Over the last three decades, Dubai prospered because India and China were mired in bureaucracy. Dubai provided a near shore playground for people who were rich and people who wanted to be rich. Dubai created sports stadiums without any local sports team, ski resorts without any snowfall and Manhattan scale real estate projects without New York!! For a total local population of less than 1.5 million, they created an unsustainable dream world. Read “The Sheikh’s New Clothes?

I use to visit Dubai in the 90s. It looked great before India opened up. When I started projecting India’s growth, I could see that the significance of Dubai will be limited. They have no oil and they always have to import business and workforce. Last year Dubai was heavily marketing themselves in the San Francisco Bay area as a location for high tech business. I never understood what benefits Dubai could provide to a company from the bay area. Dubai’s impressive skyscrapers are built on foundations of sand.

Going forward, Dubai should focus on high end education. It can become a magnet for the bright minds of the middle east. It should develop Middle East version of democracy and become an example of success in the Middle East. Instead of trying to attract westerners, it should develop a platform for entrepreneurs from the Middle East. Dubai can really establish a foundation of a knowledge ecosystem for the Middle East and the growth will be organic and sustainable.