Economy of Dubai

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The Burj Al-Arab in Dubai.

The Economy of Dubai is valued at US$ 46 billion (2006). The International Herald Tribune has described it as "centrally-planned free-market capitalism." Although Dubai's economy was built on the back of the oil industry, revenue from petroleum and natural gas currently account for less than 3% of the emirate's gross domestic product. Dubai became important ports of call for Western manufacturers. Most of the new city's banking and financial centres were headquartered in the port area. Dubai maintained its importance as a trade route through the 1970s and 1980s. The city of Dubai has a free trade in gold and until the 1990s was the hub of a "brisk smuggling trade" of gold ingots to India, where gold import was restricted.

Today, Dubai is an important tourist destination and port (Jebel Ali, constructed in the 1970s, has the largest man-made harbour in the world), but is also increasingly developing as a hub for service industries such as IT and finance, with the new Dubai International Financial Centre (DIFC). Transport links are bolstered by its rapidly-expanding Emirates Airline, founded by the government in 1985 and still state-owned; based at Dubai International Airport, it carried over 28 million passengers in fiscal year 2006 and 24 million the year before.

The government has set up industry-specific free zones throughout the city. Dubai Internet City, now combined with Dubai Media City as part of TECOM (Dubai Technology, Electronic Commerce and Media Free Zone Authority) is one such enclave whose members include IT firms such as EMC Corporation, Oracle Corporation, Microsoft, and IBM, and media organisations such as MBC, CNN, Reuters, ARY and AP. Dubai Knowledge Village (KV),an education and training hub, is also set up to complement the Free Zone's other two clusters, Dubai Internet City and Dubai Media City, by providing the facilities to train the clusters' future knowledge workers. Dubai Outsourcing Zone is for companies who are involved in outsourcing activities can set up their offices with concessions provided by Dubai Government. Internet access is restricted in most areas of Dubai with a proxy server filtering out sites deemed to be against cultural and religious values of the UAE - this includes any .il (Israeli) domains, and VoIP services are also illegal and usually blocked. However, areas served by TECOM (an internet service provider) are currently not filtered. This is expected to change early in 2007 according to the TRA (Telecom Regulatory Authority).

Real estate and property

Main article: Developments in Dubai

The government's decision to diversify from a trade-based but oil-reliant economy to one that is service- and tourism-oriented has made real estate more valuable, resulting in the property boom from 2004–2006. Construction on a large scale has turned Dubai into one of the fastest-growing cities in the world.

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The property boom is largely driven by megaprojects — these are just some of many projects planned for Dubai:

• Off-shore:
  • Palm Islands
  • The World
• Inland:
  • Dubai Marina
  • The Burj Dubai Complex
  • Dubai Waterfront
  • Business Bay
  • Dubailand
  • Jumeirah Village

The Jumeirah Palm, the world's largest man-made island.

The aspirations of the ruling sheikhs are reflected by the ultra-modern architecture of the city. Dubai is home to iconic skyscrapers such as Emirates Towers, which are the 12th and 24th tallest buildings in the world and the Burj-al-Arab hotel, located on its very own island in the Persian Gulf and currently the world's tallest and most expensive hotel.

Emaar Properties is currently constructing what will become the world's tallest structure, the Burj Dubai. The final height of the skyscraper is a closely guarded secret — an indication of the developer's resolve to attain the title of the world's tallest building and its intention to hold on to it for as long as possible — but estimates so far point to a height upwards of 810m. Burj Dubai is expected to be completed in 2009. By 17 Jan 2007, it had reached 100 floors. Burj Dubai's neighbour is another behemoth under construction: the world's largest shopping mall — the Dubai Mall.

Also under construction is what is planned to become Dubai's new central business district, named Business Bay. The project, when completed, will feature a phenomenal 500 skyscrapers built around an artificial extension of the existing Dubai Creek.

In February 2005, the construction of Dubai Waterfront was announced, it will be 2½ times the size of Washington, D.C., roughly seven times the size of the island of Manhattan. Dubai Waterfront will be a mix of canals and islands full of hotels and residential areas that will add 800 km (500 miles) of man-made waterfront. It will also contain Al Burj, another one of the tallest buildings in the world.

Dubai has also launched Dubiotech. This is a new park to be targeted at Biotech companies working in pharma, medical fields, genetic research and even biodefense. The aim of this park is to foster the growth of this sector in Dubai and to utilize the region's talent in addressing this rapidly growing sector.

One of Dubai's recent groundbreaking plans is for a 30-story, 200 apartment skyscraper that will slowly rotate at its base, making a 360 degree revolution once a week. The world's first rotating skyscraper is to be in the center of the Dubailand complex and should be completed by 2009.

There are over 300 stores in the Gold Souk.

The International Media Production Zone is a project targeted at creating a hub for printers, publishers, media production companies, and related industry segments. Launched in 2003, the project is scheduled to be completed in 2006.

A new project was announced on May 1 2006 by the authorities. It is named Bawadi and will consist of a 27 billion US-dollar investment intended to increase Dubai's number of hotel rooms by 29,000, doubling it from the current figure offers now. The largest complex will be called "Asia, Asia" and will be the largest hotel in the world with more than 6,500 rooms.

The first villa freehold properties that were occupied by non-UAE nationals were The Meadows, The Springs, and The Lakes (high-end neighbourhoods designed by Emaar Properties, collectively called Emirates Hills).

Expatriates of various nationalities have been pouring capital into Dubai in the past several years, greatly contributing to the city's prosperity. Iranian expatriates alone are estimated to have invested up to $200 billion in Dubai.

Dubai interests have also purchased large amounts of real estate in foreign countries, in particular snapping up trophy properties in global centers like New York and London. Purchases in 2005 included New York's 230 Park Avenue (formerly known as the New York Central Building or the Helmsley Building) and Essex House on Central Park South.

See the Dubai Department of Tourism and Commerce Marketing's list of developments in Dubai for more information.

Construction

Main article: Developments in Dubai

Since 2000, Dubai's municipality has initiated a plethora of construction phases and plans across the entire city of Dubai, predominantly in the Mina Seyahi area, located further from Jumeirah, towards Jebel Ali. Many areas of Dubai are dominated by the large number of construction cranes. Construction in Dubai and the UAE in general is a much faster process than in any Western country. This is partly because Dubai construction companies employ many low wage labourers from the Asian subcontinent for up to 12 hours a day, six or seven days a week.

One of the main reasons for the boom in construction in Dubai is its drive to diversify the economy. The Dubai government does not want to depend on its oil reserves which are largely believed to become exhausted by 2010 and, as such, has diversified its economy to attract revenues in the form of expanding commercial and corporate activity. Tourism is also being promoted at a staggering rate with the construction of Dubailand and other projects that include the making of mammoth shopping malls, theme parks, resorts, stadiums and various other tourist attractions.

Another reason for the construction boom is the recent reversal of a law in 2002 that allows non-nationals of the UAE to own property (not land) in Dubai (albeit freehold and 99 year leases are actually sold to people with ownership still remaining with private companies). The larger of the property tycoons are Nakheel Properties and Emaar Properties. In Dubai, demand is currently outstripping supply by a significant margin and is showing no signs of slowing in the near future. Rents have skyrocketed with the recent inflow of professionals and companies from around the world who are attracted by Dubai's no-tax benefits although rises have recently been capped to 7% per annum up to 2007 under a directive from Mohammed bin Rashid Al Maktoum. Legislation in this area is still developing as the property market for foreigners is relatively new.