SUNDAY, MAY 30, 2004
Life after oil: Dubai a tourism dream
One of the world's most successful business ventures is a small city-state that learned lessons from Singapore and Hong Kong . Dubai has some oil and gas, but they contribute barely 6 per cent of its economic output and are due to run out in 10 years. It has been wisely using its oil and gas income over the years to invest in a different sort of future, replacing hydrocarbons with people as it has expanded to be a tourism and business hub.
The machines off Jumeirah Beach are laying foundations for houses on one of the world's largest man-made islands, designed in the shape of a palm tree. England 's soccer stars, led by David Beckham, were among early buyers when 2,000 villas sold out in a week last year. Unfinished properties are trading at a huge premium.
Dubai boasts of 272 hotels with 30,000 rooms, 30 shopping malls and almost 5 million foreign visitors a year. Its airport's capacity is being tripled to 60 million passengers a year. Dubailand is being built - a $19-billion theme park twice the size of Disneyworld .
Oil, discovered in 1966, provided cash to fund projects such as the world's largest man-made harbour at Jebel Ali. This put Dubai on the map as the cargo hub of West Asia . Many of the 2,600 firms in the tax-free zone now use it as a staging post for trade with China .
Emirates Airline has played a crucial part. From the start, Dubai has run an open-skies approach, welcoming foreign airlines to fly in competition with Emirates, even though its chairman is another ruling-family member.
As the city-state built huge tax-free shopping malls and launched sporting events, notably the Desert Classic golf tournament and the Dubai World Cup horse race, so it became a holiday destination.
Dubai is remarkably open to foreigners. Of its 1.5 million people, over 80 per cent are expatriates. In the business world, Brits, Indians, Iranians and Lebanese are prominent, while for the grunt work of building artificial islands there are plenty of job-hungry Indians and Pakistanis from across the ocean. Dubai 's easy-going style - alcohol is readily available, foreigners can own freehold property - has made it such a positive place to live and work.
Given its dodgy reputation, it might have been easier to start the financial centre with a clean sheet of paper.
The answer to that has been, once again, to import foreign expertise to drive change, this time regulators from Europe . New laws have been passed to ensure financial transparency.
If it succeeds in this latest venture - and its record suggests it will - Dubai will deal another blow to critics who harp on about its shady past rather than its modern incarnation as a thriving tourist resort and increasingly important business hub. (The Economist)
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