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Digital desert: Dubai bids to become tech oasis

One of the seven members of the United Arab Emirates launches an intensive industrial campaign to become a center for e-commerce, software development and hardware in the Middle East.

LAS VEGAS--Oil put Dubai in the center of world commerce, and the nation is looking to technology to keep it there.

Dubai, one of the seven members of the United Arab Emirates, has launched an intensive industrial campaign to become a center for e-commerce, software development and hardware in the Middle East. The project is largely being driven by Sheikh Mohammed bin Rashid Al Maktoum, the nation's crown prince, and is being fueled by the immense wealth garnered through oil.

The nation hopes to imitate the technology-fueled economic boom in Ireland, where numerous multinational companies have based their European operations to take advantage of inexpensive labor and real estate.

"Similar to what Ireland has done for Europe, Dubai has done for the Middle East," Wadi Ahmed, marketing manager for the crown prince, said in an interview at the Comdex trade show. The crown prince "is the primary reason for the technological effort."

Dubai's efforts are far from unique: Government officials from Tennessee to Malaysia have sought to make their regions attractive for technology companies. Whether Dubai will be any more successful than these other efforts is yet to be seen.

Comdex 2000:
Back to the future Tax breaks are one of Dubai's chief selling points. Companies with offices in Dubai Internet City, an industrial park, don't have to pay corporate taxes for 50 years. Employees at the park, like all residents of Dubai, don't have to pay income tax.

Tech companies that have set up offices in Dubai Internet City include Microsoft, Oracle, Hewlett-Packard, IBM and Siemens, Ahmed said. Microsoft CEO Steve Ballmer delivered a speech, via satellite, to a meeting at Internet City a few weeks ago.

"We've got a queue of about 250 companies waiting for more buildings to be built," said Ahmed. "The IT world is looking at Dubai. Dubai is not a desert anymore."

Another project is the Jebel-Ali industrial park, a free-trade zone with minimal taxes for hardware manufacturers. The crown prince also has created the Dubai Ideas Oasis, an incubator that provides funding and tax breaks.

Modernization has drastically altered the country's demographics. Currently, expatriates constitute 90 percent of the population.