November 13, 2023 • 25 mins
Join us on a captivating journey to the heart of the Middle East as we unravel the extraordinary transformation of Dubai. In this episode, we delve deep into the city's meteoric rise from a regional trading post reliant on oil to a buzzing global hub for investment, tourism, and technology. Discover how Dubai's strategic diversification efforts led to an economy where oil now contributes less than 1% to its GDP, a stark contrast to the 50% it once commanded. We'll explore the pivotal roles of initiatives like the Jebel Ali Free Zone Authority, which revolutionized trade, and examine how Dubai's strategic location and business-friendly policies catapulted it into a major player in global finance. This episode is not just about economic growth; it's a story of vision, innovation, and ambition. Tune in to see how Dubai emerged as the tech hub of the Arab world, setting a new standard for urban transformation and development.
Helpful Links:
- https://www.brookings.edu/articles/what-the-united-arab-emirates-can-teach-resource-rich-countries-in-africa/
- https://www.wsj.com/articles/dubai-emerges-as-tech-hub-of-the-arab-world-11646568001
- https://web.archive.org/web/20180317113009/https://www.bloomberg.com/view/articles/2018-01-14/dubai-s-the-very-model-of-a-modern-mideast-economy
- https://www.investmentmonitor.ai/features/where-are-the-global-islamic-finance-hubs/
- https://abcnews.go.com/International/wireStory/dubais-stock-market-hits-8-year-high-lifted-101519465
- https://www.youtube.com/watch?v=oc5tHbEK0IQ
This podcast empowers high-earning women to make informed financial decisions and thrive.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Ask a lot of people, have youbeen to the Middle East?
And they'll say, oh yeah, Dubai.
Jed Tabernero (00:04):
The world's tallest building, the largest
man made islands, and thebiggest shopping mall, all can
be found in this thriving,futuristic desert metropolis.
Yeah, we're thinking of Dubaiand the United Arab Emirates.
In a bid to encourageentrepreneurs and tech investors
(00:25):
to live in the country, The UAEis also offering 100, 000 golden
visas that allow entry for 10years.
In this episode of Things Have Changed Podcast,
we dive into the fascinatingeconomic journey of the UAE,
once heavily dependent on oil.
Which accounted for a staggering50 percent of Dubai's GDP fast
(00:51):
forward to today, and thelandscape has shifted
dramatically with oil nowcontributing less than 1 percent
to Dubai's GDP.
The UAE is now home to threeunicorns, or startups, worth at
least a billion dollars.
And they are all based in Dubai.
The country aims to have atleast 20 unicorns by 2031.
(01:13):
So how did an economy in a desert become a hub
for trade, transport, finance,tourism, and technology?
Tune in as we dive into themeteoric rise of Dubai and the
broader UAE.
Are we seriously consideringDubai now as a global tech hub?
A global tech hub that couldpotentially one day rival the
(01:35):
likes of London and Paris?
A hundred percent.
Shikher Bhandary (02:16):
okay, so my first international trip ever
growing up in Bangalore, thefirst trip that I'd ever done
outside of the country was toDubai.
My parents had already gonethere because they were visiting
my sister in the US.
A lot of transit to the UnitedStates from India.
passes through the Middle Eastbecause it's just such a great
(02:37):
like middle strategic locationfor you to have your transit and
we'll get to this later as to asone of the reasons why Dubai is
crushing the whole trade andfinance aspect of things.
But I landed in Dubai and youknow, this is a boy who's, who's
never been outside the country.
And.
(02:57):
I got lost in the airportbecause I was flying solo.
I was 14.
I guess 14 is is old.
Right?
Like 9th grade or
Jed Tabernero (03:07):
Pretty young bro.
I don't know that's prettyyoung.
Shikher Bhandary (03:09):
Dude, I was,
Jed Tabernero (03:10):
I left the country at 14
Shikher Bhandary (03:12):
I was lost, dude.
I was lost in the Dubai airport.
Also, partly, not because of theairport.
It was because of me.
I was so starstruck.
Just so many things happening.
It is humongous, firstly.
And there are stores.
There are, there are a millionpeople.
(03:33):
It was such a startling thingfor me.
Because, You fly into the MiddleEast.
Now, back then, Dubai was notlike the Dubai that we hear and
talk about today, right?
It was still like, what, 14, 15years ago?
Wow, long time ago.
But it was starting to get thatreputation and just landing into
(03:53):
the airport and you're like,wow, this is insane.
So, I got lost.
Great thing, I went to a helpdesk on the verge of tears.
They were able to callinternationally to my sister.
My sister got the number for myparents.
My parents were already sittingin a hotel in Dubai.
They, I guess, forgot about me.
Jed Tabernero (04:11):
nice
Shikher Bhandary (04:12):
Concierge helped me to get to the spot
where my parents finally met me.
Which was pretty cool.
It was a great experience.
For a 14 year old kid who gotlost in one of the biggest
airports in the world.
My parents were like freakedout.
They were like, what the hell?
What is happening?
Are we going to see our kidagain?
(04:34):
Customer experience in many waysis really good.
Jed Tabernero (04:38):
intense.
I mean I would say first of all,you're lucky that the first
country you left to from Indiawas UAE.
I mean, that's probably for me.
It was a freaking, when I firstcame to the UAE, I already knew
all about it.
I knew all about Dubai and youall about how nice things were.
And Emirates is just a soughtafter airline.
(05:01):
You know what
Shikher Bhandary (05:01):
Yeah.
Yeah.
Jed Tabernero (05:03):
coincidentally, my first time coming into
Bangalore, I also went throughDubai.
And that was kind of dude,riding Emirates for me was.
Tip top.
I was like, damn, I made it.
I was in economy, you know whatI mean?
But it just felt so good.
It felt so good.
If you haven't written Emiratesbefore, first of all, you should
(05:24):
try it.
If you get a chance, Emirateseconomy class is just up there.
A lot more space.
It's got a world leading mediasystem.
It's, it's beautiful.
I would love to be part of theEmirates infrastructure someday
instead of being Delta.
Shikher Bhandary (05:41):
incredible is how that whole section, at least
UAE, has transformed over thelast 30 years.
Now you walk into a New YorkCity hotel, a top hotel, you
know, a bunch of clocks behindthe receptionist.
And it's basically, what are thenames, right?
You'll have New York, you'regoing to have Sydney, you're
(06:04):
going to have Paris, you'regoing to have London, and now
you have Dubai on it.
It's gotten onto that slate oflarge metropolises in the world.
Jed Tabernero (06:12):
Yeah.
I mean, how did UAE become evenan economic powerhouse right in
the very beginning and doing ourresearch to how this evolved was
really, was really dope becausewe learned a lot about the
Middle East in general.
So Dubai and UAE just generallyare divided into Emirates,
(06:33):
right?
Just for everybody's education.
And Emirates is a land that'sruled by an Emirate, an Emirati.
And the economies were kind ofAll over the place.
You know, there's some areas,some Emirates who ruled by lots
of fishing villages who weresearching for like really rare
(06:54):
Japanese pearls.
Shikher Bhandary (06:55):
That's how it kind of came about, right?
Jed Tabernero (06:59):
That's the crazy thing.
Yeah.
And it's not something you thinkabout today, but if you've been
there, right.
There's like these museums aboutthese pearls that they used to
collect and stuff.
So
Shikher Bhandary (07:09):
too long ago to this.
We are talking about like 1960,like before the oil, Middle East
oil stuff that started happeningwith the US and stuff.
This is not we are talking1960s, early 1970s, where Dubai
was Like a fishing settlement.
That's insane.
It's 60 years ago, dude.
Jed Tabernero (07:30):
you wouldn't have guessed right?
You wouldn't have
Shikher Bhandary (07:32):
One lifetime in one lifetime.
Jed Tabernero (07:34):
exactly.
Exactly.
There's still folks who areprobably, you know, familiar
with that view of Dubai and allof a sudden this, you know,
massive construction buildings,you know, new islands, holy
crap.
There's just so much going on inDubai.
And one of the other things, ofcourse, you know, the rest of
the middle East, when oilstarted becoming a really
important resource foreverybody.
(07:56):
UAE also found oil, but comparedto the rest of the Emirates,
Dubai didn't have much, right?
A lot of that oil was sitting inAbu Dhabi.
So Abu Dhabi is the capital ofUAE.
That's where most of the oil isnow.
You got to think about it fromthe perspective of the Emiratis,
(08:17):
right?
They have a certain structurefor leading.
There's, they have a president,they have a PM A specific person
will come from a specificEmirati in terms of the
functions of the government.
You know, the president willalways come from Abu Dhabi.
PM will always come from Dubaikind of thing.
So they had cultural, you know,things that put them together as
(08:37):
Emiratis of these seven states.
Right.
anD one of the interestingthings was Dubai, because it had
such a little share.
Of the oil of the entire UAE hadto think of creative ways to
stand out for the rest of theEmiratis, right?
They were running out of, ofoil.
(08:57):
I mean, they still have ittoday, but it's not so much
that, you know, it could buildthem into the powerhouse that
they are today.
So they had to get reallycreative with that.
We mentioned the intro Dubai'sGDP.
At some point it was about 50percent oil, right?
And now it's only one.
(09:18):
So that's kind of the stat thatwe're, we're focusing on.
How did they become from 50percent oil to just one?
What, what is the other now?
What is the other parts of thepie that's producing all of this
stuff, you know, for Dubai?
Shikher Bhandary (09:31):
And I think this is like a, like the
template, the example of how youdiversify out of oil.
And they figured it out.
They are like the template thatnow, you know, we spoke about
Nigeria, all of these othercountries dependent on oil are
now looking at the Dubai modeltoo.
To wean themselves off preciousresources like oil.
(09:54):
Throughout this series, we'vetalked about what are the
pillars that actually support aglobal economy, right?
And we'll go through them one byone trade, transport, tourism
and technology.
Because Dubai literally goes inand checks all these boxes as a
way to now become like aninternational hub for trade and
(10:15):
business.
It's incredible.
So on the trade front, Jed, theJAFSA, how did that
revolutionize things?
Jed Tabernero (10:22):
Yeah, it's, it's interesting doing this research.
We read about this policy thatwas pretty similar actually to
other countries that we'vestudied before in the show, like
China.
And other places that had kindof a different government set up
that didn't allow for thingslike free trade wasn't always so
easy for all countries, right?
We forget that that somecountries actually don't have
(10:44):
free trade, and it's veryrestricted.
And, and UAE was one of theseplaces where, you know, the
culture is very strong.
And, you know, they want toprevent that from being
influenced by outside sources.
Therefore there was, it was alittle harder to do trade like
you would in the U S forexample.
So JAFSA or Jebel Ali free zoneauthority is one of those
(11:11):
policies that allowed for kindof do whatever you want
businesses.
You know, you could tradehowever you wanted.
There were no taxes in the zone.
It was super business friendly,you know, for example, in the
Philippines, right?
You cannot start a business inthe Philippines without a
Filipino citizen.
(11:32):
You cannot own a businesscompletely without having
employed a certain amount ofFilipinos, right?
There's some policy around thatin most countries and in UAE was
the same, you know, like it'svery hard to become a citizen of
Dubai.
I've been watching a ton ofthings about moving to Dubai
recently.
So I know a lot about theimmigration process coming over.
(11:55):
But the JAFSA allows forbusinesses to come in.
For people to come in and startbusinesses, entrepreneurs to
come in and start building,right?
Without all of these taxes,tariffs, and these things that
make it hard for a business tothrive, right?
And so because they've openedthese Jeff says, these areas
(12:17):
where you could just dobasically whatever you want is
as a business, business startedcoming in, dude, you know,
what's crazy?
Something I learned about Dubaiis that It's, I don't know if
it's the top in the world, butthe ratio of expats to actually
UAE citizens is off the charts.
(12:38):
I think there's more, there'smore expats over there than
there are locals, which iscrazy.
That's crazy to think for me.
Because that used to be Qatar,which is not so far away the top
in the world.
Now it's, now it's UAE.
And that just shows you, right?
Expats are coming in becausethey're welcome and they're
coming in and starting crazybusinesses.
(12:58):
There's a ton of money in Dubai,dude.
Shikher Bhandary (13:01):
They allow free patriation of your capital,
of your investments, of your ofall your belongings.
So you're not paying.
So say you own X amount ofdollars in the U S you will have
X amount of dollars in Dubai andnot say 30%.
off of those dollars becauseyou're paying taxes to this new
(13:24):
government, you know, that's thecase almost all across the
world.
And they were the first one tooffer, Hey, you come here.
We are not going to levy anywithholding tax on your
repatriation of profits,dividends.
And so businesses suddenly werelike, Hey, you know, we can
freely transfer our funds.
Internationally withoutincurring taxes.
(13:45):
It just became such a greatdestination for international
trade.
Think about like duty free.
Remember Dubai duty free waslike the single biggest driver
of like people live in flyingthere.
Like I remember even when I hadgone there, like my friends at
Jed Tabernero (14:01):
I mean, something,
Shikher Bhandary (14:02):
yeah.
Buy me something.
It's duty free, dude.
Jed Tabernero (14:04):
exactly.
And you know, one of the thingsthat was coming out of this was.
Because there's a ton of expatsthere, right?
By the way, huge population ofFilipinos out there.
Shout out.
There's a ton of Filipinos inDubai, but one of the things
that happened as a result ofthis, because of all of these
expats coming on all of thesebusinesses, starting businesses,
(14:25):
um, it became a place for peopleto throw in money.
Right.
Beyond the whole duty free thingfinance had developed as an
industry in Dubai for theentirety of the Middle East.
Ton of funds started coming inbecause all these businesses
were there, right?
Like similar story to New York.
(14:46):
You had all these entrepreneurscoming and starting businesses.
Wall Street came, right?
And then it popped off and WallStreet State, even if the other
industries had left already, themoney stayed, the capital state.
So in these JAFSA zones, youhave these areas where financial
companies are just pouring inmoney.
There's professionals overthere.
(15:07):
Even I work with somebody fromDubai.
And Amazon, which is kind of,you know, that's kind of crazy
to think we don't have a largepresence over there, but we have
somebody over there that dealswith accounting and finance.
Like that's, that's a pretty bigdeal.
So it started becoming, youknow, this place where the
middle East would funnel theirmoney into to fund certain
(15:27):
businesses or to spend theirmoney.
Not just on finance.
It's also, we were talking abouttourism, a ton of people come
there and it's known for havingthose Lamborghinis that chase
you around police cars.
Right.
Which is a crazy thing to thinkabout.
Shikher Bhandary (15:43):
They just nailed those vibes, you know,
those vibes.
Oh, you're going to seeLamborghinis.
It's going to be.
Awesome, biggest tower in theworld.
You can come in and as aforeigner, you could own a
hundred percent of yourbusiness.
You drop down the regulations.
And so the city kind ofdeveloped this high skilled
(16:03):
workforce and like world classinfrastructure.
Jed Tabernero (16:07):
Dubai has become.
The center of Islamic finance,right?
There's this entire region thathas a ton of money, but
typically Western institutionsaren't super present in these
areas, right?
It's considered, you know, notgood to do business in these
areas.
And so Dubai has become one ofthose places where, well, if
(16:29):
you're not going to the U S toLondon.
If you're not going to New Yorkand London, you're coming to
Dubai to put your money into.
We're reading this report onIslamic finance development.
And it pointed out that thisglobal Islamic finance industry
is worth about 4 trillion USDdude.
That is a ton of money.
And Dubai is the place that'sattracting all of this
(16:53):
investment.
The government is willing to trya ton of new things here.
And I feel you know, that's abig plus for people to start
moving in.
Shikher Bhandary (17:01):
Yeah.
On that, on just on thetechnology front You know,
they're, they're home to nowsome serious startups.
At least three of them, I thinkin the tech side are worth more
than a billion dollars.
So Ketopi, Vista Global, and youknow, a real estate technology
company, Emerging MarketsProperty Group.
It's showing up as, as apossible destination where it's
(17:24):
not just the the tourism that,that takes the, the economy
further, but it's also like techfrom within, right?
Uber acquired, uh, Kareem, theDubai rival for like 3.
1 billion.
Now that is a massive exit.
(17:44):
And the founders, the earlyemployees are now flush with
cash.
And now they are excited tostart building other things.
Jed Tabernero (17:52):
that's cool because I mean, people don't
realize, but these billiondollar exits, they happen in
like Europe and U S like almostexclusively.
That, that doesn't reallyhappen.
And especially in the ventureworld, like it's just not
developed all across the worldyet for, for those big exits.
Shikher Bhandary (18:09):
The government has big, big ambitions to
acquire talent.
And they have like a statedgoal.
I don't know how manygovernments have this, but they
have a stated aim of becominghome to 20 tech companies worth
a billion dollars or more by2030.
Like they have a stated aim,right?
And to actually achieve this,what they're doing is, and this
(18:30):
is kind of close to home whereI've seen quite a few founders
move from India to, to Dubai,just because they're starting to
offer these hundred thousandgolden visas that allow
entrepreneurs and tech 10 years.
So that is way longer than anyregular visa.
Jed Tabernero (18:51):
It is.
And, you know, beyond the goalsthat they're, they're doing
something about it.
You know, they're, I thinkthey're the only place that has
a minister AI dude.
That's kind of crazy.
They have a minister of AI who'ssupporting, you know,
development and adoption of, ofAI in the city.
And I have to shout out likeDubai's government, just
(19:13):
regionally that region has donea lot of things to, to grow.
The tech infrastructure there,and I can't just point out the
entirety of the UAE, like Dubaihas done a good job itself as a
city to attract a lot of, a lotof talent and these billion
dollar tech startups are therebecause actively they've been
working to get these, thesefolks over.
(19:33):
So huge, huge kudos to them forgetting into a, a future based
economy here.
And like we said, in thebeginning.
Crazy example for shifting froma resource dependent city to now
this diversified set of thingsthat can help them, you know,
they can double down in whichareas work.
(19:55):
And it sounds like tech tech isworking.
Shikher Bhandary (19:58):
It's working, but what's the sector that has
worked the most and is crushingit for them?
Well, I'll, I'll bring two, twoaspects into this.
It's the travel transport andtourism, the big T tourism.
Yeah.
The two T's.
Dubai and the UAE and the MiddleEast in general is a landing
(20:22):
spot for me to travel from theUS to India, right?
Split my flight into two, twolong haul trips, right?
Some of the biggest empires inthe world started in this region
because of its close proximityto trade with different partners
either in Europe or in Asia.
(20:42):
So that transportationinfrastructure has played a huge
role in connecting the countryUAE to the global market.
And what has that resulted in?
Well, they've become a tourismbehemoth.
I didn't know there are moretravelers visiting Dubai.
(21:05):
But then New York City, I didn'tknow that, that sounds, that
seems so incredible.
Dubai is like the fourth mostvisited city in the world by
international tourists.
Actually surpassing New York orTokyo.
So the only destinations thatare above it are London, Paris,
Bangkok, which is insane.
Jed Tabernero (21:22):
if you think about it, this, this stat came
out in 2018, dude, it's 2023right now.
Can you imagine how much far agoDubai has developed into a
tourism behemoth?
And we just
Shikher Bhandary (21:34):
just in the five years.
Yeah.
Jed Tabernero (21:37):
so ridiculous.
But no, it's a great point.
Things to point out about theairport, if you're considering
this, because I was playing atrip to the Philippines just
last night.
anD I booked my tickets to go tothe Philippines.
If I wasn't with Delta SkyMiles,I would have done it with, with
Emirates.
And what's crazy is, I'm talkingabout a route to Southeast Asia
from New York.
(21:57):
So, if you're thinking about it,like, how the heck is there a
route from JFK to Dubai and thento Southeast Asia?
Well, they have it right.
It's almost like one of thosethings where there's always
going to be a ride for Emiratesin the places that we'd like to
go.
So it's always a considerationfor us.
I get it now.
Shikher Bhandary (22:16):
Yeah, there's a really interesting saying that
the Romans built roads and whenthey built roads, you know
People came and trade prospered.
So Dubai what they have done isthey've connected themselves to
different parts of the world sopeople just come and use it and
use it as a hub and Tradeprospers because it's such an
(22:37):
easy destination to to travel toto conduct your business
Jed Tabernero (22:42):
Right.
And you know, it's not justroses and great stories for
Dubai.
I'd like to end on a note andsay.
It's been such a successfulmodel that the region is now
replicating this same model inother parts of the Middle East.
We're gonna have somecompetition soon Dubai so they
(23:04):
have to figure out their wayaround that.
Of course, they have firstmovers advantage, but Saudi
Arabia is trying to do the samething.
They're launching so manyinitiatives that are very, very
similar to Dubai's attractingtech in town.
Shikher Bhandary (23:15):
Riyadh, Qatar Like the Qatar FIFA World Cup
was there.
Saudi just won the 2030 WorldCup as well.
Like they are leaning into thismodel.
Jed Tabernero (23:27):
that's something they need to navigate around.
It's really exciting for theregion to be, you know,
welcoming in more folks to startbuilding stuff, especially in
the tech space.
We're really excited about that.
But this change that Dubai has,has undergone, we'll see that
get replicated in more placesthan just the Middle East and
we're super excited to see whatthat, that brings about.
Shikher Bhandary (23:52):
Yeah.
It's going to be interesting howthis all unfolds, right?
Dubai has really ambitious 10,20 year old plans.
So does Saudi.
So does Qatar.
So does Kuwait, you know, all ofthese countries in the Middle
East are now thinking, Hey, youknow what, they found so much
success.
They have become a veryimportant cog in the global
economy wheel.
(24:12):
We can do that as well.
So it's just going to beincreased competition and we're
going to see how, how that playsout.
But yeah, that's us signing off.
We loved.
Deep diving into this region,this fascinating story of how a
fishing settlement 60 years agobecomes one of the world's
largest metropolises.
And I don't think it's heard ofbefore.
(24:33):
60 years is one lifetime.
But yeah, stay curious.
The information and opinionsexpressed in this episode are
for informational purposes only.
And are not intended asfinancial investment or
professional advice.
Always consult with a qualifiedprofessional before making any
(24:55):
decisions based on the conceptprovided.
Neither the podcast, nor iscreators are responsible for any
actions taken as a result oflistening to this episode.
Ask a lot of people, have youbeen to the Middle East?
And they'll say, oh yeah, Dubai.
Jed Tabernero (00:04):
The world's tallest building, the largest
man made islands, and thebiggest shopping mall, all can
be found in this thriving,futuristic desert metropolis.
Yeah, we're thinking of Dubaiand the United Arab Emirates.
In a bid to encourageentrepreneurs and tech investors
(00:25):
to live in the country, The UAEis also offering 100, 000 golden
visas that allow entry for 10years.
In this episode of Things Have Changed Podcast,
we dive into the fascinatingeconomic journey of the UAE,
once heavily dependent on oil.
Which accounted for a staggering50 percent of Dubai's GDP fast
(00:51):
forward to today, and thelandscape has shifted
dramatically with oil nowcontributing less than 1 percent
to Dubai's GDP.
The UAE is now home to threeunicorns, or startups, worth at
least a billion dollars.
And they are all based in Dubai.
The country aims to have atleast 20 unicorns by 2031.
(01:13):
So how did an economy in a desert become a hub
for trade, transport, finance,tourism, and technology?
Tune in as we dive into themeteoric rise of Dubai and the
broader UAE.
Are we seriously consideringDubai now as a global tech hub?
A global tech hub that couldpotentially one day rival the
(01:35):
likes of London and Paris?
A hundred percent.
Shikher Bhandary (02:16):
okay, so my first international trip ever
growing up in Bangalore, thefirst trip that I'd ever done
outside of the country was toDubai.
My parents had already gonethere because they were visiting
my sister in the US.
A lot of transit to the UnitedStates from India.
passes through the Middle Eastbecause it's just such a great
(02:37):
like middle strategic locationfor you to have your transit and
we'll get to this later as to asone of the reasons why Dubai is
crushing the whole trade andfinance aspect of things.
But I landed in Dubai and youknow, this is a boy who's, who's
never been outside the country.
And.
(02:57):
I got lost in the airportbecause I was flying solo.
I was 14.
I guess 14 is is old.
Right?
Like 9th grade or
Jed Tabernero (03:07):
Pretty young bro.
I don't know that's prettyyoung.
Shikher Bhandary (03:09):
Dude, I was,
Jed Tabernero (03:10):
I left the country at 14
Shikher Bhandary (03:12):
I was lost, dude.
I was lost in the Dubai airport.
Also, partly, not because of theairport.
It was because of me.
I was so starstruck.
Just so many things happening.
It is humongous, firstly.
And there are stores.
There are, there are a millionpeople.
(03:33):
It was such a startling thingfor me.
Because, You fly into the MiddleEast.
Now, back then, Dubai was notlike the Dubai that we hear and
talk about today, right?
It was still like, what, 14, 15years ago?
Wow, long time ago.
But it was starting to get thatreputation and just landing into
(03:53):
the airport and you're like,wow, this is insane.
So, I got lost.
Great thing, I went to a helpdesk on the verge of tears.
They were able to callinternationally to my sister.
My sister got the number for myparents.
My parents were already sittingin a hotel in Dubai.
They, I guess, forgot about me.
Jed Tabernero (04:11):
nice
Shikher Bhandary (04:12):
Concierge helped me to get to the spot
where my parents finally met me.
Which was pretty cool.
It was a great experience.
For a 14 year old kid who gotlost in one of the biggest
airports in the world.
My parents were like freakedout.
They were like, what the hell?
What is happening?
Are we going to see our kidagain?
(04:34):
Customer experience in many waysis really good.
Jed Tabernero (04:38):
intense.
I mean I would say first of all,you're lucky that the first
country you left to from Indiawas UAE.
I mean, that's probably for me.
It was a freaking, when I firstcame to the UAE, I already knew
all about it.
I knew all about Dubai and youall about how nice things were.
And Emirates is just a soughtafter airline.
(05:01):
You know what
Shikher Bhandary (05:01):
Yeah.
Yeah.
Jed Tabernero (05:03):
coincidentally, my first time coming into
Bangalore, I also went throughDubai.
And that was kind of dude,riding Emirates for me was.
Tip top.
I was like, damn, I made it.
I was in economy, you know whatI mean?
But it just felt so good.
It felt so good.
If you haven't written Emiratesbefore, first of all, you should
(05:24):
try it.
If you get a chance, Emirateseconomy class is just up there.
A lot more space.
It's got a world leading mediasystem.
It's, it's beautiful.
I would love to be part of theEmirates infrastructure someday
instead of being Delta.
Shikher Bhandary (05:41):
incredible is how that whole section, at least
UAE, has transformed over thelast 30 years.
Now you walk into a New YorkCity hotel, a top hotel, you
know, a bunch of clocks behindthe receptionist.
And it's basically, what are thenames, right?
You'll have New York, you'regoing to have Sydney, you're
(06:04):
going to have Paris, you'regoing to have London, and now
you have Dubai on it.
It's gotten onto that slate oflarge metropolises in the world.
Jed Tabernero (06:12):
Yeah.
I mean, how did UAE become evenan economic powerhouse right in
the very beginning and doing ourresearch to how this evolved was
really, was really dope becausewe learned a lot about the
Middle East in general.
So Dubai and UAE just generallyare divided into Emirates,
(06:33):
right?
Just for everybody's education.
And Emirates is a land that'sruled by an Emirate, an Emirati.
And the economies were kind ofAll over the place.
You know, there's some areas,some Emirates who ruled by lots
of fishing villages who weresearching for like really rare
(06:54):
Japanese pearls.
Shikher Bhandary (06:55):
That's how it kind of came about, right?
Jed Tabernero (06:59):
That's the crazy thing.
Yeah.
And it's not something you thinkabout today, but if you've been
there, right.
There's like these museums aboutthese pearls that they used to
collect and stuff.
So
Shikher Bhandary (07:09):
too long ago to this.
We are talking about like 1960,like before the oil, Middle East
oil stuff that started happeningwith the US and stuff.
This is not we are talking1960s, early 1970s, where Dubai
was Like a fishing settlement.
That's insane.
It's 60 years ago, dude.
Jed Tabernero (07:30):
you wouldn't have guessed right?
You wouldn't have
Shikher Bhandary (07:32):
One lifetime in one lifetime.
Jed Tabernero (07:34):
exactly.
Exactly.
There's still folks who areprobably, you know, familiar
with that view of Dubai and allof a sudden this, you know,
massive construction buildings,you know, new islands, holy
crap.
There's just so much going on inDubai.
And one of the other things, ofcourse, you know, the rest of
the middle East, when oilstarted becoming a really
important resource foreverybody.
(07:56):
UAE also found oil, but comparedto the rest of the Emirates,
Dubai didn't have much, right?
A lot of that oil was sitting inAbu Dhabi.
So Abu Dhabi is the capital ofUAE.
That's where most of the oil isnow.
You got to think about it fromthe perspective of the Emiratis,
(08:17):
right?
They have a certain structurefor leading.
There's, they have a president,they have a PM A specific person
will come from a specificEmirati in terms of the
functions of the government.
You know, the president willalways come from Abu Dhabi.
PM will always come from Dubaikind of thing.
So they had cultural, you know,things that put them together as
(08:37):
Emiratis of these seven states.
Right.
anD one of the interestingthings was Dubai, because it had
such a little share.
Of the oil of the entire UAE hadto think of creative ways to
stand out for the rest of theEmiratis, right?
They were running out of, ofoil.
(08:57):
I mean, they still have ittoday, but it's not so much
that, you know, it could buildthem into the powerhouse that
they are today.
So they had to get reallycreative with that.
We mentioned the intro Dubai'sGDP.
At some point it was about 50percent oil, right?
And now it's only one.
(09:18):
So that's kind of the stat thatwe're, we're focusing on.
How did they become from 50percent oil to just one?
What, what is the other now?
What is the other parts of thepie that's producing all of this
stuff, you know, for Dubai?
Shikher Bhandary (09:31):
And I think this is like a, like the
template, the example of how youdiversify out of oil.
And they figured it out.
They are like the template thatnow, you know, we spoke about
Nigeria, all of these othercountries dependent on oil are
now looking at the Dubai modeltoo.
To wean themselves off preciousresources like oil.
(09:54):
Throughout this series, we'vetalked about what are the
pillars that actually support aglobal economy, right?
And we'll go through them one byone trade, transport, tourism
and technology.
Because Dubai literally goes inand checks all these boxes as a
way to now become like aninternational hub for trade and
(10:15):
business.
It's incredible.
So on the trade front, Jed, theJAFSA, how did that
revolutionize things?
Jed Tabernero (10:22):
Yeah, it's, it's interesting doing this research.
We read about this policy thatwas pretty similar actually to
other countries that we'vestudied before in the show, like
China.
And other places that had kindof a different government set up
that didn't allow for thingslike free trade wasn't always so
easy for all countries, right?
We forget that that somecountries actually don't have
(10:44):
free trade, and it's veryrestricted.
And, and UAE was one of theseplaces where, you know, the
culture is very strong.
And, you know, they want toprevent that from being
influenced by outside sources.
Therefore there was, it was alittle harder to do trade like
you would in the U S forexample.
So JAFSA or Jebel Ali free zoneauthority is one of those
(11:11):
policies that allowed for kindof do whatever you want
businesses.
You know, you could tradehowever you wanted.
There were no taxes in the zone.
It was super business friendly,you know, for example, in the
Philippines, right?
You cannot start a business inthe Philippines without a
Filipino citizen.
(11:32):
You cannot own a businesscompletely without having
employed a certain amount ofFilipinos, right?
There's some policy around thatin most countries and in UAE was
the same, you know, like it'svery hard to become a citizen of
Dubai.
I've been watching a ton ofthings about moving to Dubai
recently.
So I know a lot about theimmigration process coming over.
(11:55):
But the JAFSA allows forbusinesses to come in.
For people to come in and startbusinesses, entrepreneurs to
come in and start building,right?
Without all of these taxes,tariffs, and these things that
make it hard for a business tothrive, right?
And so because they've openedthese Jeff says, these areas
(12:17):
where you could just dobasically whatever you want is
as a business, business startedcoming in, dude, you know,
what's crazy?
Something I learned about Dubaiis that It's, I don't know if
it's the top in the world, butthe ratio of expats to actually
UAE citizens is off the charts.
(12:38):
I think there's more, there'smore expats over there than
there are locals, which iscrazy.
That's crazy to think for me.
Because that used to be Qatar,which is not so far away the top
in the world.
Now it's, now it's UAE.
And that just shows you, right?
Expats are coming in becausethey're welcome and they're
coming in and starting crazybusinesses.
(12:58):
There's a ton of money in Dubai,dude.
Shikher Bhandary (13:01):
They allow free patriation of your capital,
of your investments, of your ofall your belongings.
So you're not paying.
So say you own X amount ofdollars in the U S you will have
X amount of dollars in Dubai andnot say 30%.
off of those dollars becauseyou're paying taxes to this new
(13:24):
government, you know, that's thecase almost all across the
world.
And they were the first one tooffer, Hey, you come here.
We are not going to levy anywithholding tax on your
repatriation of profits,dividends.
And so businesses suddenly werelike, Hey, you know, we can
freely transfer our funds.
Internationally withoutincurring taxes.
(13:45):
It just became such a greatdestination for international
trade.
Think about like duty free.
Remember Dubai duty free waslike the single biggest driver
of like people live in flyingthere.
Like I remember even when I hadgone there, like my friends at
Jed Tabernero (14:01):
I mean, something,
Shikher Bhandary (14:02):
yeah.
Buy me something.
It's duty free, dude.
Jed Tabernero (14:04):
exactly.
And you know, one of the thingsthat was coming out of this was.
Because there's a ton of expatsthere, right?
By the way, huge population ofFilipinos out there.
Shout out.
There's a ton of Filipinos inDubai, but one of the things
that happened as a result ofthis, because of all of these
expats coming on all of thesebusinesses, starting businesses,
(14:25):
um, it became a place for peopleto throw in money.
Right.
Beyond the whole duty free thingfinance had developed as an
industry in Dubai for theentirety of the Middle East.
Ton of funds started coming inbecause all these businesses
were there, right?
Like similar story to New York.
(14:46):
You had all these entrepreneurscoming and starting businesses.
Wall Street came, right?
And then it popped off and WallStreet State, even if the other
industries had left already, themoney stayed, the capital state.
So in these JAFSA zones, youhave these areas where financial
companies are just pouring inmoney.
There's professionals overthere.
(15:07):
Even I work with somebody fromDubai.
And Amazon, which is kind of,you know, that's kind of crazy
to think we don't have a largepresence over there, but we have
somebody over there that dealswith accounting and finance.
Like that's, that's a pretty bigdeal.
So it started becoming, youknow, this place where the
middle East would funnel theirmoney into to fund certain
(15:27):
businesses or to spend theirmoney.
Not just on finance.
It's also, we were talking abouttourism, a ton of people come
there and it's known for havingthose Lamborghinis that chase
you around police cars.
Right.
Which is a crazy thing to thinkabout.
Shikher Bhandary (15:43):
They just nailed those vibes, you know,
those vibes.
Oh, you're going to seeLamborghinis.
It's going to be.
Awesome, biggest tower in theworld.
You can come in and as aforeigner, you could own a
hundred percent of yourbusiness.
You drop down the regulations.
And so the city kind ofdeveloped this high skilled
(16:03):
workforce and like world classinfrastructure.
Jed Tabernero (16:07):
Dubai has become.
The center of Islamic finance,right?
There's this entire region thathas a ton of money, but
typically Western institutionsaren't super present in these
areas, right?
It's considered, you know, notgood to do business in these
areas.
And so Dubai has become one ofthose places where, well, if
(16:29):
you're not going to the U S toLondon.
If you're not going to New Yorkand London, you're coming to
Dubai to put your money into.
We're reading this report onIslamic finance development.
And it pointed out that thisglobal Islamic finance industry
is worth about 4 trillion USDdude.
That is a ton of money.
And Dubai is the place that'sattracting all of this
(16:53):
investment.
The government is willing to trya ton of new things here.
And I feel you know, that's abig plus for people to start
moving in.
Shikher Bhandary (17:01):
Yeah.
On that, on just on thetechnology front You know,
they're, they're home to nowsome serious startups.
At least three of them, I thinkin the tech side are worth more
than a billion dollars.
So Ketopi, Vista Global, and youknow, a real estate technology
company, Emerging MarketsProperty Group.
It's showing up as, as apossible destination where it's
(17:24):
not just the the tourism that,that takes the, the economy
further, but it's also like techfrom within, right?
Uber acquired, uh, Kareem, theDubai rival for like 3.
1 billion.
Now that is a massive exit.
(17:44):
And the founders, the earlyemployees are now flush with
cash.
And now they are excited tostart building other things.
Jed Tabernero (17:52):
that's cool because I mean, people don't
realize, but these billiondollar exits, they happen in
like Europe and U S like almostexclusively.
That, that doesn't reallyhappen.
And especially in the ventureworld, like it's just not
developed all across the worldyet for, for those big exits.
Shikher Bhandary (18:09):
The government has big, big ambitions to
acquire talent.
And they have like a statedgoal.
I don't know how manygovernments have this, but they
have a stated aim of becominghome to 20 tech companies worth
a billion dollars or more by2030.
Like they have a stated aim,right?
And to actually achieve this,what they're doing is, and this
(18:30):
is kind of close to home whereI've seen quite a few founders
move from India to, to Dubai,just because they're starting to
offer these hundred thousandgolden visas that allow
entrepreneurs and tech 10 years.
So that is way longer than anyregular visa.
Jed Tabernero (18:51):
It is.
And, you know, beyond the goalsthat they're, they're doing
something about it.
You know, they're, I thinkthey're the only place that has
a minister AI dude.
That's kind of crazy.
They have a minister of AI who'ssupporting, you know,
development and adoption of, ofAI in the city.
And I have to shout out likeDubai's government, just
(19:13):
regionally that region has donea lot of things to, to grow.
The tech infrastructure there,and I can't just point out the
entirety of the UAE, like Dubaihas done a good job itself as a
city to attract a lot of, a lotof talent and these billion
dollar tech startups are therebecause actively they've been
working to get these, thesefolks over.
(19:33):
So huge, huge kudos to them forgetting into a, a future based
economy here.
And like we said, in thebeginning.
Crazy example for shifting froma resource dependent city to now
this diversified set of thingsthat can help them, you know,
they can double down in whichareas work.
(19:55):
And it sounds like tech tech isworking.
Shikher Bhandary (19:58):
It's working, but what's the sector that has
worked the most and is crushingit for them?
Well, I'll, I'll bring two, twoaspects into this.
It's the travel transport andtourism, the big T tourism.
Yeah.
The two T's.
Dubai and the UAE and the MiddleEast in general is a landing
(20:22):
spot for me to travel from theUS to India, right?
Split my flight into two, twolong haul trips, right?
Some of the biggest empires inthe world started in this region
because of its close proximityto trade with different partners
either in Europe or in Asia.
(20:42):
So that transportationinfrastructure has played a huge
role in connecting the countryUAE to the global market.
And what has that resulted in?
Well, they've become a tourismbehemoth.
I didn't know there are moretravelers visiting Dubai.
(21:05):
But then New York City, I didn'tknow that, that sounds, that
seems so incredible.
Dubai is like the fourth mostvisited city in the world by
international tourists.
Actually surpassing New York orTokyo.
So the only destinations thatare above it are London, Paris,
Bangkok, which is insane.
Jed Tabernero (21:22):
if you think about it, this, this stat came
out in 2018, dude, it's 2023right now.
Can you imagine how much far agoDubai has developed into a
tourism behemoth?
And we just
Shikher Bhandary (21:34):
just in the five years.
Yeah.
Jed Tabernero (21:37):
so ridiculous.
But no, it's a great point.
Things to point out about theairport, if you're considering
this, because I was playing atrip to the Philippines just
last night.
anD I booked my tickets to go tothe Philippines.
If I wasn't with Delta SkyMiles,I would have done it with, with
Emirates.
And what's crazy is, I'm talkingabout a route to Southeast Asia
from New York.
(21:57):
So, if you're thinking about it,like, how the heck is there a
route from JFK to Dubai and thento Southeast Asia?
Well, they have it right.
It's almost like one of thosethings where there's always
going to be a ride for Emiratesin the places that we'd like to
go.
So it's always a considerationfor us.
I get it now.
Shikher Bhandary (22:16):
Yeah, there's a really interesting saying that
the Romans built roads and whenthey built roads, you know
People came and trade prospered.
So Dubai what they have done isthey've connected themselves to
different parts of the world sopeople just come and use it and
use it as a hub and Tradeprospers because it's such an
(22:37):
easy destination to to travel toto conduct your business
Jed Tabernero (22:42):
Right.
And you know, it's not justroses and great stories for
Dubai.
I'd like to end on a note andsay.
It's been such a successfulmodel that the region is now
replicating this same model inother parts of the Middle East.
We're gonna have somecompetition soon Dubai so they
(23:04):
have to figure out their wayaround that.
Of course, they have firstmovers advantage, but Saudi
Arabia is trying to do the samething.
They're launching so manyinitiatives that are very, very
similar to Dubai's attractingtech in town.
Shikher Bhandary (23:15):
Riyadh, Qatar Like the Qatar FIFA World Cup
was there.
Saudi just won the 2030 WorldCup as well.
Like they are leaning into thismodel.
Jed Tabernero (23:27):
that's something they need to navigate around.
It's really exciting for theregion to be, you know,
welcoming in more folks to startbuilding stuff, especially in
the tech space.
We're really excited about that.
But this change that Dubai has,has undergone, we'll see that
get replicated in more placesthan just the Middle East and
we're super excited to see whatthat, that brings about.
Shikher Bhandary (23:52):
Yeah.
It's going to be interesting howthis all unfolds, right?
Dubai has really ambitious 10,20 year old plans.
So does Saudi.
So does Qatar.
So does Kuwait, you know, all ofthese countries in the Middle
East are now thinking, Hey, youknow what, they found so much
success.
They have become a veryimportant cog in the global
economy wheel.
(24:12):
We can do that as well.
So it's just going to beincreased competition and we're
going to see how, how that playsout.
But yeah, that's us signing off.
We loved.
Deep diving into this region,this fascinating story of how a
fishing settlement 60 years agobecomes one of the world's
largest metropolises.
And I don't think it's heard ofbefore.
(24:33):
60 years is one lifetime.
But yeah, stay curious.
The information and opinionsexpressed in this episode are
for informational purposes only.
And are not intended asfinancial investment or
professional advice.
Always consult with a qualifiedprofessional before making any
(24:55):
decisions based on the conceptprovided.
Neither the podcast, nor iscreators are responsible for any
actions taken as a result oflistening to this episode.
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