How Dubai Works

Dubai is a “brand” today.

It is “Dubai Inc” with a CEO, a Vision, a Mission and Corporate Governance : a Model Corporation.

Long back, people were allowed to name their companies “Dubai Steel”, “Dubai Trading” etc, but not any more.

One needs explicit clearance from the highest authority to name a new company “Dubai….”. The brand name is too precious, and too focused, to allow anyone to use it.

“Dubai” is a world class brand today.

Dubai works as a MNC with a CEO – H H Sheikh General Mohammed bin Rashid Al Maktoum.

The CEO’s personal characteristics are :
- Age 58 (born 1949)
- A Graduate of Sandhurst
- An accomplished horseman (winner of many endurance horse races)
- Owner of (probably) the world’s most valuable stable of racehorses.

Above all, the CEO is a very focused Leader, who creates value from nothing.

A bit of background.

Dubai was a tiny desert village with nothing to show for it except a creek, a very shallow one which didn’t allow large dhows, let alone ships, to come to its tiny harbour.

H H Sh Rashid, the CEO’s father, borrowed money from Indian and Pakistani traders to dredge the creek. This started trade.

Sh Rashid had the vision of growth. He set up Jebel Ali Port, which today is one of the major Container terminals of the world, as well as an industrial complex.

The next big thing that Dubai did was to start Emirates Airlines. The first two flights, EK 103 and EK 104, were flown using PIA aircraft on a “wet” basis (plane, crew, fuel) between Dubai and Karachi. The numbers EK 001/002 were reserved for the flights to London.

In the mid 80s, when Emirates started, people questioned the wisdom of starting a new airline. Look at Emirates today. It is gearing up to be the biggest airline in the world.

Dubai is developing desert and sea. It is building housing on desert and sea, where nothing existed before. This housing is being lapped up by people who are being funded by mortgage lenders and banks.

What makes this happen ?

It is one thing to plan. The key is – execution. That is what Dubai Inc specializes in.

Execution comes from competition.

In this, Dubai is unique.

Everywhere else in the world, there are only three basic models of business :
- Monopoly by the Government
- A Government entity competing with private entities
- Private entities competing with one another.

Only Dubai has this model : Government entities competing with one another, and with private entities.

Look at Real estate in Dubai. Government owned companies - Emaar, Nakheel, Dubai properties – are competing with one another and also with private entities : family owned entities as well as Public companies, such as DAMAC and Union Properties.

It is a free for all ! This is Competition.

The message from the CEO is clear :
- Show me a Business Plan.
- Convince me that it will work.
- Execute your plan.
- If you succeed, you will get bigger projects.
- If you fail, you are out.

That is how Dubai Inc works.

May I request you to consider this :

- When the CEO was told that Dubai didn’t have a sufficiently long coast line to have attractive beaches for luring tourists, he said “make new beaches”. The result – Palms – 3 of them, plus the “World” – artificial islands in the sea which have many many miles of “beaches”.
- When rents started rising in Dubai, the CEO put a cap on rent increases.
- All Government departments now provide Internet access. You can do virtually anything over the Net, unless you need physical presence, e.g. an eye test.
- Dubai Inc earns money while providing convenience. Consider the E-gate card, which allows you to enter and exit Dubai Airport without standing in endless queues, just by swiping a card. Yes, you have to pay for the card, but would you like to stand in a queue after flying for umpteen hours ? Also, Dubai Airport saves on salaries of staff in the Immigration Counters. Win-Win here. You want convenience ? U pay, and Dubai Inc saves money !!
- In Dubai, proposals are written within days, decisions are made overnight, and work starts the next day. That is the pace – a scorching pace.

Let me give an example.

When Dubai Bank was being set up, the Vice-Chairman of the bank told the newly recruited Retail Banking Head that he wanted the bank to start in 90 days. He took this guy to the site of the bank’s main building. It was a hole in the sand.

The Retail head exclaimed “You won’t have an office for me in 90 days!! How am to start a bank ?”

The Vice-Chairman replied “I will give you a building within 90 days. Give me a Bank”

The bank was set up within the 90 days deadline, with a glamorous office building.

Am I being too much of an admirer of Dubai ?

Yes, there are problems in Dubai. A city with such growth is bound to have problems. But, Dubai Inc recognizes, addresses, and solves these problems. For example :

- Rents were going sky high. The Govt put a cap on rent increases year to year.
- Laborers were suffering in the mid-day heat. The Govt banned construction activity for three hours in mid-day, so that workers could get rest.
- Traffic is growing too fast for roads to cope. The Govt built a “floating bridge” in a matter of four months, and is building new bridges and a metro system.

I could go on. But, to me, the most piquant example of the Govt’s response to a problem is the following.

The newly set-up Diamond Exchange in Dubai was getting few takers. The target audience, diamond dealers from India, stayed away. The CEO enquired as to the reason. The answer was : these people are Jains, and they want a Jain temple. There is no Temple.

The next day there was a Jain temple, and the diamond dealers came. The diamond exchange is now vibrant.

Finally, let me tell you about a quote of the CEO, when he addressed a group of Indian businessmen some years ago : I am riding a tiger. I cannot get off. You have to help me stay on the tiger.

Dubai is riding a tiger, the tiger of growth.

The keys to growth, as demonstrated by Dubai, seem to be :
- Vision – where do you want to go ?
- Execution – how do you make your Vision happen ?
- Accountability – Perform and grow, or go away.
- Practicality – Find solutions that make sense.
- And (tongue in cheek) Audacity – doing what no-one else thought of.

That is how Dubai works.