Dubai Political and Economic Development

Dubai is a monarchy state and a part of the United Arab Emirates (UAE). Warring neighbors characterized by conflicts, extremism and widespread hostilities surround it. Some of these countries include Iran, Iraq and Pakistan. The emirate is located in the desert with extreme temperatures. These conditions reflect hardship for Dubai, but the emirate is also rich in oil and natural gas. Dubai has however undergone significant economic, political and social changes in the last four decades.

Consequently, it is one of the most developed emirates in the UAE, a major business hub characterized by diverse and dynamic business activities. It enjoys the advantage of a strategic location and a transport hub in the Gulf region. Dubai has managed to transform itself from fishing economy to more diverse and dynamic one consisting of logistics hub, tourism, finance and shipping (Matly and Dillon 2007). It is viewed has the most advanced, luxurious emirate. Dubai is known for a thriving real estate industry.

One factor behind the impressive growth of Dubai is leadership. Leadership has been always noted as a vital factor for effective economic growth. While leadership may emanate from various sources in a given community, in the case of Dubai, Sheikhs have been critical in promoting economic development. In this paper, the focus is on how Dubai’s development is dependent upon the effective ruling of the Sheikhs – Sheikh Rashid and Sheikh Mohammed Bin Rashid Al Maktoum and how Sheikh Mohammed made Dubai a famous city by using the social dimension of power.

One may wonder how the tiny city in the desert transformed itself into a leading city with various business opportunities and tremendous economic growth. Many have attributed this development to the development of Jebel Ali Port in 1970s under the management of Sheikh Rashid Al Makhtoum, and it was later improved by Sheikh Mohammed (Government of Dubai Media Office 2015). Sheikh Rashid had comprehended the difficulties that Dubai had relative to its oil and gas rich neighbors and in fact, it was predicted that its natural gas and oil resources could be depleted by the year 2010.

As a result, Sheikh Rashid was focused on creating a strong economy that could thrive despite dwindling of oil and gas resources. In this regard, Sheikh Rashid had comprehended that the boom from oil cash could result into deeper economic woes for the emirate. It is surprising how Dubai has developed so fast. This development can be attributed to leadership roles played by different Sheikhs to ensure economic prosperity in different sectors.

The Sheikhs had turned their attention to achieve economic development through airport and seaports. Today, Dubai is known as the transport hub because of its port infrastructures. The Mina Port had increased the capacity significantly by creating the largest facilities to handle larger vessels with huge volumes of cargos. Jebel Ali Port is now the largest port in the Middle East and one of the largest manmade harbors globally. Jebel Ali Port has been ranked with the some of the world largest historical sites such as Hoover Dam and the Great Wall of China. Air transport was a top priority for Sheikh Rashid, and it facilitated Dubai’s economic growth.

The late Sheikh Rashid was also credited with the establishment of Dubai’s World Trade Center in 1979, which was the tallest and perhaps the largest building in the Gulf region in that period.

The creation of Dubai, Inc. also transformed Dubai’s economic growth. While other emirates and countries focused on oil and gas wealth, Sheikhs focused on establishing trade hub, business parks and transport networks to connect other parts of the world.

Sheikh Mohammed has focused on developing many business parks. This marked the second phase in the development of Dubai. Sheikh Mohammed was responsible for initiating the Dubai Vision 2010 in which the emirate would appeal to multinational companies and aimed to change Dubai to a knowledge-driven economy.

By the year 2006, these efforts had seen many international IT firms set up their business operations in Dubai because of favorable economic environment. These developments have resulted into the creation of new projects such as the Dubailand, the Dubai International Financial center (DIFC) and the Palm, project that consist of several initiatives to drive financial activities in the Middle East and globally. Although the idea of free zone was already in Dubai under Jebel Ali Free Zone when Sheikh Mohammed came to power, he focused on ensuring that regulations were liberal to attract foreign investors.

In these free zones, freedom of ownership and abolishment of taxes have been promoted alongside simple processes for business requirements, documentation and government regulations (Heritage Foundation 2015). Under Sheikh Mohammed, Dubai has witnessed remarkable growths in Dubai Internet City, Dubai Media City, Dubai Humanitarian City, and Dubai Studio City among other major service cities to promote economic development. The government has generated substantial revenues from sales of land and reinvested the incomes into ultramodern business parks.

Following the successful establishment of business parks, Sheikh Mohammed turned his attention to transform Dubai into a tourism destination in the Middle East. The Jumeirah Group, for instance, was initiated in 1997 to provide luxurious hotel services in the emirate. Today, the Group provides such services in other regions globally. Recent developments have also been witnessed in the hotel and restaurant industry to support the tourism sector in Dubai.

These high-end hotels have luxurious spas, canals and bazaars. To ensure that tourism was successful, Sheikh Mohammed focused on developing tourism attraction hotspots. This plan was achieved suing two methods, including (1) developing state-of-the-art shopping malls; and (2) establishing unique ultramodern projects involving mega shopping activities. For instance, Dubai is recognized for gold souks, shopping festivals, top notch fashion design festivals and other events. These activities are responsible for driving tourists to Dubai.

Under the leadership of the above-mentioned Sheikhs, Dubai’s economic profile has changed to reflect massive achievements under different sectors in the past few decades. Dubai, for example, has recorded vital GDP and economic growth that generally rely on non-oil growth. The growth is expected to continue annually and in the larger UAE (Heritage Foundation 2015).

The tourism sector has expanded and is currently the regional leader because of modern, innovative projects that target affluent investors. Given the best facilities with modern equipment, Dubai has turned to conference tourism to attract business events and meetings. In addition, Dubai promotes itself as place for high profile sporting events such as golf tours, formula one and athletics among others. Tourism promotional investment is massive for Dubai.

Dubai economic development is also reflected in the massive air and sea infrastructures. As previously mentioned, the emirate has heavy investments in the transportation hub than any other Middle East country and therefore it has increased chances to attract new investments.

Apart from these investments, Dubai’s economic profile also includes a thriving real estate sector supported by strong financial services. Although the recent global financial crunch affected investment activities in the two industries, Dubai seems to have recovered from the shock and once again, the real estate has been one of the most important sectors in driving the emirate’s economy. It continues to improve over time.

With favorable monetary policies, the Sheikh hopes to attract foreign investments, create a stable foreign exchange climate and generally make Dubai a regional trade and financial hub (Heritage Foundation 2015). In fact, the robust financial sector has been instrumental in the development of the entire economy.

Both Sheikhs were able to transform Dubai’s economic fortune because of their vision on strategic objectives and policy review, changes and implementation. For instance, the idea of free zones in high potential areas is responsible for significant foreign direct investments in Dubai. In addition, Sheikh Mohammed recently launched Dubai Strategic Plan 2015 (Nagraj 2014).

Dubai is much exposed to western culture relative to other emirates and other states in the Gulf region. This pro-western culture has appealed to some western investor. The emirate does not restrict social practices, including alcohol consumption and consumerism tendencies.

Dubai also strives to enhance transparency. Most Gulf countries have remained opaque and there is a general lack of transparency in government practices. It is difficult to distinguish the royal families’ wealth and state financial affairs. Moreover, Islam is the major religion in the emirate. Dubai however is open to other forms of religions and there are no incidence of attacks on non-Muslims relative other radical Middle East countries.

Sheikh Mohammed made Dubai a famous city by using the social dimension of power. The use of power included influencing what people thought about Dubai globally. Dubai was unknown small town in the desert that served only travelers in the Middle East region. Sheikh Mohammed had recognized the uniqueness of Dubai in terms of diversity (Dubai Strategic Plan (2015) 2015). Consequently, the Sheikh focused on creating a cohesive society, which focused on promoting immigrant tolerance, respect and communication.

This created a multicultural society in the Arab nation. Social dimension of power has ensured that Dubai continues to influence and attract visitors globally who recognize its traditions and diversity. These activities have enriched and driven Dubai to economic growth and global, diverse population has been instrumental in the process. Dubai recognizes the relevance of family as an important unity that nurtures people, enhance social acceptance and protect vulnerable groups. Dubai appeals to foreigners because of these social values (Pfeffer 1981).

Sheikh Mohammed also attempts to use social dimensions of power to enhance transparency in the emirate and ensure effective resource distribution (National Defence University n.d). This is a rare occurrence in the Gulf region where states are known for secrecy and protection of the royal families. The Sheikh has focused on creating a transparent government through the executive council to enhance accountability and promote the rule of law.

Such factors appeal to foreign investors who prefer democracy and the rule of law (Glaser 1996). In fact, soft power defines democratic processes in any state, and Dubai has leveraged it to become one of the most liberal emirates in the region (Atlee and Atlee 2008). These reforms from within the government are rare, but are encouraged to enhance accountability and decision-making across different arms of the government (Gastil 1993).

To ensure that multinational companies maintain their credibility in the government, Sheikh Mohammed has strived to ensure that free zone governance is fair and thorough. The emirate has followed some of the best practices such as modeling Dubai International Financial City (DIFC) from the UK charters (Matly and Dillon 2007). Hence, the ruler is willing to borrow best practices globally to develop successful models.

Different types of religions are also tolerated in Dubai. As a result, Dubai appeal to other non-Muslim investors compared to other Gulf countries. Islam is the mainstream religion but Sheikh Mohammed promotes respect and tolerance to ensure a just society and therefore appeals to many immigrants globally. Immigrants are free to practices their faith without interference from the government or the natives. In fact, several churches are found across Dubai.

In conclusion, one can observe that the development of Dubai did not take place by mere lack. Rather, it was a well planned agenda guided by the leadership of both Sheikhs – Sheikh Rashid and Sheikh Mohammed Bin Rashid Al Maktoum. The vision of Sheikhs has transformed Dubai into one of the most developed and robust city in the world with various modern facilities to drive growth and explore emerging economic opportunities. Investments across different sectors of the economy have ensured that Dubai is running a non-oil dependent economy. The current Sheikh and future ones must strive to maintain economic growth of Dubai witnessed in the last four decades.

References

Atlee, John S, and Tom Atlee. Democracy: A Social Power Analysis. 2008.

Dubai Strategic Plan (2015).

Gastil, John. Democracy in small groups: Participation, decision making, and communication. Philadelphia, PA: New Society Publishers, 1993.

Glaser, Hollis F. “Structure and struggle in egalitarian groups: Dimensions of power r elations.” Small Group Research, 27, 1996: 551-571.

Government of Dubai Media Office. Sheikh Mohammed bin Rashid Al Maktoum. 2015.

Heritage Foundation. 2015 Index of Economic Freedom: United Arab Emirates. 2015.

Matly, Michael, and Laura Dillon. Dubai Strategy: Past, Present, Future. 2007.

Nagraj, Aarti. Sheikh Mohammed Launches New Strategy, Dubai Plan 2021.

National Defence University. Strategic Leadership and Decision Making: Leveraging Power and Politics. n.d.

Pfeffer, Jeffrey. Power in organizations. Boston: Pitman, 1981.