk and heavy investments.

During this period ,PIA i.e the Pakistani airlines was doing  quite great due to the strategic location of Pakistan and it was seeing a great boom in its ticket revenues so the emirates decided to take planes on lease from Pakistan instead of buying them at huge costs which would avoid the huge investments in the business.

In its starting year with just two planes that were taken on lease from PIA, Emirates flew , who knew that it would go on to become the largest airline business in the world. Overtaking the most prominent ones in the business.

One of the main factors that made Emirates stand out from other businesses was their way of treating the customers. There was a sense of royalty treatment that was provided by the Emirates to its customers that made their customers come back to them again and again.

UAE also adopted the policy of becoming a tax free nation i.e it had no income ,corporate and the sales tax to the business practices that was being carried out by the Emirati or the people from all rest of the world that made UAE attractive to business worldwide.

Soon there was a surge in the number of business that were being setup within the territory of UAE due to this the housing prices went up in the UAE which resulted in the rise of National income for the landholders in the UAE that were the Emiratis and already the immigrants were enjoying the perks of running  a tax free business.

Conclusion 

Due to all these economic and business revolutions that took place in the UAE it became a nation that would have less dependency on its oil and more diversified into other sectors in terms of national income and GDP 

As of today oil contributes to just 30 percent  in the GDP of UAE whereas the rest of 70 percent comes from other means of business as of reports by the economist oil reserves will run out by 2050 in UAE.

After 26 years the UAE has not much to worry about because their dependence on oil money has reduced much and there are other ways of generating income in UAE that are emerging rapidly , do leave your answers  in the comments about some of the emerging business models in the UAE.