Major Challenges Facing Dubai and The UAE

Environmental challenges

Environmental issues caused by natural resource exploitation are among the UAE's challenges. Other challenges include high energy costs and rapid population growth. As a result of global warming, the country has experienced high temperatures, water scarcity, draughts, aridity, high temperatures, and rising sea levels. Most of the countryside is mainly arid, with sparse precipitation and high temperatures, which are exacerbated by climate change and have contributed to the worsening situation of water scarcity, water quality, and water contamination. The country ranks 29th in the world in terms of carbon dioxide emissions. The following are major environmental threats:

Invasive species

Invasive species are a significant factor threatening the UAE's biodiversity. Many species enter the region due to increased commercial activity and illegal wildlife trade. Some plants that can withstand high temperatures and salinity have been admitted to the country for use in forest cultivation and city landscaping. In contrast, others have been admitted as personal possessions.

Foreign species are expected to have severe consequences for wildlife and the environment. Many migratory species and wild animals use specific areas of the country to spread. Among these are sea turtles, dugongs, birds of prey, and sharks. Like other wild animals, these species face various threats to their survival.

Carbon footprints

The UAE's energy, water, and carbon footprints are among the highest in the world per capita, owing to the hot and dry climate, which necessitates importing many goods that cannot be produced in the country.

Limited water sources

Natural freshwater sources in the UAE are scarce and limited to groundwater. The government is increasingly relying on desalinated water, which is produced using excess heat from power generation. This issue has impacted the marine environment due to the discharge of highly concentrated seawater into the Arabian Gulf, among other things.

Overfishing

Overfishing is one of the many threats to marine life. Climate change is also having an impact on marine species such as fish and coral. The UAE has relied on fisheries as its primary food source, but the pressure on marine habitats is increasing.

Waste generation

The UAE has one of the world's highest per capita waste generation rates, most of which end up in landfills. These pressures have compelled the government to implement effective policies and develop scenarios and coordinated strategies to mitigate any significant adverse environmental impact while also protecting biodiversity and ecosystems.

Air pollution

Keeping ambient air quality within required standards has been one of the main challenges for the country's environmental authorities. Human activities, emissions from fuel combustion for energy, water, transportation, and industrial activities all significantly impact pollution.

Land degradation and desertification

Population growth, human activities that degrade soil quality, and land utility and consumption systems all increase land degradation and desertification. Desertification is primarily caused by drought and over-exploitation of natural resources.

The increasing pressure on natural resources, water resources, urban encroachment on arable land, the intensive use of pesticides and fertilizers, and overgrazing all contribute to soil deterioration.

Desertification, land degradation, and drought are global issues that affect millions of people's lives and pose severe challenges to sustainable development. Poverty, poor health, food insecurity, biodiversity loss, water scarcity, reduced resilience to climate change, and forced migration are all exacerbated.

The UAE developed the National Desertification Strategy 2014-2021, which was in line with global efforts to combat desertification. It also issued numerous national-level decisions, projects, and initiatives to limit desertification and land degradation.

Market Challenges

Despite the UAE being a premier business hub and open market in the Middle East, exporters and foreign companies doing business in the UAE face challenges. Many difficulties are discussed in greater depth in subsequent chapters.

• Payment delays and issues are among the difficulties.
• Scams and frauds frequently target foreign businesses and tiny and medium-sized businesses.

Delayed Payments

Late payments are a persistent issue, particularly in public-sector procurements. Companies with extensive experience in government procurement report carrying government receivables for years. Companies should conduct due diligence, carefully consider payment terms, and take advantage of resources such as Export-Import Bank, letters of credit, or payment before shipment. If payment delays continue, companies should contact their Commercial Service department.

Scams, Frauds, and Unsolicited Offers

Scams and fraud are ongoing issues. Scams and frauds frequently target foreign businesses and tiny and medium-sized businesses. Due diligence is essential. Companies should be wary of unverified entities offering lucrative business deals and should never send money without conducting due diligence. Be especially cautious if you receive an unsolicited offer. Companies should contact their Commercial Service department if they receive a suspicious unsolicited offer. A due diligence service for International Company Profiles is also available.

Other market challenges that the UAE faces:

• Tendering processes that are not transparent.
• The absence of a unified government tendering online platform.
• Difficult commercial agent agreement termination rules
• Protracted and complicated dispute resolution procedures.
• Strict national workforce development mandates.

COVID-19 pandemic

The global COVID-19 pandemic and global economic downturn impacted the UAE, as it did every other country. The pandemic triggered an unprecedented financial crisis as oil prices fell, significantly reducing the UAE's oil revenues. The non-oil economy suffered from severe tourism, aviation, trade, and logistics declines. Economic projections became uncertain as a result of the downturn. 

Click following links to learn bout Dubai and the UAE:

What Are United Arab Emirates Major Industries?

Dubai Major Industries and Markets