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Dubai
as an entrepôt
Over the past thirty years, the Dubai economy has been boosted by the general rise in oil prices. But with its oil reserves likely to run out over the next few decades, the emirate has looked to its other natural advantages in order to preserve its economic prominence. One such advantage is its position near the head of the Gulf, and – accordingly – Dubai has invested heavily in capitalising on its appeal as a trade thoroughfare and entrepôt. At the heart of this effort have been Dubai’s Free Trade Zones. These are areas designed first-and-foremost to attract foreign investment and commerce. Accordingly, then, they allow 100% foreign ownership – in contrast to the standard 49% allowed outside the zones – as well as a range of other business and tax incentives, designed to be attractive to large corporations.
These free zones have proliferated over the past fifteen years. Perhaps the most famous of them is that located at Jebel Ali, which incorporates the largest man-made port in the world. But others include the Dubai Internet City and Dubai Media City, which have both attracted big business-operations such as Microsoft, IBM, CNN, Reuters and AP.
The internet and media cities provide the key clue as to how Dubai is managing to keep abreast of the competition. Whilst the emirate faces multiple ‘hubcompetitors’ in the region, it is constantly seeking innovative and attractive investment. So it focuses not only on financial services and traditional trade, but also on technology, media, and biotech. Nor are Dubai-based firms content just to stay at home and attract everyone to them. They are keen to invest abroad, as was clearly shown by the takeover of Britain’s P&O by Dubai Ports World – a company which is also investing and developing heavily in India and China. That Dubai is one of the leading global centres for commerce is evidenced by the fact that it is now a crossroads for some 170 global shipping lanes and 120 airlines. As more and more companies take advantage of its free trade zones and other business-friendly measures, this success can only be expanded upon.
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