{"id":1431,"date":"2019-10-31T13:48:16","date_gmt":"2019-10-31T11:48:16","guid":{"rendered":"http:\/\/www.liberalglobe.com\/?p=1431"},"modified":"2019-10-31T13:48:17","modified_gmt":"2019-10-31T11:48:17","slug":"uae-ways-to-stop-the-dependence-of-the-economy-on-oil","status":"publish","type":"post","link":"https:\/\/www.liberalglobe.com\/?p=1431","title":{"rendered":"UAE: Ways to stop the dependence of the Economy on oil"},"content":{"rendered":"\n

The ever-increasing political pressure at global level and the sensitivity\nof an increasing proportion of citizens on the planet to take immediate\nmeasures to slow down climate change for the worse, force the governments of\nmany states which their economies is based on exporting and trading of\nhydrocarbons to develop alternative industries and markets with the aim of\nincreasing the independence of their economies from oil.<\/p>\n\n\n\n

by Thanos S. Chonthrogiannis\n<\/strong><\/p>\n\n\n\n

It is prohibited by intellectual\nproperty law or in any way illegal use of this article, with heavy civil and\ncriminal penalties for the offender.<\/em><\/em><\/p>\n\n\n\n

\"\"
Satellite image of UAE<\/strong>
Photo by NASA<\/figcaption><\/figure><\/div>\n\n\n\n

The country of the UAE belongs to this club of countries whose economy is based on oil exports. This export figure was at 20% of the annual GDP (2017), with oil exports totaling 67,3 billion USD with 382,6 billion USD GDP (2017) (Source: WTO, www.wto.org<\/a> ).  <\/p>\n\n\n\n

The diversification of the UAE economy as an alternative to oil dependence<\/strong><\/strong><\/p>\n\n\n\n

The efforts of the UAE government aim to develop two main industries as\nalternative revenue industries in relation to the export and trading industry\nof fuels and minerals and outside the manufacturing sector that the last years\nflourished.<\/p>\n\n\n\n

In the given period there is a drastic fall in property prices in the UAE\nand Dubai due to geopolitical developments, while a large percentage of construction\ncompanies are unable to serve their loans so that they become overdue, selling\ntheir properties at very low prices in order to survive. More details about\nreal estate prices and red loans read the analysis titled \u00abStrategies to solve\nthe problem in the Construction and Banking sector of the UAE from the fall in\nprices in Real Estate\u00bb.<\/p>\n\n\n\n

The two main industries to be developed to which the UAE government’s\nefforts are aimed are the ever-increasing attraction of new business activities\nand the strengthening of the local tourist product offered.<\/p>\n\n\n\n

In the first case to achieve attracting new business, the UAE government\nhas embarked on the ever-increasing time-hosting of international exhibitions\nwith the participation of an increasing number of countries.<\/p>\n\n\n\n

Based on this strategy, both the host of international exhibitions, the UAE\nand the participating countries in these exhibitions with their own promotional\nkiosks expected to gain access to new markets and the development of channels networks\nto access new markets.<\/p>\n\n\n\n

In addition, all and mainly the UAE are looking to strengthen bilateral\nrelations with the participating countries and create new links with interested\ncompanies with a view all to gain short and long-term common benefits. Short-term\nbenefit in the case of the UAE is the cover of costs for the facilities and the\nhosting of international exhibitions.<\/p>\n\n\n\n

International exhibitions such as the Expo 2020 hosted in Dubai, the\ncapital of the UAE, and always based on the views of the organizers that during\nit will host about 26m visitors, strengthening the revenues from the tourism\nindustry with revenues of 35m USD. The objectives of this report are the linking of ideas and the\n“Construction of the future” while promoting fair and sustainable\ndevelopment.<\/p>\n\n\n\n

The “Vision 2021”<\/strong><\/strong><\/p>\n\n\n\n

Within this framework the UAE government has set the plan “Vision 2021” for the UAE, in which it will try to lay the foundations for the restructuring of the export sectors of the economy that inject revenues into the state treasury.<\/p>\n\n\n\n

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Location of UAE on the map<\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The fact that Dubai is a business, financial and cultural centre of the\nGreater Gulf region, helps to increase traffic to host international\nexhibitions, making the city a pole of attraction for international business.<\/p>\n\n\n\n

For example, the infrastructures of the Expo 2020 International Exhibition\nin Dubai have been created in such a way so that after the end of the\nexhibition they are used to establish a new type of business zone, naming it\n“Region 2020” with its exhibition centre aims to consistently attract\na certain number of visitors per year which will feed the UAE hotel industry,\nexcept other things.<\/p>\n\n\n\n

The weaknesses of this vision are based on external factors that shape and\nthe growth rates of an economy based on industries with seasonal revenues such\nas tourism and the decisions to install new businesses in the region.<\/p>\n\n\n\n

The construction industry is reeling with more and more overdue loans to\nmake their appearance with the passage of time while many properties are\nneither sold nor rented creating increasing financial distress in construction\ncompanies, by trapping an increasing number of sellers due to continuous\ndecreasing demand for the product concerned. <\/p>\n\n\n\n

A possible conflict in the Persian Gulf will “vent” the numbers\nof visitors to the UAE and in general in the countries of the region. This\nmeans that the revenues of the UAE State fund budgeted by these industries will\nsuffer.<\/p>\n\n\n\n

The alternative industries for development<\/strong><\/strong><\/p>\n\n\n\n

For all these reasons that determine the decisions of an investment, the\nUAE should steadily develop other industries in their economy that will ensure\nthem stable and not seasonal revenues in their state coffers.<\/p>\n\n\n\n

The UAE should become independent fully in energy terms from the use of oil with the development of Photovoltaics (PV) parks with energy storage devices, nano-solar skin technologies etc. that will give on a continuous basis the necessary electricity for the gradual coverage of their population. <\/p>\n\n\n\n

In addition, other countries in the region will have to adapt the same strategy. Here, however, a specific strategy should be implemented to replace the energy that comes from hydrocarbons to clean energy. More specifically,<\/p>\n\n\n\n

We need to be realistic in our approach for this reason the whole world\nmust understand that on the wealth generated by all these companies that\nbelongs in the specific oil and fossil fuel extraction industries, etc.,\nmillions of people have invested their savings (in the shares of these\ncompanies and not only) through the investments made by mutual funds, pension\nfunds, banks, building societies, hedge funds, businesses , etc., without\nignoring the hundreds of thousands of workers working in these companies.<\/p>\n\n\n\n

For this reason, any type of “correction” in the prices of the shares of these companies will cause a great loss of global wealth and can even reach the point of causing a financial crisis and a profound global recession. <\/p>\n\n\n\n

Therefore, the shift towards clean energy should be done in a gradual manner with the minimum possible loss to the existing wealth of these companies. More information on how to make this change in clean energy through these hydrocarbon mining companies read the analysis titled \u00abHow to reverse the Climate Catastrophe\u00bb. <\/p>\n\n\n\n

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Fishing Farm<\/strong>
Photo by Carl Steinbeisser<\/figcaption><\/figure><\/div>\n\n\n\n

The second industry to be developed by the UAE is the neglected Agriculture\nand Fishing industry that contributes the humble 0,8% to the country’s annual\nGDP (Source:  World Bank, www.wb.org). In the event of a\ngeopolitical crisis, visitors-tourists and businessmen-will disappear, hotels\nwill be emptied, the red loans will soar and the feeding of the population with\nbasic food products will become highly problematic.<\/p>\n\n\n\n

We would therefore recommend the UAE government to use the revenues from oil exports for the development of the Agriculture and Fishing industry. <\/p>\n\n\n\n

The government should create Desalination factories which will be linked to underground irrigation networks that will be directed to companies that will have greenhouse facilities in the desert for the mass production of basic dietary agricultural products. The goal should be to fully cover the population by selling these products and then to direct them on exports.<\/p>\n\n\n\n

In a similar way aquaculture companies should be created to produce\nspecific types of fish that their production will feed the full coverage of the\npopulation and then be able to pass into export activities.<\/p>\n\n\n\n

The UAE government\u2019s goal should be the Agriculture and Fishing industry in the coming years to contribute 10% to the country’s annual GDP, due to exports. <\/p>\n\n\n\n

With these types of policies both the UAE and the neighbouring countries of the Gulf region will be able to diversify their economies by dismounting them from oil and creating the bases for a stable and not seasonal income stream in their state coffers, while ensuring the internal nutritional viability of their populations. <\/p>\n","protected":false},"excerpt":{"rendered":"

The ever-increasing political pressure at global level and the sensitivity of an increasing proportion of citizens on the planet to take immediate measures to…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[859,5],"tags":[1183,1106,1184,1180,1182,1181,1101],"class_list":["post-1431","post","type-post","status-publish","format-standard","hentry","category-economics","category-economic","tag-agriculture-industry","tag-construction-sector","tag-fishing-sector","tag-oil","tag-photovoltaics","tag-tourism-industry","tag-uae"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/1431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1431"}],"version-history":[{"count":2,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/1431\/revisions"}],"predecessor-version":[{"id":1449,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/1431\/revisions\/1449"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}