Openness, world-class logistics, finely tuned public-private involvement – does the Dubai model set an example to the world?
It is a counter-intuitive truth that, historically, nations rich in resources tend to underperform those without. The phenomenon is known as the “resource curse”.
The fact is that having no resources forces a country to explore other means of driving economic growth – be that human capital, for example, or infrastructure. It forces a nation to be innovative.
An interesting example of a place that has negotiated this challenge with impressive skill and dexterity is Dubai. Aware that it could not rely on hydrocarbons for ever, the emirate has created an economic model that sets a global example.
Dubai’s leadership was remarkably clear on its strategy. Culturally and historically, the emirate had always enjoyed a spirit of openness – it has always been, after all, a centre for merchants and traders – and so it unashamedly played to its strengths, introducing a fully diversified economy that took in logistics, retail, hospitality and finance.
When people refer to the “Dubai model” one of the main characteristics they would highlight is the emirate’s openness and inclusivity
The enduring spirit of openness that facilitated this cannot be underestimated. When people refer to the “Dubai model” one of the main characteristics that they invariably highlight is the emirate’s inclusivity. Here, after all, is a place where the majority (83 per cent) of the population is foreign, with the atmosphere for overseas workers being extremely welcoming.
This has resulted in an incredibly open business environment in which overseas companies, entities and individuals can come to the city to work, create and produce.
Through implementation of mechanisms such as the freezone model Dubai has boosted its ability to attract foreign talent into the emirate – not just to do business in Dubai but elsewhere in the region, and in other continents, too.
The spirit of openness has enabled Dubai to become the business hub not just for the entire Middle East but also for Africa, much of South Asia and beyond.
Much of this is, of course, down to Dubai’s geographic positioning, standing as it does at the crossroads between the East and West. However, it is not just that. The emirate’s world-class infrastructure has been a key driver, too, which leads me onto what I believe to be the central plank of the success of the Dubai model. Indeed if I was asked to pinpoint the one area that has been core to the success of Dubai, I would answer, without any hesitation, “logistics”.
Dubai’s world-class ports, airports, airlines, logistics centre and freezone model is what gives it one of its unique advantages over many other places around the world. You only have to consider the current global trade patterns to see this point illustrated. The fastest growing global trade in the world continues to be South-South trade between emerging markets.
Dubai is not only conveniently located geographically at the heart of those new trade flows, but, having invested in both the hard infrastructure (airports and ports) and soft infrastructure (operators) to service those flows it has positioned itself to take full advantage of this new trading paradigm.
Additionally, the emirate has also been most adroit in gauging the optimum level of government involvement. Dubai’s government was very smart in developing and investing in areas such as infrastructure and hospitality – another of the Dubai model’s success stories – at a time when private sector players were reluctant to invest.
The government needed to take a leading role – and that is exactly what it chose to do. Now, with the government having led by example and laid the all-important groundwork, we are finding that the private sector is joining in, with the result being a thoroughly vibrant and diverse economy.
As I write there is a great deal of excitement around Dubai’s success in its bid to host the 2020 World Expo. This is, of course, a hugely positive development for the emirate and for the broader region.
However, thanks to the Dubai model, the story of Dubai is not dependent on Expo. For Dubai had, unquestionably, already arrived on the global map and the Expo win is a reminder of that.