The genius of Dubai is that it began as one of the least resource-rich states in the Arabian Gulf. The modest oil reserves discovered in the 1960s were projected to run out long before those of its oil-rich neighbors. That led its ruler, Sheikh Rashid bin Saeed Al Maktoum, to initiate an aggressive strategy to create a diversified economy that would outlast the oil boom. “Whilst others were engaged in political rhetoric, giving politics priority over the economy and over development programs, creating slogans like ‘No voice should speak louder than the voice of war,’ Dubai was working, distancing itself from the shouting,” Maktoum’s son and current ruler of Dubai, Sheikh Mohammed bin Rashid, told a Kuwaiti newspaper in 2003. “Progress provides power to politics. Without power, politics is a wretched business. By power, I mean economic power, the strength of economic development.”
Oil now makes up barely five percent of Dubai’s GDP, compared to more than half in 1980. The economy is growing by 16 percent a year, among the fastest in the world. Retail, construction, real estate, and financial services are leading the economic boom, not oil. Five million tourists pass through Dubai every year. Its population of 1.4 million, composed of at least 60 percent guest workers from South Asia earning two to three times the average income in their home countries, is growing by four percent every year. “People and materials are the biggest constraints,” says John Braley, a development manager at Turner International, which is overseeing 19 large projects in Dubai. “There are not enough human beings on earth right now to deal with construction.” Most development projects are sold out within days of being announced. They cannot be built fast enough to keep up with demand from buyers in Iran, India, Eastern Europe, and the U.K., and are often paid for by the time they’ve been completed.