Sources of Income and Patterns of Expenditures in Recent Years

Western Countries Discussion

Is it known that most of the European countries like Germany or United Kingdom, and United States developed themselves due to the invading other areas or establishing colonies. These countires were supplied with all necessary resources which were taken for free. Consequently, these countries are able to make any sphere become a source of incomes. However, such benefits are not enough, especially when their effect is not endless. That is why western countries are seeking for sufficient partnerships.

Dubai is able to provide such partnership. That is why Dubai is invested by developed western countries in order to establish a successful partnership. Even though it is not willing to obtain any monopoly, Dubai strives to be oriented to the worldwide market, especially western countries. Therefore, it was opened a free economic zone and diminished tax rates. In addition, western countries realize the unique character of Dubai economics and of United Arab Emirates as a whole. As they are not able to create such conditions of their own, they support Dubai in order to get as more benefit from it as possible. Actually, being loyal does not mean that Dubai is not a serious competitor. That is why developed western countries regard Dubai as a serious partner rather than source of easy benefits. All in all, western counties are interested in investing Dubai because of its unique economic system which is not possible at the West.

 

Choice for Dubai

It is hard to deny that United Arab Emirates is one of the most unique countries in the world. Moreover, it is one of the richest, as well. United Arab Emirates has a peculiar system, natural resources, and protection of some powerful countries. These and other factors make this country so thriving that it has become an object of many discussions. Actually, one of the most discussed topics is a macroeconomics: what is so peculiar about it in United Arab Emirates, and which role does it play. However, it should be noted that each emirate makes its own effect on the macroeconomics. That is why it is necessary to specify the topic of discussion and choose one of the emirates for a further observation. First things first, but the choice of the emirate has to be grounded, as well.

Dubai is chosen to be discussed because of its general popularity and peculiar features which are not typical of the other emirates. First of all, it is famous for its developed tourism services: hotels, resorts and entertainment. Moreover, Dubai is more developed than the other emirates. Historically, it got the electricity first, roads of modern type, telephone lines, and first international airport among the other emirates. It is necessary to mention that historical background of Dubai made a sound impact on the current macroeconomics. Due to the clever guidance of politics and mass migration, Dubai became the centre of reexport in the world. In addition, the macro economics of Dubai is affected by one of the biggest investment companies: Dubai World. Actual impact which it makes on macroeconomics will be discussed later and in more specific way. Furthermore, this emirate is keeping being the most thriving and promising. All in all, it is necessary to give a general description of Dubai.

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General description

As it was mentioned previously, a huge role in macroeconomics played a historical background. In 1930 because of decrease of pearl sources, the sheikh had to find some alternative sources of incomes. That is why it was decided to make Dubai a centre of a secondary export. By decreasing of tax rates many investors were interested in Dubai, especially British ones. Consequently, in 1950 due to the wave of migration of British businessmen from Ash Sh?riqah, it resulted a general improvement of the emirate. Moreover, after military conflicts in Persian Gulf, prices for oil were increased, and in this way influenced the economy policy of Dubai. It started being focused on the development of trading and tourism. In addition, Dubai copied the model of free zone in order to build Internet city, mass media city, and hotel city.

In fact, all this background has its reflection nowadays. From 2002, it was observed a prominent rate of private investments in real state possessions, which was a helpful booster for developing of many national projects. In 2008, it was introduced a project of construction of Jumeirah Gardens. It also presupposes building new districts and destroying old ones. In addition, the channel from the east to west is supposed to become longer and wider so that more ships can have an access to the sea. As it was said before, Dubai is keeping developing due to its current opportunities. In contrast, it does not have the aim to obtain monopoly in a certain section. It tries to present itself as an alternative to the western model of economics and business, even though it was supported by western representatives. Moreover, by 2009 a debt of Dubai and its national enterprises comprises 80 milliard dollars which is more that GDP of it.

Main Sources of Income

To begin with, it is necessary to say that the most significant impact on macroeconomics makes the company Dubai World. It is an investment company which is the biggest one in the entire United Arab Emirates. Initially, Dubai World was focused on the port business, but due to the investment diversification it took under control establishments of electricity resources, financial and bank sphere, entertainment business and so on. It is obviously seen that Dubai World affects most of the major spheres of Dubai economics. By having branches in different spheres Dubai World regulate the main income sources of the emirate. In general, it is possible to say that Dubai World is a primary source of incomes in Dubai for contemporary days.

The next source of income is definitely port and harbour business. All in all, there are three major ports in Dubai: Hamria, Rashid, and Jebel-Ali. The most important is Jebel-Ali, it is the biggest and the best port in the entire Persian Gulf. Its efficiency can be explained by provided free economic zone, no taxes for foreign ships, full rights for any enterprise without any respect to being under control of a certain emirate, cheap electricity and developed facilities. Needless to say, that these benefits attract foreign partners and summon big investments.

There is no doubt that oil production is a peculiar feature of Dubai and United Arab Emirates as the whole. It should be noted that it is not so significant as in other emirates, but still it plays an important role in macroeconomics of Dubai. In fact, oil production in Dubai is regarded as an additional source of incomes. This sphere has its constant customers without any respect to seasons or some changes in the international market. Comparing to the other sphere, oil production keeps itself at the same level for many years. Therefore, it proves its own stability. In contrast, there is no effort made to develop it. All in all, oil production in Dubai produces a certain income, which is constant and stable, even though it is not willing to be increased.

Conclusions

Finally, it is necessary to sum up all points mentioned above. Dubai is emirate which has its peculiar features due to a wide range of factors. The economic status of Dubai is affected by its historical background very strongly. First of all, it is necessary to say that Dubai had to find some new sources of income because of pearl resources started to decrease. Consequently, it was decided to diminish tax rates for foreigners and make Dubai the centre of a secondary export. Further, after the war in Persian Gulf and increased prices for oil, Dubai focused its macroeconomics on trading and tourist business. In addition, it was created a free economic zone with Internet, mass media and hotel cities.

 
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Speaking about main income sources of Dubai, it is necessary to say that most of them are the result of its historical background. The most significant source of incomes is the investment company Dubai World. It dealt with port business, but later due to diversification of investments it started focusing on the bank and financial spheres, entertainment business, electricity resource establishments, etc. In such a way, Dubai World has its branches in many major spheres of the emirate. The second by its significance source of incomes is port and harbour business. There are three major ports in Dubai, but the most important is Jebel-Ali. It is very popular with foreign businessmen because of no taxes for foreign ships, full possession of enterprises, low prices for electricity and developed facilities. In addition, oil production in Dubai is also a source of incomes, even though it is not so developed as in the other emirates. It has constant customers and income, but it is not likely to be developed in the future.

Finally, it is necessary to remind that Dubai and United Arab Emirates as a whole has a unique economical system which is not possible for western countries. That is why these countries are looking for a partnership with United Arab Emirates and with Dubai especially.

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Jan 15, 2021 in Economics
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