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The Economic Scenario in Dubai

MG is an air warrior and a global traveler who loves to visit and explore new places

the-economic-scenario-in-dubai
the-economic-scenario-in-dubai

Background


Dubai at the turn of the century was a nondescript Place. It had however a strong connection with the subcontinent. It was the stepping stone from India to the Middle East and Saudi Arabia. Guru Nanak took a voyage from the coast of Saurashtra to Dubai and carried on from there to Mecca in 1498. Dubai however did not progress much as they were very few natural resources and all-around was the great Arabian desert.

From 1900 until the next 50 years Dubai developed slowly and by the fifties and sixties had become a trading hub. This was because of its advantageous location. But one man Sheikh Rashid bin Saeed Al Maktoum had a fantastic dream to make Dubai a sought-after location in the world. He visualized a future in which merchants, bankers, businessmen, and tourists would all come to Dubai for business and pleasure. For this, he felt the need for infrastructure and built the largest artificial harbor in the world. The Jebel Ali port which was inaugurated in 1977 after his death is a tribute to his vision.

The initial development of Dubai was fuelled by the oil boom but Dubai is unique as at the moment it has very little oil and yet is the most developed country in Asia and Africa. It is part of the United Arab Emirates and has a per capita income that is higher than the United States.


the-economic-scenario-in-dubai
the-economic-scenario-in-dubai

Economic progress

Dubai did not rest by making just a Harbour but expanded in all avenues. The city expanded further. The great development can be attributed to the son of Sheikh Rashid. This man simply referred to as Sheikh Mohammed was given power by his elder brother Sheikh Maktoum bin Rashid Al Maktoum who declared him the crown prince in 1995.

Sheikh Mohammed fueled a spiral of economic development as he built skyscrapers by the dozen. A point to be noted is that the Maktoum family has controlled Dubai since 1833. Sheikh Mohammed developed his economic theory on a model constructed by Michael Porter of Harvard. Micheal porter advocated bringing businesses with similar backgrounds and affinity together. The purpose was to attract the best talent and finance like the rush to silicon valley in California.

This led to a tremendous rise in entertainment centers and businesses in Dubai. American business pored in billions of dollars while the labor force was supplied from the subcontinent. It is the only country in the world which has an expatriate population of 80% consisting mostly from the subcontinent and primarily from the state of Kerala.

Collapse

So far so good but a few years back the dream had started turning sour. It was something expected but not anticipated. Perhaps the reason is hard to analyze but one can make a surmise. Firstly it is possible that Sheikh Mohammed was carried away by his own euphoria and did have some fantastic unrealistic investments. The second point concerns real estate where his projects began to flounder and his company was the first to seek a settlement with creditors as it had defaulted.

The situation became bad, but one can still say that after a bailout by Abu Dhabi the situation has changed and Dubai is back to square one. Property prices had crashed by 50% have come back to normal and there is widespread buying of property.

The sheik was perhaps himself stunned by the turn of events. An example of the downside Damac Properties in Dubai failed to pay employees full settlement on Dismissal. Another property group Nakheel had cut 500 jobs and Al-Shafar had laid off over 1000. All this looks like a bad dream as the resilient economy of Dubai boomeranged and once again Dubai has become the favorite of all investors.

Once again there is a beeline for Visa and jobs in Dubai, but there is a silver lining to this depressing scenario as the Sheikh is making amends. Secondly, Dubai by virtue of its location on the east-west route has bounced back and the world markets cannot let Dubai wither away. Dubai has recovered its economic health and the world has heaved a sigh of relief.

the-economic-scenario-in-dubai
the-economic-scenario-in-dubai

Dubai now

At the turn of 2020 Dubai was sitting on an apex. It had become like the El Dorado again. 62 million visitors pass through Dubai second only to New York and the city itself had wonderful entertainment centers, bars, belly dancers, and was the one place in the Middle East one could pick up a Muslim girl from Egypt, Syria, or Lebanon to date.

The well-heeled from England and the United States were buying second homes in Dubai as also the rich from India. Then came the covid virus; I will say the China virus. There is no doubt in my mind that this was a diabolical plan by China to upset the apple cart of the United States. Dubai also suffered but the administration was extremely responsive and the virus spread has been controlled. It is one of the few success stories in the world and slowly but surely Dubai is limping back to normal.

One looks forward to the time when the virus will be completely eradicated which it will be, in due course of time, despite the Chinese machinations. I have an inherent feeling that Dubai's resilience is going to pull through and the city will be back to where it was in January 2020, when it was the entertainment hub as well as the investment center of the world.

Comments

MG Singh emge (author) from Singapore on November 22, 2020:

Sp Greaney yes it's a lovely place. You will love it. Thanks for commenting

Sp Greaney from Ireland on November 22, 2020:

I have never been here but I know some people I went to college with went there for jobs. It's interesting to read about how it became the success it is today. It just shows you that a leader can achieve anything with money, power and determination.

MG Singh emge (author) from Singapore on November 21, 2020:

thanks Tom.

MG Singh emge (author) from Singapore on November 21, 2020:

Hi Tom, thanks. I spent 2 years in uae before transferring to Singapore. Great experience, everywhere lots of Mallu's. Dubai is a swell place but gold smuggling? Yes, part of the game. Had a wonderful GF from Cochin who worked in the Mercure Grand resort. Calls for a story.!!

MG Singh emge (author) from Singapore on November 21, 2020:

Olusegun thanks for commenting. Yes Sheikh Makutam was a leader with vision. Very few like him.

OLUSEGUN from NIGERIA on November 21, 2020:

Good work. It is good to have wonderful visioners as leaders.

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