UAE Pestel

Political:
 The UAE is a confederation of seven Emirates. Formed in 1971, the UAE’s federal authority,
the Federal Supreme Council, which is the country’s highest legislative and executive body,
consists of the hereditary rulers of each Emirate who further elect a President and Vice
President from the existing members. Therefore, the rulers of each Emirate are from history
based ruling families and not elected from the citizens.
 The UAE is run by a federal government and local governments of the seven emirates. Their
powers and roles are defined by the Constitution. The Emirates have jurisdiction over
matters not assigned to the Federal Government, noting that federal laws supersede any
local laws. 
 Generally said, the federal government rules over foreign and security policies
whereas the local governments are more responsible for social and cultural topics.
 Interesting about the political system is, that citizens do not have the ability to vote their
government in free and fair periodic elections. Citizens can vote for the Federal National Council,
a consultative body that examines, reviews, and recommends changes to legislation and may
discuss topics for legislation. The elections are not based on a party system, but on individual
candidates. (There are no political parties in the UAE, because political parties are forbidden.)
 The UAE is a member of the United Nations, the World Trade Organization, the Arab League
and the Gulf Cooperation Council.

Legal:
The legal system in the UAE is based on both civil code principles and on Islamic Shari’ah Law. 

First we will look at the specific rules from the labor law:
 The UAE Labor Law identifies the normal working hours for the private sector as 8 hours per
day or 48 hours per week. The working hours may be increased to 9 hours a day for certain
business industries such as hotels and cafes.. 

Deloitte& Touche (M.E.). (2021). Doing Business Guide – Understanding the United Arab
Emirates` tax position. Retrieved 30 october 2021 from
https://www2.deloitte.com/content/dam/Deloitte/xe/Documents/tax/doing-business-guide-
uae-2021.pdf
 Furthermore, workers are not allowed to form or join unions and they have no right to organize,
strike or bargain collectively and additionally there is no minimum wage.
 Apart from that, the law protects kids and teenagers. The law prohibits employment of persons
younger than 15 and includes special provisions regarding children ages 15 to 18 but the negative
side is that these rules do not apply to the agricultural sector.

Secondly we will discuss the rights of women:

 Women are not treated equally as they do not have the same rights as men. They are excluded
from certain social and economic benefits, because tribal family law often designates men as the
heads of families. For example, Muslim women must have the consent of their male guardian to
marry. Local interpretation of sharia forbids Muslim women to marry non-Muslims. They also are
required to “obey” their husbands. They may be considered disobedient, if she decides to work
without her husband’s consent.
  Also important to point out is that the law prohibits criticism of national rulers and speech that
may create or encourage social unrest. The government restricts freedom of speech and the
press and practises censorship. The state blocks internet access to certain material, including
political discussion and LGBT content.

Business laws:

 There are certain rules regarding the ownership of companies: In Free Trade Zones
foreigners it is allowed for foreigners to have 100% ownership but outside of them a national
sponsor must own 51% of the business.
 A problem for business owners is that the UAE has no comprehensive IP law, but several
laws are in place governing trademarks, copyrights, patents, industrial designs and
confidential information. Therefore, the lack of IP enforcement actions within Free Trade
Zones (FTZs) is a major concern for foreign businesses.
 But a new Commercial Fraud Law imposes tougher penalties on counterfeiters but still,
enforcement is a major problem.

International Trade Administration, U.S. Department of Commerce. (2020, September 12).

Retrieved 30 October 2021, from United Arab Emirates – Country Commercial Guide.
https://www.trade.gov/knowledge-product/united-arab-emirates-protecting-intellectual-
property

Social:
As already mentioned, high gender inequalities persist, most notably in legal protection and financial
inclusion with a significant number of women remaining unbanked. Interestingly, even though there
are a lot of gender inequalities, women in the UAE account for about 70 per cent of all university
graduates in the country.

Regarding the work ethics, special rules and values are important.
 First of all, trade in the UAE is built on trust, founded on personal contact and the
forging of relationships over time.
 Apart from that, the UAE working week runs from Sunday to Thursday. Friday and
Saturday is the official weekend.
 Given the family-based nature of many businesses, the head of the family generally
has the final say.
 Emirati people usually avoid direct criticism therefore there is often an unwillingness
to say ‘no’.
 Business is often conducted over lunch or dinner, generally in a restaurant. Later,
there may be invitations to the family home too where you can expect meals to be
lengthy and sociable.
 In more conservative families, Emiratis will not eat with people of the opposite sex,
especially in restaurants.

General information:

 The population of UAE is very diverse since fewer than a fifth of the UAE population are
nationals. The remainder are expats from over 200 countries, the majority from South and
Southeast Asia – creating a unique cultural meeting-point. Due to that, expatriates accounts
for over 80% of the work force.
  The UAE is one of the most expensive places to live in the Gulf, according to Numbeo’s global
Cost of Living Index. Rents can account for almost half of salaries in the big cities where
85.5% of the population is living.
 The UEA is a safe place to live since it has one of the lowest crime rates in the world.
(similarity to Singapore?)
 Arabic is the most commonly spoken language, but English is the recognized business
language. The big expatriate community means you might also hear Persian, Hindi, Urdu,
Bengali or Chinese, among other tongues.
 Even though UAE’s culture is driven by Islamic traditions, other faiths are practiced freely.
 The population pyramid shows, that the median age is 30 years old, so the population is quite
a young one.
 United Arab Emirates’ HDI value for 2019 is 0.890— which put the country in the very high human
development category—positioning it at 31 out of 189 countries and territories.
 The UAE has a literacy rate of 95%.
 As already mentioned, high gender inequalities persist, most notably in legal protection
and financial inclusion with a significant number of women remaining unbanked. The United
Arab Emirates has a Gender inequality index value of 0.079, ranking it 18 out of 162 countries in the
2019 index. In United Arab Emirates, 50.0 percent of parliamentary seats are held by women, and 76.0
percent of adult women have reached at least a secondary level of education compared to 81.0 percent of
their male counterparts.
 http://hdr.undp.org/sites/default/files/Country-Profiles/ARE.pdf
 Significant human rights issues included: torture in detention; political prisoners; undue restrictions
on free expression and the press, censorship, and Internet site blocking; substantial interference
with the rights of peaceful assembly and freedoms of expression and association; the inability of
citizens to choose their government in free and fair elections; and criminalization of same-sex
sexual activity

Opportunities:
 There are likely to be significant business opportunities in the UAE as a result of its
commitment to the SDGs. Already one of the world’s most dynamic and successful
economies, the UAE has expanded its infrastructure to focus on dedicated economic clusters.
There are several industrial free zone clusters that vary from renewable clean technology
clusters such as Masdar, to media clusters such as twofour54 media and production in Abu
Dhabi and Media City in Dubai.

HSBC Bank Middle East Limited. (2020, August). International Business Guide United Arab Emirates.
HSBC Group. Retrieved 28 October 2021, from
https://www.business.hsbc.com/business-guides/uae/infrastructure
Bureau of Democracy, Human Rights and Labor. (2020). 2020 Country Reports on Human Rights
Practices: United Arab Emirates. U.S. Department of State. Retrieved 29 October 2021, from
https://www.state.gov/reports/2020-country-reports-on-human-rights-practices/united-arab-
emirates/

Assi, R., & Marcati, L. (2020, March 8). Women at work in the Middle East. McKinsey& Company.
Retrieved 28 October 2021, from https://www.mckinsey.com/featured-insights/middle-east-and-
africa/women-at-work-in-the-middle-east

Amnesty International Ldt. (2021). United Arab Emirates 2020. Amnesty International. Retrieved 29
October 2021, from https://www.amnesty.org/en/location/middle-east-and-north-africa/united-
arab-emirates/report-united-arab-emirates/