The global financial crisis
The global financial crisis is a global period of time in which markets faced economic difficulty; As this led consumers to reduce their purchases of services and products until the economic situation returns to improvement, and the global financial crisis is defined as a situation that leads to a rapid decline in the value of assets or financial institutions, which leads to encouraging investors to withdraw their money from bank accounts or sell their assets ; Because they expect that its value will decrease as a result of its stay in the financial institution or bank.
The United Arab Emirates
The United Arab Emirates is an Arab country located in the Arabian Peninsula, and it shares an eastern border with the Sultanate of Oman, on the western and southern sides it is bordered by the Kingdom of Saudi Arabia, and from the north it is located near Iran, and its geographical area reaches 83,600 km. The Emirates are Fujairah, Ras al-Khaimah, Umm al-Quwain, Ajman, Sharjah, Dubai and Abu Dhabi.
The UAE was founded in 1971 AD, and the Emirate of Abu Dhabi is its official capital, which contains all the decision-making centers in the state. Others such as Hindi, Persian, and English, Islam is the official religion with the spread of a group of other religions.
The impact of the global financial crisis on the United Arab Emirates
The United Arab Emirates has been affected by the repercussions of the global financial crisis, specifically the Emirate of Dubai, whose banking and real estate sectors have been greatly affected. The impact of this crisis on the Emirates has become known globally as (Dubai debt crisis),[4] and its impact is summarized according to the following points:
International and local banks in the UAE stopped financing modern projects indirectly; especially construction related projects; Because of the banks' anticipation of the financial situation in the Emirates in order to reconsider projects, and fund them according to new bases.
The banking and financial sector has been greatly affected by this crisis. This prompted the government of the Emirate of Abu Dhabi to support the major banks in the country.
bankruptcy of a group of companies in the Emirate of Dubai; Because many of them entered the real estate market without having appropriate experience, with the presence of investors with external financial loans within the real estate sector, which led to its rapid growth in a weakly controlled environment.
The instability of the value of the US dollar within the global financial markets, and this affected the economic and financial transactions that depend on the dollar currency in the UAE; Which led to an increase in the negative effects on the financial market in the Emirate of Dubai.
Closing most of the economically unprofitable professional sectors, relying on mergers between companies, and seeking to reduce expenses for marketing projects; As a result, the salaries of the employees were doubled.
Gulf investors have reconsidered their investments in the real estate sector in Dubai; Due to the lack of the appropriate ability to sell assets as a result of the decline that appeared in the real estate market in Dubai, which is based on the results of statistics issued by the German Bank, which showed that the decline in real estate prices reached half.
Ways to get out of the UAE from the global financial crisis
The United Arab Emirates, in particular, the Emirates of Abu Dhabi and Dubai, has taken a number of ways to get out of the global financial crisis, the most important of which are:
Abu Dhabi was keen to provide assistance to the Emirate of Dubai; In order to be able to pay its debts, this assistance was provided by relying on the purchase of the emirate's assets, and through the use of debt instruments in order to maintain Dubai's global and economic position.
Dubai Group's debt restructuring; By submitting a proposal to creditors that relies on the repayment of debts in cooperation with them in order to reach a solution that achieves satisfaction for all parties.
Dubai announced the sale of many of its internal properties to investment companies; Which contributed to providing sufficient financial liquidity for the emirate to cover its debts, and this also encouraged the stalled investments to return to rise again.
Economy of the United Arab Emirates
The economy of the United Arab Emirates is one of the largest Arab economies after the economy of the Kingdom of Saudi Arabia;[6] the rate of the UAE's GDP, measured by purchasing power ratio, in 2016 amounted to 667.2 billion US dollars, according to the US Central Intelligence Agency. Known simply as (cia),[7] the UAE has also managed to enhance its global economic position, becoming among the list of emerging economic systems globally; Because of the continuous acceleration in the economic growth it has achieved in various fields; The economic development has attracted a lot of international investments due to the economic openness that the UAE has pursued by relying on the use of flexible laws, in conjunction with providing the best investment environment in the Arab region. The UAE economy contains many diverse economic sectors, the most important of which are:
Tourism sector: It is one of the sectors that encouraged the visit of many tourists from all countries of the world to the UAE, and tourism contributed to supporting the growth of the GDP; By supporting tourism investments, such as establishing water ports and airports, and contributing to the development of land, air and sea transportation.
The trade sector: It is a sector that has witnessed a set of great developments in the UAE through supporting investments, so the country has become an important regional center to support exports to other countries, with the total UAE exports reaching $235 billion, and distributed over the equivalent of 198 global markets.
The industrial sector: It is a sector that the UAE has focused on, as it is one of the foundations associated with economic growth. Where this interest appeared in the oil industries, and the manufacturing industry achieved a great development in the country with an increase in the volume of production, and interest appeared in other industries such as the metallurgical industry, wood industry, aluminum, materials used in construction, and equipment.