Oil and Non-Oil Economy of the UAE Essay Example for Free

Oil and Non-Oil Economy of the UAE Essay The general dichotomization of the economy of the United Arab Emirates is into the oil and non-oil sectors. While the aggregate output remains dependent on oil production, the United Arab Emirates is focusing on the development of its non-oil sector as part of its diversification plan. However, its ability to develop fully its non-oil sector depends on the performance of its oil sector. One consideration is the relative contribution of the oil and non-oil sectors to the economy. The other consideration is the ability to the oil-sector to support the diversification plan in the non-oil sector. Abed and Hellyer (2001) explained that in 1998 the production of crude oil accounted for less than a quarter or 22 percent of gross domestic product. However, even if the contribution of crude oil production to aggregate output is less than a quarter, the impact of the sector on the economy is much bigger. Oil exports contributed 37 percent of earnings in foreign exchange and 60 percent of public sector revenue. The oil sector contributes to the aggregate economy in four fronts, which are business investment, household income and consumption, public spending, and net exports. This substantiates the claim that the oil sector comprises the backbone of the UAE economy. Further growth occurred in the oil sector in 2006 with the Ministry of Information and Culture (2006) reporting that the oil and gas sector contributed 28 percent to aggregate output. Concurrently, there is also growth in the non-oil sector, particularly in manufacturing and financial sectors. The UAE Federal Government (2008) further reported that oil and gas production experienced further growth by contributing one third to gross domestic product. This is primarily due to programs intending to optimize oil and gas production in the different emirates. At the same time, there is also solid growth in the non-oil sector. In the next years, the contribution of the oil sector should stabilize at one third of the economy and the non-oil sector becoming a stronger contributor to economic growth. This would allow the UAE to maximize returns from the oil and gas sector to boost growth in the non-oil sector. UAE Economic Developments to Achieve Diversification The United Arab Emirates is already on its way towards economic diversification. Although, the oil and gas sector remains as an important sector, the UAE has achieved developments in the non-oil sector. There are areas of economic developments that the UAE has to focus on to achieve diversification. Dunning (2005) identified the optimization of resource base as a means of achieving diversification. The UAE has to hone the potential of its key resources to establish different industries. The country has already done this by continuously developing its oil and gas sector. However, it also needs to optimize the resource base for the non-oil sector such as the development of land through urban planning or the urbanization of peripheral lands to provide venues for manufacturing and services sectors or the maintenance of natural resources for tourism. Another economic development needed to support diversification encompasses structural changes. According to Shihab (2006), the economic structure needs to support the needs of the non-oil sector. One way of achieving this is influencing employment patterns to develop labor force for the non-oil sector. This means investing in human services such as education and health to ensure labor productivity. Muysken and Nour (2006) stressed on the deficiencies in the educational system and low level of skills of the labor force as areas for improvement if the UAE wants to succeed in diversifying its economy. Another way is the establishment of different industries to broaden the economic base and create employment. A third economic development is integration of infrastructure and social structures to support diversification. DeNicola (2005) explained that infrastructure developments are necessary to attract investments and create employment opportunities for non-oil industries. Shihab (2006) explained that social factors such as the development of a culture of consumerism and calm co-existence among local minorities and expatriates support growth in the non-oil sector. Justification for Diversifying the UAE Economy Imbs and Wacziarg (2003) explained that the overall justification for economic diversification is sustainable growth by spreading economic risk across different industries. Economies reliant on a single sector such as the reliance of the member countries of the Gulf Cooperating Council on the oil sector also face high risks in the long-term because oil is a non-renewable resource (Fasano Iqbal 2003). There are also specific reasons for the goal of the UAE for diversifying its economy. One is avoidance of the effect of the oil curse theory, which explains that dependence on oil has long-term negative effects on the economy. Oil exporting countries gain revenue by relying on price fluctuations in the global market alone, which does not require investments or efficiency that in turn precludes long-term development of economic capabilities or competencies. Revenue generated from oil is sufficient to support welfare services, placing focus on allocation instead of production. (HSBC Middle East 2003; DeNicola 2005) Another justification is the maximization of revenue generation through resource development. Diversification would enable an oil dependent economy such as the UAE to gain revenue from its other resources. Sole reliance on oil limits the revenue generating potential of the economy and hampers economic efficiency by idling resources. (Shihab 2006) Another related reason is resolving revenue volatility. Dependence on oil involves the downside of volatility in the long-term because oil is non-renewable, which means oil reserves will eventually run out in the future. Oil dependent countries need to develop other sources of revenue to ensure continuity of revenue generation even after oil reserves have dwindled. (Gylfason 2004) Still another justification is human development by creating employment opportunities for the young population. The UAE has a predominantly young population, which means a pool of intellectual and skill resource able to support the development of non-oil industries. Diversification enables the economy to develop its human resources to increase quality of life and sustain productivity. (HSBC Middle East, 2003; Muysken Nour 2006) Non-Oil Sector in Economic Diversification for Sustainable Economic Development The Ministry of Information and Culture (2006) explained that the non-oil sector contributed 72 percent of the GDP of the UAE. This reflects the potential of developing the non-oil sector to achieve economic diversification and ensure sustainable economic development. The non-oil sector comprises goods manufacturing and services, with the former contributing 57. 9 percent and the latter contributing 42. 1 percent to GDP from the non-oil sector. Industries under goods manufacturing are agriculture, livestock and fisheries, mining, manufacturing, construction, and electricity, gas and water. Industries under services include restaurants and hotels, transportation, storage and communication, real estate and business, and social and private services. Diversification is already apparent in these various industries and there is still wide room for the development of these industries and the establishment of new industries. Hejmadi (2004) explained that development of the economic free zones were crucial to the development of different industries in goods manufacturing and services. These zones provided a venue and incentives for the flow of both domestic and foreign investments into diverse industries to create employment opportunities and contribute to the growth in aggregate output. Apart from the continuous development of these industries, a potential industry for diversification in the non-oil sector is tourism. Sharpley (2002) explained that tourism is becoming a ubiquitous means of achieving economic diversification for many countries seeking to secure long-term economic growth. Tourism fits the resource approach to sustainable growth since the UAE has many tourism destinations to attract tourists and its cultural openness also comprise an impetus for foreign tourists. Blanke and Mia (2006) reported that travel and tourism already exist as an industry in the UAE and contributing 1. 1 percent to GDP. There is wide potential for development. However, there are challenges to tourism development requiring investments in destination development and promotions (Sharpley, 2002; Henderson 2006) References Abed, I. Hellyer, P. (Eds. ), 2001. United Arab Emirates: a new perspective. London: Trident Press Ltd. Blanke, J. Mia, I. , 2006. Chapter 22 assessing travel tourism competitiveness in the Arab world. [Online] Available at: http://www. weforum. org/pdf/Global_Competitiveness_Reports/Reports/chapters/2_2. pdf [Accessed 25 January 2009] DeNicola, C. , 2005. Dubai’s political and economic development: an oasis in the desert?. Williamstown, MA: Williams College. Dunning, T. , 2005. Resource dependence, economic performance, and political stability. Journal of Conflict Resolution, 49(4), pp. 451-482. Fasano, U. Iqbal, Z. , 2003. GCC countries from oil dependence to diversification. Washington, DC: International Monetary Fund.

The Role of Women in The Zoo Story Essay -- Zoo Story Essays

The Role of Women in The Zoo Story Although the women characters in "The Zoo Story" are never front and center staged, they have leading roles in shaping the conditions and sensibilities of Jerry and Peter. The women referred to by each of the male characters affects, or has affected, their perceptions and routines in life. Jerry has had many encounters with various women, while Peter speaks only of three. The quantity of women roles in each man's life is not the dominate cause of their behaviors; it is the quality of the women. In "The Zoo Story" the women "backstage" are unseen influences that cloud reality for Jerry and Peter. The few women in Peter's life keep him relatively tamed. He is the male underdog of the household, surrounded by a wife and two daughters. Indicated by the dialog, Peter does not appear to be an assertive man. The women of the house are the dominate decision-makers. . .cats instead of dogs, two parakeets (one for each daughter), two television sets (one for the children). They represent the middle-class, happy family, ...

Focus Point Holdings Berhad Essay

FOCUS POINT HOLDINGS BERHAD Introduction This case analyzes the effect of Focus Point Holdings Berhad financial strategy on the firm’s operating activities and financial performance. Focus Point Holdings Berhad is an investment holding company that engages in the operation of professional eye care centers in Malaysia. The company is also involved in the trading of eyewear and eye care products; management of franchised professional eye care centers; provision of medical eye care services; provision of food and beverages services; trading of hearing aid solutions and related accessories; and retail of optical and related products. It operates 175 professional eye care centers under the Focus Point, Focus Point Optical City, Opulence, eyefont, ExcelView, Solariz, and Focus Point Signature brand names, each serving a different market segment. This Malaysian home grown optical store was established in 1989 as Focus Vision Care Center. In 1993, it became a private limited company and in 2010, a public entity. Financial Strategy  With the understanding that the fundamental success of a strategy depends on a realistic internal view of its core competencies and sustainable competitive advantages, the company translated its vision and mission statements to pursue its economic objectives. Vision: To become a leading brand in Asia through our focus approach in vision care Mission: To provide consumers with the best vision care and eyewear services as well as to uphold the highest standards in reliability, quality and profesionalism The company arrived at two major decisions, that is, to go public and to franchise the store. 1 Going Public The company’s decision to go for listing on August 23, 2010 is a financial strategy that raised RM16.07 million of which 8.94 million was channeled into expansion plans and upgrading and refurbishment of the existing eyecare centers. The company pursued the market penetration growth strategy, aimed at increasing market share for existing products or services in existing markets. The focus of growth was on expansion of new outlets, upgrading and refurbishment of existing outlets and expansion of branded eyewear products. Franchising  Franchising enabled the company to improve on its economies of scale due to its size, brand name and experience. At the same time, it provided the company with the key advantage of incremental income with minimal capital expenditure in the setting up of new outlets. Revenue contributed by the franchising model mainly comprises of sales of eyewear and eye care products to their franchises and royalty fees which are based on 5% of gross turnover of the respective franchisee’s outlets, and franchise fees payable by franchisees which amount to RM30,000 for a period of 5 years. The franchise agreements signed between the group and their franchisees are valid for a period of 5 years, with an option to renew for another five years with the same franchise fees of RM30,000 payable over the extended 5 year period. To enhance the success of this strategy, a Memorandum of Collaboration was signed between the company’s management and Permodalan Nasional Berhad to facilitate financing for Bumiputera franchisees. The company also collaborated with Maybank on a similar loan scheme for non-Bumiputera franchisees. 2 Internationalization In the same year as its initial public offering, Focus Point Holdings Berhad began to pursue its overseas expansion by opening its first franchise overseas outlet in Brunei. The company’s internationalization effort accelerated the openings of franchises in other south-east asian countries such as Singapore, Cambodia, Vietnam, Indonesia and Thailand. The first-mover advantage gave the company the edge, especially in highly-populated countries like Vietnam and Cambodia where consumer spending power was increasing in tandem with their growing economies. On the other hand, Singapore’s economy provided an opportunity for the company to venture into high-end market for professional eye-care services. Effect Of Strategy On Operating Activities By going public, the company was able to collaborate with and convince financial institutions and agencies to provide franchising loans to interested franchisees. Access to financing and the strong presence in the nation resulted in an increase in the number of outlets from the pre IPO total of 130 outlets to 136 outlets in 2011. In 2012, the group has 170 outlets in of which 85 are wholly owned outlets and 85 are franchised outlets. The company cordial relationship with local and international principals and the close working relationship with departmental stores had also allowed the group to secure good premises and maintain Focus Point’s leading position in the market. The overseas franchise business is growing with Brunei alone operating 6 franchised outlets. The money raised from IPO that is used for expansion plan and upgrading outlets has helped in efforts to foster greater customer relations. This is vital for long term business sustainability as data indicated an increasing target population. With the median age of the population increasing, it is expected that the number of population with eye disorder will also 3 increase. The global vision care market is expected to grow by 4.4% over the period of 2010 – 2017. Effect Of Strategy On Financial Performance The IPO exercise, financing facilities for franchisees and internationalization have contributed to a higher revenue and better overall financial performance as shown: 4 PBT – Profit before tax PAT – Profit after tax The above financial highlights showed that the financial performance of Focus Point Holdings Berhad is stronger after going public and taking on aggresive marketing activities to generate increased business volumes. However, the group’s venture into the food & beverage (F&B) segment in the last quarter of 2012 has affected the group’s profit, earnings and 5 dividends per share. The investment in the fast growing F&B segment is expected to enhance the group’s revenue stream and profitability in a longer term. Company’s Performance Versus Industry  The overall level of competition among operators in the professional eye care industry in Malaysia is high as there are many players competing in the industry. As in many retail businesses, there is a low barrier to entry into the operation of professional eye care centres. However, there is lack of industry peers to benchmark as there are no other competitors that are directly comparable to Focus Point Holdings Berhad. Many of the competitors are smaller outlets, independently owned and run by the owners. The nearest competitor locally is England Optical Group with similar growth strategy – store expansion, franchising and internationalization. England Optical Group operates 131 outlets, 120 in Malaysia, 10 in China and 1 in Cambodia. With reportedly 10% market share of the local optical industry, Focus Point Holdings Berhad is currently the market leader in the industry. Market share among competitors are widely dispersed with each holding a smaller percentage of the market. Conclusion A financial strategy analysis helps department heads review external and internal elements affecting a company and how such elements impact short-term and long-term activities. There are never any guarantees for business success, but creating financial strategies gives any business direction and guidance. For Focus Point Holdings Berhad, to ensure sustainability, the group increased the source of income to include food and beverage, in addition to income from eyewear and eye care and franchising. Overall the company is on the  6  right track, focusing on innovation and product development, market expansion especially in untapped regional markets and maintaining a good public image. 7 References Bender, R. , & Ward, K. (2003). Corporate financial strategy (2nd ed.). |Burlington, MA: Butterworth-Heinemann Focus Point Annual Report 2010 Focus Point Annual Report 2011 Focus Point Annual Report 2012 Irene, Y. (2010). Focus point targets local and overseas market expansion after listing, Kuala Lumpur: The Star.com.my Lee, A. (2010). Focus point braces for future challenges. Kuala Lumpur: The Star.com.my Lee, KS. (2010). Focus point plans forays into South-East Asia. Kuala Lumpur: The Star.co.my News: Focus Point to expand via franchising. (2003). Retrieved from Malaysian Franchise Association: http://www.mfa.org.my/?franchise-news:focus-point-to-expand-viafranchising:2C00C881V1

Child Labor in the 1800s - 1403 Words

Child Labor in America Throughout the 1700’s and the early 1800’s child labor was a major issue in American society. Children have always worked for family businesses whether it was an agricultural farming situation or working out of a family business in some type of workplace. This was usually seen in families of middle or lower class because extra help was needed to support the family. Child labor dramatically changed when America went through the Industrial Revolution. When America’s industrial revolution came into play, it opened a new world to child labor. Children were now needed to work in factories, mills, and mines. These were not ordinary jobs for young children, these jobs required much time, effort, and hard work. â€Å"American†¦show more content†¦Conditions of factories were not safe for anyone, let alone a small child. Due to these conditions many children died before their prime. Many children â€Å"began work at age 5, and generally died before they were 2 5† (www.victorianweb.org), America was beginning to lose an entire generation due to these working conditions that so many had to endure. Children were hired at an alarming rate. â€Å"In 1870, the first time census reported child workers, there were 750,000 workers in the United States age 15 and under, not including those who worked on family farms or in other family businesses† (â€Å"Child Labor in America†), these numbers were not something that was looked over, it astonished many. â€Å"A cotton manufactory of 5 or 6000 spindles will employ those 200 children† (Bremner 232). The workforce would continuously grow, hiring more and more children each day. Factories were good for using children as a means of their productivity. â€Å"Textile factories, for the most part [†¦] were in the forefront of this industrial revolution, and children formed an essential component of the new industrial workforce† (Bremner 232). Many times without these c hildren working some of these factories would not have survived through the revolution. Another issue that was experienced during this time was the lack of education the children had. Although they were helping theirShow MoreRelatedChild Labor During The 1800 S1285 Words   |  6 PagesZach Wood October 5, 2016 Child Labor 1880-1910 Child labor was very common in the late 1800’s and the early 1900’s in many places. Child labor usually took place in a factory working on a manufacturer line or doing as much physical labor as they could possibly do, being as young as they are. 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