792-Dr. J. K. Patel Institute Of Management - Gujarat Technological ...

8. PESTEL Analysis
. Political analysis
The UAE government is considered to have a steady policy-making agenda.
The country is also one of the first Gulf countries to have conducted partial elections
in the region. However, the absence of democratic institutions and weak relations
with Iran now pose problems for the government.
Economic analysis
The state budget surpluses that the UAE enjoys have been driven by high oil
prices; two-thirds of the UAE’s fiscal revenues are accrued from oil and gas sales.
The government's high degree of dependence on exports of these resources for its
revenues makes it vulnerable to oil price movements, and it has realized that in the
long term more reliable sources of tax revenues will be required. The economy's
overdependence on oil revenues is now causing the government to be concerned
about future sustainability.
Social analysis
The country has a low level of unemployment and an abundance of semiskilled
youth workers for its labor markets. However, low literacy and a lack of proper
facilities for education are dogging the social system. Furthermore, the government's
expenditure on coaching is low.
Technological analysis
The country has a strong telecommunication network with state-of-the-art
technologies. As a result, it is attracting entrants to its IT market at a rapidly
increasing pace. However, poor science education and a lack of R&D facilities are a
hindrance to technological development.
Legal analysis
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