One of the most mind blowing facts about Dubai is its story.
Everyone knows that Dubai has risen from dust and sand to a global trading and business hub that it is today.
However, many have a misconception that it is due to the oil money. Oil was only discovered in Dubai in 1966 and production started only in 1969. Dubai was on it’s way to become a global hub way before then.
It’s all due to this man:
HH Sheikh Rashid bin Saeed Al Maktoum;
Father of HH Sheikh Mohammed Bin Rashid Al Maktoum, current ruler of Dubai (picture below):
Let me explain in detail:
It all started when HH Sheikh Mohammed’s Father – Sheikh Rashid bin Saeed Al Maktoum started his reign in 1958, Dubai was nothing but a small cluster of settlements near Dubai creek, with no electricity or infrastructure. These settlements were mainly supported by pearl trade which was a declining and unsustainable business. Sheikh Rashid was a man of vision, and he played a series of Masterstrokes that made Dubai an important city in the global map. These were as below:
- Building up Dubai Creek (1955–1961) : It was very well known that Dubai falls in the middle of trade route between east and the west. Despite that fact, in 1950s, Dubai was in trouble. The Dubai creek – a natural harbor was choked with silt. Ships had to anchor in deep water a mile offshore and transfer goods to barges, which ferried them into the creek, and only if weather and tides cooperated. The creek was shallow for most boats. As a result, ship captains skipped Dubai on their way. Sheikh Rashid commissioned a feasibility study that called for dredging the creek and building up it’s banks with bulkheads and sheet piling. But estimated cost of about $ 3mn USD was far beyond Dubai’s means. Sheikh Rashid decided to raise cash. He did so by levying special taxes, selling bonds, and strong-arming donations from merchant families who relied on the creek. Once the port construction completed in 1961, business started flowing in. Dubai became a profitable destination. Dubai’s entrepôt business, it’s reexports caught like gasoline fire. Sheikh Rashid repaid all that he borrowed and more well ahead of time.
- Electrification and Infrastructure (1961): Sheikh Rashid’s next task was to brighten up the place. He setup a municipal electric plant with a 1440 kw capacity and strung the town with wires. (This was in 1961 when at the same time Israel had launched rocket into the space). That same year, they setup telephone exchange and lines. That same year Dubai got it’s first paved road, first bridge, and first installation of municipal water system. Engineers were hired and they started building roads and roundabouts, underground pipes for water. New amenities swept Dubai: -An ice plant, radio, television broadcasts, streetlights, municipal government, and a police force.
- Dubai Airport – Outpacing the Neighbors (1960–68): Of-course, Sheikh Rashid wasn’t content to just bring the city on par with the region. He wanted more. It was in Sharjah (Dubai’s neighboring emirate) that the British had earlier built their airbase before they left the region, paving an airway that grew more valuable as aviation progressed. Air transport was becoming more important in the world trade. Sheikh Rashid, who began flying from Sharjah on his own travels, knew Dubai needed an airport. He knew it would be a moneymaker, even if it was only a refueling stop. He hired a British aviation company, International Aeradio Ltd., to design the airport. It was built by 1960. He removed all the duty on air cargo which Sharjah’s ruler was still imposing and turned all the business to Dubai’s airport. By 1968, Dubai Airport grew big enough to handle Boeing 747s. By contrast, Sharjah’s airport slipped into anonymity as a hub for arms merchants and budget airlines.
- Port Rashid (1971): Dubai creek gave the beginning that Dubai needed, but it was still a relatively a small port. Even after the dredging, it was too small for the ships that dominated international trade in 1960s. Dubai’s growth was hurtling and by 1967, Sheikh Rashid vowed to solve this problem. He hired Halcrow, the British planners that handled the dredging, and asked them to design a deep-water port named after himself: Port Rashid. It was the biggest earth-moving project in Dubai’s history, but with oil discovery, Dubai had the money to make it happen. In 1971, the port opened with size of 35 births which was inaugurated by Queen Elizabeth II. The state run operator that ran the port is today world’s fourth largest.
- Dry Docks (1971–1983): Sheikh Rashid wanted Dubai to be more than a port. He wanted it to be a center of the shipping industry. In 1971, he commissioned a feasibility study on building a dry dock, a yard where largest vessels could be hauled out of the sea and repaired. Dubai’s British advisers said the project was ridiculous. Global shipbuilding was in rescission. Dubai was too small to absorb such a huge industrial investment. Talk about risk taking, this project was ridiculed as far as by the wall street journal. However, again, this was a successful bet in hindsight after the port completed in 1983. In 1980s, an Iran-Iraq war turned into a full blown tanker war. This was an economic lemon for Dubai. Wounded ships started to to come in for repairs and Dry Docs was suddenly greeted with swamps of damaged ships. So much so that there was a huge wait-list to get the ships repaired.
- Big Gambles (1970s and 1980s): The Dubai Dry Docks exhibited ambition that bordered on folly. But Sheikh Rashid’s next three announcements made people think he was a bit crazy: 1. A mammoth Dubai Aluminium Smelter which recycled plant’s heat to distill sea water to fresh water; 2. Dubai World trade centre, a skyscraper in an empty desert 3. An another bigger port in Dubai’s farthest scrap of empty beach – Jebal Ali Port. As usual, the ridicule continued but all three turned into massive success stories. Dubai Aluminium is one of the world’s largest single-site primary aluminium smelters. Dubai World trade centre houses some of the biggest corporations of the day – IBM, UT, British Petroleum, office of U.S. Consulate, Dubai’s local stock exchange. Jebel Ali is the world’s largest man-made harbor and the biggest and by far the busiest port in the Middle-East.
Everything that Sheikh Rashid did was criticized at that time, but in hindsight, it was visionary. He made the best possible use of Dubai’s small oil reserves. At the same time Kuwait, Saudi, and it’s other oil-rich neighbors used the oil money to subsidize cushy lifestyles and overpaid bureaucracies. His steel-gut gambles on infrastructure were the pivotal decisions that make Dubai what it is today.
Sheikh Rashid’s reign lasted upto 7th Oct 1990, till his death. But his wisdom was not lost. He imparted his wisdom in young Sheikh Mohammed who carried the baton forward.