Why Dubai emerged as one of the world’s most important cities
Dubai’s emergence as one of the world’s foremost business and residential centres has been in the making for years. We explore its growth trajectory.
In the year 2012, Dubai was voted at No. 10 in the Wealth Report 2012, with a quality of life that was deemed better than that found in Dallas, Toronto, Madrid and Vienna, among others. It was just one rank behind in the ‘Knowledge and Influence’ category, and seventh in the ‘Economic influence and activity’ category. Dubai is set to consolidate its position in the Top 10 countries and rise further up the list in the next two decades.
The rise and rise of Dubai
How did a port city take pole position on housing, trade, banking, education and quality of life? A lot of factors have led to Dubai’s stupendous growth, and these continue to hold the city in good stead despite global economic downturns elsewhere.
1 It welcomes immigrants. Of all the cities in the world to open its arms to immigrants and allow them equal access to education, housing and business opportunities, Dubai leads the pack with its immigrant and expat population beating the numbers of local residents hands down. Immigrants to Dubai have brought with them a strong entrepreneurial spirit and unique cultural influences — these have enriched Dubai in numerous ways and made it a cosmopolitan world city. It is very easy to get a Dubai visa for both tourism and stay.
2 A business centre — literally. Dubai is strategically located in the Middle East, connecting Asia and Africa to the region. This wonderful location has made it a natural choice for foreign businesses and trade to set up base here and expand operations in the area. It has emerged as a strong hub for institutional investors and sectors like banking, insurance and media with its high market rate growth.
3 Low or no taxation. Dubai’s famous ‘no income tax’ rule is the biggest motivator for expats to head to this city. Even in other taxation spheres, Dubai levies very low taxes and only a few more are to be introduced this year and the next. It has set up international special economic zones that have brought in a lot of foreign investment. Plus, it has low regulations for foreign businesses to set up business here and encourages free trade.
4 It benefits tremendously from tourism. Dubai remains largely insulated from the oil price decline in the rest of the Middle East. This is because its economy is bolstered by its tourism and trade channels. These two segments jointly contribute to about 29% of Dubai’s GDP. Plus, its excellent internet infrastructure has given rise to a strong media culture with relaxed work visa requirements.
5 It is becoming a large tech hub. Countries with cutting edge technology development capabilities will be world leaders in the coming decade — and Dubai is well poised to enter this elite club. The last five years have seen an unprecedented boom in Dubai’s tech sphere, with both start-ups and large MNCs drawing in a lot of foreign funding. Many tech giants are also setting up offices here.