Term Paper: International Competition Middle East

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Middle East Region

There is no hard and fast rule that defines what constitutes Middle East. It traditionally includes countries or regions in Southwest Asia and parts of North Africa. Persian Gulf is considered as the main centre the area around which is generally referred as Middle East. Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, the United Arab Emirates, Yemen, and Palestinian Territories are collectively known as Middle East. Middle East region shot to fame because of its vast reserves of oil. The economy of most these countries took a boost based on the oil resource. However, with passage of time region has esteblished its own peculiar identity in the world. Gulf region with UAE as a model of succcess is now known all over the world.

Oil-based Economies

Middle East is the region which has the greatest reserves of oil in the whole world. The reserves present in Saudi Arabia, Iran, Iraq & Kuwait exceeds the reserves present in different parts of the world. So, the world oil supply is mainly provided by large companies operating in countries with large reserves of oil. Price is generally a market factor but in case of oil the price is controled by the group of these oil rich countries that have made a cartel with the name of OPEC (Organization of Petroleum Exporting Countries). OPEC can greatly influence the world oil prices. The first biggest oil crises was faced in 1973 when OPEC oil export embargo was imposed by many of the major Arab oil-producing states in response to western support of Israel. Again 1979 brought in its wake Iranian revolution and oil crises. Similarly Gulf War has also affected the oil prices. This region has alaways been considered startegically important mainly beccause of oil. Some of the Gulf States in UAE have gone beyond oil and have created diveres economies for themselves. Initially the example Saudi Arabia was given but its economy mainly remained dependent on oil. On the other hand Daubai and also to some extent Israel adopted different approaches and stand apart in the community of nations.

Saudi Arab's Rise

Saudi Arab was initially considered an example of growth and development before other Gulf States emerged as clear winners. Saudi Arab used its oil resources and the money earned into the development of the country's infrastructure. However, the fall in crude oil export volumes, as well as in prices stirred a cause of concern for the economy. Saudi government replied by starting major expansion projects in order to add value to oil exports. These expansion schemes were launched to help secure international markets. Petrochemical Companies in Saudi Arabia even went ahead with foreign partners for joint ventures in the sector. The Kingdom has clear advantages in the form of in low cost of producing oil and gas. Therefore when world demand falls its feed stocks still compete for sales. The Saudi Arab continues to reap advantage of its oil resources even today but it has also realized that like other states in the region it has to open its door to the world economy and globalization. "The Saudi government has also taken steps to encourage more private investment in the economy. Although progress has often been slow, the need to curb spending given the rising budget deficit, together with a growing conviction among a new generation of Saudi officials that subsidies, especially for utilities such as power and water, cannot be continued forever, is giving rise to moves to open up investment channels. The Al Zamil flotation, for example, was made possible by new regulations issued by the Ministry of Commerce that encouraged the merger and share offering. Privatization of the Saudi telecommunications sector is also a case in point" (Smith, 1998).

The changes in the policies and business outlook are seen necessary if Saudi Arabia has to maintain a competitive edge in the world market. No country can afford to have an inward looking and closed approach. So, today the country's entry into the global economy is marked by private businessmen and investors, independent public offerings (IPOs), mergers of public companies with smaller private companies, privatization of state-shareholdings and the involvement of private investment in utilities and infrastructure projects etc. These changes are essential to enhance the competitive edge regionally and globally which in return could also open up more opportunities for Saudi investors on the capital markets. A sustainable development and progress is definitely the foal of present day Saudi Arabia but it has to learn that oil cards alone are not enough for the country years ahead.

The Dubai Model

Dubai's story starts with a man named Rashid bin Saeed al Maktoum who saw potential in a small creek village on the shores of Persian Gulf and borrowed millions of dollars from Kuwait to dredge the creek He implemented his plans by building warehouses, roads, schools, buildings and his dream turned into reality with skyscrapers, world-class port, & colossal Duty free shop. Today Dubai is building man made islands and attracts more tourists than the whole of India and has economic growth that exceeds many times that of China. People from 150 diverse nations come here to work. Dubai is a success story from the Middle East region and has become a model for others to follow. Other in the region now feel that if Dubai can do it then why can't we.

Dubai along with other sic emirates is the part of the United Arab Emirates or UAE. Dubai has emerged as one of the most exciting places on planet earth. The mega city attracts crowds from all over the world making it a proverbial world capital. Tennis stars Andre Agassi & Roger Federer made this city famous when their pictures playing an exhibition match on the rooftop helipad of the opulent Burj al Arab hotel splashed all across the globe. Burj al Arab hotel is also known as the world's tallest hotel. Dubai is also going to have the world's tallest building which is under construction by the name of Burj Dubai. Today it has become a shopping paradise where millions of people go to buy all sorts of items from clothes to diamond-studded cell phones. Dubai International Airport is one of the busiest in the world."The United Arab Emirates, of which Dubai is part, has gone from being one the most oil-dependent Gulf economies in 1980 to one of the least dependent. People returning to Dubai after a few years' absence say they hardly recognise the place as towering office blocks, housing estates, shopping malls and business parks spring out of the desert. Forty part-built apartment towers - the world's biggest single-phase housing project - loom over Jumeirah beach, along which tribesmen would lead their camels until only two decades ago. Advertising campaigns revel in superlatives to draw the eyes of the world to Dubai: the world's tallest tower, the biggest man-made islands, the richest horse race, the only underwater hotel, the only seven star hotel, a ski slope in the desert" ('Dubai Shows Gulf There Is Life after Oil', 2005).

Multiculturalism is one important aspect of the emerging Middle East and Dubai in particular. For example, all kind of eateries and restaurants Italian, Chinese etc. can be found. Indians, Filipinos, Pakistanis, People from Arab countries and people from Western countries comprise the workforce in Dubai whether it is white collar or blue collar job. The new cultural wave of tolerance allows foreigners to spend wee hours of the night in a pub while at the same time call for five times prayers also fill the air of Dubai. "Dubai's tolerance can also be a good thing. Alongside its bars & night clubs there are mosques and churches and Hindu temples and for a city with so many competing religions and nationalities, it is remarkably free of ethnic conflict. 'I don't know who is a Sunni and who is a Shia and I don't care' Sheikh Mohammad told the scribe in a brief meeting. ' if you work hard, if you don't bother your neighbor then there is a place for you in Dubai.' Even Israelis can do business (quietly) with Dubai" (Molavi, 2007).

Dubai Ports World went ahead in competing internationally when it purchased a British firm that managed six U.S. ports. Even though the fact is that UAE ports host more U.S. Navy ships than any port outside the United States, the decision garnered mixed response from U.S. experts. The reason for apprehension was 9/11 incident in which Arabs were involved but afterwards UAE has shown itself as a strong supporter of U.S. In its war on terror. The apprehensions shown by Americans were rebuffed by the management of Dubai Ports World saying that if there business is not restricted to America and they could find a lot of business all over the world considering their competitiveness.

In a world that whines about the rising Islamic extremism, Sheikh Mohammad the current ruler of Dubai… [END OF PREVIEW]

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International Competition Middle East.  (2007, February 6).  Retrieved November 20, 2019, from https://www.essaytown.com/subjects/paper/international-competition-middle-east/7868

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