How DUBAI's Secret STRATEGY made it SUPER RICH & SUPER POWERFUL? : Dubai Growth case study thumbnail

How DUBAI’s Secret STRATEGY made it SUPER RICH & SUPER POWERFUL? : Dubai Growth case study

Dubai is a massive player on the global stage in terms of human development of innovation just over 50 years ago oil was discovered here in dubai so how did dubai get so rich rule dubai for 32 years shaykh rashid was credited with transforming dubai into a world-class metropolis our growth and the growth of our industry will.

Generate the trade tourism and business that will drive the future success of the great city in which we live hi everybody dubai is one of the most incredible nations of the 21st century in spite of just being 35 square kilometers in area which is 19 times smaller than the city of mumbai.

This nation has evolved from being a barren desert to the 12th wealthiest city in the world and while most people would think that dway got rich only because of oil in reality today oil makes up barely one percent of its entire gdp in fact dubai has lesser oil reserves than india and even vietnam and yet while today many.

Oil rich nations are struggling to grow this city has become such an important financial business hub that out of the 500 biggest companies in the world an astonishing 140 companies have their headquarters in this tiny city of dubai and in the global politics it is more or less the epicenter of the world trade itself the question is in just 40 years.

How did this little city of dubai go from a barren desert to becoming one of the wealthiest in the world how did they manage to achieve this without banking on their oil reserves and most importantly what are the lessons that india needs to learn from the iconic rise of dubai this video is brought to you by cuckoo fm but more on this at the.

End of the video to understand this you first have to understand the basic structure of the middle east because most people really don't know what is the difference between uae dubai and abu dhabi so this is the middle eastern region wherein you have the united arab emirates or uae what is uae ua is nothing but a federation of seven.

Emirates which are abu dhabi dubai sharjah ajman umal khaiwan fujairah and russell kemah these emirates are almost like states that work autonomously within the federation if this is very very clear to you let's move to 1960s dubai back in the 1960s the uae had not been.

Formed and dubai was just another fishing town that existed at the creek along the middle eastern trade routes so let alone buildings it was just another desert with nothing else but people riding on camels this is when something crazy happened on the 4th of july 1962 an oil tanker called british signal.

Sailed from das island carrying abu dhabi's first ever cargo of oil in 1958 the first offshore well was drilled in the omaha field of abu dhabi and it was from this field that the first shipment of crude oil for the world market was exported on the british signal in 1962.

In the 1960s the middle eastern regions discovered tons of oil beneath them and suddenly they realized that they were practically sitting on a cold mine and as the oil prices started shooting up billions of dollars started flooding into the city now most people would say yeah bro so what i mean if you give something as important as oil reserves.

To any country or any leader that country will obviously become rich and powerful right well not really guys because if you look at the oil reserves all across the world you will see that uae is only the 7th largest oil reserve in the world and if you notice something peculiar in this table the largest oil reserve is.

Actually in venezuela and this is what is happening in venezuela the economy is going into a spiral of dysfunctionality venezuela has of today the highest inflation in the world venezuelans today cannot eat you see people eating from the garbage.

Cycle of violence and street protest so yeah oil reserves does not mean that you'll be rich and powerful in fact even in uae if you look at oil reserves in the emirates you will see that while abu dhabi has 92.2 billion barrels of oil dubai has only 4 billion barrels so it's.

Not like they had infinite wealth and you know what is the best part when dubai discovered oil the ruler of dubai was sheikh rashid bin said al-maktoum he said a very very important statement that echoes through the tunnels of time even today he said and i quote i have good news and bad news we have found oil but not much.

Now you see for a ruler who has lived in a remote barren desert all his life this statement was nothing short of extraordinary because he clearly realized that they have to do something before oil runs out and not so surprisingly that is exactly what he did while on one side they started making a lot of money selling oil on the other.

Side he started identifying the most important strengths of dubai that could be leveraged to build a diversified economy and the first thing he spotted is the strategic location of dubai and more importantly this place that is 35 kilometers southwest of dubai this was a very very important location for world trade why because it was in.

Close proximity to iran and the entrance to the persian gulf so obviously very very important for the middle east trade and secondly it was a very very strategic connecting point to arabian gulf the indian subcontinent the commonwealth nations like kazakhstan kyrgyzstan russia ukraine and uzbekistan and then immediately down south it was.

In close proximity to africa so practically dubai was so strategically located that it could give unparalleled access to some of the most important regions in the world both through sea and air and it provided access to a market of 1 billion people during that time this is the reason why shea took up a.

Super bowl project with something called the jabel ali port that started operating since the late 1970s and he took up very heavy loans to first dig deep into the shallow waters and carried out dredging as in what sand is taken out from the dubai creek to create a deep water port this port was then used both for.

Shipping dubai's oil and more importantly to build cutting edge shipping facilities so that dubai could offer world class shipping services to the most valuable ships in the world and today the jabal ali port provides many important logistical services in many areas of general maritime freeze along with that the port also provides.

Cooling services with advanced storage and cooling facilities which cover an area of 10 000 square meters and these facilities help to store all the shipments that contain perishable products and products that need special storage conditions these products include pharmaceutical products chocolate and cosmetics and.

Today the jabal ali port is the ninth busiest port in the world and handles roughly 10 percent of the entire world's container traffic with over 14 million containers handled every single year as a result while oil contributes to just one percent of dubai's gdp as of 2018 the maritime industry alone contributed seven percent of dubai's gdp and along.

With the maritime industry the sheikh went ahead to build a second important asset for the economy of dubai which was something called the free zone now the prince of the prime minister he often signed the agreement for work to start in 1976 and the desert heard the great project dubai freeze on in simple words were.

Specially allocated areas wherein companies from all across the world could set up their business with special privileges these special privileges included four mind-boggling incentives that were not being offered anywhere in the world which were number one hundred percent foreign ownership as in you don't have to collaborate with a local.

Company to set up your business number two hundred percent repatriation of capital and profits as in you can send hundred percent of your profits to your home country number three hundred percent import and export tax exemption and lastly 100 exemption from local and corporate taxes both basically they said just set up your business here and keep.

All your profits with yourself now the question over here is then how does dubai make money in spite of giving so many privileges well as it turns out dubai does not make a lot of money from the free zones so the question is then what is dubai getting out of all of this well the shake of dubai is giving out these benefits for three important.

Reasons de-risking diversification and to create an irreplaceable irreversible global business ecosystem so that the way can make money not today not tomorrow but 10 years 20 years down the line to understand this you need to understand the fact that every business actually needs a conducive ecosystem along with.

Important supporting entities to actually function as a business and without these entities a company or a business alone cannot function at all a simple example of the same is ola you see guys for ola to function as a service you first need internet providers like jio and airtel who can provide 4g access at deutsche price that.

Is when you'll be able to book a cab from the road itself then you need android and iphone manufacturers who can make phones with the processing ability to run these apps and at the same time make it affordable enough for the drivers and passengers to use them after that you need automobile manufacturers and banks who could make it affordable.

For the drivers to buy these cars and lastly you need google maps api that could be used for tracking and navigation and all of these entities put together make an ecosystem for ola and uber to actually operate and once they establish this ecosystem they never ever leave the market until they die and even if they.

Do someone else will come and take their place because the real asset over here is not ola the entity but the ecosystem of cabs that ola and uber have managed to build their business on in fact let alone operating in the ecosystem jio zumato airtel and ola have spent billions of dollars to create an ecosystem in india for which they are.

Suffering thousands of crores of losses except of course jio similarly in dubai because of regulation and taxation being so lenient some of the most incredible tech companies have set up their bases and like i said before in the little city of dubai which is almost 118 the size of mumbai it has more than 100 000 organizations including fintech foodtech.

And medtech companies from all across the world that is an incredible number for a city that is so freaking small this is the reason why dubai has become one of the best business ecosystems in the world with world class talent world class companies and more importantly cutting edge startups that are making an irreversible irreplaceable business.

Ecosystem so after 10 years even if dubai imposes a 5 to 10 percent tax these companies will be more than happy to pay that tax and will never ever leave dubai as a result after oil dubai can bank all the taxes from these insanely prosperous businesses in the city therefore the emirate of dubai is laying a solid.

Foundation to derisk itself from oil and diversify into business ecosystem and this brings me to the most important and perhaps the most well known aspect of dubai which is tourism long story short dubai is by far one of the most strategic locations in the world for air transportation if you look at dubai in the world map you will see.

That dubai is barely a 4 hour flight away for a population of 2 billion people and an 8 hour flight away from 5 billion people which is literally 2 3 of the world's population and these flights come from some of the most important destinations in the world including europe singapore india china and even africa on the other hand for.

Destinations that are not close by like canada us and australia dubai acts as the perfect labour spot for the planes going from these places and to these places but the biggest hurdle for dubai back then was the image of dubai now obviously if i show you a bear in sandy land which swings between 28 degrees to.

50 degrees that doesn't look like a lucrative tourist destination right so guess what they just took all the money that they made from oil and they just changed that now for a city that is 42 times smaller than delhi dubai has done such an insane job with its tourism industry that while the entire country of india had 17.91 million tourist.

Arrivals in 2019. dubai which is one lifetime smaller than india had 16.73 million tourist arrivals and they built many many avenues of spending like hotels amusement parks aqua venture parks underwater zoos and even ski slopes yes they built a ski slope with 6 000 tons of snow inside a freaking desert as.

A result in total the international overnight visitor spend in dubai in 2018 was 30.82 billion dollars which is way ahead of mecca bangkok singapore and even london as a result the tourism industry of dubai as of 2019 contributed 11.5 percent to the gdp of dubai this is how dubai diversified its economy from oil.

Into tourism business ecosystem and maritime trade and today it is using its business ecosystem and maritime trade to create an irreversible irreplaceable scenario for the biggest companies and the most powerful trading countries in the world and this brings me to the most important part of the episode and that are the.

Lessons that we need to learn from the incredible rise of the way before we move on i want to thank our partners koko fm for supporting our content people if you are someone who wants to be a great leader like the sheikhs of dubai then i would highly recommend you to listen to this audiobook called start with why by simon sinek on cuckoo.

Coco fm is india's leading vernacular audio learning platform with over 1000 plus hours of content library with 4.5 plus rating and a huge library of non-fiction content in fact you must even check out this audio series on field marshal sam manik shaw in hindi if these kind of subjects intrigue you then do use the code thing20 for a 20.

Discount on the subscription and the first thousand people can get a 50 discount if they use think 50 to the special link in the description if this sounds useful to you download the cuckoo film app from the link in the description moving on to the lessons the first thing we need to learn is that no matter how much resources you have at.

Your disposal unless you use it properly it will never ever create wealth for you in case of oil like we saw on one side we have venezuela which collapsed in spite of having the largest oil reserve in the world dubai used it very very judiciously to achieve sustainable growth instead of recklessly depleting it now in case of india i don't know if.

You've seen this but then i've seen these uncles in the past 5-10 years who often say that you know india has so much population now that is why we are underdeveloped china also has population now but they used it to their advantage so this advantage or disadvantage is completely upon you in fact japan right now is on.

The verge of crisis due to lack of population and this brings me to lesson number two diversification of resources is extremely critical for the growth of any country and a single asset cannot help you with sustainable growth and lastly can you imagine if dubai being such a small city can become a tourism hub with man-made marvels.

India is filthy rich in terms of natural beauty and destinations that are far far beyond man-made structures so if we calculatively use these resources to create a tourism industry in india we could be the biggest tourism hub in the world think about it that's all from myself to today guys if you learned something.

Valuable please make sure to hit the like button and make beauty bubba happy and for more such insightful business and political case studies please subscribe to our channel thank you so much for watching i will see you in the next one bye bye you.

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