The model for economic prosperity

The Muslim world today languishes in economic decline. Whilst the economies of the West are stable, prosperous and able to provide for the basic needs of the majority of the people, the economies of the Islamic world are unstable, inefficient, underdeveloped and unable to satisfy the basic needs of the masses. This stark difference in living standards and wealth between the West and Islamic world have prompted many Muslims to contrast the two sets of economies in attempt find the secret of the West’s success. This analysis has often resulted in Muslims attempting to imitate the economic policies of western nations today in an attempt to develop their respective nations. Often the measure of success becomes largely superficial with a focus on developments that are tangible; skyscrapers and vast shopping malls being seen as indicators of economic progress.

Due to this, Dubai is unique amongst the Muslim world in that it has witnessed phenomenal development over last 20 years or so. It is today a modern city, with much wealth on display in the form of tall buildings and unique developments. It is a city that not only Muslims from Islamic countries head towards in large numbers, but people of all kinds from all over the world. Dubai offers a western lifestyle with an Eastern flavour for all. But it is in Dubai’s apparent success that lies its weakness. No one can doubt that it has achieved a degree of material success. The problem is that some people across the world are highlighting Dubai’s method of success as the one to follow in order to progress economically.

Dubai has been blessed with a vast amount of oil, the revenues of which have allowed a modern city to develop out of a once small fishing village. In recent years Dubai has also taken to orienting its economy towards the tourism and service sectors. This has led to Dubai to become a hub of tourism in not only the Middle East but the world also. It is also aspiring to become a financial centre to rival the likes of London and New York.

The problem with Dubai is that it’s not a model for others to follow, but a unique case of development. It has developed in such a manner that it is in fact existing in an economic bubble. The driving force behind Dubai’s growth has been largely its oil wealth, and followed by that companies that are run by foreign workers. Its position as a trading hub has also brought it wealth. The problem with this is that the oil is not unlimited, and is already running out. The skilled workers that are helping to develop the service sector are mostly from overseas, with only a tiny part of Dubai’s population is now considered to be native Arabs. It also is in a region that is unstable, with the threat of war a very real prospect.

These factors show why Dubai is not an example of true economic development. It has merely exploited limited natural resources and has been importing talent from abroad to drive its economy. This is coupled with the fact that Dubai does not produce any manufactured product that the people in the city buy. It is a nation that is not self-sufficient, as it does not have the infrastructure or natural resources in place to develop the products it consumes. Its growth has been a direct result of it becoming an essentially tax free zone for foreign nationals and companies. These companies, whilst providing jobs and income to people in the country, are not transferring any technical skills to the people. Its real estate prices are rising in large part due to speculation that the prices will continue to rise, and a profit can be made from selling the property on.

These reasons show why Dubai is nothing more than a mirage in the desert. Its growth and survival are dependent upon the talent and expertise of foreign entities. It can only offer specialist services such as banking and finance as a means to guarantee its future, along with tourism. As these sectors rely heavily on the goodwill and confidence of foreigners, Dubai is vulnerable to economic collapse if ever these powers decide to pull out. This could be caused for a variety of reasons. A regional war could render Dubai an unsafe place for workers, with trade routes also being cut off. Housing prices would collapse and money that is currently pouring in to real estate would rush out of the city. Though this may appear an extreme scenario, it is not an unlikely one given the political reality of the Middle East. Even while this prosperity continues, it comes at a cost in the dilution in Islamic values as alcohol and other vices are permitted in order to attract a western workforce to drive the economy.

The limitation upon anyone trying to emulate Dubai is that there can only be one hub of tourism and finance in the region. By definition, there cannot be two hubs in one place. The example of two regional airlines is sufficient to explain this point. Emirates are an airline that runs out of Dubai, whilst Etihad runs from Abu Dhabi. Emirates have managed to establish itself as a brand and are popular with people travelling to the region. Etihad on the other hand struggles, as there simply is not enough traffic to make two airlines so close to each both as popular as Emirates.

The only way for the economies of the Muslim world to revive is for them to develop an industrial base. By doing this these economies will move away from being mere suppliers of raw materials and importers of finished products from other nations. Developing the manufacturing sector of an economy will not only provide jobs to both skilled and unskilled people, it would drastically alter the trade balance between imports and exports as the economy would be able to sell finished products in lower volumes, but at a higher net price.

The Muslim world has been blessed with an enormous amount of resources. The Muslim world, unlike many current and rising powers, would not be starved of resources that would slow economic growth. It also has a talented workforce, which would be necessary to start such an economy. Many of the scientists in western universities, companies and institutions are Muslim. There are also many Muslim accountants, engineers, businessmen and other professionals around the world. All this is apart from non-Muslim workers who would be attracted to a dynamic and advancing Islamic Economy.

All this requires a vision. This vision can only be provided by the Islamic Khilafah, which will seek to implement Islam in order to make the Ummah politically independent and economically self-sufficient. Such a vision cannot come from the current rulers of the Muslim world. These tyrants are too busy in competition with another to impress their colonial masters. These oppressors shall never allow the Ummah to rise, as it they help to keep it weak in order for colonial nations to easily exploit it. The Khilafah will provide the Islamic vision, which is to satisfy all the basic needs of the people, provide luxuries as best it can and convey Islam to mankind.