Just over 50 years ago, oil
was discovered here in Dubai. It helped build this modern metropolis but the resource
accounts for less than one percent of the state's GDP. The city is now a global business hub
and luxury tourist destination that boasts the world’s tallest building
and a police force that drive supercars. So how did Dubai get so rich? One of the main sources of Dubai’s wealth
is from its prosperous maritime activities. It was once a modest fishing town,
which by the early twentieth century had become an
important trading port. Its location, close to both Iran and
the entrance to the Persian Gulf, attracted merchants from
all over the region. Today, Dubai’s main cargo port Jebel Ali
is the busiest port in the Middle East and arguably the United Arab Emirates’
most valuable commercial asset. A big reason for the shipping terminal’s
success is that it’s located inside the Jebel Ali Free Zone,
also known as Jafza. Spread over 57 square kilometers, Jafza
is the world’s largest economic free zone. It's one of more than twenty other industry specific free zones dotted around Dubai all set up by the government. These zones attract businesses with
tax breaks, custom duty benefits and no foreign ownership restrictions,
all within a developed infrastructure that is run by an independent authority,
helping streamline bureaucracy. Within Jafza are now
several thousand companies, accounting for more than 20% of
total foreign investment in the UAE. The zone employs close to 150,000
people, helping generate more than $80 billion worth of trade, which
accounts for 21% of Dubai’s GDP. Extensive development in the
city has come at a cost however. The UAE has the world’s
sixth largest migrant population, with foreigners making up more than
80% of the people living in the country. The majority of that workforce is made up
of South Asians working on construction sites for low wages and long
hours in poor conditions, often unable to return home
because their passports are withheld. But in 2017 following global criticism,
the UAE’s Federal National Council passed a new bill that gives workers
30 days paid vacation every year, one day off a week, medical insurance,
and a contract before starting work. But for Dubai’s rulers and investors,
this cheap workforce helped it become one of the world’s fastest
growing metropolitan areas. It’s important to note that while Dubai is the
largest and most populous state in the UAE, the richest state is Abu Dhabi,
the country’s capital city. It currently holds nine percent of
the world's proven oil reserves. Back in the 1930s Abu Dhabi began
to discover its rich oil reserves while its neighbor Dubai
had failed to find any. This occurred around the same time
as the decline of the pearl industry, the gulf’s main source of income,
creating friction between the two emirates. Tensions escalated into an armed conflict
following a border dispute in 1947. British intervention did lessen hostilities, but it
didn’t stop Dubai falling into a deep depression, leaving many residents starving and
having to flee to other parts of the gulf. It was clear that
something had to change. Enter Sheikh Rashid
bin Saeed Al Maktoum. Soon after becoming the
ruler of Dubai in 1958, he decided to go on a bit of an
infrastructure spending spree. To do this, the Sheikh took out big loans
in addition to the money still coming in from the state’s maritime
trading activities. He spent the money establishing
private companies which then built electricity lines, telephone
services, more ports and Dubai’s first airport. Much of the development in Dubai and across the
Emirates has been facilitated by the British government. The two countries' relationship began
back in the late 19th century when the U.K. agreed with the
Sheikhs to establish the region as a British protectorate in return
for diplomatic concessions. It’s clear to see that the U.K. still maintains
a strong business relationship with the Emirates,
particularly Dubai. That is the London Gateway Port, a new deep-sea
container terminal, 25 miles east of the city. It’s one of the U.K.’s main links between London
and 90 other cities around the world and yet it’s owned and operated by
DP World, a company based in Dubai. It was 1966 when the U.K. and Dubai
relationship became increasingly lucrative following the gulf state’s
discovery of its first oil field. When announcing the news
however, Sheikh Rashid said: The city though, wasn’t dependant
on selling oil in order to thrive. Instead the oil was used to fund
Sheikh Rashid’s existing strategy of basing Dubai’s economy
around trade, tourism and finance. That decision now looks like a good one as the
world increases its use of renewable energy and moves away from
a reliance on oil. Dubai now has the world’s busiest airport
for international passenger traffic, confirming its position
as a gateway to the East. But it’s no longer just a stopover, it’s also
become a destination for millions of visitors. The state’s vast infrastructure made this possible,
but for many years it was largely unused. Now with an ever more globalized
planet, Sheikh Rashid’s gamble of borrowing tens of billions of
dollars looks to have paid off having turned this once quiet backwater
into one of the world's most powerful cities.
Interesting video. Dubai's success comes down to a vast array of factors including oil and slavery