How the Life of Emiratis Has Been Transformed under Sheikh Mohammed
Sheikh Mohammed bin Rashid Al Maktoum, the emir of Dubai, has transformed this coastal town into one of the top cities globally. As shown in the case, the interest in transforming the socio-economics of this city started long before he assumed his current role as the leader of this city. Soon after his graduation, he started developing interests in the business. He noticed that this coastal town was strategically located along important sea routes. As such, he knew that promoting the use of its harbor by regional and international companies would benefit his people. When he assumed power, his primary agenda was to reduce the reliance of the city on the revenues from the oil and gas industry. This leader acknowledged the importance of the petroleum industry in boosting the country’s economic growth. However, he was concerned that over-relying on this economy would pose a serious economic threat to the country. It would mean that whenever there is a significant drop in international oil prices, the economy would be affected directly. He was also concerned that the country’s natural oil reserves would run dry after a few decades. It was necessary to diversify the economy.
One of the most important steps that Sheikh Mohammed took was to revamp the country’s transport infrastructure. When he took power, movement in the country was hampered by a weak transport system. He initiated one of the greatest infrastructural developments that have ever been witnessed in modern history. Within his first decade in power, Dubai had the best transport system in the region. The metro system in the city is one of the most efficient in the world. It is automated, fast, and reaches most of the destinations in the country. Dubai residents can now move with ease from one part of the emirate to the other. He has also improved the condition of the airports and seaports to promote trade. Joblessness among his people is no longer a problem. In fact, the city has seen a major influx of people from different parts of the world seeking employment. This leader has also succeeded in boosting tourism in the country as a means of diversifying the economy. Dubai is currently home to the world’s tallest building and the biggest man-made island. He has also maintained security in the country despite the instability in some of the neighboring countries. He understands that the country’s growth depends on improved security and political stability (Mayo, Nohria, Mendhro, & Cromwell, 2010). His ability to balance political and business leadership skills has significantly improved the living standards of his people.
The Context Sheikh Mohammed Inherited
When Sheikh Mohammed took power, he inherited a relatively weak economy that heavily relied on the export of oil. As shown in the case, the emirate was relatively stable politically at the time of the inheritance, but its economy was not as promising as it currently is today. At the time when he was taking over the leadership, the country had very little that could attract international tourists. Many roads were in a deplorable state, and the rail system was barely functional. The entire country had started registering economic growth because of the exportation of oil, but there was little to show that the leadership was committed to diversifying the economy of the country. The education sector was also growing, but at a sluggish pace, with a few institutions of higher learning offering a limited number of courses for the local students.
How He Has Changed the Context of Dubai
The current ruler of Dubai has significantly transformed the socio-economic context of this city because of his leadership skills, determination, and desire to see the city compete globally in trade and tourism. Other than the economic transformation that he has promoted in the city, as discussed above, Sheikh Mohammed has also transformed the socio-cultural context of the city. It is important to note that the city is still dominated by Muslims. However, the massive flow of immigrant workers and tourists from all over the world has transformed it into a highly diversified metropolis. When trying to promote tourism, one of the biggest challenges that his leadership faced was how to balance the strict Islamic culture and the relaxed western lifestyle common among the tourists. The ruler knew that majority of sustainable tourists came from the west. Most of them do not ascribe to strict Islamic practices. His shrewd business and political leadership skills made it possible to have a balance. He was able to create an environment where tourists would feel comfortable but in a way that does not compromise Islamic teachings among the locals.
He also changed the education sector in the country. He realized that one of the best ways of diversifying the country’s economy was to empower his people through education. The government initiated ambitious projects meant to improve education in the country. Under his rule, numerous new schools have been developed, and the old ones renovated to match world-class standards. The government also trained over 20,000 teachers to ensure that these schools have enough staff to meet the increasing demand. Sheikh Mohammed also launched the Dubai Cares program to ensure that needy students in the country access basic education that can help them to transform their lives. Another context that has changed significantly in Dubai since he assumed power is the number of women in the job market. The leaders who came before him had made significant steps in promoting the education of girls. By 2009, 96% of the women in the country were literate, as shown in the case. However, they only formed less than 15% of the country’s workforce (Mayo et al., 2010). It meant that many of them do not get gainful employment after completing their education for various reasons. However, that has changed significantly under his rule as more women now get to positions of power in the corporate world.
Comparing and Contrasting the Global Management Practices in View of Business Lifecycle in Dubai
The case presented show that the management practices in Dubai have similarities and differences with that of the regional and global society in the view of the business life cycle. It is evident from the case that the business lifecycle follows a specific pattern of growth from boom to burst. In Dubai, this pattern of the business lifecycle has been witnessed in many industries, especially the oil and gas and real estate sectors. In the oil and gas industry, there is always a consistent increase in the price of oil in the international market that leads to a boom. The growth is then affected by socio-economic and political forces that then cause a drop in the price of this commodity. The trend is not unique to the country. It has been witnessed in many other oil-exporting countries regionally and internationally. A drop in international oil prices affects all countries dealing in this commodity.
The real estate sector has also registered the same pattern of the lifecycle. In Dubai, the real estate sector experienced massive growth in the early years when Sheikh Mohammed took over the leadership of the country. As the population of the city continued to increase due to the influx of immigrants, the value of homes rose consistently. More real estate investors came to the country to take advantage of the opportunity. However, the industry was significantly affected when the international oil prices started to fall. The case shows that management practices taken by the local business leader in dealing with a bubble burst are similar to those used in many other developed countries when dealing with similar problems.
The case points out significant differences in the management practices which are embraced in Dubai and that common in the regional administrative units. Most of the regional countries have embraced conservative autocratic leadership where the government has tight control over the economy. However, this approach is not common in Dubai. The ruler has created a platform where the private sector can play a significant role in the economic growth of the country. The leadership of this country has made it possible for foreign investors to participate in the country’s economic growth, including in the real estate sector.
Another major difference between the management practices in Dubai and that of the neighboring countries is the level of diversification of the country’s economy. Unlike many of the neighbors that rely on the boom-and-bust cycles in the oil industry, the ruler of this emirate has enhanced diversification. It means that when the oil and gas industry is affected, the tourism and trade sectors can still help in stabilizing the country’s economy. The diversification has been made possible by massive infrastructural development, improved security, and an enabling business environment (Mayo et al., 2010). These management systems and structures have enhanced the success of the country’s economy. It has improved the prospects of the country being economically successful even if the oil wells run dry in a few decades to come.
Dubai’s Role in Business Sustenance in the UAE
Dubai has a major role in business sustenance in the United Arab Emirates. From the social responsibility perspective, this city has a role to play in the entire country because of the massive support it has received in its development. Abu Dhabi, which is the country’s oil and gas capital, has been supportive of Dubai in its infrastructural development. The president of this country has also created an environment that makes it possible for the city to achieve the desired level of development without unnecessary disruption. The city now has a responsibility to the entire country. Currently, the city provides numerous amenities that benefit not only the foreign tourists but also the locals from different emirates. The living standards of most Emirati nationals have improved significantly because of the developments witnessed in this city. The rate of unemployment among the locals is at its lowest in the country’s history because of the emergence of numerous businesses in the country. Compared to other regional countries, the per capita income among the Emirati nationals is one of the highest in the region. The level of education has also improved significantly. It is important to note that the numerous educational institutions developed in Dubai serve all the citizens.
The city also has a role in enhancing the sustainability of the country’s economy. It is important to note that most of the regional countries and other emirates in the UAE still depend heavily on the oil and gas market (Mayo et al., 2010). It means that the stability of the economy of these emirates largely depends on the stability of international oil prices. Any significant drop in the oil price has a direct impact on their economy. However, Dubai has a role in ensuring that it maintains the country’s economic stability even when the oil and gas industry is affected. Massive investments have been made to diversify the economy of this country. The city currently boasts of some of the best amenities in the world that attracts tourists globally. It is also an important trade route that is used by regional and global traders. Its advanced infrastructure makes it easy to move goods from one part to another. These initiatives have made it possible to shift the economy of Dubai from that which relies on oil and gas export to that which depends on diversified service industry. It is expected that when the country’s economy is affected by the drop in the oil process, the lucrative businesses in Dubai will cushion the country from the shock. The earnings from various industries will sustain the country’s economy during such challenging economic situations.
Reference
Mayo, A., Nohria, N., Mendhro, U., & Cromwell, J. (2010). Sheikh Mohammed and the making of Dubai Inc. Harvard Business Review, 9(410), 1-23.