Another key factor behind the strength of this economy lies in the close relationship the government has fostered with the private sector, and its constant communications with foreign and local entrepreneurs. The government is commited to local and foreign businesses at the highest levels and its intention to consistently bolster this relationship. This is the only way to bring more depth and dynamism to the economy and lend support to the Emirate’s focus industries. The UAE has developed from a mere trading hub for the Persian Gulf and the Middle East regions, into an increasingly important international hub serving a vast area extending from Central and South Africa to the Subcontinent and the CIS countries. These are in large part the results of the efforts of His Highness General Sheikh Mohammed bin Rashid Al Maktoum, Dubai Crown Prince, UAE Defense Minister and President of Dubai Development and Investment Authority.

For many years now, the UAE has been implementing a development plan aimed at diversifying its economic structure away from oil and launching policies capable of attracting investments. Its efforts in this domain were rewarded with its economy becoming one of the region’s most dynamic and diversified; and further marked by an increase in the contribution of the non-oil sector in its GDP to over 90%. Moreover, its economic development over the years has been distinguished by a comprehensive growth in all sectors, while simultaneously enjoying higher levels of interaction with international markets. One of the most prominent developments witnessed by the UAE over the past few years has been its emergence as a tourist destination attracting visitors from all over the world. Iran would do well to emulate this model as tourism is a field in which it has unbelievable potential.

For many years now, the UAE has been implementing a development plan aimed at diversifying its economic structure away from oil and launching policies capable of attracting investments. Its efforts in this domain were rewarded with its economy becoming one of the region’s most dynamic and diversified.

UAE is now seeking to consolidate its achievements by striving to review and upgrade its legal structures and promote an institutional culture, which supports the development of all sectors. Simultaneously, they are continuously upgrading and developing their country’s infrastructure and the standards of services provided by government departments and other public institutions. This exercise aims at reaching superior levels of efficiency in performance and uprooting all forms of bureaucracy and routine.

Today, when we look back to what the UAE has achieved in the past few decades, we realize that UAE—in particular Dubai, where citizens and residents alike enjoy a very open and dynamic attitude towards trade—prospered by providing an environment conducive to the growth and success of businesses.

Even before the discovery of oil, when resources were very scarce, the government strived to provide an efficient mix of projects and policies to help the private sector play a major role in the development process. The Dubai Creek dredging project was one such venture. The same is true for all the other projects which were implemented in the UAE over the past decades—beginning with the Rashid and Jebel Ali ports, to the Dubai World Trade Center and the Dubai International Airport and recently the Dubai Internet, Media and Healthcare cities. All these projects aimed at providing additional growth opportunities for the private sector and promoting overall economic development.

Rashid Al Maktoum, Dubai’s Crown Prince, believes that the role of the government should be restricted to legislation and regulation, in addition to the continuous development of infrastructure—thus making the private sector the engine of the development process.

The Dubai Government has cultivated a reputation of keeping its promises and commitments, thus earning the confidence of major multinationals and the local business community. This confidence is considered one of Dubai’s most priceless resources and accomplishments, because it represents the achievement of a close partnership and co-operation over many decades. This reputation has been maintained and strengthened through a closely-knit series of measures and policies, ranging from maintaining intensive investment in infrastructure to easing formalities and developing legislation. The government seeks to adopt the standards in force in the private sector, as far as efficiency and service are concerned. In today’s world, where barriers and borders are falling, and where competition is reaching record levels, cities and states reneging on their commitments and promises, risk and may jeopardize their future prosperity. But those who keep their word will reap the highest rewards.

With the world ushering in a new phase of development in which the standards of competition and excellence have changed, new types of challenges have emerged. Dealing with these challenges requires radical changes in the prevailing focus and methods. Major initiatives launched by the government—such as the Dubai Shopping Festival and Dubai Internet City and Dubai Media City—are examples of these methods that have accelerated the UAE’s economic growth. In addition to the general direction towards limiting its economy’s dependence on oil revenues, Dubai has developed new industries and markets to maintain the vitality of its economy.

The government’s initiatives represented a qualitative leap in this respect. The Dubai Shopping Festival was an innovative regional initiative, which lent an increasing momentum to tourism, shopping and services, while the Media and Internet cities greatly boosted the region’s drive to embrace the principles of the new economy. It is now expected that the Dubai Healthcare City will turn UAE into an international center for medical care and health services. The combination of these initiatives has had a very clear impact on the economy. In addition to their direct contribution in creating huge business opportuni­ties, they helped maintain UAE’s competitive edge as an increasingly important regional hub serving a large geographic area, which includes the Middle East, the Subcontinent, Central Asia, CIS countries and North and East Africa.

While the initiatives launched by the government over the past few years have had a local and regional character, some of its more recent ones (i.e. The Dubai International Financial Center), seem to suggest international ambitions.

Dubai is promoting its status as one of the world’s most prominent centers of finance, business, tourism, aviation, IT, media, services, trade and industry. This means that the UAE will maintain its appeal as the prime option for multinationals and as a magnet attracting the best-qualified professionals in all fields. Although this might look a very ambitious goal to some; Emirates airlines—one of the world’s best success stories in the airline industry—is just an example how it is attainable.

Furthermore, Dubai became one of the world’s fastest growing tourist destinations, to the point that it is preparing to receive around 15 million tourists by the year 2010. The emirate has also became one of the most important centers for international exhibitions and conferences, as proven by its hosting of the annual meetings of the IMF and the World Bank in September 2003, in addition to scores of other annual meetings of multinationals and inter­national exhibitions.

Rising regional competition is considered an incentive for UAE to become even more creative and responsive in its initiatives. Competition benefits all parties because it promotes more innovation and a sense of initiative. The UAE is fully confident that it will always play a vital role in the region’s economies and it is committed to keep working in order to provide an ideal business environment that will offer perfect opportunities for growth and prosperity. In addition to the country’s highly sophisticated infrastructure and excellent facilities and incentives, the UAE is keen to keep the momentum and build upon its competitive edges, in order to maintain its leading position in the region.

It is a well-known fact that the UAE has an extremely flexible and efficient trade and economic legal structure, an ideal investment environment and an ultra-modern infrastructure, attracting international investors and multinationals due to its simple government formalities, the absence of bureaucracy and its efficient communications and transport facilities. Dubai-based companies also benefit from the active role the emirate plays in the re-export trade, making it the most prominent re-export center in a region with over two billion consumers, encompassing the Persian Gulf, the Middle East, Africa, the Subcontinent and the CIS countries.

Some of Dubai’s flagship companies such as Emirates airline, Dubal, Dubai Ports and Jumeirah International are state-owned. Even though the government is not discounting the option to disinvest from these ventures in the future, but it does not see a need to privatize such enterprises at the moment.

Privatization imposes itself whenever there is a need to reduce the public sector’s dominance of the economy in favor of the private sector, or when losing state corporations become a burden on public finances—which is often the case in Iran. None of these factors apply to the said corporations. Dubai’s economy is not suffering from a dominance of the public sector. The said corporations are operating in accordance with the efficiency norms adopted by the private sector, and they are, moreover, making profits.

Dubai is embarking on a new phase of development. With the first round of investments concentrated on deploying the infrastructure along with ambitious undertaking such as the Jebel Ali Free Zone and Port, Dubai International Airport, Emirates airline, Dubai Aluminum and Dubai Technology and Media Free Zones, the emirate is now looking at the next level of projects to stimulate the economy.

The new phase comprises a healthy dose of ambitious projects worth $30 billion in virtually all sectors. Apart from the traditional tourism, trade, technology and manufacturing industries, a new batch of investments is coming from foreign, regional and local entrepreneurs in residential, financial services, light and heavy manufacturing entities and specialized free zones. This expansion is not just in the hope of future gains, though. It is also to cater to the growing demands of the here and now. Dubai’s population has grown from 765,000 at the end of 1997 to 1.03 million by 2001, at an average annual rate of 8.6%; and as the emirate’s economy grows, a compelling need has emerged for more space—commercial, residential and leisure.

To make room for the business flow, the city’s parameters are being extended to accommodate the various initiatives unfolding at an impressive speed. The transformation, while scattered all over the city, is especially concentrated in the cluster that begins from the Dubai World Trade Center right down to Jebel Ali Free Zone and beyond. With the city center’s land resources exhausted, the sands on the southern fringes of Dubai are making way for stratospheric office towers, free zones, cozy residential communities and round-the-clock entertainment districts.

Dubai World Trade Center’s (DWTC) $177 million convention center offers more than 7,500 square meters of meeting space with a capacity for 6,000 delegates. Two new hotels, owned by the DWTC, flank the new convention center. The facility also includes a concourse linked to the 59,000 square meters of the existing exhibition halls. It is fitting that DWTC, the emirate’s flagship MICE entity, leads the industry. A key initiative that will not only add to the physical infra­structure, but also enable Dubai to gain a strong foothold in the financial services industry is the Dubai International Financial Center (DIFC). The center aims to bridge the gap between major western capital markets in London and New York to their eastern counterparts in Hong Kong, Tokyo and Singapore.

The wider region that Dubai straddles is home to 1.8 bil­lion people with a combined GDP of $1.5 trillion. The latent potential existing in this disparate region has not been exploited yet. But DIFC is offering global financial service giants the opportunity to establish their regional asset man­agement, Islamic banking, reinsurance and back-office operations, apart from the benefits of liquidity and depth of a regional stock exchange. From the vantage point of their DIFC offices, a new breed of asset managers, brokers, analysts, researchers and money­men can leverage the riches of the region and find new avenues of growth for their businesses.

UAE has a textile industry valued at $4 billion, most of which comes from the $54.5 million Dubai Textile City (DTC). Its prime market stretches from the western tips of Africa to the Indian subcontinent. Dubai’s sprawling textile industry will soon relocate to a 4.85 million square feet complex as a joint venture between the 300-member Textile Merchants Association (Texmas) and Dubai Ports, Customs and Free Zone Corporation. The complex will accommodate 250 units spread over an area of two million square feet. The project comes at a time when the UAE is set to lift an eight-year-old ban on the establishment of new ready-made garment and textile factories in line with World Trade Organization rules that require member states to tear down financial and trade barriers.

The new initiative, combined with Dubai’s already established position in Europe, Africa and the Middle East, will usher in fresh players in this burgeoning sector. It will also allow the textile industry to maximize its export quotas to the United States and target other markets such as South America, Far East and Southern Africa. Investments in garments and other industries in Dubai are highly feasible due to the abundance of inexpensive labor and energy costs and the emirate’s strategic location. Official statis­tics show that nearly 150 ready-made garment factories operate in the UAE, with a combined capital of nearly $69 million, the bulk of which is concentrated in Dubai and Sharjah. The UAE Ministry of Finance and National Economy figures show that in 2001, textiles and textile articles contributed 16.5% to the UAE’s merchandising exports, making it the country’s sec­ond largest export product after base metals. It is clear, that the motive behind DTC is to strengthen the local textile industry further and beckon new entrepreneurs.

Other developments in the area include the Dubai Auto Parts City and an automobiles trading and maintenance depot. Dubai is a big player in the regional automobile re-exporting business, and the twin ventures would further accelerate the growth of vehicle-related investments. More than 260,000 automobiles ply the streets of Dubai and that alone presents a market ripe for global automobile mak­ers. Daimler Chrysler and General Motors have already set up a regional auto parts warehouses in the city, and there are indications that other manufacturers will follow suit.

The emirate has several other irons in the fire. Dubai Internet City and Dubai Media City, that began welcoming tenants only two years ago, are already undergoing rapid expansion in multiple phases. The cities are now considered regional bases of some of the world’s leading technology and media entities, and are home to 650 companies employing 5,000 knowledge workers. Officials of the entities are confident that they will be able to attract 30,000 workers to the two cities within the next five years. Dubai’s status as the premier IT hardware and service provider to the region is unparalleled which has led to virtu­ally all multinationals with Middle East aspiration to set up office in TECOM. With the markets of Afghanistan, Iran and even Iraq, looking to open up, international companies can target these markets from the comfort of Dubai’s strong setup. Apart from blue chip IT companies, investments are also flowing in from new and traditional IT services and hardware providers in the areas of Internet security, e-hosting and technology and communications gadgets.

The region’s interest in the media industry is also impacting on Dubai Media City. New and existing players have moved into the free zone, turning the city into a veritable hotspot for journalists, publishers and media tycoons. But there is still plenty of room for investors to launch regional channels, publications and media services from Dubai’s modern set up. The technology and media companies will also be fed by the intellectual stimulation of the nearby Knowledge Village. A center for learning and innovation, the $68 million village is looking for investments in media academies, innovation centers, e-learning institutions, research and development organizations, a multimedia library, corporate training institutions, scientific and technology institutes, certification and testing organizations and incubators.

While Dubai explores new avenues, it has also bolstered its key revenue-earning industries. The new investments pouring into the sector are being supported by an infrastructure strong enough to handle the flow. To manage this massive increase in trade, Dubai Ports Authority (DPA) has unveiled a $1.14 billion (Dhs4.2 billion) expansion plan for Jebel Ali Port. The expansion would increase the port’s capacity from its present four million twenty-foot equivalent units (TEU) to 21.8 million TEU by 2020. The expansion comes well in time: DPA’s TEU trade flow has been rising steadily from 2.84 million TEU in 1999 to 4.14 million in 2002, according to DPA figures.

There are also plans to start laying down the foundations of a second airport near the Jebel Ali Port in 2015. Dubai Civil Aviation has already embarked on a $4.1 billion expan­sion of the existing facility involving two new concourses, a third terminal by 2006, and a mega cargo terminal to be built in phases by 2018. The second airport is being envisioned to cater to the rapidly rising tourism inflow. According to a report published by the World Tourism Organization (WTO), Dubai has posted a 30% strong rebound in terms of international tourists arrival and is placed first in the most frequently visited destinations. The report places Hong Kong, France, Turkey, Belgium, China and Germany behind the emirate in terms of visitor inflow. According to the report, out of 715 million international tourists, Dubai receives 0.7%. Furthermore, 20% of the 24 million tourists from the region also frequent the emirates. Currently, the Dubai International Airport handles 15 million visitors including four million tourists, and civil aviation officials forecast that these figures will climb to 35 million and 15 million respectively by 2010.

A few blocks away is the Venice-inspired Dubai Marina, a residential-cum-business-cum-entertainment district. The $4.4 billion project features apartment blocks, hotel and commercial buildings surrounded by an artificial lagoon. Dubai Marina will eventually be home to 50,000 people, predict company officials. Emaar has also opened the doors to a new league of investors with new resi­dential blocks such as the Springs, Hills, Meadows, Greens, Arabian Ranches and Gazelle, offering a range of options and price packages to suit the needs of the ‘mass affluent’ foreign and regional investors.

The icons of the city’s entertainment and leisure industries, however, would be the twin Palms Islands. The project involves the creation of the world’s two largest man-made islands known as The Palm, Jumeirah and The Palm, Jebel Ali. Located just off the coast of the city, the two palm tree-shaped islands are expected to contribute to Dubai’s position as a premier global tourist destination. The project will increase Dubai’s shoreline by a total of 120 kilometers and create a large number of residential, leisure and entertainment invest­ment opportunities.

The creation of The Palms is an extraordinary project of grand propor­tions. Involving approxi­mately 100 million cubic meters of rock and sand, each island will support 40 luxury hotels, 2,500 exclusive residential beachside villas, 2,400 apartments, two marinas, water theme parks, restaurants, shopping malls, health spas and cinemas. Investor interest is already sky-high with numerous hotel chains and business groups having committed millions of dollars to the unique attraction.

Although the Palms would dominate the city’s leisure proj­ects, a cluster of other equally enterprising developments will also dot the area. One such project is the $272 million Souk Al Nakheel. The project features 60,000 square meters of retail space, a 20,000 square meter hypermarket and 56,700 square meters of entertainment, leisure and food outlets. The centerpiece of the development is a snow dome with a 320-metre ski slope. Souk Al Nakheel will open for business by late 2003 and the entire project will be ready by end of 2004, with options for further expansion.

Adjacent to the DIFC, local property company Emaar plans to build the world’s tallest tower—Burj Dubai. The tower combines residential, commercial, hotel, entertainment and leisure outlets with open green spaces, water features, pedestrian boulevards, an ‘old town’ and one of the world’s largest shopping malls. At 452 meters, Petronas Towers in Kuala Lumpur are currently the world’s tallest towers, while China recently announced that it intends to build the 492-meter Shanghai World Financial Center—Burj Dubai is expected to dwarf both those buildings.

Sport too, is big business. With Dubai already a global venue of choice for horse racing, golf and rugby, the emi­rate is now aiming to offer speed thrills to Formula One fans around the region. Local real-estate developers, Union Properties, is building the Dubai Autodrome and Business Park, which comprises more than seven square kilometers of motor sports and a five kilometer FIA-approved Formula One racetrack. A 1.2 kilometer indoor and outdoor go-carting and motor biking track will be the development’s centerpiece. The business element of the park will feature a selection of specifically designed warehouses to cater for the motor sports industry, and opens up a previously unlikely investment avenue for entrepreneurs.

Another example of private entities investing in the emirate is the Dubai Pearl, located in an area extending from the heart of the Dubai Technology and Media Free Zone to the Palm Islands. The $817 million project is a joint venture between Dubai Technology, E-commerce and Media Free Zone and Omnix Group. To be completed by 2006, the project features three hotels, an opera house, residential and commercial space. At the center will be the Pearl Techno World showcasing the latest information technology and communications products.

These developments, the majority of which will be completed in the next five years, will alter the physical structure of Dubai in its quest to become a magnet for tourism and commerce.