Dubai’s Economic Developement Essay Example

year. While Abu Dhabi is the capital city, Dubai is renowned as a top tourist destination. In the year 1950, Dubai was a vastly different place, characterized as a town lacking distinctive features and mainly inhabited by traders and pearl divers. Occasionally, pirates or smugglers sought refuge in the creek area. However, despite its smaller oil reserves compared to Abu Dhabi or Saudi Arabia, Sheikh Rashid Al Maktoum recognized an opportunity to transform his desert land when a small reserve of oil was discovered in Dubai. Consequently, during the early 1970s, Dubai collaborated with six other emirates to establish the United Arab Emirates.

In December 2006, The Economist conducted a report on the economic stability of the UAE. It emphasized the significance of The Palm Tree Islands development in Dubai for attracting tourists and diversifying revenue sources. The report noted that during that period, the UAE's economy was heavily dependent on income from oil and gas production, with daily crude oil output reaching around 2.5 million barrels.

According to The Economist (2006, December), the natural gas output for the year was 46 billion cu m. This diversification of the economy led to the development of several sectors including agriculture, fishing, boat building, construction, and tourism. In 2006, the currency of the United Arab Emirates was Dirham and it maintained a stable exchange rate of Dh 3.67 per $1 US. Since its establishment in 1981, Dubai World Trade Center has attracted many investors due to its rapid growth as a tax-free country with numerous benefits (Ten Guide 2005).

According to the Ten Guide (2005), Dubai's petroleum reserves are projected to be depleted by 2016 if the current demand remains

consistent. Recognizing this dependence on oil sales for economic stability, Sheikh Mohammed bin Rashid Al Maktoum decided to shift focus towards developing major tourist attractions. Despite initial skepticism from engineers, his ambitious plan involved constructing palm tree-shaped islands along Dubai's coastline and in the sea. The first of these islands, known as The Palm Jumeirah, extended the coastline by 120 km and required a hefty investment of $7 billion US dollars. The primary objective behind this project was to boost tourism and ensure long-term economic sustainability for Dubai. Construction of The Palm Jumeirah commenced in June 2001.

The man-made islands, designed to resemble a date palm tree with 17 fronds and a water-breaker system, were meticulously planned and compared for feasibility over a period of four years before construction began. The Sheikh, concerned about the environment, decided to use natural rocks and sand instead of cement materials for the foundation of the islands (Nakheel 2007). The government of Dubai anticipates a daily influx of over 120,000 residents and 20,000 tourists.

The Palm Jumeirah has modern infrastructure and multiple transportation options such as sea, air, and car travel. To connect the island to mainland islands, there is a Sub-Sea Tunnel with six lanes. According to BBC News Online from 2005, it is estimated that Dubai's tourism industry will experience a growth of 4.4% by 2016.

According to BBC News Online (2005), approximately 90% of Dubai's economy is currently powered by the non-oil sector, with the tourism industry projected to be the main driver of economic growth and sustainability in the country. In addition to this, notable tourist attractions and ongoing construction projects include The Palm Tree Islands. The success

of The Palm Tree Islands has inspired Sheikh Mohammed bin Rashid Al Maktoum to undertake a more ambitious project called The World. This endeavor aims to create a man-made map of the world on the sea, comprising 300 islands ranging from 150,000 to 450,000 sq ft in size.

The islands can be bought by private owners for a minimum price of US$ 6.85 million per island (Nakheel 2007). Alongside the development of the coastline, there are other construction projects underway. A particularly noteworthy project is a mega mall that includes the largest indoor skiing facility in the world. This one-of-a-kind concept has drawn numerous tourists who are thrilled at the chance to ski in the desert. Moreover, an opulent underwater hotel and resort called Hydropolis has been built 66 feet below sea level, becoming another favored tourist spot.

The hotel’s guests can enjoy the opportunity to see fish and other sea creatures right from their windows (Chipman 2001). In addition to these new attractions, Dubai is home to the world's only seven-star hotel, Burj Al Arab, and by 2009, construction of the world’s tallest building will be completed. These impressive architectural marvels will greatly enhance Dubai's appeal to tourists and investors. In conclusion, Dubai's economy was once reliant on oil and gas exports, but it has successfully shifted its focus to the thriving tourism industry. Following the success of Burj Al Arab, Sheikh embarked on additional projects including The Palm Tree Islands and The World Islands to further stimulate Dubai's economic growth. As a result, tourist influx has increased and is projected to continue rising until 2010 (Al-Bawaba News 2008). The Sheikh's ambitious construction projects have propelled

the tourism industry in the country and ensured economic stability independent of oil resources.

Due to his ambitious projects, Dubai not only became a popular tourist and investment destination but also gained the reputation of being the ultimate "place-to-be".