Why Is Dubai So Rich? The Real Story
Dubai in the United Arab Emirates is home to the tallest skyscraper in the world.Burj Khalifa, It stands almost 3000 feet in the air, and cost the city more than 1 billion dollars.On the ground signs of Dubai’s wealth are apparent, as the police patrol the streets in Ferraris, and Lamborghinis.So why is Dubai so rich?
how did the Emirates, get so rich?and why is Dubai so rich?
Well, the UAE is a federation of seven emirates, each ruled, in part, by its own Islamic monarchy.
Historically the UAE has been a prime location for international trade. Situated at the mouth of the Persian Gulf, ships sailing around Asia and Africa made frequent stops there.You can read this articles about What country is Dubai in?
In the late 1950s, large oil deposits were found near the UAE’s capital of Abu Dhabi, beginning a hugely lucrative oil industry.The oil deposits proved to be so vast, that presently, they account for a tenth of the World’s total oil reserves. Crude oil exports are responsible for almost $400 billion dollars of the UAE’s GDP.
But Dubai, by itself, isn’t very oil-rich.
Reports indicate that in 2010, only around 1% of Dubai’s economy was from oil sales.
So why is Dubai so rich?
Well, both Dubai and the entire UAE have a historically productive relationship with the United Kingdom. This relationship granted them access to exclusive western investments and partnerships.
In 2000, the international credit boom helped the Emirates solidify their place in the Middle East as a financial and cosmopolitan hub.Foreign investments poured in for ambitious projects like the world’s tallest skyscraper, largest resort, and even a series of man-made islands.
Since then, tourism, trade, and retail have flourished, attracting a large number of visitors and immigrants.
Dubai was reported to be the world’s 5th most popular tourist destination in 2014.
Additionally, there are no corporate taxes, except on oil companies and foreign banks, making them an attractive business destination.
However, despite the flow of investments and a growing tourism industry, the late 2000s global economic crisis hit the emirates especially hard.Real estate prices collapsed throughout the area, and one study found that more than 200 construction projects were cancelled between 2009 and 2011.
It got so bad that eventually, Abu Dhabi had to bail out Dubai with a $10 billion dollar loan. So yeah, Dubai is massively rich.