The evolution of the transport and logistics sector in Dubai

Abstract

Over the past decade the emirate of Dubai has emerged as a leading transport and logistics centre serving not only the Middle East and North Africa (MENA) region, but also Russia, Europe, Asia and the Far East. This has been driven by concerted and far-sighted government initiatives which since the mid-1970s have sought to diversify an economy underpinned by oil revenues, but with an otherwise limited domestic resource base. With little arable land and a very small and un-skilled population, Dubai was a pearling port and regional entrepot based around shipping until the discovery of oil in the 1960s. A succession of formal government plans has introduced incentives and inducements aimed at encouraging Free Zone based companies to set-up operations in the emirate with the aim of fast-tracking the establishment of a modern, service-based economy. Initially the planning focus was on establishing the finance, tourism and property sectors as well as on significant expansion and upgrading of traditional trading activities. More recently the emphasis has broadened to incorporate more technology-intensive service industries. The phased development of Dubai’s transport and logistics sector over the past several decades has culminated in the establishment of a major regional multi-modal commercial and transport hub, a so-called ‘transtropolis’. Although a work-in-progress, several stages of this long-term project are already operational and construction remains ongoing.The future success of this government project is unclear. In the public sector, there exist major challenges, some reflective of the need to efficiently manage and coordinate such a huge undertaking while others stem from the uncertainties of a competitive global market-place. For individual companies and industries (public and private) looking to participate and commit to the venture, a number of issues need to be addressed in the formulation of business strategies.