Rise of Dubai: How Dubai became Global Business Hub

The emergence of Dubai as one of the most favorite economic destination for investors, consumers as well as job seeker and tourists envies many developed economies. Galloping from a primitive social milieu and pre-industrial economic structure, this resourse deficient country has reached the pinnacle of success. The Policy Times team tries to dissect whole story.

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RISE OF DUBAI: HOW DUBAI BECAME GLOBAL BUSINESS HUB

A dark Gulf port whose dealers once exchanged pearl, gold, electronics, and textiles has now arisen as the Arab world’s driving centre for finance, media, the travel industry, flying, operations, innovation, development, shipping and even funding. Dubai infers just 6% of its GDP from oil and gas yet has figured out how to twofold its economy’s size start­ing around year 2000, displaying yearly monetary de­velopment rates higher than even China or the Asian tiger economies. The emirate’s driving state-possessed partnerships, for example, Dubai Holding and Dubai International Capital have utilized vital global specula­tions to both convey abundance assets along with draw in new FDI to Dubai, likened to Singapore’s Temasek.

History: Way back in 1833, Dubai had started off as a small settlement by some 800 members of the Bani Yas tribe, who were attracted to the natural harbour created by the creek flowing through Dubai. They turned the area into a small center for fishing and pearling. These people were later joined by the Arabian nomads of the Middle East called Bedouins. They too settled near the creek in small houses known as barastis.

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During the 1960s, economy was merely dependent on the revenues generated from trade and oil exploration concessions. The history of Dubai’s development shows that when a major chunk of revenue obtained from oil reserves started to flow in 1969, Dubai started devel­oping rapidly. Vast sums of cash were thrown into the picture, and major infrastructure like schools and hos­pitals started developing swiftly. Over the years, it trans­formed Dubai incredibly into the glam and glitzy hub we know today.

Geography and Economy of UAE: Dubai is situated on the Persian Gulf coast of the United Arab Emirates and is roughly at sea level. The Emirate of Dubai shares borders with Abu Dhabi in the south, Sharjah in the northeast, and the Sultanate of Oman in the southeast. Hatta, a minor exclave of the Emirate, is surrounded on three sides by Oman and by the emirates of Ajman (in the west) and Ras Al Khaimah (in the north). The Persian Gulf borders the western coast of the emirate. Dubai covers an area of 1,588 square miles (4,114 sq km). The United Arab Emirates (UAE), of which Dubai is one of its seven Emirates, is estimated to hold the sev­enth-largest proven oil and natural gas reserves glob­ally. The UAE produces an average of 3 million barrels of petroleum and liquids per day and has oil reserves of 100 billion barrels. Approximately 30% of the country’s GDP is directly based on its oil and gas output, contributing to almost 13% of the value of its total exports. Profits and royalties from the oil in­dustry provide the great majority of UAE government revenue.

Natural Gas: The Emirates is also a significant consumer of natural gas. In 2014, the country consumed about 69 billion cubic meters of natural gas, making them the world’s 9th larg­est natural gas consumer. It is the country’s primary source of energy, accounting for 60% of the UAE’s primary energy consump­tion. The UAE holds the seventh-largest proved reserves of natural gas in the world at 215 tril­lion cubic feet. Accord­ing to EIA preliminary estimates, natural gas consumption in the UAE reached a record high of more than 2.7 billion cubic feet (BCF) in 2018. Solid economic growth and the result­ing energy demand over the past few years are straining the country’s natural gas supplies. The UAE uses a large amount of natural gas in its extensive EOR operations and to operate its many power plants and desalinization plants. The UAE will likely need to continue importing large volumes of natural gas to meet domestic demand, at least in the near term.

Solar Energy: The UAE is one of the countries with the highest sun exposure rates globally, making it a potential place for renewable energy. The government is taking advantage of sun exposure and the potential for renewable energy to establish a clean energy strategy. By 2050, the coun­try hopes to have a balance between energy production and consumption, with solar energy playing a pivotal role in achieving this. The energy equation targeted by then is 44% renewable energy, 38% gas, 13% coal, and 6% nuclear also.

Marine resources: The marine and coastal environ­ment of the UAE holds great importance in terms of economic, social, and environmental aspects. It encom­passes the majority of the population and biodiversity, most economic and social activities are held there, and it is an essential source of oil production, desalination, and fishing, and a major artery for trade with the out­side world.

The United Arab Emirates (UAE) is estimated to have the 7th largest proven oil and natural gas reserves in the world. The UAE produces an average of 3 million bar­rels of oil and liquids per day and has 100 billion barrels of oil reserves. The UAE was the third-largest petroleum producer in OPEC in 2019, second to Saudi Arabia and Iraq only.

About 30% of a country’s GDP is directly related to oil and gas production, accounting for nearly 13% of its total exports. Profits and loyalty from the oil industry account for the majority of UAE government revenue.

Despite being part of UAE, Dubai does not bask under the scintillating shine of petroleum based prosperity as it is not endowed with oil reserves like other fellow states of UAE. It has effectively diversified its economy with the stellar performance of other sectors like tourism, construction, banking etc. Since last several decades, Dubai is one of the world’s leading tourism destinations, which has been a major source of revenue as well. The city was able to host 14.9 million overnight visitors in 2016. In 2018, Dubai was the fourth most-visited city in the world in terms of international visitors. In addition to tourism, a massive construction boom, an expanding manufacturing base, and a thriving services sector are helping the UAE diversify its economy. Nationwide, it is estimated that there are approximately $350 billion worth of active construction projects.

In terms of attracting investment, Dubai also gained remarkable success. It has made Foreign Investment a major plank of its economic transformation. Riding on the massive success of Dubai in investment, UAE ranked 1st in the Arab world, accounting for 36 percent of the total FDI inflow to Arab countries in 2018. It ranked 2nd in the West Asia region with 35.5 percent of total FDI inflow to the region and about 22 percent of total annual FDI inflows to the Middle East and North Africa region. The FDI in the UAE is mainly in the sectors of wholesale and retail trade, real estate activities, financial services and insurance, manufacturing, mining, and quarry exploitation.

The main investors in the UAE are Switzerland, the United Kingdom, India, the United States of America, France, Austria, Japan, the Kingdom of Saudi Arabia, Kuwait, and The Netherlands.

Dubai’s administration has had a modern key arranging process that has executed a progression of foundation projects on such a stupendous scale that Wall Street speculation bank Morgan Stanley gauges that something like 20% of the world’s 125,000 development cranes are currently dynamic in Dubai. The sail formed Burj Al Arab, seaward man-made islands worked looking like palm trees and landmasses, luxurious ocean front lodg­ings, gated networks with the undeniable reverberation of Beverley Hills and Palm Beach, Ski Dubai, shopping centers aplenty, vacationer and show events, the rise of DXB as an aviation center to equal Heathrow, O’ Hare and Changi guarantee that travel industry is Dubai’s new dark gold, Arabia’s New Age focal point of global­ization. The global culture of prominent utilization and freewheeling private enterprise has marked Dubai as a hot vacationer location in the new thousand years.

The globalist ethos strikes a responsive harmony in Dubai in light of the fact that the emirate’s destiny was generally attached to unfamiliar exchange and its ability to rethink itself, not responsibility for stores of oil and gas. This implied that Dubai never at any point devel­oped into a belly-to-burial place government assistance state or the rentier state brain science of, say, a Kuwait or Qatar. Dubai’s traders, the exemplification of cos­mopolitan and enterprising gamble-taking during the ancestral, traditionalist social orders of the Gulf, went about as the normal accomplices to the advancement techniques started by progressive Al Maktoum Rulers. From Jebel Ali to the foundation of Emirates Airlines, from the send-off of free zones committed to worldwide money, the Internet, advanced education to the Arabian Gulf’s most memorable freehold property projects, the improvement of Dubai expected and supported the dy­namic investment of the private area.

Assuming that impersonation is a definitive adulation, the Dubai model was justified in the Gulf when Qatar and Riyadh advanced the DIFC idea of a seaward mon­etary zone and Emaar was welcome to revaluate the property markets of Morocco, Syria, Egypt, Pakistan, and India with its extravagance projects dispatches.

If financial development, broadening from oil and gas and the making of productive stages for money man­agement the Arabian petrodollar bonus is a record of achievement, there is no question that Dubai has been the improvement example of overcoming adversity of the locale. The advancement model of Dubai has fig­ured out how to give UAE residents a stake in the city’s prosperity, generated a meritocratic tip top of techno­crats and agents with simple admittance to the Rul­er-CEO, a liberal social environment that has drawn in 180 ethnicities to the new Arabian Xanadu on the Creek and a protected, secure climate for unfamiliar ventures. Political strength is a main consideration that has seen Dubai’s banks become a shelter of flight capital from nations like Pakistan, Iran, South Africa, and the Le­vant. Political dependability is one more component of Dubai’s charm, with perpetually smooth progressions of force, no set of experiences of the savagery, terrorism, or coups d’état so endemic in the Arab world. As a matter of fact, Dubai discredits financial expert Joseph Stiglitz’s “resource curse” hypothesis that Petro-economies mean unfortunate GDP development, suppression, monetary stagnation and silly ventures, a peculiarity saw in the past of an excessive number of other Middle East oil trading states.

Dubai has put forth a valiant effort to coordinate into the worldwide economy and monetary business sectors. Its ongoing masterful course of action assesses very nearly 1,000,000 new unfamiliar specialists and 15 mil­lion vacationers, more than yearly guests to New York, by 2010. So, for what reason did Dubai succeed when such countless different nations neglected to accom­plish practical high development and broadening from oil and gas? All things considered; the vendor ethos was in Dubai’s DNA even before the Oil Age started in the lower Gulf in the last part of the 1960’s. Furthermore, Dubai was not even close to favoured with the dark gold land lottery of Kuwait, Abu Dhabi, or Qatar, so ex­change, the travel industry and money was the emirate’s only road for abundance creation. Oil rents were never sufficient to guarantee the size of Dubai’s advancement desires, even in the 1980’s. Dubai likewise profited from the introduction of the UAE Federation and Abu Dha-bi’s enormous appropriations in the Federal spending plan and public safety umbrella.

Obviously, Dubai’s speed of advancement claimed its own human and monetary expenses. Expansion rates have flooded as genuine compensation development has been stale. Extravagance mogul networks coincide with work camps for devastated laborers, who have now and again revolted in the city. Theoretical air pockets prompted an amazing accident in the Dubai stock trade. Dubai’s “open economy” has drawn in both authentic financial specialists – and ill-conceived lenders, driving Dubai to support its enemy of tax evasion carefulness.

Terrorism is a danger to all Arab Gulf states, especially Dubai, with its stylish vacationer torment and Western exile territories. However, Dubai has marked out its own place as a hatchery of cosmopolitan ways of life in Arabian culture and as a model for innovative turn of events. Dubai disproves Samuel Huntington’s “clash of civilisations” or Bernard Lewis’ “what went wrong” speculations with its actual presence. Since Dubai went right, was the mixture of civilisations, much like the new Arabian Cordoba.

DUBAI FACTS

  • Dubai has been conferred more than 130 Guinness World Records till now
  • Dubai has increased its land area from 3,900 square kilometers to 4,114 square kilometers, thanks to its construction of manmade is­lands policy
  • Dubai is a land of Rough­ly 85% of its population is foreign
  • Dubai has attracted lots of business from its taxation
  • There are no personal or income taxes in Dubai

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Rise of Dubai: How Dubai became Global Business Hub
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The emergence of Dubai as one of the most favorite economic destination for investors, consumers as well as job seeker and tourists envies many developed economies. Galloping from a primitive social milieu and pre-industrial economic structure, this resourse deficient country has reached the pinnacle of success. The Policy Times team tries to dissect whole story.
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THE POLICY TIMES
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