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Big Dreams Become Reality
Dubai has experienced astonishing growth and economic success over the past 20 years. In the 1980s, there was nothing here that would attract anyone but oilmen and a few crusty expats. But the Al Maktoums, aware that Dubai's oil reserves will not last forever, had a clear vision of making it a world player in other areas as well.
In the drive for diversification, the government first targeted tourism as a growth industry, which really started paying off in the 1990s. It positioned Dubai as a luxury market, where mass market would never mean down market. First to come were European tourists, and the emirate is now targeting the rapidly growing Indian and Chinese middle classes. Between 2001 and 2006, Dubai's hotels-and-restaurants sector increased in value from AED 2,977 million to AED 5,793 million (about $81 million to $158 million), and room occupancy numbers rose by 228%, much of which is credited to hotel investments and shrewd advertising. Passenger traffic at Dubai International Airport also surged from approximately 5 million in 1990 to almost 29 million in 2006.
As the first phase of diversification succeeded, the emirate unveiled its long-term vision and a range of initiatives aimed at establishing Dubai as one of the world's principal business hubs. An appealing financial package is key to growing business, and Dubai offers many fiscal benefits, including no taxes on corporations and personal income, and 100% repatriation of capital and profit. No foreign exchange controls, trade barriers, or quotas exist, and vast free zones allow importing and exporting with no financial consequences for manufacturing and trade. Dubai acts as a Middle Eastern base for multinational companies—in fact, more than a quarter of Fortune 500 companies have regional offices here. The government forecasts that these and other developments will create more than 800,000 new jobs by 2015 and that growth is drawing people like magnets. According to the government, more than 24,000 people settled in Dubai each month during 2006—that's an astonishing 33 new residents every hour.
For visitors, construction sites are the obvious sign that Dubai's economy is booming. Annual spending on new buildings surged from AED 5,2 billion in 2001 to an amazing AED 21,5 billion in 2006—and most of that money was invested in thought-provoking architecture that got the world's attention. Slated for 2007–2008 are 125,000 residential units, but government projections suggest that an additional 500,000 units will be needed by 2017. Office space in the emirate doubled between 2006 and 2008, and growth of the business industry continues. In an emirate awash with petrol dollars, money has never been an object, and Dubai's open real estate market has been a draw for investors from around the world. The first freehold real estate projects were such a success—turning $1 million investments into $3 million returns—that the resulting influx of foreign dollars has kept the property market red-hot.
Several bourses, or stock exchanges, and trading platforms have been established, catapulting the Emirate Dubai International Financial Centre (DIFC) onto the radar of world finance. The DIFC's goal is to host 20% of the world's investment funds—its 110-acre free-trade park already includes such companies as Morgan Stanley, JP Morgan, Merrill Lynch, Chase Bank, Ernst & Young, Allianz, Deutsche Bank, State Bank of India (SBI), and HSBC. In addition, a rapidly expanding Financial Exchange, a Diamond Bourse, and a Gold and Commodities Exchange have been set up since the turn of the millennium.
Dubai is a world of superlatives—the world's tallest tower, the world's biggest airport, the world's largest artificial harbor, the world's largest man-made port, the world's biggest man-made island—just to name a few. No one knows how long this prosperity will last, but at the moment there's no end in sight. In January 2008, Nakheel, one of Dubai's largest developers, announced the emirate's sixth offshore project, The Universe, and several other major projects aren't slated to begin for another decade. However, there may be a few bumps in the road ahead. Because of its success, the emirate's economy is strained, with average rent and food price increases far exceeding wage increases. This only pressures the lowest paid workers who keep the wheels of daily life turning. More important, India and China are both experiencing unprecedented growth, and the price of raw materials like steel and cement are skyrocketing. In addition, skilled labor is in such short supply that some developers are delaying project completion dates. If a jittery world market turns bear, it will certainly squeeze investment. Dubai plunged into the fray with gusto and in doing so made itself susceptible to global economic factors that even Sheikh Mohammed can't control.
Did You Know? Twenty-seven percent of the world's construction cranes can be found in Dubai. More than 70% of the world's sea dredgers work on Dubai's Palm Deira—just one of five offshore projects in the emirate.
Between the Sea and the Desert Sand, sea, and mountain come together to create the important, yet fragile, ecosystem in Dubai. The emirate covers 1,588 square miles, nearly 5% of the UAE total, and occupies the northernmost parts of the Rub' al Khali—the Arabian Desert or Empty Quarter, a desert the size of France that runs south through Abu Dhabi and into the Arabian heartland.
The Empty Quarter was first made famous during the mid-20th century in the writings of British explorer and travel writer Wilfred Thesiger. It's one of the least populated places in the world, but it's been a Grand Central Station for geologists in the latter part of the century because of its expansive oil reserves. Although some stretches are devoid of vegetation, the Dubai desert is not the ocean of sand that many envision. In almost every acre a vivid vegetation contrasts with the terra-cotta-colored dunes and flats—a hue that results from the iron-oxide coating of feldspar mixing with the mainly silicate sand. All species living here are adapted to arid conditions, but their existence hints at life-giving moisture in the earth. Wild grasses and low scrub form a thin carpet over much of the area, with acacia trees standing sentinel. The date palm is endemic to the region and has been cultivated for generations, as it's highly nutritious and portable.
In western Dubai, the desert meets the warm waters of the Arabian Gulf. If left to nature, this coastline would offer only sandy beaches, grass-covered dunes, and swaths of mangrove trees, but there's very little virgin landscape left. Only a few square miles at Jebel Ali, close to Abu Dhabi, have escaped the developers' clutches. The Dubai Creek, a sheltered tidal inlet, is a rare find around the Gulf and could have been a rich natural environment. However, it's been dredged and managed since the 1950s, resulting in artificial banks flanked by buildings and manicured parks and golf courses. Still, the Ras al Khor Wildlife Sanctuary (2.4 square mi) gives visitors a glimpse of the diverse animal and plant life that used to thrive here. Mangroves, mudflats, sabkha (salt-encrusted flat that lies above the water), and reed beds are an important last refuge for 266 species of birds and animals, and 47 types of plants. The sanctuary is an important stop on the migratory routes for many bird species, including plovers, sandpipers, sanderlings, snipes, terns, stilts, and a flock of elegant flamingos.
Just offshore, a narrow skirt of shallow coral reefs runs parallel to the coast, which then leads to a continental shelf and a deeper ocean trench. These varied ocean depths offer a wide variety of habitats for fish and other marine life. The warm shallows host small, colorful tropical fish, and the offshore waters support populations of dugong, several species of dolphin and porpoise, and hawksbill and green turtles. The coolest, deepest waters in the Gulf provide a conduit for larger pelagic species, including whales and sharks, but not in regular enough numbers to attract a whale-watching industry.
Perhaps the most surprising geological features in Dubai are the serrated peaks of the Hajar Mountains, which form a crescent-shaped collar around the northwestern coast of the Gulf. They are the oldest and highest region in the UAE, and act as a physical boundary between Dubai and neighboring Oman. The Hajar are a rare and archetypal example of ophiolite volcanic geology, or rock that lay below sea level and collected a dermis of sedimentary rocks after which they were thrust upward by the movement of the earth's tectonic plates.
Camels are the most common desert animals by far, some wild, some feral. You are unlikely to see any other large creature during your explorations here and may have to search hard for small animal life. Even though it may seem the desert is void of life, it's out there. The Arabian Peninsula has a range of predators found in small numbers. The Arabian leopard, more petite than Asian and African leopards, lives mainly in the Hajar Mountains and hunts antelope and the occasional goat or sheep. The smaller sand cat—approximately the size of a house cat—lives on a smorgasbord of desert creatures, from rodents to insects. The final hunter in the desert is the sand fox, and this species extends its diet to plant life, including carrion, fruit, and berries.
Predators currently are under stress as prey becomes more difficult to find. Numbers of the ibex, a once-common mountain goat known for its magnificent horns, have dropped to only about 500, and the Arabian oryx (a horned antelope) no longer roams in the wild. A bigger selection of smaller mammals exists as more than 40 rodent species, the largest of which is the desert hare, still call Dubai home. Gerbils and mice in a mind-numbing array of genera have been most successful in the sand and in arid rocky environments. They share space with reptiles, including the well-camouflaged desert chameleon and the rare colorful gecko.
Insects vary from huge black-dung beetles to grasshoppers and crickets to mantises. Dubai has far more moths than butterflies. In fact, more than 350 species of moths have been documented, including various types of the striking hawk moth.
Environmental protection has been a low priority during Dubai's drive for development. Very few areas are officially protected, and as vast tracts of desert and marine shallows continue to be transformed for human use, biodiversity declines while land degradation increases. Although the offshore islands may be engineering marvels, the jury is out on how they affect surrounding coral reefs, turtle-nesting habits, and migrations of larger marine creatures. In addition, 5-star hotel ratings can be quite taxing on the environment, as Dubai's water usage and waste production (per capita) are some of the highest in the world. In 2007, a United Nations report declared the Gulf environment "stressed."
There is some good news, though. The Arabian oryx has been reintroduced in small numbers and is thriving in the sanctuary at the Al Maha Desert Resort. Plans for the offshore islands include enrichment of the submarine environment by creating habitats that are conducive to sea life. Once the projects are completed, scientists should see a rise in sea-life numbers again. However, the potential problem is that the scale of the projects may disrupt breeding cycles for such species as turtles for so long that they will not be suitable sites for recolonization. However, some scientists suggest that the artificial reefs are already starting to attract new species and an increasing number of fish.
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