Dubai On The Rise

Since the 1970s, the Middle Eastern city has built itself into a center of global commerce and connections — an exhilarating example of mobility. And that building process shows no signs of slowing down.

Article by Gene Rebeck and photography by Steve Cook

Dubai is a place of surprises. No matter whether you’re a first-time visitor or someone who visits on a regular basis, it’s impossible not to be astonished by the sense of perpetual renewal and warp-speed development. The last decade has seen a flurry of wildly ambitious building projects, many raising the bar on world records. The 163-story Burj Khalifa is the world’s tallest building. The Palm Jumeirah, which stretches more than a mile into the Persian Gulf and houses upscale hotels and resorts on its 17 palm frond–shaped extensions, claims the title of world’s largest artificial archipelago. And the opening of Ski Dubai, a 240,000-square-foot ski resort located inside a shopping mall, generated not only a world record, but also a generous amount of jaw-dropping buzz.

In most cities, the momentum would have subsided a bit by now. But there’s no slowing Dubai down. Work is progressing rapidly on the Dubai Water Canal, a waterway curving through the heart of the city-state, with private marinas, shopping centers and luxury residences lining its banks. A project called Mall of the World is poised to become not only the world’s largest shopping center, but the world’s largest indoor theme park and world’s largest network of temperature-controlled streets (four miles of them). The city-state also has plans to build the world’s tallest twin towers, an underwater hotel and a $1 billion, full-scale replica of the Taj Mahal.

In short, Dubai is not afraid to think big. But here’s something else surprising: Dubai is that rare Middle Eastern economy that doesn’t run largely on oil. In fact, petroleum accounts for less than 5 percent of its annual revenue. That’s the result of a strategic decision made several decades ago. Realizing that its oil reserves were limited, it moved to diversify its economy and position itself as one of the Middle East’s chief centers of trade.

“As soon as you arrive, you can tell Dubai was largely built as a global connecting point and that strategic planning early on has paid off,” says Don Colleran, Executive Vice President, Global Sales and Solutions, FedEx Services. “Its airport is now the busiest in the world for international passenger traffic, and it’s in the top 10 for cargo. There’s remarkable energy at every turn.”

Location and logistics

Dubai is both a city and one of the seven emirates that make up the federation known as the United Arab Emirates (UAE), which was formed in 1971. It’s also one of the Middle East’s most cosmopolitan places. Thanks largely to its booming economy, more than 80 percent of its 2.4 million residents are expatriates, and a great many of them are involved in the development of Dubai’s economy. But while its skyscrapers and artificial islands make the international headlines, the emirate has also invested in less flashy, but no less important, projects. In particular, the ruling Al Maktoum family has capitalized on the city-state’s strategic location on the Persian Gulf, which makes Dubai a natural logistics hub that can connect East and West by sea or air.

Case in point: Dubai is less than an eight-hour flight from two-thirds of the world’s population. With that in mind, Al Maktoum International, the smaller of its two airports, is in the midst of a $32 billion expansion that will link it with Dubai International, currently the world’s third-busiest airport. Once that project is complete, Al Maktoum International will be able to accommodate 16 million tons of cargo per year, up from 1 million tons right now. That will help solidify the emirate as a logistics center. (As it is, Dubai International is already the world’s sixth-biggest air cargo hub.)

Then there’s Jebel Ali, Dubai’s deep-water port. Jebel Ali is the world’s largest man-made harbor and the busiest port in the Middle East. It’s been steadily expanding since 2001, and if the current pace continues, it will become the world’s biggest container port by 2030. “The activity in and around Jebel Ali is exhilarating,” Colleran says. “The port’s size and scale make total sense considering Dubai’s geographic position and how perfectly it links European, Asian and African markets.”

Free Economic Zones and free trade
The Jebel Ali port is significant for another reason: Constructed in the late 1970s and opened in 1979, it is the Middle East’s first Free Economic Zone (FEZ) and is now the largest FEZ in the world. FEZs have proven themselves robust tools for encouraging foreign investment and fueling economic growth. In a nutshell, FEZs allow foreign firms and corporations to operate under a special tax, customs and imports regime, and are governed by their own framework of regulations.

There are now 22 FEZs in Dubai. A look at one of them, Dubai Healthcare City, showcases how the value of this commitment to open trade can pay long-term, even unexpected, benefits. It was originally envisioned in part as a medical tourism destination, a place for wealthy patients to fly in for first-class healthcare treatment. Since its founding in 2002, however, Healthcare City has evolved into a world-class center for healthcare, medical education and research, pharmaceuticals, medical equipment, wellness, and allied support. It boasts an impressive lineup of firms, including Johnson & Johnson, Merck and AstraZeneca. Its more than 140 medical facilities employ thousands of professionals. And last year it solidified its standing in the global healthcare community by signing a deal to establish the Harvard Medical School Center for Global Health Delivery–Dubai in the United Arab Emirates. The center will focus on health challenges throughout Dubai and the region.

Connections for tomorrow
Dubai is now in the early stages of its Surface Transport Master Plan, a multi-decade initiative that will build new connections within the city-state. The plan calls for new roads, highways and mass-transit options, including the expansion of the Dubai Metro, which is already the world’s longest driverless train system.

One impetus for the project is Dubai’s hosting of the World Expo in 2020. The six-month-long exhibition of global trade, innovation and products is expected to draw millions of visitors. But another factor is fueling the initiative: By some estimates, Dubai’s population will swell by more than 1 million people within the next five years. That’s a staggering increase, particularly when you contrast to its population of 300,000 in 1971, when the UAE was formed. Building the infrastructure that will ensure mobility for that boom is critical to Dubai’s future.

In a sense, however, it’s also the natural consequence of far-sighted economic planning. While other Gulf states are dealing with slower economic growth, thanks to the worldwide drop in oil prices, Dubai continues to boom — and there’s no sign it will come to a stop anytime soon. “Dubai’s growth and innovation show what the power of connections can achieve,” Colleran says. “Every time I travel here, I’m amazed — new hotels, new highways, new arts districts. It’s truly remarkable how Dubai keeps reinventing itself.”

 

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