An emerging country or economy is a country that has some of the developed and developping countries characteristics. According to the economy growth it may be developed in the next days.
Researchers published many definition about emerging countries, explaining the transition from a dictatorship to a free market oriented economy by having more freedom in economic, free trade and more integration with global market.
According to Julien Vercueilproposalon emerging economy characteristics:
· Intermediate income.
· Catching-up growth.
· Institutional transformation and economic opening.
There are main characteristic that define an emerging market or country from others, such as:
· Lower than-average per capita income:
Developing countries will have either low or lower middle per capita income according to the World Bank.
· Rapid growth:
Undertaking the rapid change to an industrialized economy. Having a 4 percent or more growth and can reach 7 percent such China and India.
· High volatility:
Can have three factors: external price shocks, natural disasters, and domestic policy instability.
Normally traditional economies are affected by disasters but also it helps to lay the groundwork for commercial development. The currency swings and the change to industrialization affects the lower sector of the population such as farmers.
· Capital markets are less mature:
Often then countries do not have a solid record on direct foreign investments. Also it’s difficult to find information of companies and or their stock markets.
· Higher than-average return:
This point goes to investors. Such countries focus on export-driven strategy. Not having a high demand at home helps then produce lower-cost goods for developed countries, which becomes higher profit for investors.
United Arab Emirates:
United Arab Emirates is a federation of seven monarchies: Abu Dhabi, Dubai, Ajman, Sharjah, Fujairah, Ras Al-Khaimah and Umm al-Qaiwain.
Considered the most diversified economy in the GCC. Considered the second largest economy after Saudi Arabia. Since independence in 1971, the economy has grown by nearly 231 times. For non-oil trade the growth by around 28 times since 1981. Also considered the 26th best nation in doing business based on its regulatory environment and economy.
UAE has a population of 10 million residence, majority are foreigners mostly from India, Pakistan, Bangladesh and many others. Emirati estimated about 11.32% of population.
Having a total GDP of $690 billion and a $68 thousand per capita. For a country that main resource is oil, petroleum and natural gas play the central role in the economy with the exception of Dubai.
The social life based on Arabian culture that marks the Emirati architecture on one hand. On the other hand UAE has a diverse society with majority of population from different countries and different background but never affecting the laws and regulation put by ruling family. These laws are based on the Islamic background of that region.
Diversity became strength in opening the country to the world and making it the fifth visited in the world.
There are some important points when it comes to legal employment structure in UAE, such as:
· Federal law:
Employment is governed by Federal Law (the Labor Law), applies to all employees with limit exception to those working within Dubai International Financial Centre.
· Documenting the Employment Relationship:
Both employer and employee will need separate Arabic/English contract, which must be registered at the Ministry of Labor. The basic elements must be of employment terms is needed in order to obtain residency.
· Types of employment contracts:
Labor Law provides two types, one is unlimited duration and the other is a fixed term.
· Termination of employment contract:
The unlimited contract can be terminate by either party, but my subject to a minimum of 30 days notice in advance. Also can agree on longer period.
As the fixed term contract, is upon expiry of term or dismissal for cause.
· End of Service Entitlement:
Employee is entitled to receive a notice period full payment, unutilized holiday balance, repatriation expenses or end of service gratuity.
· Compensation for Arbitrary Dismissal.
· UAE Wage Protection System.
· Transfer of Employees.
With a population of 10 Million approximately, 11.3% only are the native means UAE has a diverse economy. Employment varies from cleaning service companies to top CEOs in different fields.
Aiming to reduce the oil contribution, they strive to diversify the economy by developing tourism, retail, trade and real estate industries. A long-term strategy is adopted to push the national economy, trying to achieve a jump from 70% – 80% by 2020.
A home to many big corporates such as Goldman sacks, JP Morgan, HP and many others the government planning to foster a knowledge economy and innovation which include education, health, energy, transport. The rapid change in infrastructure and construction development is well known.
The use of expatriation can be defined with a total of 7 Million expatriates, language spoken majority differ such as Hindi 1.2 Million, Arabic 5.9 Million and others around 1.4 Million.
with women role in society female labor force has increased from 9.5% in 1990 to 12.4 in 2016 according to the “World Bank Data” which indicate that the country is growing slowly towards less gender segregation.
The unemployment rate is 3.7% with the lowest in Dubai with 0.30% and that’s among Emirates. Economic opportunities rate for both gender with low income around 86%, for middle income 63% and for high income 77%.
Literacy rate for youth female age between 15-24 is 99.1%, also for male gender is 99.6% according to the “World Bank”.
Cultural differences what makes the country more diverse, we find according to monarchies and their separate rule as federations Dubai is the most diverse among the seven. With some restrictions in public behavior as the whole country is derived by sharia law.
Local companies always try to follow world business behavior, dress codes organizational cultures, trying to be more global with globalization perceptions, sustainable development and improved quality life.
Some of the working labor might face some discrimination, forbidding them from joining or creating labor unions by law and any sort of action can end up in deportation. For media activity, the UAE is ranks poorly in the annual “Press Freedom Index”.
The UAE is open to FDI, which is a main key to long-term economy plans. However, frameworks favors local over foreign investors. There remains no national treatment for investors and foreign ownership of land and stocks is restricted. The non-tariff barriers persist in restrictive agency, distribution requirement and sponsorship.
There are four major laws and regulations on foreign direct investment:
· Companies law:
Applies to commercial companies, with which all companies must come into compliance. Requiring them to have a minimum of 51% UAE national ownership.
· The Commercial Agencies Law:
This law requires foreign principals distribute their products in the UAE only through exclusive UAE national commercial agents.
· The Federal Industry Law:
All industrial projects must have 51% UAE national ownership and also requires that projects either managed by UAE national or having a board of directors with a majority of UAE nationals. An exception was made on some projects such as oil refining, natural gas and other raw materials.
· The Government Tenders Law.
The Importance of HRM:
There are some central issues that in need to be addressed in UAE, acquiring, developing, motivating, and retaining them.
The diversification in the country is a key reason. The majority is from developing and underdeveloped countries. The government has depended on expatriates more than citizens, which can have some advantages having few Emirati populations, and to coop with the rapid growth they went towards hiring foreigner. Again foreign labor has lower cost and that can be the main target for firms.
Expatriates can be useful when it comes to training local and adding more knowledge and international experience to local firms.Although depending on them and focusing on foreign investment only to power up an economy of a country can have bad outcomes in the long run.
As an impact of diversity a change in economy policies is needed to adapt the growth of population, businesses and cultural differences. Such changes might face some cultural barriers of the host country.