Page 120 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

104 Dubai & Co.

GDP—and that figure is declining, due to both the emirate’s active
diversification strategy and a relative scarcity of oil resources.
Insiders report that Sheikh Rashid bin Saeed, the ruler of Dubai
from 1958 to 1990 and father of Dubai’s current ruler, when congrat-
ulated by geologists who had discovered that Dubai’s oil reserves
were larger than originally thought, urged his advisors to plan as if
oil were to run out sooner. This was consistent with Dubai’s long-
standing attitude of caution and skepticism toward its oil reserves.
Thus, for decades, in addition to nurturing its oil business, Dubai
has also focused on developing itself as a center of trade and com-
merce. As early as the time of Sheikh Maktoum bin Hasher, who
ruled Dubai from 1894 to 1906, Dubai abolished commercial taxes
so as to attract traders and develop its regional profile. 7
Oil resources have, nonetheless, brought huge capital flows
into Dubai from Abu Dhabi and the broader GCC. This phenome-
non has been especially noticeable in recent years, which have wit-
nessed a sustained boom in Dubai’s real estate market and other
key sectors. Wealth from the broader region has poured into Dubai
in the form of both investment and consumption: Dubai hotels, for
example, are full of visitors from Saudi Arabia and other GCC states
who come to Dubai for weekend getaways. Dubai is the destination
of choice for training seminars and management retreats, not to
mention for family holidays.
Prosperity in the UAE has also benefited the other, smaller
emirates despite their limited oil reserves. Sharjah, for example, has
come to play a central role as a “suburb” of Dubai and a source of
housing for Dubai’s booming workforce. Traffic between Sharjah
and Dubai has become a chronic problem in recent years, with
many commuters spending hours in bumper-to-bumper traffic
every day. Sharjah’s more conservative social environment is
sometimes seen as more family friendly than the glamorous, more
cosmopolitan Dubai. Ras al-Khaimah is also becoming an increas-
ingly important business hub, partly because it is less crowded and
more affordable than Dubai.

OPEN FOR BUSINESS
Perhaps the single most important element in the UAE’s success
story is the country’s remarkable effectiveness in creating a