Is Dubai a Good Business Model for the Arab Region?
Dubai is a city in the Middle East on the Persian Gulf. This location is a critical factor for its economic success in transportation and tourism. These two industries along with finance and real estate have put Dubai on the map. The city is known for its glitz and glamour but underneath this is a city that took on a massive debt in order to finance all its construction projects. This debt load however is what brought people and business to the city. Dubai is a city that is flourishing in the Middle East, but other Middle Eastern and North African countries should not try emulating all their policies due to the different history that Dubai has compared to the rest of the Arab world and the massive debt load cause by the ambitious plans of Dubai.
History of Dubai Since 1833
In 1833 the Al Maktoum family took over Dubai without any physical harm from the Abu Fasala clan. This date is important because the Al Maktoum family were the first rulers of Dubai to put business interests first. The family believed that if there were low tariffs that traders in the region would leave their country and set up shop in Dubai. The Al Maktoum’s envisioned Dubai as being a world class port city. They had confidence that due to the high tariffs and government red tape in the region would drive traders to their city. This idea was true and helped Dubai but the city was still mostly fishermen living in mud houses. Dubai started becoming an entrepot in the region in the 1920’s. Due to their low duties on exports and imports, businesses would drop goods of in Dubai which would be re-exported to another market. In 1959 Rashid bin Saeed Al Maktoum started the dredging of Dubai creek with a loan from Kuwait1. Sheikh Rashid was very business friendly and is quoted as saying, “The business of Dubai is business.” Any vessel in the world could dock at the port due to the new depth provided by the dredging. The...
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