Strategies to Attract FDI in UAE

Abstract

International cooperation has acquired particular importance among countries with different levels of economic development. Though the international experience for most cases of cooperation has approved of negative feedback, the perspective of direct investments remains promising. UAE belongs to the countries with a high level of economic development. Its infrastructure, tourism, and alternative energy application create profound perspectives for the investment.

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Although there are extended possibilities for the investment in many spheres, the preferable industry remains the one providing the highest income. The real estate possibilities and alternative energy in the UAE allow considering foreign direct investments. As the estate market in the country is insufficient because of high prices, the idea to invest in energy consumption, particularly using technology for alternative energy production is applicable in the case of UAE. The possibilities of foreign direct investments (FDI) in the energy sphere encompass both non-renewable and renewable energy sources.

Keywords: foreign direct investment, renewable energy sources, non-renewable energy sources, alternative energy, GDP, marketing strategy

Introduction

United Arab Emirates (UAE) belongs to the countries with highly developed infrastructure and is the place visited by hundreds of thousands of tourists from all over the world. Undoubtedly, the hotels of the country, its companies, and firms handling architecture, landscape, interior design, and many other spheres can acquire high profits and receive revenues on various projects. The country has approved itself in the sphere of tourism. Accordingly, its infrastructure attracts numerous investors and tourists. That is why the companies direct their activity at constant improvement. The elements used for decor and the buildings constructed according to the present-day technologies allow assuming the high living standard of the Emirates’ citizens. Nevertheless, the exploitation and intention to follow the tendencies of technological progress have created the necessity to receive investments.

The primary objective of this study comprises the analysis of the spheres requiring investments and designing the strategies due to which the invested sphere will acquire high incomes both for itself and the investors. Therefore, foreign direct investment (FDI) for UAE companies comprises a peculiar interest for further business development.

Tourism and recreation in UAE hold developed infrastructure. The materials applied for the interior design of the majority of hotels are rather expensive. Covering the expenses on building the hotels became possible due to hundreds of thousands of tourists arriving in the country in different seasons. Yet, the lack of natural resources has made UAE representatives develop their infrastructure.

Energy consumption in the regions of UAE remains a vital issue. Taking into account the climatic conditions and the tourism service offered for numerous foreign guests, energy consumption remains high. AC devices, electricity, and many other appliances require tremendous energy resources. Directing the marketing strategies towards renewable and non-renewable energy can help attract investors. The reason is that the energy sphere comprises a perspective for receiving high revenue by stakeholders due to the high demand for energy, climatic conditions of the country, the high degree of sustainability in the touristic sphere and profitability of the real estate.

Significance of the Study

The investigation of the direct foreign investment measurements comprises scientific and economic significance. Scientifically, the issue of the direct investment in the UAE and the formation of the strategies to attract foreign capital represents the relative insufficiency of the domestic capital costs. Enrolling in foreign cooperation is a profitable perspective for UAE as the country’s climatic peculiarities and the lack of natural resources require creating the sphere by which it would be possible to enrich the GDP.

The economic value of foreign investments can initiate the extended international cooperation in the country and give way to the international market as well as extend its marketing share in tourism, real estate, and alternative energy application. The increase in the industrial variety of the country at the expense of foreign cooperation can prevent the crisis and approve sustainability both domestically and internationally.

The energy sphere remains one of the principal fields of the economy. Numerous energy companies supply water and electricity to Abu-Dhabi and Dubai. Many of them support foreign cooperation and have offices all over the world. Taking into account the growing emissions of carbon dioxide, the country tends to utilize solar, nuclear, and other renewable energy sources. As oil and coal reserves are insufficient, the country imports them from abroad. Still, solar power potential and natural gas remain sufficient (United Arab Emirates: energy resources n.d.). Producing electricity is necessary for the workability of electric transport infrastructure.

When considering the strategic perspectives for the investments, the example of Abu Dhabi Stock Exchange (ADX) analyzed during 2005-2009 demonstrates that the size and risk can impact on dividend payout. The size and risk and profitability explain 42% of the total variations in the dividend payout policy (Mehta 2012). The scale of payout circles possible perspectives taking into account the size of the company. Therefore, the bigger the company is, the more dividends it will get.

As UAE is among the countries that achieved relative success in tourism, energy, and real estate spheres, the quantitative data demonstrate convergent results. Moreover, the FDI for UAE had different effects during 1975-2012 by showing ambiguous results at microeconomic and macroeconomic scales (Sbia, Shahbaz & Hamdi 2014).

On the one hand, FDI spurs economic growth. The direct diffusion of technology gradually increases the stock of knowledge in the host country via training and acquiring skills in various spheres that allow practicing new management tactics and organizational altering (Sbia, Shahbaz & Hamdi 2014).

On the other hand, FDI can cause regression. In fact, the intra-industry sector might not be suitable for creating higher revenues within the host economy due to the two-sided cooperation between the domestic firms. In the case of UAE’s study of the energy sphere and tourism, such kind of financial exchanges comprises unpredicted tactics and may have different results. Thus, a deeper analysis of FDI’s impact on different levels is essential for establishing the exact strategies and winning perspectives for both receivers and investors.

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Notwithstanding the financial crisis of 2008 posing the threat to economic growth, Sbia, Shahbaz, and Hamdi (2014) stress that winning EXPO 2020 in 2013 helped Emirates attract foreign investors (p. 263). Therefore, such an event has certainly motivated the country’s representatives towards high performance within its developed sectors and reconsideration of the existing perspectives.

Proper reconsideration in the case of UAE inter-industry financial exchange requires deep analysis. Numerous analysts have difficulties in finding the exact results and predicting the financial and economic processes in the world. That is why proper planning in foreign investments, debates, conferences, and symposiums with foreign governments is necessary. UAE needs investments to develop. The country’s attractiveness in the recreation sphere, its skyscrapers, and high-service hotels constitute its positive reputation and the ability to achieve high-quality service and ensure high living standards.

Dubai is only one of the seven regions, which is advantageous for FDI. The country’s businesspeople are skillful in arranging different kinds of events. Many of them exercise their business activity in the sphere of property investment, tourism, oil and gas, and other financial investments (Sbia, Shahbaz & Hamdi 2014). Though the global financial crisis of 2008 made it hard for UAE to understand the clients, tourists and investors remain its stronger side. The drawback of UAE remains the disability or uncertainty in making rapid decisions in the situations connected with risks and the ability to adapt to market tendencies directed at higher income spheres.

Proper risk management in the scale of tourism and the introduction of the governmental regulations in the field of renewable energy remains the issues to consider and necessitate further investigation and valuable policy implications for UAE. The results of the efficient financial analysis and predicting stable economic growth can approve the country’s international position. Yet, the stability in financial development is possible due to FDI. Each sphere of the economy in the country works in a relatively independent way. Finding a compromising decision on the governmental level or exploring the domestic partnership can also impact on the possibilities to attract more FDI. The investments from different partners will quicken economic growth and resist possible or further crises.

The inter-industry financial exchange is a considerable problem in the UAE. As risk policy and anti-crisis strategy in UAE have not achieved workability and approved efficacy, it requires deeper analysis held by professional economic experts.

 

Industry Profile and Data Analysis

According to the above-mentioned energy industry peculiarities, UAE requires imported raw oil and coal. Such energy sources deplete, and the country needs more renewable energy sources. Due to the constant hot climate and rare rains, solar energy batteries, and equipment, both domestic and foreign, find its application in the country. Air conditioning systems in UAE need much work as well as the electric transport infrastructure. Using electricity in vehicles was another way of reducing the harmful carbon dioxide emission.

Choosing the energy sphere for FDI investments can help introduce new renewable energy sources and skillfully apply them to various spheres. The establishment of the newest technologies will promote a better position in the country at the international market and its macro- and microeconomic levels. The possibilities to export the energy-saving technology can help implement the international experience into UAE energy strategies and establish wide cooperation directed at constant investments from abroad. Moreover, this can create new chances for the UAE as an investor. Borrowing German experience and introducing UAE energy-saving technologies in Europe can help attain more popularity not only in tourism but also as an energy manufacturer.

Unlike Sbia, Shahbaz, and Hamdi (2014) underlining the longitudinal effect of the crisis in 2008, the Indian analysts' Khan and Agha (2015) pertain to another conception, claiming that the country has managed to acquire high-level economy. The relative instability of GDP exemplifies the misconceptions between the studies and allows understanding that UAE managed to overcome the crisis.

Though UAE uses exported oil and natural gas comprising 40% of export in general, the energy sphere contributes 38% index of the country’s GDP. Therefore, renewable energy combined with non-renewable sources can be promising within the field.

The intention to diversify energy sources and achieve maximum revenue has become the reason that the UAE’s officials have made the decision to apply incentives for foreign investors (Khan & Agha 2015). As most of the investment projects require hard work of the domestic companies with less return of costs, such tactic is a bit complicated for the host country. Therefore, the country’s difficulty in managing proper price policy and establishing cooperation measurements by approving the workability of the financial results of their work and forming the higher income percentage for the hosts.

As the export raw material and GDP percentage received from the energetic field remains the same, the analysts' Khan and Agha (2015) attempted to explain such phenomenon in their study. Particularly, the unidirectional causality between GDP and CO2 and its emission impact upon GDP. Therefore, such a relationship promotes the distinct deduction that the imported oil and gas raw materials contribute to GDP. Though the country has abundant recourses of gas, oil deposits are rather low compared to solar energy potential (Appendix D). The desert climatic conditions of the country in this case matter as the knowledge management and application of the latest solar energy technologies can acquire the leading position in the power supply. Due to global warming, the 2016-2020 indices can increase compared to 2010, and the solar accumulators will be able to absorb more sunlight.

The wind power potential of 2010 was twice as smaller compared to solar energy (Appendix D). In this case, the applicability of wind power turbines as the energy supply potential is applicable as well. Still, it requires the application of the proper wind power technology and utilization of the equipment with the technological characteristics applicable to the wind speed in the region.

The scholars' Zanella, Oyelere, and Hossain (2015) recommend that there is need of UAE government to make policies that will attract more foreign direct investment so that the dependency of the country on the oil sector will be reduced, and thus the negative effect of GDP growth over CO2 emission will also be lessened.

The consideration of non-renewable energy-saving includes considering the possibilities within the range of products. Thus, diesel engines as the replacement of electricity are more efficient. It is worth noting that the payback time for the diesel engine comprises about a five-year term (Iqbal & Soyumer 2016). Numerous engines in UAE work on diesel. That is why many car owners, particularly the representatives of the middle class, tend to replace the petrol engines with diesel ones. Though the technical characteristics of this engine are rather obsolete, the car service with the diesel engine is cheaper compared to petrol. Therefore, cheaper fuel denotes fewer amortization expenses and a larger period of the functionality of the car elements.

Extended advertisement on the billboards at such populated regions as Dubai and Etisalat and Abu Dhabi (Iqbal & Soyumer 2016) exemplifies the demand scales and the necessity of the customers to possess the diesel engine installation on the cars.

The idea of applicability of hybrid cars combining solar battery accumulator and diesel engine can be an alternative way of energy-saving (Iqbal & Soyumer 2016). Offering to reestablish mini-grid networks by combining the existing components of the standalone system requires the investment for infrastructural upgrades. The repositioning of the distribution panels and recalling of DC and AC wires comprise the necessary measurements for the system to function. Voltage stabilization within the mini-grid requires the device which is expensive to manufacture. Nevertheless, understanding the efficiency of such engine and experimental approving of its workability can help create suitable car models.

The favorable side of such installation anticipates the electricity to be generated in standalone systems efficiently due to its storage and dispatching within mini-grids. As a result, the car will require less electricity and diesel consumption. Nevertheless, the distances between the constituent elements of the hybrid Solab of 180 m and the necessity to use cables have created complications to connect and mount the PV plants within the mini-grid (Iqbal & Soyumer 2016). Thus, AC cables for the diesel generator can save 12 800 $ yearly. Still, the upgrading of the existing diesel systems requires $67 000 without the payment for the scope of work done. The calculated Levelized costs of the existing systems are $119 927, whereas relevant costs for the battery are $66 856. Such configuration saves 90% less diesel, particularly from 102 kWh to 9.6 kWh, while the electricity reduction is to 98.9 kWh from 220 kWh (Iqbal & Soyumer 2016).

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The preferences of solar energy represent the interest of FDI. Having considered the exact expenses on the installation of the device manufactured in UAE, it becomes possible to distinguish the conceptual ways and strategies directed at cooperation and energy installation improvements. Still, the perspectives of return of investments (ROI) are longitudinal and extended. Amortization calculation and the understanding of the exact peculiarities of investments’ sum presuppose the distinct numerical data understanding. Unlike the Japanese models of Toyota Prius solar-diesel engine as the type of hybrid cars, applying the petrol-electric accumulator can become a cheaper competitive advantage of UAE hybrid cars’ model at the international market.

Yet, creating such models and their implementation as the export unit requires numerous pilot projects, profound testing, and experiments. Knowing the climate peculiarities of UAE, such cars can be applicable in Egypt, SA, or countries with a Mediterranean climate such as Spain or Italy. Taking into account the taxation system for using diesel engine cars, such automobiles can comprise environmentally friendly technology compared to the customary and expensive petrol Ferraris or Lamborghinis.

Conceptual Discussion

The principal concepts indicated within the study concern the types of energy sources and income acquisition. Non-renewable energy sources exemplify raw materials for the production of diesel fuel and petrol, particularly oil and gas. Renewable sources represent solar and wind energy. GDP or gross domestic product denotes the income of the state acquired during the year taking into account all the fields of the domestic economy as well as the direction of the import and export. GDP expresses the income received by the country during the year. Though UAE had difficulties in increasing GDP, its striving for economic success allowed making the percentage increase gradually. Accordingly, such a slow tendency anticipates the country to become more developed within 5-10 years (see Table 1).

As the principal income spheres of UAE remain tourism and real estate, the expected percentage of the GDP from these spheres remains higher. Yet, the increasing impact of energy worldwide due to climatic change and global warming as well as taxation directed against CO2 emission shows ambiguous results in UAE. The country attempts to avoid the extended taxation peculiar for Italy or Germany. That is why CO2 emissions increase sustainably between 2002 and 2010 (Appendix B). Taking into account the desert climate as the geographic circumstance of fewer winds and more sun, the air pollution indices remain high.

The microeconomic level represents the firms and companies within the energy fields (Sbia, Shahbaz & Hamdi 2015), whereas macroeconomic denotes the international level of energy industry. Therefore, FDI can affect the macroeconomic level via microeconomic issues.

Marketing tactics encompass the necessary measurements within macro- and microeconomic levels directed at cost optimization and ROI during a lesser period of time. UAE power supply study indicates growing attention towards alternative energy sources, i.e. those received without mining. The abundant alternative energy source within the UAE is solar power. Considering the tendencies towards the necessity to investigate the efficiency of solar-diesel cars, knowledge management, and holding experiments within the UAE also need foreign direct investments (FDI). The latter presupposes the sum of money received from abroad due to which the country and the field will develop economically and ensure high incomes both domestically and for the side providing the investment.

FDI represents utilizing the money from foreign countries directed at promoting the development of this or that sphere. The case of the UAE represents an interest in investing in solar energy manufacturers. The devices adopted in UAE are efficient within the country and require further study to apply them as the export unit. Moreover, the possibilities of solar batteries in other climate zones need further study. The understanding of marketing tactics concerning FDI in UAE belongs to the strategic view formation within the energy sphere. The combination of the stronger sides of the country, particularly its touristic sphere, developed infrastructure as well as the available domestic natural resources, positions UAE as the country able to manufacture and manage costs and direct them towards sustainable development.

Review of Literature

The literary resources provide an extended analysis of the qualitative and quantitative data concerning the UAE. In fact, the issue concerning the exact prognoses of the results of FDI for the country has not been studied. The analysis of the energy sphere comprises the attempt to reflect possible and workable tendencies for further development.

When analyzing the literature and studies held concerning UAE, most of them are connected with energy sphere (Iqbal & Soyumer 2016; Jafarkazemi & Saadabadi 2013), FDI (Sbia, Shahbaz & Hamdi 2014; Khan & Agha 2015), state policy statistics (United Arab Emirates: energy resources n.d.; Central Intelligence Agency n.d.), and economic and marketing strategies (Mehta 2012, Sundarakani, Tan & van Over 2012). The real estate belongs to the spheres which acquired high economic indices during the latest years. Dubai attracts numerous tourists due to luxurious hotels and unusual designs. UAE representatives managed to create workable infrastructure in spite of the crisis in 2008 and unfavorable processes that happened later.

Due to the development of the energy sphere and the possibilities of technological achievement in the sphere of tourism, UAE has far more competitive advantages than many other countries. As the real estate sphere has FDI, alternative energetic products are common with the field. That is why one of the alternative solutions can be attracting foreign investors via tourism and conferences among others. The scientific investigation and creation of cost optimization for investigatory projects are the primary concern of such conferences.

When considering the technical characteristics of the solar energy devices, Jafarkazemi and Saadabadi (2013) distinguish tilt angle and orientation as vital factors affecting the capacity of solar surfaces. The accumulators comprise the collector and the panel. In some cases, there are some limitations for adjusting the solar collector or solar panel at the ideal orientation and tilt angle. The south direction is the side where the amount of sunlight getting onto the surface of the energy collector is the largest. The necessity to alter the turn angle towards the sun during the daytime requires the construction technique allowing the battery to locate the sunlight as much as possible. Establishing special warmth or heat detectors can allow aiming the device in the direction of sunlight (Jafarkazemi & Saadabadi 2013). Yet, such technology requires both web and actual applicable testing as such high tech is possible via software engineering. For now, directing the battery towards the southern side remains the simplified and precautious achievement of UAE construction designers.

Previous learning of the possible risks in FDI for UAE requires cost stickiness learning (Zanella, Oyelere & Hossain 2015). The cost stickiness is defined as costs decreasing by less than 1% when sales decrease by 1% while reacting closer to the proportion of change when sales increase. Using panel data regression analysis did not detect cost stickiness in the UAE. The lack of employment protection legislation (EPL) for expatriate labor force comprises the main explanation of not having the typical benefits available in other national jurisdictions in UAE (Sbia, Shahbaz & Hamdi 2014). Such a phenomenon represents the underestimation and demotivation of the human resources for working inside the country. Their inclination to participate in the outsourcing, hence cooperation with the foreigners and paying more attention to logistics sphere

The scholars Sbia, Shahbaz, and Hamdi (2014) support the position that the UAE is dependent upon foreign capital, representing the economy with dynamic and active tendencies. The linkages to foreign investors and numerous international partners assume western economy type. A downturn is the situation with which the managers cannot cope, hence cost adjustment in such a policy is more difficult. Having more domestic capital and lesser dependence on foreign costs could provide more sustainability. Therefore, creating the reserve capitals at the expense of ROS could solve this problem. The problem is that 49 companies investigated within the study are insufficient for the formation of the overall marketing tendency concerning human resources and EPL. The degree of operating leverage to enclose fixed and variable costs of sales can become the subject of further study combining the neighboring countries within the Gulf region (Sbia, Shahbaz & Hamdi 2014). Nevertheless, the experience of relative military uncertainty could be influential for UAE economics.

Considering infrastructure comprises the system alongside energy consumption. Property markets at different stages of maturity evolve endogenously (internally) due to infrastructure disjuncture (Sbia, Shahbaz & Hamdi 2014). Trade and customer direction enable the appearance of tremendous malls in Dubai. The scholars distinguish microeconomic and macroeconomic difficulties as harmful for the environment and threatening the customary living conditions of people. The rapid extension and growth of clothing sales within Dubai expose exogenously (externally) disturbances, particularly unforeseen financial, macroeconomic or geopolitical events, and natural or man-made disasters comprise endogenous (internal) scale.

The understanding of the supply chain bears importance in the paper as well. The possibilities of outsourcing, i.e. attracting foreign human resources for performing different scopes of work, have acquired the way of optimizing costs (Sundarakani, Tan & van Over 2012). Due to the companies engaged in outsourcing, the UAE can collaborate with foreign investors. Yet, the drawback of such a system remains high rates of exploitation and the necessity to learn supply chain peculiarities by less qualified workers. Undoubtedly, the limited scope of human resources required for logistics oversees the higher unemployment of UAE citizens due to the EPL phenomenon.

The principal challenge of globalization and outsource remains working with IT and attempting further chances of software development rather than HR management. As mentioned by Sundarakani, Tan, and van Over (2012), the customers’ expectations can only be met if reliable and real-time information is readily available. Logistics and supply chain management requires adopting newer IT directed at improving customer service. The survey conducted within the logistics sphere of UAE clearly demonstrated the belief that IT is a necessity. Yet, such a tendency is not peculiar for UAE only. Higher competitiveness of the foreigners and cheaper workforce in UAE is an unfavorable drawback of the insufficient policy directed against unemployment.

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In fact, such tendencies allow assuming the unfair violations in payment, lacking social welfare as well as the high rates of HR taxation. Thus, the government should reconsider the payment methods and cost redistribution within the companies. The responsibility and decision-making coherence expressed financially is to equal the team members to motivate and create collaborative perspectives within the domestic firms.

Foreign direct investments in UAE comprise peculiar interest for the country. Its ability to overcome crisis and uncertainty of the last few years has approved its sustainability in logistics, supply chain, and tourism. Yet, the overload of the human resource market creates redundancy which results in unemployment. Overcoming such an unfavorable phenomenon can create new jobs in the energy sphere.

Research Methodology

The study of the UAE energy field within macro- and microeconomic scales covers qualitative and quantitative data. The statistical methods indicate the study of GDP indices during 1990-2011 as considered within the literary sources and numerical data concerning the energy products within the field. The comparison of crude oil in the country and the indices of the exported oil as important for raising the GDP also reflect the vital importance as the complement of the overall character of the field. As imported crude oil influences the rates of GDP, the investigation will reflect and indicate the indices of both domestic and imported raw material.

The statistic analysis of the issues covered within the practical application of the energy sources concerns the introduction of solar-diesel cars and the prognosis in 2017-2018 years. As the scholars consider the numerical data within 1990-2011, the primary concern of their investigations handles the crisis of 2008 (Appendices A & B). To be more precise, in 2009, the degree of FDI reduced from 14 000 to 4000 as the investors understood the harmful impact of the crisis. Therefore, the analytical approach in this case and proper learning of the risks proved to be inefficient. The gradual increase in further investments to 6 000, 8 000 and 10 000 in 2010, 2011 and 2012 respectively show the UAE’s capability to recover from the crisis and reflect its mode of work during the given periods. The flow charts within the paper reflect the tendencies of economic growth of the indices within the country and the field.

The qualitative analysis comprises learning the investigations held during the previous years and establishing the distinct measurements and costs applied for the implementation of the technologies for automobiles. The study of GDP fluctuations denotes the understanding of the macroeconomic level of the state and indicates the possible tendencies of growth in the power supply sphere. Considering the profound impact of traditional energy sources, the applicability of cheaper diesel compared to petrol is less costly. However, the engineering of hybrid cars with solar-diesel supply also requires high costs. That is why the researchers remain uncertain in their understanding of FDI’s impact on the energy sphere. Impossibility to configure the statistics of using the relatively new kind of energy restrains the definite prognoses. Yet, with the depletion of natural sources in general and in UAE in particular, the preference in solar systems and the introduction of wind turbines on the stage of pilot projects can be applicable in the case of UAE.

The study of wind power and its efficiency and workability requires deeper investigation. Due to insufficient data approving fewer possibilities for wind plant development using the turbines instead of cables to accumulate electricity remains the issue to consider. The study of climate change and the appearance of winds is the task of meteorology. Relating to the European experience of wind power applications, the turbines are efficient in the regions with fewer trees and a certain landscape type. Though the UAE is close to Saudi Arabia and its climate is more peculiar for the deserts with less wind activity, few countries apply wind power turbines with less wind activity. That is why wind power draws attention to the qualitative level rather than quantitative.

The synthesis of the data acquired during the UAE energy potential study unites the GDP indices combined during 1998-2015 and systemizes the possibilities acquired during the actual power supply experience. Predictions for 2015-2020 remain uncertain due to instability within the sphere on the international scale. High costs of non-renewable energy materials approve the monopolistic and sustainable leadership of petrol and diesel installations within the cars. That is why using the energy products for automobiles and their direct impact on GDP growth require consideration and concentration on hybrid sources.

Results and Discussion

The investigation of UAE indices will cover 2013-2015 indices concerning the GDP tendencies within the country as well as consider the quality data. The understanding of the necessity to analyze the energy sector within 200-2010 as well as 2010-2015 helps better understand UAE’s ability to overcome the crisis and consider the scenario of its strategies directed at investment attracting.

The index encompassing the knowledge of the ways of acquiring incomes is the gross domestic product (GDP). It exemplifies the sum of money earned as income during the year. Analyzing other points concerning the state profits, one cannot but mention Gross National Saving (GNS) or Gross National Product. The latter index shows the difference between the sums of investment spent and earned by the country. All the mentioned indices help better understand the income issues of the state and its resistance to the crisis.

Lessening the GDP purchasing parity in 2015 compared to 2014 can be the reason for unfavorable economic conditions on the macroeconomic level.

Lowering the GDP purchasing parity and the GDP per capita (PPP) expresses the concern for UAE government. The reduction in GNS from 41.6 to 27.1 is almost double. Therefore, unemployment increases as well as insufficient policy in the sphere of human resources and lacking the extended rates of business structure enabling the person to work. Small growth rates of GDP compared to the previous years are higher but do not hold the lowering tendency. Yet, unemployment rates can cause lowering. Thus, FDI in UAE can create workplaces in the sphere of constructing solar batteries as well as web testing and manual test configuration for manufacturing the appliances. Profound scientific investigation and possible encouragement of foreign science intellectuals within the sphere of alternative energy could attract more personnel. Training systems within the UAE due to the company workers or the representatives of the international organization could create distinct cost management after the investment.

When talking more about climatic factors applicable to solar energy appliances, the relief also remains vital. Flat and barren coastal plain merging into rolling sand dunes of vast desert wasteland represents UAE as a desert climate country (Central Intelligence Agency n.d.). Considering the relatively plain surface of the lands in UAE, the possibilities for constructing numerous solar energy generators remain optimistic.

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The combination of solar installation and wind power turbines is also a realistic perspective. The unification of devices and hardware to generate more energy can comprise peculiar interest as well. Such installation is not customary for Europeans, and many solar batteries and wind power turbines’ location predetermines climatic conditions and suitability for the residential or non-residential zones. When the turbines can lie in the desert area, the utilization of solar batteries on the roofs of the hotels for heating or air conditioning is acceptable. The Bulgarian, Spanish, German and other hotels attempting to save costs tend to use solar generators seasonally. However, UAE can apply such generators regardless of the season. Considering the limited possibilities of GDP growth and the importance of the energy sphere due to imported raw material, using solar batteries can be cost-effective both domestically and with FDI.

The perspectives of using solar accumulators for charging cars instead of the usual petrol or diesel engine are less outstanding. Hybrid car type of petrol and electricity has approved itself in Japan and Germany. Toyota Prius modification in Japan has become one of the first cars to approve efficiency and being environmentally friendly. Indeed, such cars managed to achieve a substantial reduction of CO2 within Europe. Yet, the essential role of CO2 emitting transport remains vital in the UAE. That is why the officials do not haste to introduce the laws limiting the petrol engine's car owners. The taxation for the engine volume is lesser compared to the USA where certain modifications of minivans causing redundant CO2 emission require tax fees.

The electricity production of 1.845 billion kWh (2012) and relatively lower consumption of 1.716 billion kWh represent high energy demands within the country. Non-availability of crude oil and its purchasing in America, Russia, or other countries makes UAE rethink its energy possibilities and establish more profound manufacturing of solar energy (Central Intelligence Agency n.d.). Desert climate and coolness in the eastern mountains reflect the lack of wind and predetermine the application infrastructure for the installation of solar energy batteries closer to the western regions with more sunlight.

High demand for crude oil and complete depletion of natural resources (Central Intelligence Agency n.d.) necessitate the import of oil products from abroad to make the petrol. Such tendencies do not pay attention to the natural gas potential and creating domestic fuel using this raw material. Still, the car owners of lower-paying capacity tend to reconstruct the petrol engines to diesel ones and use diesel fuel. The CO2 emission indices within the UAE remain high. The governmental authorities are less inclined to reconsider the environmental policy and taxation for the petrol or diesel engine volume cars unlike the USA or some European countries. That is why non-renewables preserve high demand and precondition of the importing.

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The wind speeds also remain the promising alternative energy source (Appendix C). In many regions, they achieve 500-600 W/m2 closer to the north with a gradual decrease to marginal 200-300 W/m2 density. Relatively low cost of wind power turbines and their availability in Bulgaria, Germany, and other European countries can help save cable costs and consider the generating technique transferring the wind energy into electricity. Installing the turbines within the windy regions closer to the north with the account on higher wind density and speed indices can accumulate the wind energy and create possibilities of generating the alternative to solar energy.

Having analyzed the energy potential within the UAE, numerous investigators rethink the combination of non-renewable and renewable energy sources regarding the cheap raw material. UAE living standards have not acquired the necessary measurements to understand the acuteness of the environmental policy. Yet, the country remains favorable for creating forward technology with an alternative energy field.

Conclusions and Recommendations

UAE has the extensile potential in the sphere of tourism and real estate holding. Many estate owners and touristic companies and hotels, to mention but a few, with or without FDI attract hundreds of thousands of tourists. In spite of the world crisis, the UAE has managed to raise its GDP indices in 2010-2012. However, 2012-2015 indices of the 1% decrease make the foreign investors cautiously consider the sums of FDI necessary to develop the UAE economy.

Though the implementation of solar-petroleum engine cars acquires high demand in Europe, the Arabian example of cheap raw material remains a diesel engine. As solar energy supply enables the installation of numerous solar energy generators, many constructors prefer locating them in the western regions of UAE directing the tilt angles to the south. The version of solar-diesel hybrid engines has approved the scientific workability, its amortization expenses and return of costs remains the subject to consider.

Human resource management and the abundance of cheap workforce constitute the drawback of governmental activity and its disability to overcome unemployment. The reason for UAE unemployment rates lies in more inclination to logistics and outsourcing sphere as a negative outcome of global cooperation. The IT sphere within the power supply can be a new perspective of web testing and IT-sphere development.

Manufacturing of the installations of petrol-solar and diesel-solar car engines due to the abundant energy source can enable UAE to become the first country to accumulate large energy resources basing on renewable materials. Its desert climate and high wind speeds can serve a profitable example for the foreign investors to understand UAE as a profitable partner and its energy sphere as the foreign investments’ object.

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