UAE Economy

Introduction

Economy

Economy is the social science that studies the economic behaviour of individual, agents, production, exchange, distribution and consumption of goods and services, understand means necessary for human and individual or collective for the society. Other doctrines help to further this study: the psychology and philosophy, attempt to explain how to determine the objectives, history records the change of targets in time, the sociology interprets human behaviour in a social and political science explains the relationship power to intervene in economic processes. Economy is a part of everyday life; people take a daily participation in economic activities, living in an economic environment, constant use of the terms used by economists (money, prices, wages, income, expenses, etc (Mark, p. 343).

Economy of UAE

Forty years ago the UAE as one of the least developed countries in the world. The discovery and export of oil gave the country's economy a sudden and rapid boost. Today the slate has one or the most powerful economics in the world. However, in recent times, the UAE economy was impacted by global economic developments. By the beginning of 2008, the country was threatened by a global economic downturn. For a while, it looked like the Gulf region would not be affected by the global financial crisis. However, in the last quarter of 2008 mega construction projects worth trillions or dollars were postponed, with the UAE being hard hit as a number of projects halted. The financial crisis triggered a restructuring of demand in the construction industry. Dubai was significantly impacted by the crisis. In the present circumstances, Dubai is seeing a shift away from luxurious projects toward construction potential in infrastructure and industry. Therefore, many construction companies face ne challenges as a result of lessons learned from the economic downturn. They will need to evaluate the risks of entering new markets, managing cash flows with greater care and addressing rising finance and insurance costs, to mention only a few tasks. The economic downturn also leads to a reduction of the pace of work on certain projects. As previously mentioned, construction projects that have not yet started were either postponed or cancelled altogether. This is closely connected with many economic and financial risks. In addition, the construction industry was hard hit as project financing dropped. The regional banks stopped all project financing due to lack of liquidity in the financial system. In the UAE, there is especially a big threat for smaller building contractors, because the demand in recent years leads to a substantial growth in the site of the small construction companies and the' now will most likely shrink back to initial pre-boom levels or even disappear. Larger and more experienced contractors will need to restructure and strategically manage their way through these challenging times (Walsh, pp. 258-292).

However, due to the challenges outlined above the construction industry is not unaffected by the global financial crisis. It will still face a number of threats which need to be overcome, but even because of the economic downturn it is possible ...