Around the globe, oil has made Dubai one of the richest states along the wealthy trading hub for the Gulf. As of now, Dubai modified itself into an international business hub and a luxury destination for tourists. Its economy is vibrant and it is a popular gateway to the East and boasts of the universal’s highest international passenger flow.
The city lives up to its affluent reputation and carries everything you desire to accomplish, involving world-class infrastructure, capital, market, and preventive surroundings. It is the only city around the globe where police officers ride Bugattis, Lamborghinis, and Ferraris, rather than ordinary automobiles. Read this article completely to know how did Dubai Get so rich and powerful.
Overview of Dubai’s early development as a trading port
Earlier when Dubai started its development, it became a successful trading port in the Persian Gulf because of the success of an exclusive deal with the British in the year 1892.
The Exclusive Agreement was led by Sheikh Mohammed Bin Rashid Al Maktoum to make Dubai a British protectorate and grant full tax exemption to all foreign traders in 1894. It is one of the busiest trading ports since 1903 when all the procedures for making Dubai a trading port were completed.
Importance of Dubai’s location for trade between Asia and Europe
Dubai has a unique geographical location with its borders Abu Dhabi in the south, Sharjah in the northeast, and in the southeast, it has the sultanate of Oman.
This strategic location of Dubai holds great importance for trading as it allows it to connect it to all the Gulf States as well as Asia and Europe. This location is important as it acts as a means to bridge the time zones between major financial hubs.
Role of pearl diving in Dubai’s Economy
Pearl diving plays a very important role in Dubai’s economy as it was the basis for founding the two largest cities of UAE named as Abu Dhabi and Dubai. During that time, many families and pearl divers shifted to these coastal cities like Dubai for the purpose of work as pearls were a booming industry for them.
This really helped Dubai to establish the history of becoming the biggest city in UAE and transform it from a barren land to a dream city for the future.
Establishment of Dubai’s first oil field
Dubai discovered oil for the first time at the offshore Fateh field in the year 1966. Then, after 3 years, they started exporting it to others to attract foreign cash flow into the economy. When oil was discovered in Dubai, it became the major and only source of income
But, later they diversified their economy. Still, it is a major contributor to Dubai’s GDP as more than 30% of GDP directly generates from the oil and gas industry.
Sheikh Rashid’s Leadership
Recently, Sheikh Mohammed Bin Rashid Al Maktoum reached the end of his 15-year tenure as ruler of Dubai. He has successfully finished these years with a lot of effort and a large list of initiatives, including the Dubai Cares campaign, the Burj Khalifa, the planting of one million trees, UAE Water Aid, the Museum of the Future, Expo 2020, the Dubai Mall, KhalifaSat, the Dubai Water Canal, and many others.
Sheikh Mohammed Bin Rashid Al Maktoum’s vision for Dubai’s future is to transform it into one of the best cities in the world. This “We the UAE 2031” vision essentially lays out in detail the objectives and plans put out by the UAE government for the ensuing ten years.
The vision’s main areas for development involve things like Cop28, Emiratization, the future of education, updated laws, a digital future for everyone, and economic ties. Similar to the previous vision, this focuses on the same principles while giving more weight to the nation’s infrastructure and sustainability sectors. In addition, the vision aimed to make the nation the safest place on Earth while also fostering a society that is proud of its heritage and feeling of community.
Major infrastructure projects under Sheikh Rashid’s leadership, including the Dubai Creek expansion and the Dubai World Trade Centre
Sheikh Mohammed Bin Rashid Al Maktoum has been a part of some of the major architectural infrastructure projects which include the expansion of the Dubai Creek, the Dubai World Trade Centre, the Museum of Future, and many others.
He established a Dubai World Trade Center that is considered a premier space for organizing large national as well as international events in the city. This place hosts a lot of events throughout the year with more than 50000 exhibitors, 3 million plus visitors, and around 185 countries participating in the event. Additionally, he expanded the famous Dubai Creek by 13 kilometers through Business Bay, Dubai Canal, and through Jumeirah into the Persian Gulf to make it a more attractive, useful, and most-visited place in the city.
Establishment of Dubai as a hub for business and tourism
Dubai has established itself from being a barren desert land to the dream city of the future in such a short span of time. Its development has resulted in it becoming an international hub for business and tourism.
It was established as a business hub due to its export diversification policies and creation of special economic zones that allow individuals to engage in free trade which strengthens its position in the economy and promotes international commerce.
Additionally, Dubai has invested heavily in establishing some of the most iconic and masterpiece architectural buildings which attract many tourists from all over the world, making it a tourist hub.
Dubai’s Diversification Strategy
A few decades back Dubai was dependent on oil fields only for boosting the economy but later on, they realized the need to diversify their source of income from various sectors.
Currently, Dubai is one of the richest and most prosperous cities at the regional as well as global levels due to their administration’s strategy to diversify their economy beyond oil fields and diversify their sources of income from various other sectors such as real estate, finance, tourism, construction, banking, gold, transport, IT, etc. This has made the real estate and tourism sectors one of the major GDP contributors for Dubai.
Major Investments in different sectors
Dubai has made several major investments in various sectors beyond the discovery of oil fields to diversify the source of income and economy of the city. To diversify, they made investments in sectors such as tourism, real estate, finance, construction, and others.
Investments in the tourism sector have benefited a lot by increasing the foreign money flow and creating more employment opportunities. The investments in the Real Estate Sector of Dubai by the government have impacted positively as their sector contributes around 8.2% of the GDP. Just like these sectors, major investments in other sectors have a positive impact on the economy.
Creation of free zones and incentives for foreign investment
Dubai has created a lot of free zones and several incentives along with the zones for attracting more foreign investments in the economy. These zones are referred to as Special Economic Zones, which refers to an area with different regulations than other areas within the same country.
Not only do they have light rules and regulations but also the international companies in these zones are provided with various incentives such as tax exemptions, less custom duty, easy business set-up, foreign ownership, etc. The creation of such zones has resulted in a rise in foreign direct investment due to such incentives which also improves our economic growth.
Importance of Tourism In Dubai’s Economy
The tourism sector plays a very important role in the economy of Dubai as it is a major economic source of income for the city. It was really a big part of Dubai’s administration’s strategy to maintain the foreign cash flow into the emirates.
Their strategy worked very well as due to their heavy investment in this sector the economy is being benefited by providing more employment opportunities, increased standard of living, and improved tax revenue and personal income.
With huge investments in the tourism sector, Dubai’s economy is able to almost double its GDP and become the largest contributor to revenue for the economy.
Major tourist attractions in Dubai
Dubai’s government has invested a lot in the tourism sector to make the city a well-known and most-visited tourist destination in the world.
After the such investment, their hard work gave results and Dubai became one of the most visited tourist destinations which are popular for its breathtaking architectural buildings, fantastic beaches, luxurious shopping, buzzing nightlife, and lavish resorts or hotels.
Some of the major tourist attractions in Dubai include the Burj Khalifa, Dubai Mall, Dubai Frame, Global Village, Palm Jumeirah, Dubai Miracle Garden, Dubai Aquarium, Desert Safari, Burj Al Arab, and many more.
Impact of events such as the Dubai World Expo and Dubai Shopping Festival on tourism
The arrangements of such big events as the Dubai World Expo or the Dubai Shopping Festival have impacted the economy in a positive way as it has become an integral part of the tourism industry and has increased the number of tourists a lot during these events.
It was also a part of Dubai’s strategy to attract foreign cash flow and benefit not only the retail industry but also the tourism sector by attracting more tourists to this beautiful city.
Since 1903, it has been one of the busiest trading ports when all the procedures for making Dubai a trading port were completed. The sector of tourism plays a very essential role in the economy of Dubai as it is a prime economic source of income for the wealthy city. The government of Dubai has invested a lot in the tourism segment to make the city a better-known and most-visited tourist destination around the world.
Frequently Asked Questions (FAQs)
Yes, Dubai is one of the richest cities in the world as more than 30 billionaires live in this city. A lot of people assume that due to its large number of oil wells, it has become wealthy but only 5% of Dubai’s GDP comes from oil. It is rich due to its strategy of being a diverse economy by earning wealth from various sectors such as transport, real estate, tourism, etc. Furthermore, it has created special economic zones and several incentives also to expand its economy and become one of the richest and most powerful cities in the world.
Dubai has more than 3200 multimillionaires and 30 billionaires that reside in this city. This number is not stopping anytime soon, it is on the verge of rising.
The tourism sector of Dubai contributes the most to expanding and growing its economy. It was strategically planned by the government of Dubai to invest heavily in this sector to maintain foreign cash flow and make it a major source of wealth for the city.
The strategy adopted by Dubai to become a rich city in the world is to make their economy a diverse economy by not depending upon only one field as their source of income. Instead, diversify the source of income and invest in different sectors so that they will contribute to the GDP after establishing them.
In 1985, Dubai developed its first free zone, Jafza, which was the world’s largest at the time. This resulted in the creation of 30 more free zones that provide tax reductions, customs duty perks, and exemptions to foreigners. This led to an increase in global business