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The capital city of the United Arab Emirates is Abu Dhabi. This metropolitan city is the second largest of the seven parts of the United Arab Emirates with the size of 67.34 square kilometers. This semiarid area is situated on an island, which is located only two hundred and fifty meters from the mainland. Its weather is hot and dry, but the land still boasts the best tourist destination sites. Being a center for political, industrial, cultural and commercial activities, Abu Dhabi generates about 56.7% of Gross Domestic Product of the United Arab Emirates. It is also one of the world's most expensive cities and it is eminent for the image of being the richest city in the world. With its skyscrapers, Sheikh Zayed Grand Mosque, Abu Dhabi is thus a famous tourist attraction.

Year

population

±%

1960

25,000

 

1965

50,000

+100.0%

1969

46,400

−7.2%

1975

127,763

+175.4%

1980

243,257

+90.4%

1985

283,361

+16.5%

1995

398,695

+40.7%

2003

552,000

+38.5%

2009

896,751

+62.5%

Abu Dhabi was created by the sheikh in 1970s the purpose of becoming an oil mining site. It was built for a maximum population of six hundred thousand people. Ever since the population has been steadily increasing, it is showing an outstanding potential for businesses in the region. Only about 25% of the population of Abu Dhabi consists of the nationals. The rest 75% comprises expatriates and other business people. This enormous labor force provides a perfect chance for the development of the city's economy. This population also provides a market for the local products as well as those for export.

Abu Dhabi holds about 9% of the world's oil and gas. By the year 2010, Abu Dhabi was producing about 2.3 million barrels of oil every day. Oil and gas encompass about 36% of Abu Dhabi's gross domestic product and 32% of the GDP of the United Arab Emirates. This makes oil and gas the main source of income for Abu Dhabi. Consequently, the leaders of the United Arab Emirates have to come up with a plan to transform the economy of Abu Dhabi from energy based sectors to other. The realization of oil wells is depreciating each and every day.

Diversification of the economy in Abu Dhabi is based on the game theory. Decisions on what to invest in depend on the available resources, their viability, the time frame within which the investments can be made and returns on investment. The major thing that Abu Dhabi is investing in is a real estate - tourism, travel and retail. With the vast acquisition of wealth from the oil sales, the United Arab Emirates Sheikh decided to transform Abu Dhabi into an ideal city. The previous building design was for a lower population density. The new skyscrapers will be much taller than the initial ones. This city provides administrative buildings for the government and still caters for the large business population as it is the capital.

The development of infrastructure in Abu Dhabi has also improved. The desert city has ideal roads to deal with the heavy traffic. One of such roads has twenty-seven lanes. The development of infrastructure is in line with the economic development system and the game theory. With the best infrastructure in place development, it is easy and catalyzed. Such characteristics make investors interested in Abu Dhabi. This infrastructure also shortens the time frame that can be used to achieve other goals of the city development.

Within the next thirty years, the population expectation of Abu Dhabi is to be doubled.

Where:

ñ P0 = initial population,

ñ r = growth rate, sometimes also called Malthusian parameter,

ñ t = time.

This rapid population increase depends on the Malthusian law of population ecology and the 70 rule where the population doubles after a certain period. Such high population will create market for the products, labor and man power for the production industries, and provide a variety of expertise needed to run the economy. This population will also need place to live in as a result of the rise of real estates.

The development of air transport is also another calculated diversification of the economy of Abu Dhabi. With the development of airports and massive investment in state-of-the-art airplanes places, Abu Dhabi is at an ideal position as an air transport provider. Abu Dhabi boasts of having the second busiest airport in the United Arab Emirates. The road and rail networks have also been significantly improved in Abu Dhabi. There are terminals that can handle more than two hundred million travelers comfortably every year. This high-tech infrastructure provides substantial room for investment and would go further in proving the game theory application in business and development of Abu Dhabi.

It has been estimated, that  the oil wells will be on the verge of being totally depleted by the year 2060. The livelihood of people of Abu Dhabi still has to continue, and the economy of the world should not be allowed to crumble. Diversification of this economy will bring about the extensive knowledge of people about the available resources and ways of using them and generate revenue. Such educational levels of the people in this city have been constantly developing. The statistics for the education levels are as follows:

Year

Literacy rate

1989

53.5%

2000

79%

2003

77.9%

2007

91%

The development of education is spontaneous and it is continuously increasing. This clearly shows that the leaders of Abu Dhabi have seen the future and they know that oil will no longer bring income to their expenditure budget. They are in search of other means of generating income through diversification of business ideologies. Tourism has been an absolute eye opener for the people of Abu Dhabi. The development of  state-of–the-art five-star hotels and architects’ transformation of sandy, but deserted beaches of the region into islands and attraction sites, which are extremely admirable by people worldwide, is taking place. The building of the first class hotels and real estate provides accommodation for individuals who are on business trips and on holidays (Barney, 2007).

There are headquarters of various international organizations such as Abu Dhabi securities, central bank of the United Arab Emirates and many others. The creation of new buildings will also be home to many multinational corporations. These are “The Land Mark”, “The Sky” and others. Abu Dhabi has developed over two thousand beautifully decorated and perfectly maintained gardens and parks all over the city.

Abu Dhabi has more than four hundred kilometers of shoreline. Only ten kilometers out of these are public beaches. With the T-shape form, that the Abu Dhabi has the vast amount of show line presents an outstanding business opportunity for it in terms of tourism. The vast and deep culture of the people of Abu Dhabi also presents room for tourism development in the city.

The main religion of Abu Dhabi is Islam. There are also other religions in the region. Only 25% of Abu Dhabi consists of the natives. The other 75% consist of multicultural people and thus there are different religions ranging from Christianity, Hinduism and others. The crosscultural platform is a magnificent avenue for peace and tranquility in the region and, consequently, it is appropriate for business investments, management and development. The diverse religions come with diverse cultures and traditions. This continues to make Abu Dhabi a veritable, ideal and respectable tourist destination site (Aris, 1994).

Investment in health care by the government of the United Arab Emirates makes Abu Dhabi come up with a serious health care plan. This unified care is of remarkably high standards. It proves that the living standard of these people is higher compared to the statistics of the earlier years. This development in the health care system ensures longer life spans of people than they were before. This is a significant contribution to the economy. There is an exponential population increase as many people live till they are old and helpless despite the fact that many diseases that killed people before can be controlled are eradicated.

Abu Dhabi has also been transformed into a center for vital sporting events such as the Red Bull Race World Series. These events attract masses of people, and this is profitable for business. So the other individuals fall in love with Abu Dhabi during such events and decide to invest in this city. They stay there for some time and they may as well end up changing their citizenship to live there. The other prominent contribution to the high population increase is also attributed to people from the whole world searching for job opportunities. The jobless rate in Abu Dhabi is 4% only, and these shows there are so many job opportunities in Abu Dhabi. The high number of the population living in the city consists of foreigners. It comprises job searching individuals who after getting well paying jobs end up moving in with their families (Barney, 2007).

Being the second richest city next to Dubai in the east and Asian countries, Abu Dhabi is a serious place to start a business. This business development has been significantly influenced by the great development of the economy of Abu Dhabi, by the discovery of oil and its mining. The population increase enhances the economic development and thus affects its business development. With many resources, both natural and manmade, and the population increase rate at a constant, the living standards will be high, and the economy of Abu Dhabi will be more developed.

In conclusion, all the factors of production affect the business in Abu Dhabi equally. These factors are land, capital and labor. Land is constant, and land in Abu Dhabi is desert with no chance for agricultural development apart from the locations where oasis exists. Transformation of the desert land into real estate and tourism sites has attracted many tourists. The discovery of oil in 1930 led to Abu Dhabi being among the biggest world producers of oil and gas. This has provided capital to fund the projects for the development of the region. With such development, there is a need for labor to increase the productivity. Many expatriates moved to Abu Dhabi and are still living there. The high population provides labor and market for the products. Concerning all these factors of production, Abu Dhabi echoes a world class business destination (Aris, 1994).

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