Session 5 UAE Executive Summary
The Galaxy Group concluded a elaborate treatment of regional economic integrating ( REI ) as it pertains to Sainsbury ‘s possible planetary enlargement into the UAE. REI occurs when states within a part build economic mutuality by promoting trade through common ordinances, reduced barriers, and understandings ( Cavusgil, Knight and Riesenberger 2007 ) . Cavusgil, Knight and Riesenberger estimates about 40 per centum of universe trade occurs via REI understandings. Five degrees of REI were identified with assorted types of REI presented and the interaction between economic and institutional integrating examined. It was determined that institutional integrating is the policy determination which follows the initial economic integrating. The channels for the economic integrating follow two waies ; trade and investing flows ( European Central Bank, 2004 ) .
The Galaxy Group researched illustrations of current, positive REI ‘s that serve both the UK and the UAE. Our analysis revealed no current REI ‘s exist between these states, and there is limited success with intra-regional integrating in the Middle East. However, the UAE does belong to the Gulf Cooperation Council ( GCC ) . Initially, the GCC was formed as a defence confederation. The thought is that deeper integrating among GCC states including increased harmonisation of economic, fiscal, cultural, and environmental and foreign policies could be the channel for greater Middle East trade integrating ( Al Bawaba, 2009 ) . However, treatments between the member states seeking to spread out the organisation ‘s function in economic cooperation are ongoing ; programs include the constitution of a common currency by 2010 with the outlook of the formation of the Gulf Monetary Union ( holding common currency ) , with similar bank consolidations and other actions like the European Union ( Al Bawaba, 2009 ) . Originally slated as the site for the common cardinal bank, UAE has now withdrawn from programs to set up a pecuniary brotherhood. Between the UK and the UAE, common patterns and administrations are covered by the World Trade Organization ( WTO ) , of which both states are full members. The understandings within the WTO, and the benefits to member states, pertain to both states and will impact Sainsbury ‘s enlargement into the UAE ( WTO, 2008 ) .
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With the benefits between the UAE and the UK created by the WTO, the Galaxy Group investigated the hazards of REI presented to Sainsbury ‘s by the UAE. The chief hazard was the instability of the Gulf part, which has been locked in struggle since the terminal of World War I, and most notably in the past 20 old ages. The part, with the limited globalisation and hard-lined political orientation, is forecast to be a halfway point for struggle in the decennaries to come ( Barnett, 2004 ) . The possible economic integrating in the part discussed earlier could bind the UAE economically, through amalgamate banking or confederations, to unstable states. As a consequence, the inevitable struggles in the part could negatively impact the UAE, particularly if they are linked to these states ‘ economic systems. The volatility of the part, when coupled with the UAE ‘s possible REI to the environing states, presents a important hazard to Sainsbury ‘s for investing and enlargement into the UAE.
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