week 9 ( the Report )

In this week we have to answer question about report which Mr. Mark give us

1.       What is the draft Federal Budget for 2012 for the UAE in US$?

                                                                             

$11.4 billion

2.       How does this compare with the 2011 budget?

2011 budget was $11.2 billion (41 billion dirham) is higher than the previous year budget by 0.2 billion USD (0.8 billion Dirham’s),

3.       Will projected revenues cover projected expenditures in 2012? Explain your answer.

The projected spending or expenditure is expected to be 41.8 billion dirham and the projected revenue is 41.4 billion dirham, therefore the revenue will not cover the expenditure.

4.       What are the spending priorities in the UAE next year?

Health, Education and Social Services

5.       According to the article, how does the UAE rank as an oil exporter and Arab economy?

It’s the second after Saudi Arabia.  

6.       Are oil receipts included in the Federal Budget?

Oil receipts are not directly included in the federal budget but grants from Abu Dhabi.

7.       If oil prices rise, which Emirate will have ‘space to spend more if needed?’

Abu Dhabi

8.       According to the article, which macroeconomic policy is a key tool for the UAE economy?

Fiscal policy

9.       What are the key components of Fiscal Policy?

Government spending, Taxation, Revenue and Borrowing.   

10.      Why is Monetary Policy of smaller importance to the UAE?

Because the Monetary Policy in good situation in the UAE

11.   Identify problems that the UAE faces in implementing both Fiscal and Monetary Policy.

The huge amount of Dubai debts and the dollar peg is one of the problems particularly that the dollar began to lose its value during the last decade.

week 8

In 2008, many factors cased the financial crisis. Also competing political, economic and organizational interests have resulted in a variety of narratives describing the crisis.

Mortgage underwriting, In addition to considering higher-risk borrowers, lenders offered increasingly risky loan options and borrowing incentives. Mortgage underwriting standards declined gradually during the boom period.

A down payment refers to the cash paid to the lender for the home and represents the initial homeowners’ equity or financial interest in the home. A low down payment means that a home represents a highly leveraged investment for the homeowner, with little equity relative to debt. In such circumstances, only small declines in the value of the home result in negative equity, a situation in which the value of the home is less than the mortgage amount owed. In 2005, the median down payment for first-time home buyers was 2%, with 43% of those buyers making no down payment whatsoever.

Consumer and household borrowing U.S. Households and financial institutions became increasingly indebted or overleveraged during the years preceding the crisis. This increased their vulnerability to the collapse of the housing bubble and worsened the ensuing economic downturn.

On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns.

The subprime crisis came about in large part because of financial instruments such as securitization where banks would pool their various loans into sellable assets, thus off-loading risky loans onto others. (For banks, millions can be made in money-earning loans, but they are tied up for decades. So they were turned into securities. The security buyer gets regular payments from all those mortgages; the banker off loads the risk.

week 7

Top 10  producers

1.       Russia                   10,120,000 bbl/day

2.       Suadi Arabia       9,764,000 bbl/day

3.       United States    9,056,000 bbl/day

4.       Iran                        4,172,000 bbl/ day

5.       China                     3,991,000 bbl/ day

6.       Canada                                 3,289,000 bbl/day

7.       Mexico                                 3,001,000 bbl/day

8.       UAE                       2,798,000 bbl/day

9.       Brazil                     2,572,000 bbl/day

10.   Kuwait                  2,494,000 bbl/day

Top 10 of oil Export

1.       Saudi Arabia       8,728,000 bbl/day

2.       Russian                 5,430,000 bbl/day

3.       UAE                       2,700,000 bbl/day

4.       Iran                        2,400,000 bbl/day

5.       Kuwait                  2,349,000 bbl/day

6.       Nigeria                  2,327,000 bbl/day

7.       Venezuela          2,182,000 bbl/day

8.       Norway                2,150,000 bbl/day

9.       Canada                                 2,000,000 bbl/ day

10.   Iraq                        1,910,000 bbl/day

Oil producers, oil Exporters and oil Based economies depends on several factors such as the number of imports and exports of oil every day, types of industries, economy nature and infrastructure. Also we can say that, the oil based economy means that the country depends on least 50% on oil like gulf countries. On the other hand, these incomes help the countries in process of creating jobs for people and reduce the unemployment.

Most of the countries in OPEC are oil based economy and being an oil based economy is a requirement to be member in OPEC due to their aim and they were established on this base, were all the members of the organization are oil based economy and they joined to it to work on increasing their revenues from selling the oil in the global market.