Quora Answer: Why is the GDP of Dubai Less Than Singapore?

The following is my answer to a Quora question: “Why is the GDP of Dubai less than Singapore?” 

GDP is tied to population, and manufacturing base.  Dubai’s population just over 3 million.  Singapore’s population is around 7 million, of which 5.5 million are citizens.  That is more than twice what Dubai has.  We must also consider the demographics, not just numbers.  Dubai has a larger percentage of low wage workers, most of them imported from the Indian subcontinent, meaning that their contribution to GDP is significantly less. 

When it comes to industry, Singapore is a major international port, in addition to being an air hub, and a financial centre.  Dubai does not have a port close to what Singapore has due to the limitations of geography.  Dubai does not sit along a major sea route, while Singapore does.  Dubai is also an air hub.  While it is a financial centre, it serves a region with significantly lower GDP and political stability.  Singapore is in East Asia.  While Dubai has diversified from the oil sector, it was into the services and tourism sector.  Singapore has manufacturing facilities for electronics, wafer fabrication, and other products.  This is in addition to tourism and services. 

All in all, it is no surprise that based on these factors, Singapore’s GDP is three times that of Dubai, despite its smaller size.  When we consider PPP, Singapore’s GDP is much more than that, since the Singapore dollar is not pegged to the US dollar.  Singapore has a lower debt to GDP ratios as well, meaning that is has a healthier economy.  Dubai has focused a bit too much on the spectacular, and lags behind in civic development by at least a decade.