Dubailand:destination Dubai

Dubai is strategically located almost midway between Asia, Europe and Africa and it can be reached by flight in a couple of hours from India, Africa and from Hong Kong, and an overnight flight from London. Dubai invested heavily in expanding its flight services and in the expansion of the Dubai International Airport capable of servicing 60M passengers every year. Large man made harbors and “open skies” policy granted unlimited access to foreign carriers and freight vessels. Selective disadvantages, such as a shortage in labor were overcome by importing cheap labor through these well-established air routes connecting SE Asia and India. The Monarchy encouraged development of direct routes to distant locations such as New York in order to increase tourism and investments from a previously untapped market. Given its strategic location between East and West, Dubai had emerged as the gateway to trade in the Middle East connecting Asia, particularly India and China with the Mediterranean and North Africa.

When it comes to Real Estate, expats and foreigners were allowed to purchase freehold property thereby increasing foreign investments. In the wake of September 11 attacks in the U.S, Muslim investors looked at Dubai as a safer alternative rather than risk the chances of their assets getting seized in Western banks. Dubai capitalized on these opportunities under the leadership of its Monarchy that was pro-development, a stark difference from its neighboring states. The surplus of (non-arable) land, a factor condition, was utilized for building large scale construction projects in Dubai that attracted tourism through its high end luxury hotels, resorts and shopping malls. Finally, Dubai promoted a moderate political and religious climate and differentiated itself from its neighbors. This complemented by Social Capital abundance generated through premier shopping, sporting events featuring celebrities and Fortune 500 companies.

Revenues from oil exports, a natural resources factor condition, allowed Dubai residents tax benefits and also attracted human capital from neighboring countries. Even though oil sales contributed towards the GDP, Dubai implemented a differentiation strategy, than its Middle Eastern neighbors, by creating alternate income streams in tourism, telecom, and aviation that accelerated the economic development by attracting investment, generating employment, and also earning foreign exchange

The Middle Eastern countries would be very well served if they could replicate Dubai’s development model of moving away from fossil fuel based economy to a new age service based economy with focus on Travel and Hospitality, Retail and Financial services industries. But there are many challenges that