Pestle Analysis United Arab Emirates

PESTLE analysisPESTLE ANALYSIS Summary The UAE has achieved steady progress over the past three decades to emerge as a significant global player in both the political and the economic arena. The extremely rapid pace of economic growth until 2008 was due to the steady demand for oil, supplemented by a shift in focus to a number of non-oil sectors. The UAE maintains active diplomatic ties with over 60 countries, primarily in Europe and Asia. The UAE is considered to be one of the leading political forces in the Middle East and is a member of a number of regional organizations, including the Gulf Cooperation Council (GCC), the Arab League and the Organization of the Islamic Conference. Although the UAE has received international recognition as an economic force, its decision to ally with the US-led coalitions during the Persian Gulf War and the Iraq war also boosted its political weight. Under the leadership of former President Sheikh Zayed, the UAE transformed from a nation affected by large-scale poverty to a highly developed and prosperous country. With the death of Zayed in 2004, his son, Sheikh Khalifa, immediately took over as president. Although the government structure in the UAE is not democratic, both Zayed and Khalifa have shouldered the responsibility of maintaining the country’s progress. The government has consistently received recognition for its efforts at creating business opportunities over the past decade. The country’s tax regime is also considered among the best in the world for businesses. The UAE market is equipped with a strong telecommunication network and, as a result, the country’s IT market is gradually becoming competitive. However, the level of science education remains low. The country has a strong integrated environmental development program. Its ecological procedures are integrated with the Environmental Impact Assessment (EIA) program, which is part of business practice in the UAE. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 11 There are no political parties and no official opposition exists in the country. Table 3: Analysis of the UAE’s political landscape Current strengths ▪ Strong policy implementation Current challenges ▪ Absence of democracy Future prospects ▪ Improving foreign relations ▪ Nuclear deal with the US Future risks ▪ Fragile relations with Iran Source: Datamonitor DAT AMONITOR Current strengths Strong policy implementation The UAE government is known for its consistent policy implementations. immediately took over as president. Furthermore. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 12 . It had one of the lowest percentile ranks—20. With the death of Zayed in 2004.7—on the voice and accountability indicator in 2008 (World Bank’s Governance Matters 2009). both Zayed and Khalifa are believed to be directly responsible for the country’s progress. The present regime does not tolerate an interventionist media and tightly controls the functioning of news outlets. Under the leadership of the former President Sheikh Zayed. along with freedom of expression. freedom of association and the availability of free media. Current challenges Absence of democracy Despite several changes in the international sphere. In general. Although such a system United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. Khalifa is viewed as a modern ruler. his son.PESTLE analysis Political analysis Overview The UAE government is considered to have a consistent policy-making agenda. the regime in the UAE has done little towards implementing democracy in the country. the country has been historically dominated by family rulers. The country is also one of the first Gulf countries to have conducted partial elections in the region. Sheikh Khalifa. while private media operators are not allowed to operate from the UAE. While the government structure in the UAE is not democratic. the UAE transformed from a nation affected by large-scale poverty to a highly developed and prosperous country. This parameter measures the extent to which a country's citizens are able to participate in selecting their government. the absence of democratic institutions and fragile relations with Iran now pose problems for the government. with a pro-Western attitude similar to his father’s. The delay in implementation of democratic laws is leading to increasing unrest among the public and the media. However. particularly the US. The UAE's geographical proximity to Iran. The risk of a US military conflict with Iran has been of particular concern. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. then the UAE's commercial interests are likely to suffer. the US signed cooperation and information-sharing agreement with the UAE to develop the latter’s civilian nuclear energy program. Future risks Fragile relations with Iran If the relations between the US and Iran take a turn for the worse. The country has traditionally taken a low-key approach to wider Arab affairs. which is quite fractious and has developed a strong Islamist bloc. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 13 . Although there was much talk about extending the FNC's powers and moving towards universal suffrage. In 2008. where it also has extensive commercial interests. in part because of a negative perception of the more advanced parliamentary system in Kuwait. makes it more likely that it would experience negative repercussions from any conflict there. Furthermore. The UAE has also signed a major arms deal with the US. Future prospects Improving foreign relations The UAE will continue to base its foreign policy on maintaining close strategic relations with the West. the UAE also waived all of nearly $7 billion debt dating from the Saddam Hussein era indicating that it is ready to take significant initiatives in certain areas. Furthermore. Nuclear deal with the US The UAE and the US agreed upon entering a nuclear exchange deal during 2008. raising the risk levels on its relations with Iran. which may lead to a war between the two countries. inter-family relations are sometimes fractious.PESTLE analysis ensures that power is mostly concentrated within the large ruling families. there is no formal or recognized legal structure for determining family seniority or claims on power. These relationships have been buttressed by a series of agreements—with France. the US and the UK—on the development of nuclear power and on the establishment of a French military base. In February 2010. the UAE reopened its embassy in Iraq—making it the first Arab country to do so since a general exodus between 2003 and 2005. The agreement is expected to create a framework for the US national nuclear security administration to assist its Emirati counterparts. there has been no tangible progress on realizing these goals. aviation and electricity. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 14 . Table 4: Analysis of the UAE’s economic landscape Current strengths ▪ High per capita income ▪ Strong trade surplus ▪ High quality infrastructure Future prospects ▪ Improving economic ties ▪ Emirates Development Bank Current challenges ▪ Debt issues in Dubai ▪ Dependence on oil revenues Future risks ▪ Hurdles to foreign investment Source: Datamonitor DAT AMONITOR Current strengths High per capita income The UAE's per capita income of $38. The largest contribution to the balance of trade comes from oil exports. The government's high degree of dependence on exports of these resources for its revenues makes it vulnerable to oil price movements. is the 23rd highest in the world. Per capita income is also expected to see a rising trend in the coming years. calculated on a purchasing power parity basis. The country has advanced infrastructure in public premises. growing from $18 billion in 2005 to $31 billion in 2009. and it has realized that in the long term more dependable sources of tax revenues will be required.PESTLE analysis Economic analysis Overview The state budget surpluses that the UAE enjoys have been driven by high oil prices. It is considered to be one of the tallest man-made structures United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. roads. This reflects the strength of the export sector of economy. it also gives a boost to internal production and reflects the strength of the domestic market. The country’s trade surplus has increased over the years. ports. High-quality infrastructure The UAE has been ranked sixth in the world for the quality of its infrastructure according to the World Economic Forum (WEF). was opened in January 2010. A strong trade account balance has provided strong finances to the government. High per capita income shows a strong market for goods and services across all sectors. Strong trade surplus The UAE economy has maintained a strong trade surplus position during 2000–09. with the UAE being the fifth largest such exporter in the world. Burj Khalifa.900 (as of 2009). a skyscraper in Dubai. two-thirds of the UAE’s fiscal revenues are accrued from oil and gas sales. with the balance of trade being the most important component of the current account. Moreover. The repayment extensions clearly indicate that the debt problems in Dubai are not sorted out yet. A committee has been set up to devise a business United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. in the long term. Dependence on oil revenues The state budget surpluses that the UAE enjoys have been driven by high oil price levels. China and the UAE have seen comprehensive and fruitful co-operation in economy and trade since 2002.8 billion) during 2011 and to AED5 billion ($1. with predications made at the Abu Dhabi and China Economic Forum suggesting that bilateral trade between the two countries could exceed $100 billion by 2015. The economy's overdependence on oil revenues is now causing the government to worry about future sustainability. Kazakhstan and other Gulf countries. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 15 .PESTLE analysis at 828 meters.6 billion). which would be increased to AED3 billion ($0.6 billion debt. and is set to work with the country to boost co-operation in the finance sector and invest in China's petrochemical industry. Bilateral ties between the UAE and China have huge potential for growth.5 billion debt restructuring in May 2010. As part of this. Dubai International Capital (DIC). Italy. This development is expected to attract investment and generate employment opportunities in the near term.3 billion ($0. The building is part of the flagship development called Downtown Dubai. The authorities have realized that. and the UAE has become one of China's most important trade partners in the Middle East. Dubai Holding and the Investment Corporation of Dubai) has around $109 billion in debt.4 billion) over five years. the country has participated in many successful negotiations with China. Current challenges Debt issues in Dubai The Dubai government is facing major debt issues. Though Dubai World reached agreement with the majority of its creditors regarding its $23. Meanwhile. Ireland. The government's high degree of dependence on exports of these resources for its revenues makes it vulnerable to oil price fluctuations. the UAE and Italian governments are keen on exploring opportunities for co-operation and may thereby benefit from increasing trade and investment on both sides. The UAE attaches great importance to its economic and trade co-operation with China. Emirates Development Bank The UAE government approved a law in June 2009 to set up the new Emirates Development Bank (EDB) with an initial capital of AED10 billion ($2. The Emirates Development Bank (formed by the merger of Industrial Bank and Real Estate Bank) will have a paid up capital of AED2. and two thirds of the UAE’s fiscal revenues come from oil and gas sales. Future prospects Improving economic ties The UAE government is making consistent efforts to improve its economic ties internationally. Bilateral trade between the two countries reached a value of AED30 billion ($8. more dependable sources of tax revenues will be required. one of two finance arms of Dubai Holding has requested for an extension on some of its $2.2 billion) in 2009. "Dubai Inc" (which is formed by Dubai World.7 billion). Improving international ties are gradually integrating the UAE economy with other parts of the globe and are expected to have a positive impact on the UAE’s economic performance. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. At least 51% of a business must be owned by a UAE national. the government aims to develop and support various sectors in the country. The Emirates Development Bank is expected to invest in infrastructure and housing projects in 2010. Complete foreign ownership is restricted under the country’s laws. With the establishment of EDB. and projects must be managed by a UAE national or have a board of directors with a majority of UAE nationals. Distribution of goods must also be conducted through a UAE national. These restrictions affect the FDI in the country. and also bridge the gap between the industrial sectors and the government.PESTLE analysis plan for Emirates Development Bank. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 16 . Future risks Hurdles to foreign investment Foreign investors do not receive the same treatment as national companies. This is another reason why the dependence on foreign workers has been increasing over the years. making the policies and procedures easier for foreigners. Current challenges Low literacy rate The UAE's 77. Dubai has seen a major rise in the influx of foreign labor due to the growth in the construction sector. A low literacy rate acts as an obstacle to the availability of highly educated native workers suited for different sectors of the economy. This has created a good environment for many highly skilled foreign workers coming to the UAE. low literacy and a lack of proper facilities for education are dogging the social system. In recent times. Foreign labor participation in the labor force is 75% of the total workforce in the Gulf countries. as employers find it easier to find the right kind of resources to match their requirements among the foreign population. and now a mere registration will suffice to work in the UAE.9% literacy rate is low compared to other countries in the region.PESTLE analysis Social analysis Overview The country has a low level of unemployment and an abundance of semi-skilled youth workers for its labor markets. Due to liberalized labor policies. The private sector remains the major employer of foreign labor. the government's expenditure on schooling is low. constituting over 95% of the total in nations such as the UAE and Qatar. The Ministry of Labor passed new legislation on immigration rules in 2007. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. the country has a skilled workforce from all parts of the globe. Table 5: Analysis of the UAE’s social landscape Current strengths ▪ Liberalized labor immigration Current challenges ▪ Low literacy rate ▪ Low education expenditure Future prospects ▪ Usage of IT systems in healthcare Future risks ▪ Unemployment levels set to rise Source: Datamonitor DAT AMONITOR Current strengths Liberalized labor immigration Labor immigration has been liberalized to allow foreign workers to come and work in the UAE. Furthermore. However. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 17 . The new law relaxed the rules regarding residence permits for foreign workers from the EU and other Western countries. iCapital. Education expenditure as a share of GDP was a mere 1. emergency. Figure 2: Public education expenditure in the UAE.8 billion by 2009.5 1 0. which increased to around $2.5 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Year Education expenditure Education expenditure as % of GDP 1. The government expenditure on education was as low as $1.5 0 Source: Datamonitor DAT AMONITOR Future prospects Usage of IT systems in healthcare The UAE MoH formulated a policy in October 2008 to automate healthcare processes through the implementation of IT systems in the country.5 4 3. radiology. admissions. medical records and United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. laboratory. the spending on higher education is 38% less than spending in other GCC countries. according to a study conducted by the National Human Resources Development and Employment Authority (Tanmia).PESTLE analysis Low education expenditure Government expenditure on education has been historically low in the country. pharmacy.5 billion in 2002. The MoH will be implementing healthcare information technology (HIT) systems from Cerner—a private sector pharmaceutical company—that are designed to improve patient care and the way that doctors and nurses do their jobs.5 2 Percentage (%) $ billion 3 2.5 1 0. will serve as the prime contractor for these implementations. 12 hospitals and 60 clinics will employ a suite of Cerner Millennium solutions to optimize and automate paperbased processes. 2002–13 5 4.2% in 2009.5 2. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 18 . a UAE-based company and consortium lead.5 2 1. The low level of education spending might decrease the availability of skilled domestic labor in the country. The Cerner Millennium solutions installed throughout the MoH healthcare delivery facilities will automate processes in the scheduling. Furthermore. surgery. around 47% of the country's population is unemployed.PESTLE analysis clinical supplies departments. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. the unemployment rate is expected to increase to 5.8% by 2013. Future risks Unemployment levels set to rise Though unemployment levels in the UAE remained low until the onset of the global economic crisis. According to the UAE Economic Report for 2009.2% in 2009. it is expected to rise sharply in the coming years. Nurses and physicians will also use these programs to manage and document patient care through online order entry. The HIT-enabled systems are expected to streamline the medical system and document healthcare activity across the country. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 19 . As per Datamonitor estimates.75% during 2002–08. jumped to a high of 4% in 2008 and to 4. The rate of unemployment which remained below 2. and results notification and viewing. increasing accountability. the telecom industry will be more open to private players going forward. Since the education laws are based on Islamic principles. the UAE has a high mobile penetration rate of more than 212 mobiles for 100 people. Current challenges Poor science education The educational system in the UAE has been inadequate for meeting its technological development needs. In less than a year. students are ill-prepared to meet the needs of a growing knowledge economy. Table 6: Analysis of the UAE’s technology landscape Current strengths ▪ Rapid growth in telecom segment Current challenges ▪ Poor science education Future prospects ▪ Dubai Silicon Oasis ▪ Growing market for information technology Future risks ▪ Low level of intellectual property registration Source: Datamonitor DAT AMONITOR Current strengths Rapid growth in telecom segment The country has made rapid progress in its telecom segment since privatization began in 2000. But the entry of telecom operator Du in 2008 marked a vital shift. it is attracting entrants to its IT market at a rapidly increasing pace. The fixed telephone line segment grew at 6. and a lack of technical education has United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. The telecom segment generated more than $6 billion in revenues in 2009. With the focus instead on traditional subjects. However. Du has a share of nearly 30% in the mobile telecom market as of 2009. schools have traditionally not devoted enough attention to science and mathematics.PESTLE analysis Technological analysis Overview The country has a strong telecommunication network with state-of-the-art technologies. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 20 . and analysts predict that it will continue to grow in the years to come. According to Datamonitor estimates.6% in 2009 while the mobile phone market grew at 4. the UAE's telecom market was still a monopoly. As a result.2% in the same year. According to the government. with the government-owned operator Etisalat being the lone player. Until 2006. There were no centers for higher technical education until 1988. poor science education and a lack of R&D facilities are a hindrance to technological development. and the constant growth in the demand for Arabic software packages in the UAE and neighboring Arabic-speaking countries for business creates strong prospects for IT development. it lags behind in terms of registering intellectual property rights. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 21 . which proves to be more expensive. in part due to the strong telecommunications network at its disposal. Future risks Low level of intellectual property registration The number of patents registered by the UAE is extremely low compared to other developing and developed countries around the world. which is trying to attract foreign technology firms. a technology park in the UAE. Future prospects Dubai Silicon Oasis The Dubai Silicon Oasis (DSO). the IT industry enjoys unique and huge advantages in the UAE. the UAE registered only nine patents with the US Patent and Trademark Office (USPTO). To make matters worse. compared to 95. the firms operating in the UAE have to rely on expatriates to meet their need for technical staff. while major universities and education facilities are now promoting and offering courses in the telecommunications and IT fields. With the size of the population and demography. The country’s proximity to Asia gives it access to a potential market of almost two billion people. the standard of living in the country will grow and technology will become essential in sustaining this standard. Furthermore. particularly in the free trade zones. Growing market for information technology The UAE is becoming a lucrative destination for IT development. houses 180 companies and is expecting more companies in 2010. Going forward. In 2009. In addition. basic computer skills are becoming part of the curriculum in lower education institutions. 1. the DSO is also likely to work with science and technology universities to foster innovation in the country. This is expected to encourage development of innovative products and also generate employment. With huge revenues and profits from oil. the 2009 budget did not make any effort to strengthen the R&D activity in the country.037 in the US. Moreover. With 10 free trade zones. Nokia and Motorola) to set up research and development (R&D) and design centers rather than merely sales and marketing offices. Although the country has been performing well in terms of economic growth. There is also formidable government support for the industry. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. the country favors investments in the IT industry.PESTLE analysis restricted the enrollment of UAE students into technologically intensive industries.525 in Israel. and provides cost-effective structures that are beneficial to interested parties. The DSO is inviting more companies (large corporates such as IBM. a venture capital (VC) fund will invest in potential startup companies in the Middle East and beyond. 9%) fiscal freedom in the country. investments and corporate relocation into the UAE. the UAE economy has projected itself as an employee-friendly nation. There is no tax levied on any personal income.PESTLE analysis Legal analysis Overview The UAE is one of the few tax-free zones in the world. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 22 . However. Free trade zones have also been legalized in multiple locations to reduce trade laws and allow new markets to take hold. which is enforced upon oil companies and foreign banks. Five of the seven emirates have joined the central system under a unified set of procedures and rules. Along with the absence of income tax laws there is also near-total (99. The UAE's establishment of civil and criminal courts has resulted in a diminished role of their Islamic equivalents. Currently there is no national sales tax. with virtually no tax laws in the country. such as Dubai's 10% tax on hotel bills. each emirate has its own income tax decree. and the country has also improved its policy towards the industrial sector. with a mandatory majority to be held resident companies. including all types of salaries and capital gains. the federation’s company ownership laws still act as a hurdle to foreign direct investment (FDI) flows and continuous government interference in business affairs can stifle the performance of businesses in the country. This has led to explosive foreign interest. Table 7: Analysis of the UAE’s legal landscape Current strengths ▪ Low tax legislation ▪ Favorable judiciary Current challenges ▪ Compliance to local ownership laws Future prospects ▪ Improved policy towards infrastructure sector Future risks ▪ Government interference in business Source: Datamonitor DAT AMONITOR Current strengths Low tax legislation The UAE as a federation does not have any income tax legislation. These new courts have been crucial in the establishment of Western corporations and foreign investment. Relying primarily on immigrant employees. Favorable judiciary The court systems are highly organized and efficiently run in the country. Each emirate has the option of participating in the federal legal system or retaining its own. Current challenges Compliance to local ownership laws The laws pertaining to the ownership of corporate holdings in the UAE are restricted. The judicial structure is being reformed to improve the level of services and facilitate transactions for better efficiency. Current policy dictates that all businesses within the UAE are required to have at least 51% local United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. although some emirates levy minor sales taxes. emphasizing the social responsibility of the private sector in line with the directives of Sheikh Khalifa Bin Zayed Al Nahyan. Facilities available at the complex include a power plant. Businesses operating in the UAE face strict financial supervision and lack foreign investment freedoms. many companies face intellectual property infringements. will have the highest cargo and passenger capacities of any airport in the world. The airport is already under construction and. Since the nation is composed of absolute monarchies. there have been no changes yet in the law. The complex will also host a new international airport called the Dubai World Central International Airport. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. the government is free to interfere in the economy. infrastructural development and manufacturing facilities within the UAE are concentrated in pockets. resulting in continued restrictions on foreign investment. Due to climatic conditions. the Company Law regulates the activities and the registration of foreign enterprises intending to establish a presence in the UAE. which hinder business activities. Future prospects Improved policy towards infrastructure sector The policy towards the industrial sector and the laws pertaining to tariffs are slowly being modified. which will be completed in phases from 2013 to 2017. This gives the government almost total control over which non-native companies may enter or do business with the federation. Dubai’s Jebel Ali complex has over 200 factories operating within it. In 2008. Future risks Government interference in business Government interference has impeded business and domestic activities. a steel fabrication unit and a free trade zone in which there is a 100% duty exemption on goods meant for transshipment or re-export. a deep-water port. There have been several human rights violations in the labor sector. it is expected to be amended in the near future to bring policy in line with WTO norms. Furthermore. However.PESTLE analysis ownership. due to the lack of intellectual property laws and property ownership laws. While the purpose of this legislation was to encourage entrepreneurship and business innovation among the Emirati population. upon completion. as duplicate products are manufactured throughout the country. For example. except for those within the free trade zones. Also. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 23 . price controls were placed on 52 commodities. The EIA policy is monitored by the Ministry of Environment. the Ministry of Environment has initiated a project in which information about any successful implementation of EIA principles is collected and analyzed for further strengthening and development. The rising level of emissions is a cause for concern.4 million metric tons during 2009. Continued growth in road traffic and metals production also contributed to the country's emission levels. along with vehicular emissions. is also encouraging the application of EIA principles to sector-specific programs. with the country being one of the largest producers of oil in the world. United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor.PESTLE analysis Environmental analysis Overview The country has a strong integrated environmental development program. It is mandatory for all businesses to assess the impact of their activities on the environment. Its ecological procedures are integrated with the Environmental Impact Assessment (EIA) program. Current challenges Increasing emission levels Emissions of greenhouse gases in the UAE have been increasing over the years. Datamonitor forecasts suggest that CO2 emissions will increase to reach 187. Table 8: Analysis of the UAE’s environmental landscape Current strengths ▪ Integrated environmental development Current challenges ▪ Increasing emission levels Future prospects ▪ Wastewater recycling plant Future risks ▪ Increasing hazardous effects of desalination Source: Datamonitor DAT AMONITOR Current strengths Integrated environmental development The UAE government places a lot of importance on sustainable development and environmental conservation in its economic development decisions. the increasing level of emissions is still a concern.1 million metric tons by 2013. The petroleum and manufacturing industries. business proposals must pass through the EIA's verification process before approval. According to the policy. which is part of business practice in the UAE. Furthermore. The Ministry of Environment.9% to reach 169. account for the majority of the UAE's overall greenhouse gas emissions. such as transport. making the country vulnerable to adverse environmental consequences. in co-operation with other ministries. However. energy and oil production. The integration of environmental assessment into business activities has brought in many changes. improving the environmental credentials of the UAE. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 24 . with supporting economic policies. CO2 emissions in the UAE increased by 3. the cost of this process has been very high. The project is aimed to design. The increasing negative affects and the high cost of drinking water have now become a problem for the country. has negative environmental implications. An investment of $4. fresh water has less than 1. Future risks Increasing hazardous effects of desalination The water resources per person in the UAE are already one of the lowest in the Middle East.000ppm and US oceans have 35. The water needs in the UAE are met through a desalination process. operate for three years a 2000 cubic meter per day Membrane Bio Reactor. build. Most of the country’s domestic water needs are met by this process. The process removes salt from seawater. This brief is a licensed product and is not to be photocopied Published 09/2010 Page 25 . United Arab Emirates: Country Analysis Report – In-depth PESTLE Insights © Datamonitor. Other Gulf countries have also invested in desalination facilities. According to classifications from the US Geological Survey. Abu Dhabi has five large desalination plants.5 million has been made for the construction of the plant and a funding of $1 million will be made available annually during the three year period for plant operations.000 parts per million (ppm) back into the sea. the effect of which is slowly becoming hazardous. therefore. The wastewater recycling and treatment plant is expected to recycle waste water for industrial usage as an alternative to potable water in the Al Ghail Industrial Park. Furthermore. The brine released into the Gulf waters.PESTLE analysis Future prospects Wastewater recycling plant An advanced wastewater treatment and recycling plant was launched at the Al Ghail Industrial Park in April 2010.000ppm. which release brine with a very high salt content of about 70. The water recycling plant incorporates environment friendly recycling technology and has been funded by the Japanese government. and the United Nations (UN) estimates that almost half the world's desalination capacity is in the Gulf. download. users may print.Copyright of UAE Country Profile is the property of Datamonitor Plc and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. . However. or email articles for individual use.