The International Herald Tribune has described it as “centrally-planned free-market capitalism.” Oil production, which once accounted for 50 percent of Dubai’s gross domestic product, contributes less than 1 percent to GDP today. Dubai became important ports of call for Western manufacturers. Most of the new city’s banking and financial centres were headquartered in the port area. Dubai maintained its importance as a trade route through the 1970s and 1980s. The city of Dubai has a free trade in gold and until the 1990s was the hub of a “brisk smuggling trade” of gold ingots to India, where gold import was restricted.
Today, Dubai has focused its economy on tourism by building hotels and developing real estate. Port Jebel Ali, constructed in the 1970s, has the largest man-made harbor in the world, but is also increasingly developing as a hub for service industries such as IT and finance, with the new Dubai International Financial Centre (DIFC). Emirates Airline was founded by the government in 1985 and is still state-owned; based at Dubai International Airport, it carried over 49.7 million passengers in 2015.
According to Healy Consultants, Dubai is the top business gateway for the Middle East and Africa. The government has set up industry-specific free zones throughout the city in hopes of giving a boost to Dubai property. Dubai Internet City, now combined with Dubai Media City as part of TECOM (Dubai Technology, Electronic Commerce and Media Free Zone Authority) is one such enclave whose members include IT firms such as EMC Corporation, Oracle Corporation, Microsoft, Sage Software and IBM, and media organisations such as MBC, CNN, Reuters and AP. Dubai Knowledge Village (KV), an education and training hub, is also set up to complement the Free Zone’s other two clusters, Dubai Internet City and Dubai Media City, by providing the facilities to train the clusters’ future knowledge workers. Dubai Outsourcing Zone is for companies who are involved in outsourcing activities can set up their offices with concessions provided by Dubai Government. Internet access is restricted in most areas of Dubai with a proxy server filtering out sites deemed to be against cultural and religious values of the UAE.
During the financial crisis of 2008-2009, Dubai was about to default and, therefore, was obliged to downsize and restructure suffering state entities. The International Monetary Fund (IMF) stated in 2019 that Dubai’s debt exceeded 100% of its GDP. Abu Dhabi rolled over a bailout loan of $20 billion to Dubai to save it.
During the first quarter of 2015, Dubai saw a 12.5% rise in the number of new registered companies as 9,317 new firms registered with the Dubai Trade, and this had brought the total number of registered companies in Dubai to 106,000.
Between January and August 2017, Dubai issued licenses for 249,000 businesses, making up 46.8% of the total number of licenses issued across the UAE during that period.
Tourism is a major economic source of income in Dubai and part of the Dubai government‘s strategy to maintain the flow of foreign cash into the emirates. The tourism sector contributed in 2017 about $41 billion to the GDP, making up 46% of the GDP, and provided some 570,000 jobs, accounting for 48% of total employment. The contribution of the sector to the GDP rose by 138% during the years 2007-2017.
The Dubai International Airport (DXB) recorded 83.6 million passengers in 2016, and 14.9 million visitors stayed in Dubai hotels in the same year, a rise of 5% from 2015.
Since the Abraham Accords peace agreement was signed on Sept. 15, 2020, over 50,000 Israelis visited the UAE as daily direct flights between Tel Aviv and Dubai were operated even during the COVID-19 pandemic as the two countries declared each other ‘green zones,’ sparing travellers the quarantine periods. On Dec. 26, 2020, an order signed by Israel’s Health Ministry Director-General Chezy Levy went into effect, requiring all returnees from Dubai to enter a 14-day quarantine.