Dubai: A Model of Transformation for Middle Eastern Oil-Producing Countries(AI Translation)

【周刊提前读】近距离看迪拜：中东产油国的转型样本

In late May, Dubai’s temperatures soar to 40 degrees Celsius, casting a golden glow on the Dubai Frame, a 150-meter-tall landmark. To the north lies the historical Dubai Old Town, characterized by its low-rise buildings and the Dubai Creek. To the south, downtown Dubai flashes modernity with Burj Khalifa and numerous skyscrapers [para. 1]. A 40-minute drive southward brings you to Dubai South, an area rapidly developing and hosting significant events like the World Expo 2021 and the UN Climate Change Conference 2023 [para. 2].

Dubai, part of the seven-emirate United Arab Emirates (UAE), is the most populous and economically advanced, with a resident makeup of only 15% locals and a vast expatriate community from over 200 countries [para. 3]. Despite only holding 4% of the UAE's oil reserves, Dubai has successfully transitioned its economy from oil to logistics and tourism [para. 4], with non-oil industries currently constituting 70% of the UAE's GDP. In 2023, these industries achieved historic export figures of $953 billion [para. 6].

In April 2023, Dubai launched the "D33 Initiative" aiming to double its GDP by 2033, focusing on manufacturing, logistics, financial services, and tourism [para. 7]. However, Dubai faces challenges such as its sparse population and extreme heat, deterring manufacturing industries seeking supply chain optimization [para. 8].

Regionally, Dubai faces fierce competition from Saudi Arabia. Saudi initiatives, like requiring foreign companies to establish regional headquarters in the kingdom, have drawn major firms away from Dubai to Riyadh [para. 9]. Despite this, Dubai maintains substantial foreign direct investment (FDI), attracting $22.73 billion in 2022 compared to Saudi Arabia's $7.886 billion [para. 10].

Dubai’s strategic position and robust logistics infrastructure have propelled its growth. As of 2023, Dubai International Airport held the second spot on the "World's Busiest Airports" list [para. 18], and construction continues to expand Al Maktoum International Airport into the "world's largest airport" [para. 19]. Dubai's openness and modern logistics have forged alliances with numerous global corporations, including a major Chinese e-commerce company aiming for 72-hour global package delivery [para. 22].

Dubai's multicultural workforce and inclusive environment foster strong international relationships and economic activities. The UAE's cultural ties and legal frameworks, blending English common law with Islamic law, further bolster its global trade aspirations [para. 26]. The e-commerce sector in Dubai is booming, driven by the Middle East's high internet penetration, which surpasses even that of the US and China [para. 35].

Companies like iMile and J&T Express have capitalized on this, establishing significant presences in the UAE's logistics market, backed by Chinese e-commerce demand [para. 39]. Both companies identify logistics as a crucial factor for manufacturers and have seen substantial growth since their inception [para. 44].

Government efforts, such as the Dubai Industrial Strategy 2030, aim to elevate Dubai's manufacturing GDP through preferential sectors including aerospace, pharmaceuticals, and food and beverages [para. 53]. Initiatives like the "Operation 300 Billion" also align with goals to increase industrial GDP, with substantial investments planned for AI and other innovative projects [para. 55].

Despite current successes in industries like personal care and food, challenges persist in luring advanced manufacturing to Dubai. Competition from Saudi Arabia and other factors like market size and profitability impact these efforts [para. 62]. Nevertheless, ongoing global shifts in industrial capacity could play to Dubai's advantage, particularly as Middle Eastern countries vie for economic dominance in this new industrial era [para. 66].

Dubai continues to attract significant FDI and leverages its modern infrastructure and strategic location to remain a formidable player in global logistics and trade, although the region's competition requires constant innovation and adaptation [para. 71].

This article is excerpted from the upcoming July 1 issue of Caixin Weekly, originally titled "Dubai's New Ambition."