It’s no secret that Abu Dhabi & Dubai are among the 15 richest cities in the entire world, with a significant number of house-holds earning over $250k annually. But it’s not just the citizens who are doing incredibly well, but the royal families especially. In fact, Ahmed bin Saeed Al Maktoum of Dubai was said to be worth $31.7 billion as of 2011, with Khalifa bin Zayed Al Nahyan of Abu Dhabi, not far behind with a modest $15 billion.
With such a ridiculous amount of wealth, it’s no wonder why both Dubai and Abu Dhabi have experienced significant growth in recent years. But where has their wealth come from? And why have they experienced so much success. But of course, more importantly; will each of these states be able to maintain the same level of growth and development that they have shown during the past 15-20 years?
While Abu Dhabi is the capital city of the United Arab Emirates, it’s not as large as it’s sister city of Dubai which has an estimated population of 3.137 million. Having said that, Abu Dhabi still boasts roughly 1.206 million, many of which own significant wealth.
Abu Dhabi accounts for approximately two-thirds of the $400 billion UAE economy, which is a staggering amount. This is due to their large hydrocarbon wealth (and one of the highest GDP per capita). They have a wealth of oil and gas which has fuelled their economy significantly over recent years and is responsible for their magnificent growth.
But just how sustainable is Abu Dhabi’s economic growth? As it turns out, with 95% of the UAE’s Oil reserves, and 92% of its gas; they’re in an incredibly good position. In addition to that statistic, without any further discoveries and at their current utilisation rate, AD’s oil reserves will last another 150 years. – Which we can argue is certainly long enough to expand their interests in commercial development, securing them a strong foot-hold in the future as being one of the world’s wealthiest states.
Dubai is the biggest city in the United Arab Emirates, boasting it’s largest populous as well. Dubai has experienced an incredible amount of growth over recent years and have fast become a leading location in delivering a lavish lifestyle with significant wealth. It is a global transport hub which has contributed greatly towards the acceleration of the city’s economic development. Their oil revenue has contributed towards this growth; however, their production levels are low and reserves lower: today, less than 5% of the emirate’s revenue comes from oil. Today, Dubai’s primary economic revenues come from trade, tourism, aviation, real estate, and their financial services.
But despite the tall, gold-plated buildings, the fancy cars and the immense wealth that can be found in the great desert city of Dubai; it’s certainly not without its financial issues. In fact, just 9 years ago, the glimmering desert jewel had fast gone from the pinnacle of wealth, to the edge of bankruptcy. – Needing a $20 billion bailout from Abu Dhabi. And while they certainly bounced back for a time, their economy seems to be losing steam.
Residential property prices are on the decline, (more than 15%) and the stock market is down a further 13%. And yes, the population has experienced significant growth in spite of this, however many have been in lower-paid construction and service jobs. What can be done to alleviate this decline in economic growth? Will Abu Dhabi bail out their sister emirate once more, or will Dubai have to find another way to dig their heels into the sand and remain firm as a wealth and prosperous city? Only time will tell!
In any case, Dubai has done much for the UAE’s economic growth and is largely responsible for building their wealthy reputation amongst holiday makers and investors alike. Whilst it’s not certain what the future has in store, we are sure that those in charge will make the right decision’s and find a way to turn the ship around and head back towards calmer seas.