Desert rose

Hope - and the world's tallest building - springs eternal in the welcoming sands of Dubai.

The economic emergence and prominence of a country is oftentimes reflected in the ambitions of its architecture – the pharaohs of Egypt and the pyramids, Louis XIV's France and Versailles, New York City and the Empire State Building. Today, while much of the world focuses on the real estate markets of China and India, one small country in the Middle East is looking to put its imprint on the world stage by constructing the planet's largest building, the Burj Dubai.

Yet, the ambitions of the United Arab Emirates – and, more specifically, the province of Dubai – extend higher than the 189 stories of the Burj, scheduled for completion in 2008. Over the past several years, the province – and the country as a whole – has made a sustained and concerted push to modernize its infrastructure and foster both foreign and domestic investment in its real estate market through a relaxation of foreign ownership laws and a broadening of its economic interests. Though it still gets a significant portion of its GDP from oil, it is one of the most economically diversified countries in the Middle East.

Although reliable statistics on foreign direct investment are difficult to come by, a recent report from the International Monetary Fund notes that Dubai is making considerable progress in attracting dollars from overseas: “Dubai's policy of extending foreign ownership of land and properties for real estate developments has resulted in a construction boom and a significant increase in FDI in this sector.”

One of the reasons Dubai has been able to attract capital from abroad is its relatively limited bureaucracy relative to other Middle Eastern countries – according to The Arab World Competitiveness Report, the UAE has the least burdensome administrative regulations when compared to its peers in the Gulf Cooperation Council (GCC). While that distinction might sound akin to being the prettiest pig at the county fair, when benchmarked on global standards, the UAE ranks fourth behind such economically inviting locations as Singapore, Hong Kong and Iceland.

These efforts have not only paid off in terms of increasing the region's reputation among foreign investors, it has also produced tangible results. Dubai's GDP has grown at a compound annual rate of 14 percent since 1998 and the market capitalization of the UAE's stock markets have tripled since 2001.