Dubai's Economic Base.

In late 1996, Dubai launched a plan called "Into the 21st Century" with US$12 bn worth of projects to boost non-petroleum productivity per capita to rates rivalling those in the developed nations. The non-petroleum sectors' contribution to GDP was to rise from 81.2% in 1996 to 100% in 2015. Total GDP was to grow 5% per annum and the non-petroleum sectors were to grow 6.9% a year.

The Dubai Financial Market (DFM) at the emirate's World Trade Centre was opened on March 26, 2000 as the first official stock exchange in the UAE - well ahead of Abu Dhabi's. Later the Dubai International Financial Centre (DIFC) was established and was regulated by the Dubai Financial Services Authority (DFSA).

Now the Dubai Mercantile Exchange (DME) is being established as a JV between the local government's Dubai Holding and the New York Mercantile Exchange (NYMEX). Having received support from Oman, the DME is to adopt a Persian Gulf sour crude oil futures contract in an electronic trading platform, with an open outcry system. Trading will begin by the fourth quarter of 2006 (see Oil Market Trends No. 23). The DME will be regulated by the DFSA.

The DFM has remained a relatively small exchange. But its trading volume increased sharply in the past three years, mainly since 2004, thanks to high oil prices and an unprecedented boom in Dubai.

In early April 2002 the London Stock Exchange (LSE) began exploring the possibility of a deal with the DFM in which Dubai would use its Sets trading technology. It was then said that such a deal would bring additional income to the LSE, now a publicly listed company, and provide DFM-listed stocks with access to a wider pool of investors.

The DFM management said in 2000 Dubai's was one of several trading floors to be established in the UAE. The UAE is to have one exchange, under a 49-article law for the Emirates Securities & Commodities Market Authority issued at end-April 2000.

The DIFC was announced on Feb. 16, 2002, by Dubai's then Crown Prince/UAE Defence Minister (and now ruler and UAE Vice President and Prime Minister) Shaikh Muhammed Bin Rashed al-Maktoum. He said predicted that the DIFC will fill a geographical hole between the financial centres of Frankfurt and Singapore.

DIFC's Chairman Anis al-Jallaf said: "Our aim is to build a financial centre - a London, a Hong Kong - here in Dubai. We want to be able to satisfy the regional needs of businesses and investors by building a hub in Dubai. We want to create a place for regional blue chips to find financial solutions and a place for international banks to seek regional investment opportunities... I can see companies from the region seeking international capital coming to list on our market, or funds investing in the region being quoted here". Jallaf added: "Due to the limitations of local markets, there are many hidden assets in the region".

Dubai's Emirates in 2001 became the best airline in the world. In late 2001 Emirates signed contracts with Airbus Industrie and Boeing worth $15 bn for the supply of new commercial aircraft. During the Paris Le Bourget Air Show in June 2003, Emirates signed a $19,000m order for Airbus to provide big aircraft, including 555-passenger A380 super-jumbos which will come into service in 2006.

Emirates is committed to buy no less than 21 A380s. Emirates in October 2003 announced the leasing of eight A340-300 from Airbus Industries to service fast-growing demand for additional seats on its long-haul routes.

Dubai's Jebel Ali Free Zone (JAFZ) is the main free trade centre west of Singapore. Established in 1980, about US$11-12 bn in investments have been made in the zone by more than 2,450 companies operating there from all parts of the world. Businesses are constantly being set up to take advantage of state-of-the-art infrastructure facilities, tax incentives and abundant supplies of power, water and various industrial feedstocks.

Jebel Ali boasts the largest man-made harbour in the world. It has boosted Dubai's role as a transshipment centre for non-oil products en route to other destinations. The deepwater port at Jebel Ali can handle vessels of 400,000 dwt. The other deepwater harbour in Dubai, Port Rashid, can handle vessels of 100,000 dwt with its main berth capable of taking vessels up to 260 metres long, with a depth of 11.6 metres.

State-owned Dubai Drydocks Co. (DDC) operates the world's largest dry dock. Gulf Marine Maintenance and Offshore Services Co. has a repair yard in Jebel Ali catering for ships of up to 140 metres in length. A 1,350 hectare industrial estate set up east of JAFZ is a base for heavy industry, connected to JAFZ by a bridge, with industrial diversification being the focus of the emirate.