How Dubai became the number one city in the Arab world for business
Before being named one of the world’s premier business hubs, it was a tiny fishing town in the Middle East. Regarding the relative wealth of Abu Dhabi, it may be the richest city in the world, but in terms of “free market capitalism,” Dubai is still the top dog. Indeed, this global city is dependent on more than just the oil business. Oil reserves in the emirates account for under 5% of the GDP. Everything running in Dubai has a part to play in the city’s progress.
Introduction of free zones
The infrastructure designed by Sheikh Rashid has now begun to come into being. Year after year, the city’s economy has improved thanks to investments from foreign enterprises, resulting in it being a hot investment option for foreign companies. A Dubai optimistic view was shown by Dubai as of October 2019 for many businesses, both in the public and private sectors. Dubai has streamlined doing business by offering free zones to other startups. International entrepreneurs are drawn to free zones because of the ample custom duty benefits, tax discounts, and even the ability to establish businesses without restrictions for foreigners.
Oil for thriving businesses and not for survival
Abu Dhabi was already much ahead of Dubai in utilizing its oil reserves. Sheikh Rashid concluded that a development strategy that prioritized trading and tourism was needed for the city when reducing the oil reserves. It’s a doorway into the Middle Eastern countries, thanks to its position.
Tourism as a foundation
In 2018 alone, about 16 million visitors from Dubai visited Dubai. Visitors worldwide have a significant role to play in Dubai’s property development and the broader economy. There are shopping malls constructed here. The city has become a tourism mecca that takes advantage of new technology.
Regardless of whether the business was founded as an entrepreneurial venture or in the hopes of making it big in Dubai real estate, it remains that it is now a globally recognized brand. Many ex-pats also own property because of the influx of foreign investors. It will benefit the city’s economy even further.
UAE began to flourish and evolve as a commerce route to the Persian Gulf because of its proximity to Iran, but at first, it was a fishing community. The country suffered a great decline during the Great Depression in the late 1930s when the pearl export sector went bankrupt. Hundreds of thousands of residents fled Dubai for other regions of the UAE, while the in-flow of capital in the form of infrastructure investment slowed to a crawl. While oil supplies from beneath the ground were fueling other aspects of the economy in the United Arab Emirates, there was a fortunate discovery of offshore oil in 1966 that helped shift the city’s fortunes. Between 1968 and 1975, the population of Dubai nearly tripled, rising from 700,000 to 2.1 million.
Over the last three decades, the population of Dubai has more than doubled to 2.78 million. GDP (Gross Domestic Product) grew by 569%, while oil made up 1%. Dubai’s maritime activity is one of the key sources of the UAE’s economy and a significant economic asset for the country. Thanks to its location near the entry and exit of the Persian Gulf, Chitty explains, the city serves as the most populated trade port in Asia.
UAE has emerged as a worldwide economic powerhouse in recent years, thanks to its favorable tax regulations, free trade regulations, and exemption from foreign ownership restrictions. Dubai is a year-round luxury tourism destination due to its mild temperature and proximity to Europe.