Dubai
In November, 2013, Dubai won the rights to the World Expo 2020, setting into motion a major project that will make a substantial contribution to Dubai's economy and be a catalyst for what the emirate hopes will be the continuation of the economic boom that began two decades ago.
Dubai expects that the Expo 2020 will attract 25 million visitors to the emirate over the six months that the Expo will run. This will make it the largest such project in the history of Dubai, and in size the Expo will in all likelihood eclipse the Qatar World Cup as the largest event in the history of the Middle East. Linked to the overall strategy to make Dubai a world-class destination, the World Expo 2020 is going to be part of a larger tourism centerpiece that is expected to propel that sector to become one of the largest revenue-earners for the emirate, and attract new visitors from all over the world who would otherwise not visit Dubai (Serkal, 2014).
This paper will examine the financial effects of the World's Fair in Dubai. This is a tricky endeavor, given the fact that no concrete budget has been set out for the Dubai World's Fair -- the best figure announced by the government is $6.8 billion (Sleiman & French, 2014), but there are analyst figures available that outline the likely financial implications of the fair. This gives us a starting point for analyzing the fair. There are other critical issues with respect to the finances of the Expo that will need to be addressed as well. The first of these is what the Expo will do with respect to Dubai's role in the global economy. World's fairs are natural revenue-generators, but the larger objective with the Dubai fair is to improve the country's standing in the world. There are also questions about how it will affect the quality of life in Dubai, especially since the Expo is tied to a larger strategy to build out Dubai as a destination for tourism and for expat living.
There is also the issue of actually paying for the fair. Dubai is not a petro-economy; its revenue streams are in services and are more diverse. This means, however, that Dubai does not necessarily have the sort of capital required to pay for the fair, in light of its recent default (Saidi, 2014). The structure of Dubai's debt comes into play in this discussion, and the type of arrangements that will need to be made to ensure that there is no financing gap will be discussed.
Overview
A world's exposition is an officially-sanctioned event, governed by the Bureau International des Expositions. Fairs occur every few years, and tend to be spread around the world, though the Dubai fair will be the first in the Middle East. A typical Expo will run for six months on a very large parcel of land. There will be pavilions, usually for different nations, along with rides and other amenities. A recent Expo was held in 2010 in Shanghai, with 73 million visitors and 246 countries and organizations represented. The next Expo is in 2015 in Milan, and then 2017 in Astana, the capital of Kazakhstan. An Expo is almost always a strong domestic tourism draw, and some of them have been successful at drawing international tourism. Expo 86 in Vancouver, for example, put that city on the global tourism map, and tourism has been a major industry ever since.
Dubai similarly sees Expo 2020 as a springboard to take its tourism industry to new heights at the world level rather than just the regional level.
Dubai is one of seven constituent emirates that make up the United Arab Emirates. Each emirate is ruled by an emir, a traditional Arab leader with absolute power that is passed down by heredity. Though they form a federation, each emir sets most laws within his own emirate, which leads to significant divergence of policy between them. For example, Dubai has relatively liberal laws with respect to alcohol -- it is available widely in the city's hotels -- but in next door neighbor Sharjah alcohol is banned. Sharjah, incidentally, does not have a strong tourism business.
Economically, Dubai is on a radically different course than many of the other emirates, which have chosen to remain economically and socially conservative. The largest emirate, Abu Dhabi, has most of the UAE's oil, and is therefore very wealthy. Dubai does not have these same oil resources, and has therefore needed to develop its wealth using a different path. With very little...
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