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Introduction
Dubai is a small city-state in the United Arab Emirates (henceforth UAE), which is renowned internationally for being a logistics hub. With hydrocarbon revenues accounting for less than 1% of its GDP, it is the most diversified sheikhdom in the region. Dubai’s development model is considered ideal and is being followed by other Gulf countries in the region. Dubai’s development approach was inspired by the Singaporean development model. Singapore developed by welcoming foreign firms to set up shop for export-oriented manufacturing and thus used its entrepot status to its advantage. The emirate followed a similar approach to development because it was historically an entrepot and housed merchants but not entrepreneurs. Thus, it followed the Singaporean model by opening its borders to foreign firms and sought to diversify its economy by building on its entrepot characteristics. However, the outcome of this approach has been different vis-à-vis Dubai and Singapore in terms of sectoral diversification which is interesting. This paper conducts a qualitative study that reviews literature about their development policies and follows the most similar systems design to explain the outcome in sectoral diversification based on the differences in inputs of their development policies. The study finds that domestic wage policies and initiatives to encourage technologically advanced firms to relocate were key factors that encouraged a service-oriented diversification of Dubai’s economy.
While the author appreciates that Singapore developed without the support from hydrocarbon revenues that Dubai was privileged with, this study questions why Dubai, an emirate blessed with the resources and capability to direct its development narrative, witnessed a different outcome in its diversification experience. This research provides insight into two cases of late development which is not often discussed by late development theorists. This study has the potential to further encourage economic historians and development practitioners in this region’s context to think about how development approaches are affected by factors like history, geographic location, and political conditions. The paper uses primary data sources such as government publications and newspaper reports, and secondary sources such as scholarly work for this study. Following this, the methodology of the study is addressed, after key factors of Singapore’s development are highlighted, then literature regarding Dubai’s development is reviewed, and then the discussion is presented followed by the conclusion.
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