Economic Transformation In Dubai
The economic changes that have transformed Dubai into the city it is today.
Dubai is an important tourist destination and its port (JebeL Ali) operates at the centre of the exporting trade in the Middle East. With the introduction of the Dubai International Financial Centre (DIFC) in 2004, it has allowed Dubai to develop as a global hub for service industries such as IT and finance.
Dubai is the second wealthiest emirate in the UAE, after Abu Dhabi which is the capital state. Most tourists believe Dubai’s revenues came primarily from oil but in fact it only used a moderate amount of oil reserves to generate the infrastructure for trade, manufacturing and tourism, in order to build up its economy.
About 95% of Dubai’s Gross Domestic Product is not oil-based. So far oil has accounted for less than one percent of Dubai’s GDP and tourism to produce 20% of the GDP. These figures explain why Dubai has had to become a more dynamic and diversified economy in order to survive the decay of fossil fuels.
In the early 1990’s there were only a handful of hotels available for tourists and Dubai never had high oil revenues like Abu Dhabi so something had to change. The Burj Al Project in 1994 (Burj Al Arab Hotel) gave hope to the economy, as a long term strategy, an ambition to become the world’s top tourist destination. Being one of the favorite tourist destinations in UAE, Dubai has seen a tremendous change in its economy in the past 50 years or so.
Some of the major investments in Dubai have been largely affected due to the recession that hit the global market in the recent past.
Even though Dubai's economy was built on the back of the oil industry, most of the city's banking and financial centers headquartered in the port area and service industries got largely affected as Dubai's property market faced a major downturn somewhere during 2008-2009 as a result of the slowing economic climate. Most of its ongoing projects along with the jobs of the expatriates got massively affected. Also, it was made public that Emaar had approximately $70 billion credits and the state of Dubai additional $10 billion while holding estimated $350 billion in real estate assets.
Dubai is an international IT hub that serves service industries such as Finance and IT. Dubai Internet City, along with Dubai Media City forms the TECOM (Dubai Technology, Electronic Commerce and Media Free Zone Authority), which is an enclave who houses well-known IT firms such as EMC Corporation, Microsoft, Hewlett-Packard, Dell, Oracle Corporation and IBM, and media organisations such as BBC, MBC, CNN, Reuters and Sky News. With an amazing growth rate of 6.1% in 2014, Dubai has again became one of the fastest growing economies in the world.
Dubai has trade relations with multiple countries in the world which aids its economy. By 2014, Dubai’s largest trading partner was identified to be China followed by India and United States. In the recent times tourism has emerged as an important aspect to boost the country’s economy. Based on its air traffic in 2013, Dubai was the 7th most visited countries in the world and it is being expected that Dubai will accommodate more than 15 million visitors by 2016.
Dubai has also surfaced as the shopping capital of the Middle East, thanks to its diverse souks and innumerable shopping centres. Dubai is aptly referred to as the ‘City of gold’, as the city houses nearly 250 gold shops.
Dubai has won the bid to host the most awaited Expo 2020, which will give an amazing boost to its economy, and is expected to create over 270,000 jobs.