BEYOND PEARLS AND OIL: DUBAI'S ECONOMIC DIVERSIFICATION IN HISTORICAL PERSPECTIVE

Abstract

My study focuses on the historical development of the economy of the emirate of Dubai. Born as a natural harbor, Dubai soon developed the typical activities of this kind of location, such as fishing, pearling and sea trade, until oil fields were discovered in 1966. In the second half of the 20th century important political reforms were also taking places and once the British protectorate had been dismantled, Dubai (and Abu Dhabi) acquired more decision-making power among the seven members of the United Arab Emirates. Symbolically these two events represented the turning points for the emirate, which became an international hub between the Western World and Asia. The incomes of the oil-based economy were invested in the infrastructural sector, building the majestic Dubai that everybody knows today. Despite all the famous luxurious features that the region offers, it has to be said that Dubai presents some difficulties in the management of its supplies, since its oil production and gas reserves are limited, compared to other Gulf states. It is at this stage that the emirate succeeds to distinguish itself as one of the leading economic centers recognized worldwide: through the capitalisation on other resources and the diversification of its economic system, Dubai became a multiethnic commercial pole, attracting people, investments and a variety of market activities. What is peculiar about this situation is the extremely quick development of a region that is still connected to its Islamic roots, but at the same time it has reached objectives that no other country in the world has been capable to obtain, especially in such a short time as the one considered in my study. In order to understand deeply the unique development of Dubai it is necessary to examine the economic policies implemented during the three main phases that characterized the economy of the emirate (the expansion of the trading activity, the subsequent oil boom and the more recent diversification process endorsing the service sectors, first of all tourism) and the reasons why these were put on practice. Examining the possible future perspectives for the economy of the region, my analysis ends with the damages and the repercussions of the 2006 crisis, that penalized most of all the real estate sector,