Dubai, one of the seven emirates that make the United Arab Emirates, located on the North Eastern shore of the Arabian peninsula, is a most amazing place. It is also an incredible example of how adversity can be turned into good fortune.
Dubai has one of the toughest climates on earth. Well, it is essentially a flat desert. For most of its history, its small population of Bedouin inhabitants were left alone by the neighbours – for lack of natural resources and strategic interest. Until the 1960s, people were mostly poor. They had no running water. There was no electricity and the city and its inhabitants were plunged in darkness at night. How could such a city become what it is today? How could this happen in the course of only two generations?
When you stand in awe at the bottom of the Burj Khalifa, the tallest tower in the word with a height of 826m, an amazingly beautiful building that dwarfs any other building that you have seen on earth so far, a building surrounded by magnificent fountains that come to life and light in a ballet of fireworks at dawn, you can only be very, very impressed.
So how could this happen in such a short period of time?
The sheikhs (the Arabic for chief, or ruler) of Dubai, as well as their distant cousins in Abu Dhabi, have been particularly good rulers in recent times. Sheikh Mohammed (Dubai) and Sheikh Khalifa (Abu Dabi) have continued the lifework of their respective fathers Sheikh Rashid and Sheikh Zayed, who started the whole process in the 1960s.
If Dubai were a company (and Sheikh Mohammed its CEO), you would say that the company came to life thanks to it seed capital, taking the form of oil, discovered in Dubai in 1966. In the 1970s, oil earnings made about 70% of the emirate´s GDP. Whereas these days, oil sales only make 2-3% of the city´s economy.
Then you could say that the geographical location of Dubai is great, acting as a hub between Europe, Eastern Africa, the Middle East and Asia.
Then the company has been able to set up a couple of “Unique Selling Propositions” (USPs) that they could sustain over time. This includes a favourable tax regime – going as far back as the late 19th century, when Dubai managed to attract the Persian merchants from the Iranian port of Bandar Lengeh. On top of this came the wisdom of its rulers, who seem to have passed on the following principles from generation to generation:
- Commerce above all: what is good for the merchant is good for the village
- Foreigners are welcome: embrace visitors, no matter what their religion
- You cannot win if you do not take risks
- Move first and outrun the competition
And what kind of risks the visionary and energetic rulers of Dubai have taken in the last 40 years!? Here a short list of the major transformative projects that nobody seemed to believe in at the time:
- the dredging of the creek in the late 1950s
- the construction of the deep water port, Port Rashid, in the late 1960s – the state-run operator of the port would grow into one of the largest in the world
- the construction of Dubai Dry Docks and the Jebel Ali Port in the 1970s, the world’s largest man-made harbour, at a time when shipbuilding was in recession
- the construction of the Dubai World Trade Centre in the 1970s, at their time the tallest building in the Middle East
- the launch of the airline Emirates, in 1985, now the fifth biggest international airlines
- the transformation of Dubai into a touristic destination from the 1980s onwards
- and many more.
And the bold moves worked. Without doubt the result of the talent and leadership skills of the top management team.
Today, Dubai is not without challenges. With a small Emirati population (about 100,000) compared to the total foreign population (about 2m), you could say that the emirate is highly leveraged, not only financially but also from a workforce perspective. How the culture of Dubai will evolve and the integration of foreigners will take place, if at all, will have to be decided by the future generations of rulers.
However, as one of the safest place on earth, with its liberal spirit, its cosmopolitan character, its emphasis on commerce and the availability of quality infrastructure, Dubai is likely to keep its competitive advantage in the Middle East for many more years to come, and to continue attracting talents from all over the world, to truly make it a unique and amazing city.