the story of the city of gold, dubai

the story of the city of gold, dubai

Dubai also spelled Dubayy, is the capital of the emirate of Dubai, one of the wealthiest of the seven emirates that make up the United Arab Emirates federation, which was founded in 1971 after independence from the United Kingdom. 

There are several theories as to where the name Dubai came from. One interpretation links it to the data, a type of locust that infests the area, while another believes it refers to a market that once existed near the city. 

In recent years, Dubai has been compared to Singapore and Hong Kong and is widely regarded as the Middle East's premier business center. The area is 13.5 square miles (35 square km).

Dubai is a city of skyscrapers, ports, and beaches where big business and sun worshippers coexist. Because of its large expatriate population, Dubai feels like a Middle Eastern melting pot, and the atmosphere is generally tolerant.

Religious affiliations are not a significant feature of city life. Even though Islam is the most common religion in Dubai, churches and Hindu temples exist.

Dubai is a relatively crime-free city where administrative efficiency and business openness have fostered phenomenal growth. On the other hand, criticism of Dubai's authoritarian government and ruling elite is not allowed, and culture of covert corruption is common.

Dubai History

From humble beginnings as a small fishing village first documented in the 18th century, the city overgrew as it became a major pearl-diving center. 

The city expanded further in the early twentieth century as its business-savvy ruling family reduced taxes and welcomed foreign merchants.

It soon became a re-exporting hub for Persia and India. In the latter half of the twentieth century, benefiting from modest oil wealth, Dubai focused on trade and attracting investment, channeling oil surpluses into significant infrastructure projects such as an international airport, dry docks, and a trade center. 

In the 1990s, the city began to diversify, focusing on luxury tourism, real estate, and finance. All of these required skilled, educated foreign workers, and many relocated to Dubai because of its tax-free wages and relatively stable politics.

The city took on a more cosmopolitan air with expatriates from other Arab countries and Asia, Europe, and North America. Dubai has had one of the most liberal societies in the region.

Creation Of Contemporary Dubai

Dubai is thought to have begun as a fishing village in the early 18th century and had grown to a town of 700–800 Bani Yas tribe members by 1822, subject to the rule of Sheikh Tahnun bin Shakhbut of Abu Dhabi.

Following tribal feuding, Al Bu Falasha tribe members seceded from Abu Dhabi and settled in Dubai in 1833. Obeid bin Saeed and Maktoum bin Butti led the exodus from Abu Dhabi and became joint rulers of Dubai until Ubaid died in 1836, leaving Maktum to establish the Maktoum dynasty.

Following the British campaign against Ras Al Khaimah in 1819, Dubai signed the General Maritime Treaty of 1820 with the British government and the other Trucial States.

This event resulted in the Perpetual Maritime Truce of 1853. In 1892, Dubai, along with its neighbors on the Trucial Coast, signed an agreement that gave the United Kingdom sole control over the security of the emirate.

A smallpox epidemic erupted in the Bur Dubai neighborhood in 1841, forcing residents to relocate east to Deira. In 1896, a fire broke out in Dubai, causing havoc in a town where many family homes were made of barasti—palm fronds. 

The fire consumed half of the houses in Bur Dubai, and the Deira district was said to be completely destroyed. More fires erupted the following year. An enslaved woman was caught in the act of starting one of these fires and was later executed.

In 1901, Maktoum bin Hasher Al Maktoum established Dubai as a free port with no import or export taxes, giving merchants guarantees of protection and tolerance.

These policies resulted in a migration of merchants to Dubai not only from Lingeh but also from Ras Al Khaimah and Sharjah (which had historical ties with Lingeh through the Al Qawasim tribe).

The steamer's movements by the Bombay and Persia Steam Navigation Company, which made five visits annually to Dubai from 1899 to 1901, indicate the port's growing importance. 

The company's vessels made 21 visits to Dubai in 1902, and from 1904 on, the steamers called fortnightly - trading 70,000 tonnes of cargo in 1906. 

The frequency of these vessels has only accelerated Dubai's role as a preferred emerging port and trading hub. In his book, Lorimer notes that the transfer from Lingeh "bids fair to become complete and permanent.

" By 1906, the town had supplanted Lingeh as the Trucial States' main entrepôt.

The "great storm" of 1908 hit the pearling boats of Dubai and the coastal emirates near the end of that year's pearling season, destroying a dozen ships and killing over 100 people.

Dubai suffered a significant setback due to the disaster, with many families losing their breadwinners and merchants facing financial ruin. These losses occurred at a time when the tribes of the interior were also impoverished.

In the Hyacinth incident (a 1910 British military action against suspected gun runners based in Dubai) 1910, the town was bombarded by HMS Hyacinth, with 37 people killed.

Dubai, Before The Oil Age

Due to its proximity to Iran, Dubai has become an important trade location. For a while, Dubai was a popular port of call for foreign traders, particularly those from Iran, and many of them eventually settled there. It was an important port by the turn of the twentieth century. 

At the time, Dubai was made up of the town of Dubai and the nearby village of Jumeirah, which consisted of 45 areas (palm leaf) huts. Until the 1930s, Dubai was known for its pearl exports.

However, the 1929 Great Depression and the introduction of cultured pearls damaged the pearl trade. After the pearling industry collapsed, Dubai fell into a deep depression, and many residents were forced to live in poverty or migrate to other parts of the Persian Gulf.

Since its inception, Dubai has been at odds with Abu Dhabi regularly. A border dispute between Dubai and Abu Dhabi on the northern sector of their shared border erupted into war in 1947. The British government's mediation resulted in the cessation of hostilities.

Despite a lack of oil, Sheikh Rashid bin Saeed Al Maktoum, Dubai's ruler since 1958, used revenue from trading activities to build infrastructure.

Private companies were formed to construct and operate infrastructures, such as electricity, telephone services, and port and airport operators.

In the 1950s, Dubai established a sort of airport (a runway built on salt flats), and the Airlines Hotel, the emirate's first hotel, was built in 1959. In 1968, the Ambassador and Carlton Hotels were added.

In 1959, Sheikh Rashid commissioned John Harris of the British architecture firm Halcrow to create the city's first master plan. 

Harris imagined that Dubai would grow out of the historic center on Dubai Creek, with an extensive road network, organized zones, and a town center. A bit of money available at the time could build all of these things.

The first telephone company in Dubai was established in 1959, with IAL (International Aeradio Ltd.) owning 51% and Sheikh Rashid and local business people holding the remaining 49%, and both the electricity and telephone companies had operational networks by 1961.

The water company (Sheikh Rashid was chairman and majority of shareholders) built a pipeline from Awir wells and a series of storage tanks. Dubai had a reliable supply of piped water by 1968.

The Dubai-based MV Dara, a 5,000-ton British-flagged vessel that plied the route between Basra (Iraq), Kuwait, and Bombay (India), was caught in unusually high winds off Dubai on April 7, 1961.

An explosion tore out the second-class cabins and started fires early the next morning in heavy seas off Umm al-Quwain. The captain ordered to abandon the ship, but two lifeboats capsized, resulting in a second explosion.

A flotilla of small boats from Dubai, Sharjah, Ajman, and Umm al-Quwain rescued survivors, but 238 of the 819 people on board perished.

The first airport in Dubai was built on the city's outskirts in 1959, and the terminal building opened for business in September 1960. Gulf Aviation first served the airport, which flew Dakotas, Herons, and Viscounts. In 1961, Iran Air began flying to Shiraz.

The British Political Agent noted in 1962, "Many new houses, office blocks, and flats are being built... Despite [British authorities'] advice, the ruler is determined to proceed with constructing a jet airport... More European and Arab firms are opening up, and the future looks promising. "

In 1962, with infrastructure spending already approaching levels some considered excessive, Sheikh Rashid came to his brother-in-law, the Ruler of Qatar, for a loan to construct the first bridge crossing Dubai's Creek. This crossing was completed in May 1963 and was paid for by a toll levied on the corner from the Dubai side of the Creek to the Deira side.

BOAC initially hesitated to launch regular flights between Bombay and Dubai, fearing a lack of seat demand. However, when Dubai Airport's asphalt runway was built in 1965, opening Dubai to regional and long-haul traffic, several foreign airlines competed for landing rights. In 1970, a new airport terminal was created, including the first duty-free shops in Dubai.

Throughout the 1960s, Dubai was the epicenter of a thriving gold trade, with gold imports totaling £56 million in 1968. The vast majority of this gold was re-exported, primarily to customers who delivered it in international waters off the coast of India.

Because gold imports to India were prohibited, the trade was labeled as smuggling, even though Dubai's merchants quickly pointed out that they were making legal deliveries of gold and that it was up to the customer where they took it.

At 4 million ounces, more gold was shipped from London to Dubai in 1966 than almost anywhere else (only France and Switzerland took more). Dubai also received over $15 million in watches and over 5 million ounces of silver.

Gold was $35 an ounce in 1967, but its market price in India was $68 an ounce-a healthy markup. At the time, estimates put the volume of gold imported from Dubai to India at around 75% of the total market.

The Oil Era

Years of exploration following significant finds in neighboring Abu Dhabi resulted in the discovery of oil in territorial waters off Dubai in 1966, albeit in much smaller quantities. 

The first field was named "Fateh," which means "good fortune." This situation resulted in Sheikh Rashid's infrastructure development plans being accelerated and a construction boom that brought a massive influx of foreign workers, primarily Asians and Middle Easterners. The city's population increased by more than 300 percent between 1968 and 1975.

Two 500,000 gallon storage tanks, known locally as 2Kazzans2, were built as part of the infrastructure for pumping and transporting oil from the Fateh field, located offshore of Dubai's Jebel Ali area, by welding them together on the beach and then digging them out and floating them to drop onto the Fateh field's seabed. 

The Chicago Bridge and Iron Company built these, giving the beach its local name (Chicago Beach), which was transferred to the Chicago Beach Hotel, which was demolished and replaced by the Jumeirah Beach Hotel in the late 1990s. 

The Kazzans was an innovative oil storage solution that allowed supertankers to moor offshore even in lousy weather, eliminating the need to pipe oil onshore from Fateh, which was 60 miles out to sea.

Dubai had already begun the expansion and development of infrastructure. Oil revenue supported a period of growth starting in 1969, with Sheikh Rashid embarking on a policy of building infrastructure and diversifying the emirate's trading economy before the emirate's limited reserves were depleted. Oil accounted for 24 percent of GDP in 1990, but by 2004, it had dropped to 7 percent of GDP.

One of the first significant projects Sheikh Rashid began when oil revenue started to flow was the construction of Port Rashid, a deep-water-free port built by the British company Halcrow. It was initially intended to be a four-berth port, but as construction progressed, it was expanded to sixteen berths.

The project was a huge success, with shipping lines forming to get into the new facilities. The port was officially opened on October 5, 1972, but its berths were used as soon as they were completed. Port Rashid was to be expanded in 1975 to add 35 more berths before the more important port of Jebel Ali was built.

Port Rashid was the first in a series of projects to build a modern trading infrastructure, which included roads, bridges, schools, and hospitals.

Modern Dubai

During the 1970s, Dubai grew due to oil and trade revenues, despite an influx of immigrants fleeing the Lebanese civil war. Border disputes between the emirates persisted even after the formation of the UAE; it wasn't until 1979 that a formal compromise was reached, putting an end to the disputes.

The Jebel Ali port, a deep-water port that could accommodate larger ships, was established in 1979. The port was not initially thriving, so in 1985, Sheikh Mohammed set up the JAFZA (Jebel Ali Free Zone) around it to allow foreign companies unrestricted labor and import/export capital. Dubai Airport and the aviation industry have also expanded.

The Gulf War in early 1991 had a negative financial impact on the city, as depositors withdrew their money and traders withdrew their trade.

Still, the city later recovered and thrived in a changing political climate. Later in the 1990s, many foreign trading communities relocated to Dubai, first from Kuwait during the Gulf War and then from Bahrain during the Shia unrest.

During the Gulf War and again during the 2003 invasion of Iraq, Dubai provided refueling bases to allied forces at the Jebel Ali Free Zone. After the Gulf War, oil prices increased significantly, making Dubai want to keep focusing on free trade and tourism.

Historical timeline leading to Dubai ascent

  • 1830: A segment of the Bani Yas tribe from the Liwa Oasis, led by the Maktoum family, takes over the small fishing settlement of Dubai, which still rules the emirate today.
  • 1892: Due to the declaration that foreign traders would be exempt from taxation, the population of Dubai doubled, and the pearling industry boomed.
  • 1930–1940: The recession hits Dubai's pearl industry, which declines, causing social pressures and feuds among the royals.
  • After his father died in 1958, Sheikh Rashid became the official ruler of Dubai.
  • 1959: The Emir of Kuwait lends Sheik Rahid millions of dollars to renovate the Creek so that large ships can pass through, establishing Dubai as a central trading hub.
  • 1966: Dubai discovers oil, attracting traders and stimulating economic growth.
  • 1968: Dubai begins crude oil exports, attracting petrodollars.
  • 1973: The Dirham is adopted as Dubai's official currency.
  • 1980: Dubai's annual oil revenue falls to US$3.
  • 1985: The Emirates airline is established, and Dubai prepares to reinvent itself as a tourist destination.
  • 1990: After the death of his father, Sheik Rashid, during the first Gulf War, Sheik Maktoum becomes ruler of Dubai.
  • 1996: The Dubai Shopping Festival and the Dubai World Cup are launched, which have since grown into annual viral events.
  • 1999: The Burj Al Arab, one of the world's tallest hotels, opens, further enhancing Dubai's reputation as a tourist destination.
  • 2003: The International Monetary Fund and the World Bank designate Dubai as a financial hub. Introducing freehold properties has also caused the Dubai real estate market to overgrow.
  • 2006: Sheik Mohammed is appointed Prime Minister, Vice President of the UAE, and Ruler of Dubai. He updates the liberal policies of his forefathers and keeps building up Dubai, which raises the city's business profile.
  • 2007: Sheikh Mohammed announces the Dubai Strategic Plan 2015, and Dubai Studio City is inaugurated. The prize money for the Dubai World Cup was increased to $10 million, and Dubai International City was built.
  • In 2008, the New Maktoum Bridge, Dubai Sports City, and Dubai International Terminal 3 all opened. The Atlantis, The Palm Hotel & Resort opens its doors.
  • 2009: The world's largest shopping mall, Dubai Mall, is inaugurated, and the Red Line (Dubai Metro) begins operations. The Dubai International Cricket Stadium officially opened.
  • 2010: The world's tallest skyscraper, the Burj Khalifa, opens, and Al Maktoum International Airport begins operations.
  • 2011: Dubai Metro launches the Green Line and the Palm Deira station.
  • 2012: The Princess Tower and JW Marriott Marquis Dubai are completed as part of Dubai's bid for World Expo 2020.
  • 2013: Dubai wins the bid for World Expo 2020, and Sheikh Mohammed unveils the Dubai Water Canal.
  • 2014: The announcement of Mall of the World, the world's largest mall and indoor theme park, and the opening of Opera Grand, the first high-rise in the Dubai Opera House District.
  • Hope, a UAE-developed Mars probe, was launched in 2015.
  • Sheikh Mohammed inaugurated the Dubai Water Canal in 2016.
  • Dubai Safari Park opened to the public in 2017.
  • 2018: The World's Largest Frame, Dubai Frame, opened in 2018.
  • Burj Jumeirah's construction began in 2019.
  • 2022: On February 22, 2022, the Museum of the Future, an exhibition space, opens.

Is Oil Discovery the Reason for Dubai's RapidGrowth?

The discovery of oil in 1966 was a watershed moment in Dubai's history and fortunes. Coupled with the formation of a new currency, the Riyal, by the newly independent countries of Qatar and Dubai following the devaluation of the Persian Gulf rupee issued by the Government of India, it enabled Dubai to expand and overgrow. 

The first oil shipment, which happened in 1969, made it clear that Dubai would be an independent state and would be able to tell the UAE what to do in the future.

7th Sep 2022

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