Dubai at the turn of the century was a nondescript Place. For the next 50 years Dubai developed slowly and by the fifties and sixties had become a trading hub. This was because of its advantageous location. But one man Sheikh Rashid bin Saeed Al Maktoum had a fantastic dream to make Dubai a sought after location in the world. He visualized a future in which merchants, bankers, businessmen and tourists would all come to Dubai for business and pleasure. For this, he felt the need for infrastructure and built the largest artificial harbour in the world. The Jebel Aliport which was inaugurated in 1977 after his death is a tribute to his vision.
Dubai did not rest there but expanded further. The great development can be attributed to the son of Sheikh Rashid. This man simply referred to as Sheikh Mohammed was given power by his elder brother Sheikh Maktoum bin Rashid Al Maktoum who declared him the crown prince in 1995.
Sheikh Mohammed fueled a spiral of economic development as he built skyscrapers by the dozen. A point to be noted is that the Maktoum family has controlled Dubai since 1833.
Sheikh Mohammed developed his economic theory on a model constructed by Michael Porter of Harvard University. Micheal porter advocated bringing businesses with similar backgrounds and affinity together. The purpose was to attract the best talent and finance like the rush to silicon valley in California.
So far so good but a few years back the dream had started turning sour. It was something expected but not anticipated. Perhaps the reason is hard to analyse but one canmake a surmise. Firstly it is possible that Sheikh Mohammed was carried away by his own euphoria and did have some fantastic unrealistic investments. Like his grand project in Las Vegas. The second point concerns real estate where his projects began to flounder and his company was the first to seek a settlement with creditors as it had defaulted.
The situation became bad, but one can still say that after a bailout by Abu Dhabi the situation has changed and Dubai is back to square one. Property prices had crashed by 50% have come back to normal and there is widespread buying of property.
The sheikh was perhaps himself stunned by the turn of events. An example of the downside was of Damac Properties in Dubai which Failed to Pay Employees Full Settlement on Dismissal. Another property group Nakheel had cut 500 jobs and Al-Shafar had laid off over 1000. All this looks like a bad dream as the resilient economy of Dubai boomeranged and once again Dubai has become the favorite of all investors. Once again there is a beeline for Visa and jobs in Dubai.
But there is a silver lining to this depressing scenario as the Sheikh is making amends. Secondly, Dubai by virtue of its location on the east-west route has bounced back and the world markets cannot let Dubai wither away. Dubai has recovered its economic health and the world has heaved a sigh of relief.