Where does Dubai's wealth come from?
I was wondering where the wealth came from. Just a little detail please.
- ElephantHopLv 41 decade agoFavorite Answer
I was gonna make the same point Mahesh just made. Dubai is built upon laundered money. The drug trade from Afghanistan (accounting for nearly 90% of the world's heroin market) gets its money laundered in Dubai.
To be honest with you, such organized criminal activities are normal and an accepted part of every country. No one's got their hands clean. Dubai took this to a new level and is now a mini-Switzerland.
EDIT: Tim, perhaps the following links may open your eyes a little to reality.
Also, human trafficking is rampant in Dubai... where do you think all those prostitutes come from. Why won't Dubai crack on these businesses catering to the super-elites?!
Take an earnest look at reality. When the soviet union collapsed, the KGB collapsed with it. Former KGB agents were out of jobs. So, they took up jobs they do best. Secrurity Consultancy, human trafficking, drugs and arms trade. Why do you think Dubai of all the regions in the region has a large percentage or Russians?!
And suggesting that Dubai's progress was gradual is pure ignorance. Dubai's growth is one of the fastest ever seen in near history. For the last 3 years, it has been unanimously regarded as the fastest growing economy on earth. 5 years ago, 60% of currently populated Dubai was a desert. In 2007, a quarter of the world's cranes were reported to have been sitting in Dubai.
Another thing, stating that Abu Dhabi alone makes all the money out of the oil it generates is again ignorance. Abu Dhabi definitely drills out a bulk of the oil... but drilling alone doesn't make you the money, an entire infrastructure is required to refine, export and service the industry. Dubai's business friendly environment makes it a better spot to implant that infrastructure than Abu Dhabi.
One last thing, Dubai's debt / GDP ratio stands at over 40%. The highest in the Gulf, standing at $80bln. So there goes your 100% Dubai money argument. [ see last two links ]Source(s): http://www.ameinfo.com/74793.html http://www.globalresearch.ca/index.php?context=va&... http://www.businessweek.com/globalbiz/content/oct2... http://online.wsj.com/article/SB119759841193228627... http://thenational.ae/article/20081124/BUSINESS/14...
- WOrDLv 71 decade ago
The only person who speaks the truth from the answers above is "twilighter"
This is why, Dubai only has 1 land oil field and its almost dry, mostly it produces natural gas. Plus a couple of offshore wells and that's it.
Last years Dubai budget shows percentage of oil income as approx ~3% of the total GDP (dubai govt numbers). There are 96% coming from elsewhere.
Also Dubai's wealth did not start overnight , or after 9/11 , or even after the formation in the UAE in 1971.
To the contrary, Dubai has always been the regional hub for business and shipping ever since it became the center for pearl traders a century before. Sure it was a small town by comparison to other cities but trade & pearl diving was the towns main activity. So its not true as someone claims Indians brought trade to Dubai, rather Indians came much later , so did quite a few other nationalities, they came to Dubai looking for jobs that were already created by the towns trade activity not strictly from those individuals. Of course the pearl trade developed into a full fledged regional jewelery & gold market. Dubai also got involved heavily in the transit & re-export business, which naturally developed into the setting up of free zones to attract foreign investors. The govt also invested into the ship repair business thus the Dubai Dry Docks started early on. Dubai's ports started thinking about this in the late 1970's not after 9/11. Dubai started building the worlds largest sea port in 1976 exactly.
If you take one of the major property developers in Dubai today, DAMAC group; it made its wealth from trading gold basically , none of that money came from oil , so for some posters to claim otherwise is just beside the truth that everyone knows.
Sure some developers are owned by the Dubai Govt. but that doesn't prove squat about those being financed by oil sales. As it was stated the majority of the GDP is non-oil related. Some people also seem to think that Dubai , as a UAE emirate, gets federal money from UAE govt. which comes from oil sales. I can assure you that is not true. Sure Dubai is entitled , but Dubai did not take a single Dirham from the federal budget per Dubai govt own request to diverted it to development in other emirates with smaller / no-oil incomes. Nor did it receive any thing indirectly from the federal govt. , as in infrastructure developments, or for local project financing. The federal ministry of planning has not built a single road here as per Dubai own request. All Dubai roads were built by %100 Dubai money.
With all due respect Mahesh N & Hyder do not know what they are talking about. Any one involved in the banking industry in the UAE knows that such "money laundering" scenarios are not even possible ever since the regulations which have been put in place after the collapse of BCCI for in the late 80's which affected the mainly the UAE. Let alone the stricter regulations that took place after 9/11 , and now under the credit crunch. And frankly it is ridiculous and laughable to think that some micky mouse businesses setup by some Pakistani exiles, with due respect to Pakistanis, that these businesses were a major source of wealth for Dubai. Just hilarious!
Also comment on "Sudhitcr" post, Etisalat pays to the federal government Ministry of Finance for its telecom license, NOT TO DUBAI GOVT.
- MaheshLv 41 decade ago
Willie has given you a good answer. Most of it is correct. You should also remember that Money laundering was rampant and is still going on here. Unaccounted political wealth from India, Pakistan, Nigeria, Palestine, Iraq, Iran are all "washed" in Dubai.
Most of the underworld also has their presence here. It is a well known fact that both Nawaz Sharif and (Late) Benazir own several businesses here. That is also a major source of wealth
- willie vLv 51 decade ago
First hand facts:
Let me answer you with some trivia and facts:
95% of UAE's oil is in Abu Dhabi NOT in DUBAI... Dubai almost got nothing except refineries.....
Gas is abundant in Abu Dhabi and Sharjah.
Agricultural land and mining is in Ras al Khaimah, Fujairah and Al Ain in Abu Dhabi.
So what really Dubai got? .... well based on the above... nothing except for a huge humber of Indian expats involve in trading.
Dubai has to rely in its limited internal resources and the thing they've got are square kilometers of sandy lands and limited shore lines. With billions of US dollars pulled out from the US by Arab Investors after 9/11, that huge amount of money has to go somewhere. And with the present Ruler of Dubai then Crown Prince on the helm - he liberalized the property market and land ownership in Dubai and put up numerous Free Trade Zones (both first in the GCC) and put those barren dessert into oasis of "little manhattan" !!! With a very secured Dubai and politically stable environment, Dubai became the destination of property booms and businesses - and this without Dubai Ruling Family investing in what you see in Dubai !!!
With people all over the world coming and investing, population grows, infrastructure is being expanded, businesses are set-up and it just keep on growing... and all of that by seizing the day by the timely vision of the present Dubai Ruler - Shk. Mohammad Bin Rashid Al Maktoum....
So where are the wealth really coming from? It's from outside Dubai in the forms of investments, tradings, banking and the biggest of them all - real estates and properties.
Not oil.... nor other petroleum derived products....
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- Anonymous1 decade ago
most of every thing you see in Dubai was built before 2000 roads included. Saying expat worker funding this is very naive to be honest. half of the users of salik are locals or paid for by locals. Salik is not where the road money comes. A single road costs more tha 438 million , that is nothing, chicken feed. Important to know no investor came to dubai it it hadn't done the previous projects on infrastructure before 2000.
Its wrong to say foreign money is main source for dubai bcoz last Feb-Mar after most Gulf stock went down most foreign investors in stock took their money out including Dubai stock market. Only very few stayed. So if we talk in numbers its proving the opposite of this so called foreign money theory.
Numbers released only 1.5 months ago shows 87% of UAE bank deposits belonging to UAE nationals or citizens. Only %13 belong to expat , bcoz expat don't keep it in Dubai they send money home.
- 1 decade ago
I tend to believe that "twilighter" probably gave a correct answer. However, my vote goes to Willie having a more precise and bullet point reply.
Elaborate answers from "tin m" are simply historically correct but mostly lacking in substance and essence.
First, Dubai Roads are not from the Federal Funds and 100% Dubai money BUT NOT entirely funded by the Dubai Govt. either but rather by the Dubai Expats hugely. Surprised? RTA has collected around Dhs.438 Million in 2007 alone from Toll Gates, Parking, Fines, Car and Lincense Registrations and renewals, etc. RTA is projecting Dhs. 650 Million end of 2008.
Dubai prominence in the world happened overnight. This overninght prominence started in the year 2000 and hasten in 2002.
What Dubai has done from the 1970's in terms of investments, growth, etc... till 1999 is nothing compared to what it achieved from 2000 till 2007. This is overnight. No country or city or place in the world has done this kind of feat what Dubai has done is so short period of time... not even Hongkong or Singapore.
You can count in your hands the investment made during the 1970's till 1999 like the Dubai Drydocks, Jebel Ali Free Zones, Shk Rashid Port, DUBAL, Emirates... and what?
From 2000 count the national and international investments and probably you will be needing the hands and feet of your family and neighbors just to count them. (Just the number of "cities" like the Media City, Silicone Oasis, Sports City, Palms, World, etc... golf courses, Dubailand, etc..... you will lost your count I bet....and whose money are used???? ... outside money NOT internal.. not even coming from the Ruling Family !!)
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- Anonymous5 years ago
If I remember correctly banking and financial services to those who do have oil wealth.
- Anonymous1 decade ago
From oil - same as several other Arab states.
Although they are also currently working very hard to attract tourists who also bring a lot of money into the country.