How has the coronavirus pandemic impacted the UAE?

When I was five, my family and I moved from our home in England, where our friends and family lived, and took the leap of faith to move to Dubai in the UAE. Growing up in the UAE but visiting England every summer gave me a unique perspective on many different aspects of life. It helped me to become more culturally aware with a greater understanding of the world and perhaps allowed me to mature faster than my peers in England as the UAE is home to nearly 200 nationalities. Recently, I was stranded in England for 10 weeks when the UAE closed its boarders with only 10 hours warning, my dad was still in Dubai. The difference ways in which the two countries governments handled everything was interesting; the impact of the virus and the lockdowns that occurred resulted in two very different outcomes.

This strongly links to this year's Young Geographer of the Year theme "The world beyond my window" because every time I look out of my window in Dubai, I can see and appreciate the vastness of the country.

Tourism is a major source of income for the majority of the UAE followed closely by oil. In the first 6 months of 2019, it was reported that there were 8.36 million international tourists, mostly from India, Saudi Arabia, the UK, China and Oman. The government estimated that there would be 20 million visitors to the country in 2020. However, in mid March 2020, the UAE government announced that due to the coronavirus pandemic, no tourist visas would be issued, which effectively stopped tourism dead, in what was the height of the tourist season. The Dubai authorities are now hoping to welcome tourists back in July but it is more likely to be September 2020.

The National, a local newspaper, reported that at the end of January 2020, “Tourism now contributes 11.5 per cent of Dubai's GDP”. GDP means the ‘gross domestic product’ meaning the total of goods and services provided in a country. As of September 2019, tourism contributed $44,838,290,340 US Dollars.

Due to the pandemic, there is currently almost zero tourism in the UAE; most hotels were closed for at least two months and tourist attractions have closed for longer. Expo 2020 was set to be held in Dubai from October 2020 to April 2021. The Expo area and buildings are the equivalent of building a whole new mid sized town in the UK and it's currently finished but empty. There was a target for over 11 million additional foreign visitors to come to visit the Expo alone, contributing to the tourism industry and the country's GDP. The Expo has now been postponed to October 2021.

However, there is now the rise of the staycation. Short holidays within the country have always been popular with the residents, but in recent weeks as the country has opened its shops and businesses, people are getting out and about after weeks of being isolated at home. All of the resort hotels are now fully open and attracting the local population with summer stays at their beaches and pools. These staycations are very popular as all of the airports have been officially closed for the last three months and the hotels can take advantage of the expat population, many of whom usually travel to their home countries over the summer and are now looking for local holidays.

Like many countries, the UAE's air pollution levels were extremely high before the pandemic hit. In June 2019 Greenpeace listed Dubai as the 10th "most heavily polluted city in the world" for air quality. The rapid development of the country and the rapid population growth were responsible for rapid rises in all forms of air pollution with rises in the various oxides of nitrogen (termed NOx) being the key measure. The National reported that " the amount of nitrogen oxides increased from 740,000 in 2006 to 1.4 million in 2014".

That same newspaper, The National, reported at the end of May 2020 after 3 months of the UAE's lockdown, "the average reduction across the country between February 1 and April 30 amounted to 30 per cent" according to the UAE Ministry of Climate Change and Environment.

The global oil price, usually quoted as either WTI (West Texas Intermediate) or Brent (named after the North Sea's Brent oilfield) had both been fairly steady in the year running up to the first news of the pandemic, with Brent hovering around the $60 to $70 per "barrel" level and WTI at $50 to $60.

The effect of the pandemic was to completely destabilise the global oil price, and also to highlight the fundamental differences between US domestic oil production (WTI) and the international market. At one point forcing Brent to crash down to 21 year low on 22nd April of $16 and WTI hitting a completely impossible and never before seen negative price point.

The UAE, being one of the world's top crude oil producers and sitting at the "mouth" of the Arabian Gulf (the Straits of Hormuz), is a key player in the global oil market and influenced by these ups and downs. While there are other key indices, the UAE generally sells at the Brent price, and the chart below shows the stages of the pandemic in both countries and the Brent price.

The chart above shows the instability of the Brent Crude price (line) and the trading volumes (bars). During 2019, Brent oil trading volumes were quite stable, but once it became obvious that the CoVid had spread outside China, volumes doubled. It is interesting to see that even today, as the oil price has started to increase again, the trading volumes are approximately treble the 2019 volumes.

It seems as though the events in the UK and UAE had less impact on the Brent price than other world events such as the Wuhan lockdown, and the WHO declaring a pandemic. This is probably because China is the world largest buyer of oil, and so any slowdown in the Chinese economy has a huge effect on the global oil markets.

As you can see, the coronavirus pandemic has really impacted the UAE in a multitude of different ways. Tourism has decreased, the amount of air pollution has decreased and the oil prices have really fluctuated, the oil prices have not been influenced much by the UAE but it was still fascinating to learn about.