Article
Abstract
International business is faced with numerous problems such as wars, geopolitical uncertainty, disruption of the supply chain, varying energy costs, rising transport and insurance rates, volatility of investments, and international trade dynamics. One example of such a diversified economy is the United Arab Emirates (UAE) where hydrocarbon production, international trade, logistics and aviation, tourism, financial services and foreign investment are all part of the mix. It has a diversified and developed economy and infrastructure that contributes to making it resilient; however, if there was a conflict in its region, businesses could be vulnerable to further economic and operational threats and risks. In this article, the four global value chain theory frameworks (GVC), transaction cost economics, institutional theory and supply-chain resilience are reviewed to gain insights into the impact of these. It also looks at UAE civil and commercial law, international trade laws and regulations, compliance with sanctions and allocation of contractual risk. The International Monetary Fund (IMF) and the United Nations Trade and Development (UNCTAD) have provided evidence on the relevance of economic diversifications, of reliable institutions and of the importance of functioning transport networks. The local companies need to increase their diversification of suppliers, safeguards on contracts, financial contingency planning, and legal compliance in UAE, the firm says. Such measures can minimize the risk of upset during conflict and help the UAE maintain its status as an international business and investment center.
Keywords: United Arab Emirates, international business, war, supply chains, geopolitical risk, UAE law, trade, investment, economic resilience.
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