Has Dubai become one of the Leading International Economic – Service Centers in the Middle East?
From the last three decades, Dubai has emerged as the Middle East’s most significant tourism, trade, and financial hub. It is now internationally recognized for being the leading business and trading center since it is the heart of the world’s Islamic economy. Since it has an inevitable global reputation, Dubai aims at investing more in the new infrastructure project and other technological innovations hence enhancing the credentials. Most of its growth is associated with its strategic location where it is at the junction of Africa, the Far East, and Europe. It is acknowledged as being the busiest city in the Middle East.
Sectors of Dubai’s Economy that are the most Developed and Key Development Drivers
Dubai is now regarded as the home of business industries. The topmost developed business sectors in Dubai include automotive and aerospace, tourism, and housing. The city is one of the best business platform for the creation of any business. The automotive and aerospace are one of the major key drivers of the growing economy (Hannawi et al., 2019). For instance, even police care that prevails in Dubai happens to be luxury vehicles with high performance. There is a great market for the automotive sector in Dubai, which is expected to also grow further by 2020. For instance, the passenger numbers are expected to increase to a compound annual growth rate of 5% generating 13.2 million by the end of 2020. Aerospace is one of the top focused areas in Dubai’s plans. Don't use plagiarised sources.Get your custom essay just from $11/page
The oil and gas industry is attracting the attention of potential investors. UAE is a member of the OPEC (Organization of Petroleum Exporting Countries) as well as in gas export countries forum. It is one of the successful players in the international oil business, being the seventh-largest provider of oil (Hannawi et al., 2019). Which makes oil one of the critical drivers of the growth of the economy in the United Arab Emirates. Additionally, the manufacturing industry is a crucial driver for the growth of the Dubai economy. For instance, the manufacturing industry is expected to generate 7% of Dubai’s gross domestic product, which exceeds the current output of 22.8%. Further, it will help in the creation of an employment pipeline of over 20 million people. The manufacturing industry in Dubai entails different sectors such as metal industry, pharmaceuticals, the industrial equipment in addition to aerospace and defense tools.
The food and beverage industry is one of the critical drivers of Dubai’s economy ranked as the best booming businesses in the UAE. It is the second-largest business where F and B are aiming at extending its arms both locally and globally before the end of 2020 (Fukuda, 2019). It is planning on increasing fresh food count with over 8.3%. UAE plans on expounding the business through different trade shows such as Guilford, which will attract over 5000 exhibits for showcasing their food items.
Most of the business entities in the UAE are growing daily and are further expected to grow after the 2020 Expo because it will help in building business relations. Hence, the high demand for company marketing, brand development, and advertisements for the creation of brand awareness. An example is where over $1 billion is spent in an ad by going directly to silicon- valley. There high demand in the market, which is a niche for business people to venture in through the establishment of advertising consultancies and businesses (Fukuda, 2019). There is a development of a free zone for leveraging the industry’s growth, such as Dubai Media City. It is majorly dedicated to the media industry for offering space for marketing and advertising.
Further, there is the health sector, which is a significant development driver since people in the UAE are health conscious and have a great interest in the healthcare facility. This has, in turn, led to the increment of demand in professional healthcare service professionals and facilities (Hannawi et al., 2019). Hence, if an investor is interested in beginning a private business, then the healthcare facility is the best. Additionally, the transportation industry is one of the developing drivers, which offers a vast opportunity since it has a high demand for transport services. So investors in the UAE can even start local taxi services for the generation of income. Hence, in Dubai, the economy is majorly driven by specific business sectors.
Where is the Competition Located/Developing?
Dubai being of the leading international financial service centers from the Middle East is driven by different sectors that are in stiff competition. For inaction in Dubai for the cast decades, it majorly depended on oil as its primary export and income-generating sector, but in the recent past, so much has changed. Reports display that the government of UAE is now focusing on the tourism sector, which makes Dubai a goal place for tourists (Fukuda, 2019). Additionally, the Dubai economy is now significantly driven by infrastructural development, making transportation effective. It also entails classified housing and the building of great hotels with the most massive towers in the world. So there is stiff competition between the principal economic development drivers. Real estate is the best in the competition with the design planning sector, which renders the city vulnerable to poor designing, limiting future city growth.
Serious Adversity (Weaknesses) of Development
Dubai is now a grand commercial center of different businesses in the Middle East and one of the fastest-growing cities. However, it is facing weaknesses in its real estate and trade. This is because the city has now focused more on tourism and international business services, which has weakened the real estate economy of UAE (Hannawi et al., 2019). Further, the failure of the city to consider housing plans in the real estate will significantly impact the city. In the future, if no housing plans, then there will be issues in the expansion of the town hence affecting the whole economy. Accordingly, the demand for conduction an evaluation of projects for the UAE government fogs to assist in the stimulation of economic growth and development in UAE. Therefore, the economist’s analyst should balance all the business sectors since they are all critical in economic growth.
Even though Dubai has shown rapid growth, its future cannot be predicted. Most of the economic analysts state that since Dubai is an open market and is entirely exposed to global trade tensions, then there might be an economic downturn flowing the current tough sanctions. Hence, immediate action needs to be taken on how to protect the city through rafting of incentives for protecting the commercial and the economic hub. Further, the UAE must ensure that there is a balance in the development of all the sectors in the economy since they are essential (Fukuda, 2019). For instance, with excellent infrastructure, then there is development and growth of trade. Additionally., there is the danger of insufficient water resources, which is a weakness since most of the business sectors demand hence the need for addressing the issue. Other defects include ways of handling air pollution, land degradation as well as desertification, which possess a significant environmental threat in Dubai.
In conclusion, Dubai is now one of the most important international commercial service centers with different development drivers. It has now become one of the global commercial, financial as well as art hub internationally. Most of its growth is credited to its strategic location is at the junction of Africa, Europe, and other states. Further, most of the significant development drivers of Dubai’s economy entails transportation, logistic, the tourism industry, wholesales as well as the oil industry. These industries are slowly replacing real estate, which has been a significant sector in the city. However, these development drivers are changing each day as it depends on policies that the government has in place for supporting every industry.
On the other hand, Dubai has a senior’s adversities of development that need to be addressed. Due to the diversification, the real estate and trades are now becoming weak. Since Dubai is growing at a fast rate, then there is a danger of lacking space for expansion. Just because Dubai is now an open market and is fully exposed to global trade, then it increases the consequences of regional members. There is a need for balancing the different economic sectors since they all play a vital role in society.so, the government of UAE must come up with a well-thought decision on how the city planning will be done
References
Hannawi, N., Jones, P., & Titheridge, H. (2019). Development of transit-oriented development in Dubai City and the Gulf States. In Transit-Oriented Development and Sustainable Cities. Edward Elgar Publishing.
Fukuda, S. (2019). Economic Development in Dubai, Abu Dhabi, and Doha. In Asian Migrant Workers in the Arab Gulf States
Ewers, M. C., & Dicce, R. (2016). Expatriate Mobility, Firm Recruitment, and Local Context: Skilled International Migration to the Rapidly Globalizing City of Dubai. In Rethinking International Skilled Migration .