Dubai's Economic Developement

Table of Contents

Executive Summary………………………………………………………………………………2
Introduction
Background: Overview of history and development of the United Arab Emirates and Dubai………………………………………………………………………………………3 Purpose Statement.……………………….………………………………………………..3 Research Methods………………………………………………………………………....3
Findings
Economy of the United Arab Emirates ….. ……………………………………….……...4
The Palm Tree Islands: focus on tourism for economic sustainability…………………....4
Other major tourist attractions and further construction projects……...……………..…...5

Conclusion ……………………………………………………………………………………….5
References………………………………………………………………………………………...6
Appendix Material………………………………………………………………………………..7

Executive summary
The construction of The Palm Tree Islands in Dubai helped achieving economic growth and stability by means of developing the tourism sector. Dubai’s success in construction of tourists attraction sites brought the city reputation of the “place-to-be”. By 2010 Dubai expects to receive fifteen million people. Already existing architectural wonders such as The World Islands, and Burj Al Arab, the only seven star hotel in the world, have become very popular and are attracting many tourists to the UAE. Today, almost 90 per cent of Dubai’s economic growth is driven from non-oil industry.

For many years, economic development of the United Arab Emirates depended on oil and gas export but these natural resources are expected to be minimal by 2016. Dubai’s Sheikh Mohammed bin Rashid Al Maktoum is the ambitious leader who came up with the idea of extending Dubai’s cost line and attracting tourists by building The Palm Tree Islands.

The first Palm Tree Island - The Palm Jumeirah, was completed in the end of 2006 and became the world’s biggest interest. Luxurious hotels, restaurants, aqua parks and other attractions are built on The Palm Jumeirah. It welcomes almost 20,000 tourists per day and has over 120,000 residents.

Background
Overview of history and development of the United Arab Emirates and Dubai
Only 37 years ago the United Arab Emirates (UAE) was a desert land occupied by Arab Bedouins. Today, it is one of the richest locations in the Middle East. Located in the Persian Gulf, the United Arab Emirates borders with Oman and Saudi Arabia. It is a small country with population of 4.104,695 in 2006 (UAE Interact 2006). The capital is Abu Dhabi but the most famous tourist location is Dubai.

Back in the history, in 1950, Dubai was a place radically different from what it is now. This was a town of no distinction, a home to traders and pearl divers, with occasional pirates or smugglers taking refuge in its creek. Then, a small reserve of oil was discovered in Dubai, a smaller one than Abu Dhabi or Saudi Arabia has, but Dubai’s leader, Sheikh Rashid Al Maktoum, saw a chance to transform his desert land. In the early 1970th Dubai joined with six other emirates and formed a state called the United Arab Emirates. (The Economist 2006, December)

Purpose Statement
The purpose of this report is to demonstrate how the construction of The Palm Tree Islands in Dubai helped to sustain economic stability of this country by attracting tourists.

Research Methods
The research tools used to prepare this report include library databases, such as ProQuest, Factivia, BBC News Online, Canadian Newsstand Major Dailies database, National Post, Dubai’s official web site www.theemiratesnetwork.com and construction company web site www.nakheel.com.

Findings
Economy of the United Arab Emirates and Petroleum Resources
The UAE’s primary source of revenue generation is oil and gas production. In 2006, the emirates were producing about 2.5 million barrels of crude oil per day. The output of natural gas for the year was 46 billion cu m (The Economist 2006, December).Successful diversification of economy led to the development of other economic traits that included agriculture, fishing, boat building, construction, and tourism. The United Arabs Emirates currency, Dirham, has a stable rate of Dh 3.67 per $1 US in 2006. After the opening of Dubai World Trade Center in 1981, many investors started showing interest in this tax-free, fast growing country (Ten Guide 2005).

Dubai’s petroleum resources will be minimal by 2016 if the demand continues at the same rate. Sheikh Mohammed bin Rashid Al Maktoum, understanding that the economic stability of Dubai would be shaken if there was no oil to sell, focused on constructing major sites for attraction of tourist to Dubai. His ambitious project of building the palm tree islands on the Dubai’s cost line and at the sea seamed unachievable to engineers at first. Dubai’s first palm tree island, The Palm Jumeirah, extended the cost line by 120 km. The construction cost for this project was $7 milliards US. (Ten Guide 2005)

The Palm Tree Islands: focus on tourism for economic sustainability
The construction of The Palm Jumeirah began in June 2001. The unique, man-made islands resemble a date palm tree, with 17 fronds and a water-breaker system. Four years of methodical planning and comparing feasibility concepts took place prior to the construction. Environmental issue was of a great concern for the Sheikh. Instead of cement materials, the foundation of the islands was made of natural rocks and sand (Nakheel 2007).

Dubai’s government expects over 120,000 residents and 20,000 tourists per day. The Palm Jumeirah has a state of the art infrastructure and transportation system. Tourists are able to reach the islands by see, air, and cars. Six-lane Sub-Sea Tunnel connects Palm Jumeirah to the mainland islands (BBC News Online 2005).

Dubai’s tourism industry is expected to grow by 4.4% by 2016.Today; almost 90% of Dubai’s economy is driven by non-oil industry. Tourism industry is expected to be country’s main focus for economic growth and sustainability (BBC News Online 2005).

Other major tourist attractions and further construction projects
The success of The Palm Tree Islands motivated Dubai’s Sheikh Mohammed bin Rashid Al Maktoum to build even more ambitious project – The World. This project will resemble the map of the world built on the see. The World will consist of 300 islands, ranging from 150,000 to 450,000 sq ft. The islands will be sold to private owners, starting from US$ 6.85 million per island (Nakheel 2007).

The construction projects are not limited exclusively to the cost line development. Recent mega mall includes the largest in the world indoor skiing facility. Many tourists were attracted by the idea of being able to ski in the middle of the desert. Another popular tourist site is Hydropolis, an underwater luxury hotel and resort, constructed 66 feet under water. Hotel’s guests are able to see fish and other sea creatures right from their windows (Chipman 2001)

Besides these new wonders, Dubai has the only seven-star hotel in the world named Burj Al Arab and by 2009 in Dubai will be finished the construction of the world’s tallest building. These massive architectural wonders will attract even more tourists and investors to the United Arab Emirates.

Conclusion
Dubai’s economic stability used to be based on export of oil and gas, but recently its economic focus has been successfully shifted towards tourism industry. After the success of Burj Al Arab, the world’s only seven-star hotel, Sheikh builds The Palm Tree Islands and The World Islands to further boost Dubai’s economic development. Tourist flow has increased and is expected to increase even more by 2010 (Al-Bawaba News 2008). Sheikh’s major construction sites promoted tourism business in the country and achieved economic stability which does not depend on the oil resources. His ambitious projects not only succeeded in attracting tourists and investors, but also brought Dubai the reputation of the “place-to-be”.
References

Al-Bawaba News, 14 February 2008. Travel and tourism continues as driver for economic growth in UAE; Sector to impact 30% of total UAE’s GDP . Retrieved February 18, 2008, from Factivia.com

BBC News (7 November 2005) How Dubai became a headline grabber. BBC News online. Retrieved 20 February 2008, from http://news.bbc.co.uk/2/hi/uk_news/magazine/4414086.stm

John Chipman (2001, May 19). Dubai to build 'palm tree ' island mecca :[Toronto Edition]. National Post,p. A11. Retrieved February 18, 2008, from Canadian Newsstand Major Dailies database. (Document ID: 245258211).

Nakheel 2007, The Palm Jumeirah . Retrieved March 11, 2008 from http://www.nakheel.com/Developments/The_Palm/The_Palm_Jumeirah/

Reena Jana, 2 March 2006. Dubai’s Architectural Wonders. Business week, Retrived February 20, 2008 from http://www.businessweek.com/innovate/content/mar2006/id20060302_615308.htm

Special Report: All that glisters... - Dubai; Dubai. (2006, December). The Economist, 381(8508), 86. Retrieved March 28, 2008, from ProQuest European Business database. (Document ID: 1183600321).

Ten Guide, UAE. The World, Dubai. Retrived February 25, 2008 from http://guide.theemiratesnetwork.com/living/dubai/the_world_islands.php

Appendix Materials

The Palm Jumairah Ski Resort Burj Dubai

The World

References: Al-Bawaba News, 14 February 2008. Travel and tourism continues as driver for economic growth in UAE; Sector to impact 30% of total UAE’s GDP . Retrieved February 18, 2008, from Factivia.com BBC News (7 November 2005) How Dubai became a headline grabber John Chipman (2001, May 19). Dubai to build 'palm tree ' island mecca :[Toronto Edition]. National Post,p. A11. Retrieved February 18, 2008, from Canadian Newsstand Major Dailies database. (Document ID: 245258211). Nakheel 2007, The Palm Jumeirah . Retrieved March 11, 2008 from http://www.nakheel.com/Developments/The_Palm/The_Palm_Jumeirah/ Reena Jana, 2 March 2006 Special Report: All that glisters... - Dubai; Dubai. (2006, December). The Economist, 381(8508), 86. Retrieved March 28, 2008, from ProQuest European Business database. (Document ID: 1183600321). Ten Guide, UAE. The World, Dubai. Retrived February 25, 2008 from http://guide.theemiratesnetwork.com/living/dubai/the_world_islands.php Appendix Materials