Globalization and transportation greatly contribute to the development of new economic ties. People leave their home countries, looking for better economic and social conditions for life. The world has become diverse and multicultural. In the meantime, economies have become much more interdependent. Still, some economies have been better than others in promoting job creation, social growth, and cultural development. The economy of Kuwait, one of the richest countries in the Gulf region, heavily depends on oil exports. This is not the case of the United Arab Emirates, a country which has made a step forward to diversify its economic activity. The economic indices and achievements in Kuwait are comparable to those in the UAE. If a natural disaster devastates Kuwait, it will be a reasonable decision to stay in the Gulf region but move to the UAE.
Natural disasters are a serious threat to economic and social stability. If Kuwait faces any such disaster, it will be wise to consider the relocation opportunities offered in the Gulf region. It is home to some of the richest natural resources and some of the world’s richest countries, which welcome newcomers from around the globe and provide sufficient job and education opportunities. According to Malik, before the global financial crisis of 2008-2009, the Gulf states enjoyed a total fiscal surplus of $600 billion. Although oil prices steadily decline, the UAE remains one of the most effective economies in the region. Any decision to relocate from Kuwait to the UAE is reasonable and wise, due to the economic prospects of the UAE, its recent successes in diversifying the economy, its welcoming business and investment climate, and its geographic proximity to Kuwait. However, it will still be a temporary decision, until Kuwait restores its infrastructure and allows its citizens to return to their homes.
The UAE features one of the best developed and thriving economies in the Gulf region and the whole world. “Since the discovery of oil in the UAE more than 30 years ago, the country has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living” (Forbes). Its nominal GDP was almost $400 billion in 2014 (International Monetary Fund 13). The same year, its GDP per capita was $42,944 (IMF 13). With the total population of 9.3 million, only 1.3 million are represented by nationals (IMF 13). In other words, the UAE relies heavily on expatriate workforce.
One of the distinctive features of the economy in the UAE is the presence of free trade zones which guarantee zero taxes and complete foreign ownership (Forbes). The UAE encourages private sector involvement in economic activities and slowly retreats from the production of oil and gas as the two major sources of economic revenues. Forbes notes that the country has managed to reduce the share of oil and gas revenues in its GDP by almost 25 percent. Unemployment rates in the UAE do not exceed 3.8 percent, offering rich job opportunities for anyone who comes from Kuwait.
The uniqueness of the economic system of the UAE is in a combination of the Islamic traditions and modern economic principles. The UAE has quickly responded to changes in the global energy markets. Falling oil prices have created a huge economic challenge. The country has been one of the first and most productive in the Gulf region trying to reduce its reliance on oil and gas. It has successfully reinvested its resources in other economic sectors (Malik). Unfortunately, the lack of effective institutional arrangements and the power of elites create barriers to economic diversification on a large scale (Malik). Nevertheless, the UAE is a good target for anyone who escapes devastated Kuwait and seeks peace and stability.
The UAE economy is similar to that in Kuwait by the levels of GDP and citizen well-being. However, unlike the UAE, Kuwait keeps exploiting its oil and gas reserves to their fullest (Central Intelligence Agency). The country plans to increase oil production to nearly 4 million barrels a day by 2020 (CIA). Besides, unlike the UAE, Kuwait remains one of the most difficult in terms of private business activity, being ranked as the 104th in the world by the ease of doing business (U.S. Department of State 1). Its public sector has swollen to employ three fourths of the national workforce (CIA). The private sector plays only secondary roles, and the UAE could become a role model for Kuwait in many aspects of economic development and diversification.
This being said, the advantages of living in the UAE are mostly economic. These include job creation, ample opportunities for business creation and foreign investment, as well as the growing involvement of the private sector in the country’s economic affairs. The problem is that the UAE is also one of the most expensive countries of the world. Its living expenses are quite high. Besides, no one can ever become a full member or citizen in the UAE. This is why it should be regarded only as a temporary location for a professional who wants to escape the negative consequences of a serious natural disaster.
In conclusion, if Kuwait faces a serious natural disaster, it will be wise to relocate to another Gulf country. The UAE can become a land of opportunity for professionals and business investors from Kuwait. Life in the UAE has its strengths and weaknesses. However, it is a good temporary decision for those who want to escape devastated Kuwait until its restores its economic capacity and infrastructure.
- Central Intelligence Agency. “The World Factbook: Kuwait.” CIA, 2017, https://www.cia.gov/library/publications/the-world-factbook/geos/ku.html. Accessed 1 Nov 2017.
- Forbes. “United Arab Emirates.” Forbes, 2017, https://www.forbes.com/places/united-arab-emirates/. Accessed 1 Nov 2017.
- International Monetary Fund. “Economic Diversification in Oil-Exporting Arab Countries.” IMF, April 2016, https://www.imf.org/external/np/pp/eng/2016/042916.pdf. Accessed 1 Nov 2017.
- Malik, Adeel. “The Gulf Economies’ Coming Meltdown? How to Prevent It.” Foreign Affairs, 5 November 2015, https://www.foreignaffairs.com/articles/persian-gulf/2015-11-05/gulf-economies-coming-meltdown. Accessed 1 Nov 2017.
- U.S. Department of State. “Kuwait.” U.S. Department of State, 2016, https://www.state.gov/documents/organization/231064.pdf. Accessed 1 Nov 2017.