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United Arab Emirates Post-COVID Globalization Impact
Kelly J. Fraser
School of Business Administration, University of South Carolina Aiken
BADM-A722: Globalization & Business
Dr. Andy
April 18, 2023
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Abstract
In modern times, the impact of globalization is a threat to the very existence of languages,
cultural practices, educational areas, and food habits of indigenous communities. Conversely,
globalization has enabled the creation of a new world politics in which countries aren’t isolated
units; for example, the world has become united in dealing with issues such as pollution and
environmental standards. Globalization and business initiatives were stifled by a world-wide
pandemic in 2020. However, some countries were able to respond in a timely matter and
overcome. The United Arab Emirates (UAE) is one of the largest oil-producing rich countries in
the world. The total population is about 10 million inhabitants in 2022. While the COVID-19
pandemic will continue to dampen the likelihood of a quick return to renewed economic growth,
additionally because global oil prices will remain low, the UAE’s response to the COVID-19
crisis in terms of policy mechanisms and a good start to its vaccination program likely mean the
country will return to some form of normalcy sooner than many other countries in the region.
When we look at present-day stakeholders such as domestic companies, workers, farmers,
indigenous cultures, and various demographics all play a role in The UAE’s global response to
the COVID pandemic, for better or worse. The UAE will continue to balance the need to
maintain domestic growth and advance movement regarding broad changes taking place at the
international level, including possible adjustments to the process of globalization from which the
UAE has thus far greatly benefited.
Keywords: globalization, domestic companies, COVID
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IA. United Arab Emirates in the 21st century (pre-covid era)
Ever since the term ‘globalization’ appeared for the first time in the second half of
twentieth century no other word has meant so many different things to different people. The
forces of globalization affect virtually every country in the world. It has opened the door to many
new opportunities as well as formidable challenges. In the 21st century there have been social,
political, cultural, economic, and educational spheres subjected to positive and negative elements
of globalization. In modern times, the impact of globalization is a great threat to the very
existence of languages, cultural practices, educational areas, food habits etc. of indigenous
communities because of the voluntary surrender to the modern ways of life leading to absolute
obliteration of some traditional cultures, traditions, food habits, and education in every sphere of
life. Globalization has allowed for the creation of a new world politics in which countries aren’t
isolated units anymore; the world has become united in dealing with issues such as pollution and
environmental standards. Recent developments in information and communication technology
allow individuals from different regions to communicate speedily across huge distances and
access information rapidly. Although globalization and technology continue to link nations,
businesses, and individuals, these linkages also highlight the importance of understanding
different cultures, national systems, and corporate management practices around the world. The
world is now interconnected geographically, but also electronically and psychologically; as such,
nearly all businesses have been touched in some way by globalization (Luthans, 2020, p.8).
Furthermore, one country in the Middle East is on the forefront of modern globalization.
Since the United Arab Emirates was formed on December 2, 1971, and up until the 21 st
century the country was a sovereign nation enjoying the profits of its natural resources and its
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reserves of oil and natural gas are the seventh largest in the world, and it had the seventh-highest
GDP per capita. As of 2019, the gas and oil sector accounted for only 30 percent of GDP.
Following years of rapid development in the early 2000s, the UAE was hit particularly hard by
the global recession in 2009. In the decade since, economic growth has averaged about 4 percent
per year. GDP stood at US$411 billion in 2018, with a per capita GDP of US $39,500 (Luthans,
2020, pg 321). The wealth turned the Emirates into a major hub for trade, travel, tourism and
finance. Dubai in the United Arab Emirates emerged as a city of skyscrapers and artificial islands
on the promise of globalization, creating itself as a vital hub for the free movement of trade,
people and money worldwide.
IB. United Arab Emirates Today
Fast forward to present day, and The United Arab Emirates is the leading emerging
market across the MENA region, as revealed in Kearney’s 2023 Foreign Direct Investment
Confidence Index (FDICI) Emerging Markets ranking; the UAE’s GDP grew an astonishing
7.9%, while many other countries were suffering weak growth following a post-COVID boom in
2021. The country is anticipated to continue growing at a steady pace in 2023 and 2024 with
growth rates of 3.2 percent and 4.8 percent, respectively (UAEToday, 2023). How did the
country reach such nominal high points where other countries failed to do so? Of course, three
years ago the world was quickly disrupted by a global pandemic so naturally, a deep analysis is
imminent on how the COVID pandemic has affected the overall impact of globalization on the
United Arab Emirates.
IC. The Country’s Global Response to the Pandemic
On paper the UE’s immediate response included taking quick and effective action. For
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example, the first confirmed cases of COVID-19 in the UAE and the Gulf region were reported
by the Ministry of Health and Prevention on January 29, 2020. Two days later on January 31 st,
2020, the Government announced that all suspected and confirmed cases of COVID-19 are to be
treated as emergencies and that medical care for all COVID-19 patients was to be provided free
of charge. Decisive and prompt responses of this kind from the UAE government right from the
early stages of the pandemic likely contributed to the diminished early burden of the disease on
the country. From school closures and suspension of flights to drive through testing centers and
national sterilization and cleaning protocols, the first 100 days in the UAE's response to the
COVID-19 pandemic were marked by multiple successful and considered COVID-19 response
measures and mandates (Warren, 2021). With one of the highest per-capita vaccination rates
in the world, the UAE led global efforts to contain the spread of COVID-19. UAE health
authorities implemented extensive preventative measures to protect public health in line with
the World Health Organization’s rules and regulations. After the initial successful results of
the trial in UAE, the use of the inactivated COVID-19 vaccine was approved for frontline
workers, which was subsequently successfully administered to the cohort. The vaccine was
given free of cost for all residents of the UAE and the country at the forefront, leading the global
vaccination rate (Warren, 2021). In addition to national effort, the United Arab Emirates made
substantial humanitarian efforts to extend support to countries fighting the coronavirus disease
both regionally and globally by working with international bodies such as the United Nations
and the World Health Organization. This included extending medical aid, supplies, and testing
capacities to Iran, African countries, and Cuba (Warren, 2021). Additionally, the UAE
established field hospitals in Jordan, Guinea Conakry, Sudan, Mauritania, Lebanon and Sierra
Leone. These measures were critical in helping local populations and communities recover from
crises and disasters and helped reduce the push factors behind irregular migration (Network,
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2022).
Realizing the role technology can play in limiting the spread of disease, the UAE moved
to quickly adopt telehealth and teleconsultation services. The existing advanced technology and
communications infrastructure and the regulatory authorities' agility facilitated the development
and enforcement of relevant policies as required by the rapidly changing circumstances and
needs. Telehealth serves as an important tool in flattening the infection curve and mitigating the
impact of the COVID-19 crisis because it limits human-to-human contact, particularly reducing
nosocomial infections (Warren, 2021). The quick and strategic response to the pandemic likely
means the country will return to some form of normalcy sooner than many other countries in the
region, and around the globe.
II. Main Forces Associated with Globalization & Impact on Various Stakeholders
In the last few years, the entire world has attempted to seize, contain and control the spread of
any COVID variant through mass vaccination; a return to large crowds is acceptable in certain
countries. Most of the UAE’s population resides in urban areas close to the Persian Gulf
coastline, and a large portion of the country’s interior is uninhabitable desert. By leveraging its
valuable oil reserves, the country has radically modernized in just a few decades (Luthans, 2020,
pg 321). Also, The UAE’s government remains committed to diversifying the UAE’s economy
and strengthening the UAE’s business environment. Their disciplined approach to driving the
future-readiness of the economy and the country is next-level.
The UAE seeks to drive global economic expansion at a time when many worry about
deglobalization, Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, declared.
The UAE, the minister said, wants to be the bridge to the private sector, driving new trade deals,
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partnerships, FDI, and talent migration, and helping to connect the world’s fastest-growing
economies. “This is why we are working with the World Economic Forum to study ways to
inject technology into our global trading system and drive that change.” The UAE minister’s
upbeat stance on multilateralism and the clarion call to accelerate international trade came amid a
gloomy forecast for global trade, prompting the World Trade Organisation to call for a new form
of globalization dubbed “reglobalisation.” After a record year for global trade, with the total
value exceeding $32 trillion and world container shipping hitting an all-time high in August
2022, the WTO has trimmed its forecast for trade growth to just one per cent in 2023, citing
increasing downside risks from inflation, consumer spending, and the ongoing energy crisis
(Issac, 2023).
Beyond trade and travel, UAE companies and sovereign wealth funds have emerged as
among the largest investors in the world, accounting for nearly 40 percent of all outward
investment emanating from West Asia from 2016–21, according to data from the United Nations
Conference on Trade and Development. With worldwide investments ranging from public
equities to real estate to tech and beyond, the UAE has emerged as a major stakeholder in the
global economy. UAE firms and funds have also been key investors in challenging frontier
markets from Africa to the Middle East (Molavi, 2023).
Funding an ongoing transformation will continue to benefit from hydrocarbon demand as
the energy transition unfolds in various ways and at various speeds around the world.
Specifically, investments in renewable energies, such as the January 2021 announcement of a
partnership with Siemens Global to develop the green hydrogen sector, a national strategy for the
fourth industrial revolution and a national employment strategy are all steps in the right
direction, although much will depend on the actual implementation of plans. The strategic
outlook for the UAE remains positive overall, despite the numerous challenges that exist in the
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volatile Gulf region. The UAE sees climate change as one of the key adverse drivers of irregular
migration. In 2021, the UAE announced its commitment to achieving net-zero carbon emissions
by 2050, making it the first country in the Middle East and North Africa to do so. The UAE’s
Net Zero 2050 initiative aligns with the Paris Agreement, which calls on countries to prepare
long-term strategies to reduce greenhouse gas emissions and limit the rise in global temperature
to 1.5 C compared to pre-industrial levels (Network, 2022).
Additionally, The UAE with the immense capacity for attracting global talent for the
workforce, research, and development leverages this opportunity to build a robust ecosystem of
knowledge and capability, as well as foster the creation of centers of excellence in the region.
The UAE also attracts partnerships, collaborations, and development with leading companies
across the world and has global connection networks that aid in the development and
augmentation of technology and infrastructure within and beyond the health sector. Further these
opportunities of development extend beyond the pandemic control and are utilized in the national
drive toward personalized, proactive, and precision medical and healthcare systems and away
from retroactive sick care (Warren, 2021).
Being a world-class tourism hub, the UAE constantly experiences business conferences,
restaurant/cafe/hotel openings, corporate gatherings, etc. As a result, companies do not find
enough time & resources to hire additional staff to administer such events. Hence, there's a
burgeoning adoption of HR outsourcing services by businesses of all sizes operating in the
increasingly competitive hospitality industry and leveraging the benefits of outsourcing their HR
functions like Payroll & Recruitment, among others (Advisors, 2022). Overall, staff outsourcing
in the selection process has allowed the human capital of an organization to be properly managed
as an added value today. Outsourcing labor in the UAE has become a business strategy in many
organizations. Companies with disjointed recruiting and onboarding processes can benefit from
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the services that HR outsourcing companies in Abu Dhabi provide to integrate sourcing and
recruiting (Francisco, 2022).
The UAE is a country of immigrants; of the 10.4 million people living in the country in
2019, nearly 90 percent were foreign-born. Today, ethnic Emiratis constitute only 11 percent of
the population. Most of the migration stems from the ongoing construction boom and high
demand for labor in Dubai and Abu Dhabi Indians and Bangladeshis, seeking these higher
paying jobs, now constitute 38 and 10 percent of the population, respectively (Luthans, 2020, p.
321). The provision of accurate and timely information is one of the UAE Government’s
migration management policy priorities. The UAE makes use of multiple channels in order to
provide guidance and raise awareness of migrant rights. The UAE also regularly carries out incountry information campaigns, including the ‘Know Your Rights’ campaign, delivering
literature in 11 relevant languages (including Arabic, English, Hindi, Urdu, Malayalam,
Sinhalese, Nepalese, Tamil and Bengali) to workplaces and workers’ accommodation sites
(Network, 2022).
III. How the COVID pandemic has affected the overall impact of globalization
The COVID-19 pandemic caused some initial disruptions in several administrative
services, but the government quickly overcame obstacles and shortages. The positives greatly
outweigh the negatives, yet some loopholes will need to be filled from the negatives. In view of
the international efforts to limit the Coronavirus spread, and the restrictions imposed on travel
and tourism movement between countries, the tourism sector was heavily affected, especially in
the Arab countries that depend on it as one of the most important sources of revenue for public
budgets as well as their balance of payments. In terms of ranking countries according to the
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global travel and tourism competitiveness index, we find the UAE ranked 29th in the world
(Abid, 2022).
Next, due to the closures connected to the Corona virus, which impacted the aviation
sector hard, Emirates Airlines, the Middle East’s largest airline, suffered a loss of $5.5 billion
(20.185 billion dirhams) for the first time in more than three decades. Revenues fell by 66
percent to $8.4 billion (30.828 billion dirhams), while passenger traffic dropped by 88.3%
(Elessawy, 2022).
Discrepancies still exist with regard to foreign blue-collar workers, with many living and
working under the conditions of the kafala system, and heavily dependent on their employers or
sponsors. There are continuous reports of unpaid or delayed wages, despite government
programs set up to avoid such abuses by companies. The migrant community was also hit hard
by the COVID-19 pandemic with many workers suddenly unemployed and finding themselves
stranded due to a lack of money to return to their home countries (Network, 2022).
IV. Conclusion & Future Globalization Business in the U.E.
In conclusion, recent years have challenged the UAE and the country has mostly
responded positively creating a global buzz around the world. By 2027 it is estimated that the
travel and tourism market in UAE will support 770,000 jobs. This will account for 11.1% of total
employment in UAE. By that time, more than 30 million tourists are expected to travel to this
popular destination, generating expenditure of more than 180 billion AED. Whilst these
projections provide a positive outlook for UAE’s tourism industry, there can also be undesirable
side effects. Without proper management, mass tourism creates a negative impact on local
communities and their environments (Bagherian, 2022). ‘Sustainable tourism’ is expected to be a
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possible solution to this problem. Also termed ‘ecotourism’, the concept could be the industry for
the new generation of Emiratis to take bold steps towards a green economy. The biggest
challenge is for sustainable tourism to become the mainstream choice, rather than an alternative
and niche package.
On the economic and social front, the UAE will continue to balance the need to maintain
domestic growth and advance movement with regard to broad changes taking place at the
international level, including possible adjustment to the process of globalization from which the
UAE has thus far greatly benefited. While there has been significant emphasis on expanding ties
with Asian countries, such as China and South Korea, as alternatives to traditional relations with
the West, in particular economic relations, there is no guarantee that a shift or pivot will provide
all that the country need. The process of economic diversification, the transition to a post-oil
economy, the move toward a knowledge economy and the integration of new technologies are all
processes that take time, and which require continual adjustment to achieve success (Network,
2022).
Another key group involved in The UAE’s globalization efforts is its youth. The UAE
government stresses the culture of volunteering in promoting sustainable development and
building a better future for new generations. The UAE has many organizations that engage in
volunteering activities and community service, including a national volunteering portal that
supports volunteering activities across the country. Indeed, while the COVID-19 pandemic
halted many volunteer activities, people responded by increasing their charitable giving. Also,
social entrepreneurship will gain more prominence among youth, driven by both financial and
social impact motivations. Innovative digital incubators and technologies have created a more
conducive environment for social startups to address societal challenges (PWC, 2021).
Finally, as the world moves into future globalization efforts within an up and down business
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arena, the United Arab Emirates can remain poised because their non-oil economy has appeared
immune to some of the drags on output observed in the global economy in the third quarter of
2022, in fact recording some of the fastest rates of expansion seen over the past three years.
Globalization bodes both good and ill for mankind and appears to be here to stay. The challenge
that lies ahead is not to try and reverse it, but to harness the positive potential whilst minimizing
the adverse effects. Unless this opportunity is seized, nations and global institutions will continue
to struggle for domination and power. The United Arab Emirates remains a peripheral player
among top countries seizing and planning globalization prominence.
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