Ever wondered what makes Dubai so rich and prosperous? (2024)

Ever wondered what makes Dubai so rich? I did too. At first, I thought it was their oil that made them rich, but boy I was wrong. The oil in Dubai was discovered just 50 years ago and it accounts for only one per cent of its earnings. So, what makes Dubai so rich? Curious to know how Dubai gained all its wealth? Well, just keep reading to know about the same.

Where it all started?

Back in the 1770s until the late 1930s, the primary source of income in the Trucial Coast of what is now the UAE was a pearl industry. Pearl diving was thought to be a humble beginning in trade for the residents of the Persian Gulf, but it set the foundation for something much larger later on.

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What actually makes Dubai rich?

In the late 1950s, soon after the clash between Dubai and Abu Dhabi for oil, Dubai struggled and didn’t have any high oil revenues, unlike Abu Dhabi, which thrived. That is when, the ruler of Dubai, Sheikh Rashid bin Saeed Al Maktoum, decided something had to change. So, he started investing in infrastructure and built Dubai’s first airport in 1960.

Also read: History of Dubai

1. Infrastructure and Tourism in Dubai

This also paved the way for the construction of several other infrastructure projects, which made them realize that infrastructure is a long-term strategy and gave hope to their economy. This led to a boost in tourism, and whatever little oil they discovered, was used in building the Dubai city we now see. Dubai has grown to become one of the top tourist destinations in the world, thanks to its state of the art infrastructure. The tourism industry makes up to 20 per cent of Dubai’s Gross Domestic Product.

2. Global Business in Dubai

The infrastructure also helped boom the trade industry. Dubai established its first free zone in 1985; Jafza, which was the largest free zone in the world. This also led to 30 more free zones that offer tax breaks, custom duty benefits and exemptions for foreigners. This resulted in attracting more global businesses. Many of these Jafza companies contribute to 20% of foreign investment in Dubai. And approximately 144,000 employees are generating $80 billion in non-oil money. That’s 21 per cent of the city’s Gross Domestic Product (GDP).

And that’s how Dubai became so rich

Dubai continued to become a dynamic and diversified economy with revenue generated through different streams. Most of the city’s GDP is non-oil based, contrary to the popular belief. The majority of its money comes from the production of goods, provision of services and Tourism. I guess that answers all our questions on what makes Dubai so rich?

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