What Makes Dubai So Rich? Uncovering the Key Factors Behind Its Wealth

From the 1770s until the late 1930s, the primary source of income in the Trucial Coast of what is now the UAE was the pearl industry. Pearl diving was thought to be a humble beginning in trade for the residents of the Persian Gulf, but it set the foundation for something much larger later on.

• Visionary Leadership and Strategic Planning: The foundation of Dubai’s success lies in the foresight of its rulers, who focused on long-term growth rather than short-term gains from oil.
• Smart Use of Oil Revenues: After oil was discovered, Dubai’s leaders made the bold decision not to rely solely on oil. Instead, they used oil income to invest in building infrastructure and diversifying the economy.
• Economic Diversification: Major investments were made in key sectors such as real estate, tourism, and aviation.
• Development of Free Zones: Dubai introduced multiple free economic zones that offer tax exemptions, full foreign ownership, and minimal trade barriers. This attracted thousands of international companies and investors.
• Infrastructural Excellence: The city focused heavily on developing state-of-the-art infrastructure, including roads, ports, airports, and public transport, supporting both business and tourism.
• Tourism as a Major Contributor: Dubai capitalised on its iconic attractions like Burj Khalifa (the world’s tallest building), Palm Jumeirah, luxury shopping malls, and entertainment hubs. Unique experiences like the Dubai Wonder Bus, an amphibious tour that takes visitors across land and water, add to the city's appeal. Tourism plays a significant role in boosting Dubai’s global reputation and economy.

In the late 1950s, soon after the clash between Dubai and Abu Dhabi for oil, Dubai struggled and didn’t have any high oil revenues, unlike Abu Dhabi, which thrived. That is when the ruler of Dubai, Sheikh Rashid bin Saeed Al Maktoum, decided something had to change. So, he started investing in infrastructure and built Dubai’s first airport in 1960.

This also paved the way for the construction of several other infrastructure projects, which made them realise that infrastructure is a long-term strategy and gave hope to their economy. Dubai’s global connectivity was further enhanced by the exponential growth of Dubai International Airport (DXB), which today stands as one of the busiest international airports in the world. It led to a boost in tourism, and whatever little oil they discovered was used in building the Dubai city we now see. Dubai has grown to become one of the top tourist destinations in the world, thanks to its state-of-the-art infrastructure. The tourism industry makes up to 12 per cent of Dubai’s Gross Domestic Product. This is ultimately among the things to know before travelling to Dubai.

The infrastructure also helped boost the trade industry. Dubai established its first free zone in 1985, Jafza, which was the largest free zone in the world. It also led to 30 more free zones that offer tax breaks, customs duty benefits, and exemptions for foreigners. This resulted in attracting more global businesses. Many of these Jafza companies contribute to 20% of foreign investment in Dubai. And approximately 144,000 employees are generating $80 billion in non-oil money. That’s 21 per cent of the city’s Gross Domestic Product (GDP). Meanwhile, zones like DIFC and Dubai Internet City, home to many global tech and fintech firms, offer 100% foreign ownership and long‑term tax incentives.

Dubai continued to become a dynamic and diversified economy with revenue generated through different streams. Most of the city’s GDP is non-oil-based, contrary to popular belief. The majority of its money comes from the production of goods, the provision of services, and tourism. I guess that answers all our questions on what makes Dubai so rich.

If you haven’t been to the extravagant city of Dubai, then I’d suggest you start planning a vacation soon! Experience all the richness the city has to offer. Wondering if you can go on a romantic vacation with your love? Pickyourtrail’s Dubai honeymoon packages are readily available for you. So pack your bags and get ready for a luxurious international vacation. It’s time to unwrap the world with Pickyourtrail! Happy journey!