DUBAI HAS THE world’s tallest building, its busiest airport by international passengers and the busiest container port between Singapore and Rotterdam. It is building the world’s largest concentrated solar power plant. It is the Arab world’s most important financial center and, as the world’s fourth-most-visited city, an exuberant playground.

No ambition is too outlandish. The United Arab Emirates, of which Dubai is a part, wants to help colonize Mars. It is building a space probe, to be launched in 2020, to find out how the planet lost its water. And, fittingly for a city-state built in the desert, Dubai is building a “Mars City” to study how humans might live on the red planet. It is experimenting with driver-less pods as well as a “hyper-loop” to transport people and goods in pods at high speed through the region.

The desire to do business has long been present, its history visible along the creek in old Dubai where the souk boasts frankincense from Oman and saffron from Iran. Gold chains hang like curtains. Older merchants still remember trading in rupees, so closely was business linked with India.

Free trade, openness, security and predictable rules have turned the pearl-fishing village into one of the world’s great economic cities. It is also a haven for money in a troubled region. Somewhat like Hong Kong in relation to China, Dubai acts as the point of access for trade with Saudi Arabia and the rest of the Gulf. Just as Hong Kong benefited from the British legal system, so Dubai has imported British-style common law for the Dubai International Finance Center, a city within a city where foreign lawyers adjudicate on business matters within its confines.

Lacking much oil, Dubai sought to establish itself as a trading port even before independence in 1971. Its then ruler, Sheikh Rashid, took a loan from Kuwait to dredge the creek and create a port. It later built a large port and special economic zone at Jebel Ali, south of the city, creating a hub to serve the Gulf, Africa and Asia.

Similar thinking applied to aviation, with the creation of the Emirates airline and the establishment of Dubai as the world’s leading hub for international flights. Tourism followed close behind. Through iconic projects, such as its palm-shaped beach-front development, Dubai found the knack for turning dull desert into prime property.

Others in the region try to copy Dubai with ports, airports and airlines, as well as artificial islands and financial districts. But none has matched the original. In part that is because rivals embark on top-down projects, whereas Dubai has tended to develop ideas in close co-operation with businesses.

Dubai has benefited from the unique federal structure of the UAE in which each of the seven emirates can experiment with economic and governance models, says Abdulkhaleq Abdulla, a political scientist: “The UAE is a bird that flies with two wings, Dubai and Abu Dhabi.” It has focused on growth through private enterprise, while Abu Dhabi provides much of the country’s oil wealth and geopolitical heft. Thanks to Dubai, the UAE is the Gulf’s most diversified economy. But the IMF says the country still compares poorly with other states that have moved away from commodity exports.

Many complain that the city-state is being run, in effect, as the personal holding company of the Al Maktoums. One cost of its success is that local citizens form just 8% of the population. Another is that it has incurred large debts. Dubai had to be bailed out by Abu Dhabi in 2009. The soaring Burj Dubai tower was renamed Burj Khalifa in honor of the ruler of Abu Dhabi—a reminder that Abu Dhabi now calls the shots.

Credit: The Economist

https://www.economist.com/special-report/2018/06/21/how-dubai-became-a-model-for-free-trade-openness-and-ambition

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Middle East

For the fourth year in a row, the United Arab Emirates tops the ranking for having the world’s best free trade zone. One of the most attractive destinations in the Middle East for foreign investment, the United Arab Emirates can boast of significant improvements over the past year, especially in the Dubai Multi Commodities Center (DMCC). In 2017, 2,000 new businesses added to the 14,805 existing companies. Bahri Group, a Saudi-based transportation and logistics company, and Deliveroo, a UK-based company, made massive investments in the DMCC. Hasbro, American Express and Colgate-Palmolive are other major companies operating in the free trade zone. The DMCC also plays a crucial role in events, hosting no less than 155 conferences and other events in 2017. In the next decade, the DMCC aims at creating more than 10,000 new jobs through significant infrastructure and development projects, some of which are underway.

Africa

As a gateway to Africa and one of the most attractive countries for investment in the region, Mauritius also has one of the world’s best free trade zones. Investment projects are cropping up year after year thanks to a range of incentives provided by the government. Mauritius recently launched a massive promotional campaign in South Africa, France and the UK to inform potential investors of the various opportunities and facilities it’s providing. It’s worth noting that free trade investment accounts for 0.7% of the national Gross Domestic Product (GDP). Today, there are 280 companies in the free trade zone with more than 3,500 employees. If you’re wondering about the benefits of investing in Mauritius, think of the excellent opportunities for investing in logistics in the Indian Ocean and the access to African and Asian markets. Besides, major development works in the port will allow Mauritius to accommodate larger vessels. Foreign investors and entrepreneurs are also entitled to storage facilities. Land and storage buildings are also exempt from transfer tax and registration fees.

Asia-Pacific

Founded in 1989 in the Chonburi Province, in Thailand, Amata City is the most attractive free trade zone in the Asia Pacific region. Stretching over 4,121 hectares of land, Amata City hosts more than 700 companies mainly from Japan and the rest of Asia. Many companies from Europe and North America, including the USA and Canada, also operate within the free trade zone. It’s worth noting that Amata City accounts for nearly 10% of the national GDP thanks to the expansion of sectors like automotive, metals, electronics and services, among others. During the past year, there was an 18.4% growth in its labour market, which is the most significant rate in the Asia-Pacific region. Today, Amata City counts more than 215,000 employees. Investors can benefit from a developed infrastructure, including access to airports and seaports, and major highways meeting the needs of supply chains and logistics. Autoliv, a Sweden-based company, and Japan-based Bridgestone and Toyota are some of the largest companies operating within the free trade zone.

Europe

America

As the most attractive free trade zone in the Americas, Panama Pacifico hosts some major US-based companies like Dell and FedEx, and German-based companies like BASF, specialising in chemicals, among many others. With excellent connectivity and access to three of the major ports in the Americas, Panama Pacifico can boast of a range of benefits for investors including a highly qualified workforce. Panama values education, training and employability. Today, more than 1,400 hectares of land is available for the development of mixed-use and green space projects. Recently, the hi-tech and logistics sectors benefited from the expansion of the Pan-American Enterprise Center over an industrial area of 95 hectares. Also, foreign investors will soon have access to a 7,900 square meters storage space.

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