Dubai, an Emerging Economy

Dubai is a state in the United Arab Emirates. Oil was first discovered in Dubai in 1966, the exporting of this, especially during the 1970s oil crisis lead to a significant increase in revenues for the government (as oil prices quadrupled). Dubai was previously a mainly fishing town but as a result of the influx of petrodollars the sheik decided to significantly invest in the area. The government decided to make the growth more economically sustainable by reducing the reliance on the scarce oil that could run out at any time. The sheik invested considerable amounts of tax revenues in building a city where real estate and tourism would bring large amounts of income in. Until the 2008 financial crisis Dubai had 25% of the world’s heavy construction equipment. Dubai now has the tallest building in the world, one of the only indoor snow slopes in the middle east, the world islands built using reclaimed land and much more.

 

Along with tourism and real estate Dubai has defined itself as one of the world’s major ports. Being geographically located between Europe and Asia it handles a large proportion of goods coming to developed economies like the UK from Asian countries. As a result of the rotterdam effect Dubai statistically appears to have large amounts of exports as a result of this however, although dubai does have a manufacturing sector due to the relatively small population very few resources are focused on this. Worries exist that firms in Dubai are making use of cheap migrant labour and restricting their human rights by withdrawing their right to stop carrying out work. Furthermore working conditions on building sites have led to a number of deaths over the past few years. A recent article by the Guardian argued that building sites in dubai are “stained by the blood of migrant workers”.