When asked how Dubai became one of the fastest growing cities in the world, many readers will have one word in their minds: oil. The United Arab Emirates (UAE) is synonymous with the substance but, contrary to popular belief, Dubai now has very little in oil reserves.
While the UAE’s oil reserves are currently estimated at around 98 billion barrels, 92 billion of those come from one province, Abu Dhabi. The growth we see in Dubai today has been largely driven by investments in real estate and tourism.
The Role of Oil
That is not to say that oil didn’t give the region a head start, however. Oil in Dubai was first discovered in 1966 and production began in 1971. However, the then Prime Minister, Sheikh Rashid, realised that his country’s oil reserves were limited. On the subject of how long his country could depend on the substance he said, “My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel,” noting it could only last a few generations. Oil marked the initial boom years of the region – between 1968 and 1975 the city’s population grew by over 300% – but later become much less significant. Oil accounted for 24% of GDP in 1990, but had reduced to 7% by 2004.
Investments in Tourism
If the railroad built the United States, the jetliner built the UAE. In 1974, Sheikh Rashid tasked the now current ruler of Dubai, Sheikh Mohammed, with overseeing the growth of the Dubai International Airport. In early 1985, Mohammed sought then British Airways veteran Maurice Flanagan to launch the then new and now world-renowned Emirates airline. It would be this move that would go on to define the new Dubai business model: state-owned companies managed by Western experts.
The sheer manpower necessary for modern Dubai’s construction means 82% of its population is now foreign born, as workers from across the world are contracted to build the numerous luxury hotels, shopping centres, and skyscrapers that now make up the city’s skyline. Projects such as the Burj Al Arab, a seven star hotel in the shape of an enormous sail, the man-made Palm islands, and Ski Dubai, the Middle East’s first indoor ski resort are attracting the world’s super rich. Ambitious design hasn’t stopped yet, though, as the proposed Hydropolis aims to be the first multi-room underwater hotel in the world.
Dubai is a perfect example of how forward thinking business ideas can succeed. Using their natural resources to create other industries has meant their economy has continued to thrive, and the country will continue to be the ultimate destination for luxury tourism.
Exclusive to TheTopTier Courtesy DMC