International Business Environment and Investments

Introduction

Globalization is a process that has created the best environment for international business processes and operations. Many countries have embraced this wave in an attempt to improve economic growth and address most of the disparities facing their citizens. As technologies continue to advance, international businesses will be pursued with ease and support the performance of emerging nations. This analytical paper uses the article Impact of FDI in the U.A.E. Over the Main Elements of Sustainable Development: Economy and Environment by Shazia Agha and Samar Habib Khan to explain how globalization has created favorable conditions for worldwide business. The discussion will also explore how the created circumstances have led to increased foreign direct investment (FDI) in the United Arab Emirates.

Article Summary

The selected article focuses on the major strategies that have been taken into consideration by the United Arab Emirates (UAE) government to promote the idea of international business. For very many years, UAE has been focusing on various measures that can promote economic growth. With the presence of resources such as natural gas and oil, the nation has found it easier to attract trade partners in the MENA region and beyond (Khan & Agha, 2015). This is the case because the nation has adequate natural assets that can be traded across the world. This nation has established trade agreements (both bilateral and multilateral) with different countries across the globe.

According to Khan and Agha (2015), forty percent of the country’s exports are obtained from natural gas and oil. Similarly, UAE has been importing products and goods such as aircraft, machines, and food materials from North America, Asia, and Europe. This is a clear indication that the concept of globalization has catalyzed the process of international business. Consequently, the nation has been able to achieve its economic goals. According to this article, exports amount to 38 percent of its gross domestic product (GDP).

In the recent past, the government has created the best environment whereby international businesses can invest in this country. On top of that, attractive incentives have become common to attract more investors. Consequently, the existing wave of globalization has created the best environment for foreign direct investment (FDI) in the United Arab Emirates (Khan & Agha, 2015). This new development has continued to support national economic performance and the empowerment of individual citizens.

The authors of the article have gone further to examine how the existing conditions in the global business environment have improved the level of FDI in the country. As a result, issues such as sustainably and economic development have attracted the attention of researchers in the country. The completed study reveals that most of the foreign investors have not been keen to focus on sustainable issues and economic development agenda. With this kind of knowledge, the article outlines meaningful insights for the UAE government to create the best environment for attracting FDI (Khan & Agha, 2015). This is the case because the practice will support the country’s economy. Additionally, powerful policies will be needed to ensure that every company that invests in this country supports the concept of sustainability.

Analysis and Discussions

Most of the ideas and thoughts presented in the above article resonate with issues associated with international business practices. Within the past two decades, many countries have established new pacts and agreements to promote bilateral trade. This kind of practice has been informed or catalyzed by the process of globalization. The emergence of modern technologies and superior logistical systems is something that makes it easier for manufacturers to produce and market their goods domestically and internationally (Matallah & Ghazi, 2015). Emerging innovations have transformed the way business processes are executed. This kind of development has been supported using desirable government-sponsored programs and policies.

Khan and Agha (2015) agree that the United Arab Emirates has not been left behind in this emerging trend. Throughout the last quarter of the 20th century, the UAE focused on exports since it had numerous natural resources such as gas and oil. The government realized that the existing model was capable of sustaining and improving the country’s GDP. The existence of appropriate policies and partnerships in the international business environment appears to catalyze new ideas that can support the nation’s economic performance (Matallah & Ghazi, 2015). With Dubai attracting an increasing number of tourists and potential investors, it was necessary for the government to put in place appropriate incentives and policies that could encourage this behavior.

From this discussion, it is evident that the international business environment has remained a critical factor that promotes the emergence of many economies. This happens to be the case because many nations have been keen to address some of the obstacles that disorient global business processes, such as increased tariffs and insecurity. In the UAE, the government created the best environment whereby different global companies could invest in the country and expand the opportunities of more individuals.

Matallah and Ghazi (2015) support this approach because it has made it easier for the government to meet the needs of many citizens in the country. For instance, they have access to employment opportunities from FDI businesses or corporations. Such companies have also been observed to offer competitive salaries. Subsequently, the country has continued to record improved economic performance. It has become easier for more citizens to acquire high-quality services and products due to the increasing level of FDI.

The government has capitalized on most of the conditions existing within the global business environment to attract experts and professionals. Investors have been able to access a number of incentives that make investment possible. For example, the UAE government has reduced taxes and improved its relationships with a number of countries across the globe, such as the United States, Belgium, Italy, India, Saudi Arabia, and China (Matallah & Ghazi, 2015). These relationships have improved the confidence of many potential investors. Oil prices and business expenses have also been trimmed. This incentive is making Dubai admirable and capable of supporting the effectiveness and performance of many international businesses.

Khan and Agha (2015) argue that the international environment has been one of the predictors of foreign direct investment in many countries across the region. To begin with, the existing conditions continue to attract many business tourists. The country’s leadership style has created confidence since positive economic has been recorded over the years. Due to the bilateral investment agreements made by this government, this nation is no longer relying on exports to sustain its economic goals. Some incentives have been proposed whereby foreign investors can benefit from reduced oil and natural gas prices, thereby minimizing their business expenses.

This model has made it easier for many people to achieve their potential. With increased income levels, many citizens are currently in a position to get superior services such as health care. Quality products and services are also available to address their needs. Sbia and Alrousan (2016) indicate that the involvement in international business is something that continues to make it possible for the UAE to attract foreign direct investment and promote economic performance.

Unfortunately, the international business environment has been associated with numerous challenges such as reduced welfare statuses and environmental degradation. The UAE has not been spared since it continues to grapple with sustainability issues due to the increasing levels of FDIs. This challenge arises from the fact that many foreign businesses have ignored most of the environmental protection laws. In an effort to improve economic strength, the government has not been keen to focus on the issue of sustainability. According to some skeptics, this idea has been ignored since it has the potential to discourage entrepreneurs from investing in this country (Sbia & Alrousan, 2016). This challenge has resulted in increased carbon dioxide (and other greenhouse gases) emissions.

Recommendations

The global society is becoming more connected than ever before. This happens to be the case because many countries have implemented appropriate measures and incentives to promote globalization. The UAE government has established ties with many countries in an effort to minimize its overreliance on oil and natural gas. The result has been an extensive integration whereby the nation trades with many global partners (Sbia & Alrousan, 2016).

Additionally, the strategy has created the best environment whereby foreigners and business firms can invest in the country. To improve the process, the government has devised powerful measures that have reduced the taxes and expenses incurred by such companies. It would, therefore, be appropriate for the UAE to continue identifying new incentives to attract more foreign investors. This move will support the needs of more people and ensure that they have access to quality services and products.

On the other hand, the unique challenges emerging from the increased flow of FDIs should not be taken lightly. Khan and Agha (2015) assert that an unsustainable environment will affect the performance of every business within a short time. It is also evident that global society is grappling with climate change. Experts have acknowledged that this kind of challenge is partly linked to the aspects associated with the international business environment.

The absence of strict laws to compel international investors and business players to protect the natural environment is something that has led to this problem. The UAE government should, therefore, implement evidence-based and reasonable policies to ensure that foreign investors and corporations engage in practices and processes that are environmentally-friendly. Every foreign investor must also be keen to tackle the challenge of pollution.

Conclusion

The above discussions have shown that the international business environment promotes the economies of many countries. In the United Arab Emirates, involvement in international business is a process that has led to increased foreign direct investments. Consequently, many citizens have been able to get new job opportunities and realize their potential. As the country continues to rely on the wave of globalization to attract more investors, it must be ready to implement adequate laws to deal with the problem of environmental degradation.

References

Khan, S. H., & Agha, S. (2015). Impact of FDI in U.A.E over the main elements of sustainable development: Economy and environment. Journal of Emerging Trends in Economics and Management Sciences, 6(7), 263-267.

Matallah, S., & Ghazi, N. (2015). Globalization, FDI and the links with economic growth: An empirical investigation for MENA countries. British Journal of Economics, Management & Trade, 8(3), 215-229.

Sbia, R., & Alrousan, S. (2016). Does financial development induce economic growth in UAE? The role of capitalization and foreign direct investment. International Journal of Economics and Financial Issues, 6(2), 703-710.

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NerdyRoo. (2021, October 31). International Business Environment and Investments. Retrieved from https://nerdyroo.com/international-business-environment-and-investments/

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"International Business Environment and Investments." NerdyRoo, 31 Oct. 2021, nerdyroo.com/international-business-environment-and-investments/.

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NerdyRoo. 2021. "International Business Environment and Investments." October 31, 2021. https://nerdyroo.com/international-business-environment-and-investments/.

References

NerdyRoo. (2021) 'International Business Environment and Investments'. 31 October.

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