Feeding on its heritage as a trading post established in the early nineteenth century, and with historical references dating back almost a millennium, Dubai is looking to its immediate and mid-term future with the eyes of the world upon it.
Not least through the irrepressible vision of its leadership, with the Al Maktoum family driving Dubai forward with a strategic plan that has seen the successful bid for Expo 2020, the world’s trade fair. It is apt that World Expo, founded in the mid-eighteenth century as a shop window for international trade negotiations is the focus of modern Dubai’s growth for the next five-years, given the city’s foundations in international trade. Dubai’s appetite for mega projects has seemingly not cooled since the pre-2008 era of hype which led to the building of the world’s tallest building Burj Khalifa, the world’s largest mall Dubai Mall, as well as a roster of other world’s-biggest. It is worth noting that Burj Khalifa will be surpassed by the ever-increasing ambition of the Kingdom of Saudi Arabia with the Jeddah Kingdom Tower, which is currently under construction and slated for a 2017 completion.
Renewed intent
The past few months have seen a spate of announcements signalling Dubai’s renewed intent. These range from The Mall of the World and Dubai Parks and Resorts to launching three theme parks, thereby diversifying the offering for the stream of visitors who flock to the Emirate annually.
It is however the local audience, from regional neighbours in Saudi, Qatar, Kuwait, Bahrain and Oman, the other member states of the Gulf Cooperation Council (GCC), who continue to dominate the numbers and spending power of visitors to Dubai. Hot on their heels are Russian, western European, Chinese and ever-growing numbers from the African continent.
Roughly 40% of Dubai’s and the wider region’s non-oil gross domestic product is generated through businesses controlled by its high-net worth (HNW) and ultra-HNW family conglomerates. The success of these businesses and their longevity has been key to Dubai’s fortunes as it enters its next stage of growth. Longevity is a watchword for Dubai, as it is a young country that only celebrated the 43rd anniversary of the formation of the United Arab Emirates on December 2. The stability offered by the rule of the ten families, the founding families across the Emirates and its Gulf neighbours, has provided the platform for visionary leadership and growth in Dubai under the rule of the Al Maktoum family since the early eighteenth century.
International trade hub
For all the razzmatazz of its epic skyline, feted shopping destinations and highways lined with luxury car marques, and the continued flow of signature project announcements, evidence shows that Dubai is becoming comfortable and economically stable in line with its political vision. Property, so often derided for being the origin of Dubai’s bubble as the world collapsed into recession in 2008, is showing signs of maturity.
In recent months, growth has been slowing, dropping from a growth rate of 35% in 2013 by 5.2% in the first two quarters of 2014, according to Knight Frank. The local economy has been the subject of cooling measures by the municipal government to manage inflationary pressure, and concentrate on sustained growth. This is one example of the increased focus on corporate governance and management of the economy imposed to prevent a return to the post-2008 growth hiatus that Dubai experienced. Strong leadership, attractive taxation and offshore structuring opportunities, with an increased focus on corporate governance, are seeing Dubai take the lead as a destination for international trade and increasingly family offices. Just as once before, the leaders of Bedouin tribes would come in from the desert to trade goods with passing merchants calling into Dubai’s inland Creek Harbour, so now Dubai finds its status at the centre of everything, geographically and metaphorically, rekindled.
The impressive reach and investment vision of Emirates airline has opened Dubai to previously unchartered markets, and made Dubai International Airport the world’s hub. The pace of passenger traffic growth is outstripping the nearest competition and by early 2015 Dubai will have surpassed London’s Heathrow in the global league tables.
Importantly, Emirates airline’s reach into Africa, Asia and South America is all within a golden 15-hour non-stop window, and its impressive new fleet and service ethos have made it a force to be reckoned with, which is making more established international carriers sit up and take note.
Consumers can hardly have failed to notice the ubiquitous branding across television screens at each and every major international sporting event outside, and sometimes in, the US over the past four years. Worryingly for competing onlookers, Dubai has opened a second airport, Dubai World Central Al Maktoum International, utilising its enviable availability of space in a relatively small geographical landscape. The new airport has capacity redundancy built in to thrice outstrip its near neighbours at both Dubai and Abu Dhabi’s existing international airports.
Meanwhile, the immense oil-driven wealth of Abu Dhabi is driving a major development of its own global hub and the growth of Etihad Airways as the fastest-growing carrier network in the world through acquisition-led growth and partnership.
Modern trading
Just as once Dubai’s status as a trading post was able to secure merchant business for its leading families through passing trade on the merchant shipping routes, so modern Dubai is able to service the $2.2 trillion network of businesses controlled by families from across the Gulf. Currently, Dubai offers a modern and sleek reference point for contemporary traders, from whatever sector, be they coming in from the desert sands across the GCC, or through its air and sea trading links. Another tenet of Dubai’s international strategy is its ownership of ports services company DP World, which has built a network of terminals that sees it control 9% of sea container movements in only nine years and has aspirations for exponential growth.
To service this influx of trading partners, Dubai has built an enviable hospitality service industry and an ever-growing financial services industry. With modern connectivity and the influence of Emirates and Etihad, the United Arab Emirates (UAE) is now focused on its status as a global hub, linking continents and making Dubai and Abu Dhabi the crossing point for Asian and African business opportunity, and increasingly South American too.
Dubai is able to offer huge diversity in investment opportunity. Real estate has, and continues to be, a staple of Dubai’s investment scene. The massively oversubscribed IPOs for Emaar Malls and Dubai
