Dubai Strategy: Past, Present, Future - Research Paper Example

Dubai Introduction The development and growth of cities often involve several decades of planning and investments. Imperatively, most of the successful cities, for instance London, took over a century to develop. However, Dubai city is an outlier that has rapidly developed to become a major successful city globally in a relatively short period of time. In the 1950s, Dubai was an insignificant poverty ridden settlement of less than thirty thousand people. Currently, Dubai is a vibrant city state with over 1.5 million people with a global outreach. The city is home to great infrastructural developments such as the Burj Dubai building which is the tallest structure made by man worldwide. The economy of the city has grown in double digits for the past decade with the GDP per capita growing from “US $ 19,000 in the year 2000 to US $ 33,500 in 2006” (Matley & Laura 2007, p. 5). In fact, Dubai city has grown in stature to compete with the world’s biggest players in sectors such as port operations, financial services, tourism and construction. This research paper will evaluate the factors that have enabled Dubai to become a successful city in a relatively short period compared to other cities globally. Dubai City’s Growth Path It is evident that oil revenues have played a significant role in the economic development of most Arabic countries. Notably, the boom in oil prices in the 1970s helped the oil producing countries to obtain a cash windfall. Although Dubai had just around five percent of the oil reserves compared to other cities in the United Arab Emirates such as Abu Dhabi, its rulers realized early enough that the oil revenue had to be invested wisely so as guarantee the city economic prosperity even after the oil was exhausted (Matley & Laura 2007). Sheikh Rashid Al Makhtoum laid down the infrastructural foundations that heralded the rapid growth of Dubai as a global metropolis. Government led development The political landscape in the Middle East is different from the governance structures in the Western countries. Dubai is a monarchical state that is ruled by a prince. In as much as the political regime may not be necessarily democratic, the political environment in Dubai and the United Arab Emirates is stable (Bagaeen 2007). Thus, the stable political environment has played a critical role in attracting and facilitating investments. It should be noted in the past decades, the government of Dubai has been the leading investor in Dubai. Private investors have played a secondary role in the development of the city and it is the government that has driven the growth in investments. Suffice to say, the government has direct control of key economic activities in the city thus can effectively influence policy directions. Although government control of a large portion of the economy may not be ideally democratic, the highly centralize political system in Dubai allows for fast decision making and rapid coordination of development activities (Henderson 2006). As a result, foreign and local investors can easily set up shop in Dubai with a clear guidance on the development path of the city from the government. The relative political stability of Dubai despite the recent Arab Uprising is also a clear indicator that the city is a viable investment destination. Flexible labor force Labor force is a key driver of economic development in any region. The economic development of a country largely depends what it can produce for internal and external consumption. Dubai has a large number of foreign and expatriate workers who fuel its labor force. According to Hvidt (2009), the percentage of native citizens compared to expatriates is 15%. This indicates that Dubai has managed to attract foreign professionals to pad its workforce. The large proportion of expatriates has enabled Dubai to advance rapidly as it does not have to struggle to educate its population to facilitate its economic growth. In this regard, Dubai purchases its workforce from the global market to suit its development needs. As the city passed through various development stages, it did not necessary have to reeducate its populations to equip them with the knowledge required for particular development phases. For instance, during the construction boom, Dubai sourced its construction workers from India and Africa. In the financial services sector, Dubai acquired its labor force from the United States and Europe. The acquisition of labor force from the international market has effectively enabled Dubai to grow rapidly and adapt to changing developing needs unlike other cities which had to take long periods to develop their own labor force (Hvidt 2009). Creation of a service economy The conventional trend of development of successful cities involved transition from an agrarian economy to industrialization and finally a service or knowledge based economy. This development process took several decades to accomplish since it was a naturally evolving process. On the other hand, Dubai city skipped the various stages of development and laid massive investments into the service and knowledge based economy. A knowledge based economy does not rely on the resources of a region but rather the mindset of the people in a particular region and their ability to take advantage of knowledge based opportunities (Matly & Laura 2007). In the recent past, Dubai has invested heavily in service and knowledge based economic establishments such as Dubai Media City, Dubai Internet City and Dubai International Financial Centre. These investments in knowledge based sectors of the economy have enabled Dubai to take advantage of the global opportunities in finance and information technology. In regards to the financial services sector, Dubai city has made significant steps towards establishing itself as a regional financial hub not only in the Middle East region but also on the global platform. By being at the center of financial transactions, Dubai has been able to create forward and backward linkages in its own economy as well as increased international significance (Balakrishnan 2008). Massive investments in ports and infrastructure Infrastructural development is the backbone of economic development as it provides the framework upon which economic activities can take place. Dubai city is strategically positioned in the globe almost midway between Asia, Africa and Europe (Henderson 2006). The strategic position of the city puts it at a prime position to take advantage of trade opportunities in various regions. Cognizant of these opportunities, Dubai city positioned itself as the hub of trade by sea as well as a center for tourism through air travel. In 1979, the Jebel Ali Port was completed and became the biggest port in the Middle East. The Jebel Ali Port also became the world’s largest man-made Harbor. To facilitate quick trade in the port, the Jebel Ali Free Zone was created as free trade area region. Due to its Free Trade Ports, Dubai city gradually grew to become the third most important re-export center in the world (Hvidt 2009). The city positioned itself as a key player in international trade thus attained global relevance. Further, Dubai city is home to one of the busiest international Airports. The Dubai International serves of forty million visitors annually from various destinations in the world. It is imperative to note that a second international airport has also been constructed in Dubai to facilitate cargo transport and cement the city’s position as a key player in world trade. The government also owns the Emirates Airline which is one of the most successful airlines in the world with routes to virtually all destinations in the world. Market positioning as a tourist destination Dubai city has branded itself as a marvelous international tourist destination. Despite the fact that Dubai city being in a desert region, it has managed to market itself as a quality and innovation center. One of the strategies employed by the Dubai government to attract tourists is the construction of iconic buildings in the city (Balakrishnan 2008). For instance, the sail shaped Burj Arab is recognized globally as an architectural marvel. The city has also invested heavily in groundbreaking constructions. Architectural branding is a key aspect in the building of the identity of the city as it has given it international recognition (Henderson 2006). Dubai has also cemented its position as an international shopping destination due to its numerous world class shopping malls. The various shopping malls offer visitors quite an experience and hence make the city to have a global appeal. The high numbers of people who visit Dubai for retail shopping contribute significantly to the economic growth of the city through taxes and related expenses. It is also notable that the construction of shopping malls has a chain effect throughout the economy (Bagaeen 2007). The shopping malls attract numerous visitors who come to buy products and this encourages trade thus promoting the logistics and infrastructural industries Internationalization Globalization has compelled the world to be economically interrelated. It is important to note that any global metropolis has to attain certain international standards so as to be able attract and retain international professionals. The city of Dubai has benchmarked its development standards with globally recognized and respected brands (Hvidt 2009). For instance, the Dubai Health Care City was created in conjunction with the Harvard Medical School as well as the Mayo Clinic. In the tourism sector, the government of Dubai has brought on board international hotel chains. The collaboration of international consultants in Dubai has enabled the city to attain a global image in a relatively short period (Matly & Laura 2007). As such, Dubai City managed to curve an international image right from its early days of development and hence positioned itself as global destination. Conclusion The successful development of Dubai City in a relatively short time is a deviation from the conventional development period for most cities. It is notable that the financial resources obtained from oil revenues played a vital role in financing the development of Dubai City. It is evident that the rulers and government of Dubai played a central role in the success of the city as a global metropolis. As noted, the government of Dubai took bold steps to invest oil revenues into the development of a serve and knowledge based economy that would last beyond the oil boom. The government invested heavily on world class infrastructure such as sea ports and airports in order to take advantage of its strategic location for trade. Also, Dubai city benchmarked its development policies based on international standards and thus rapidly established itself as a viable international destination. Suffice to say, the successful development of Dubai City was not so much based on its oil revenues but rather on the visionary planning by the government and the rulers. Bibliography Bagaeen, S 2007, ‘Brand Dubai: the instant city; or the instantly recognizable city’, International Planning Studies 12.2 (2007): 173-197. Balakrishnan, M 2008, ‘Dubai–a star in the east: A case study in strategic destination branding’, Journal of Place Management and Development 1.1 (2008): 62-91. . Henderson, J 2006, ‘Tourism in Dubai: overcoming barriers to destination development’, International Journal of Tourism Research 8.2 (2006): 87-99. Hvidt, M, 2009, ‘The Dubai model: an outline of key development-process elements in Dubai’, Int. J. Middle East Stud. 41: 197-418 Matly, M & Laura D, 2007, ‘Dubai strategy: past, present, future’, Harvard Business School (2007): 1-20. Read More