The Financial Crisis of the United Arab Emirates

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[pic 4] Eco99international.com, (2015). [online] Available at: http://www.eco99international.com/sites/default/files/users/nathan/Book00/phillips_curve.png [Accessed 10 Oct. 2015].

It is obvious and inevitable that the great depression had hit the country UAE. As seen in the figure beneath, mostly the whole world had actually undergone a decrease as a whole in their economy. The UAE was one of them, as shown in the three charts above talking about the Real GDP, the Unemployment rate, and the Inflation rate all declined as a whole when it was during the period of the Financial Crisis. The real GDP then started to recover.

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The government tried many things to minimize the impact of an economic recession. It was quite successful for getting the economy out of the recession by using the fiscal policy. Very few people could say that they weren’t affected by the financial crisis that hit us during the year 2008, because most of the people, and most of the businesses in the world became a victim. Dubai is one of the worst hit cities in the world among the other countries. Dubai’s economy which mostly relied on tourism, retail, real estate and finance had become solid. Headlines on news papers and the news enough to cover up the whole world had been telling and warning people that huge corporations started to layoff workers not only in hundreds but thousands. The Financial institutions faced debt, job loss, and people who could not afford to pay loans, started to leave the country, which meant that the bank had to stop offering credit and loans, which pulled the situation down even more. But the Fiscal policy has saved them from drowning into the sea of worried workers. The two main ways to help the economy from going into recession by using the fiscal policy is to change composition of taxation and government spending in various sectors. Using “aggregate demand and the level of economic activity, savings and investment in the economy, and the distribution of income” (Martins 2009) will help the economy a lot in recovering. They used the fiscal policy by altering taxation and the government spending to recover from the crisis.

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