Dubai or Detroit, Delhi needs to
pick its course right.
“And the times, they are a’changing…” drawled Bob Dylan in my earphones as my cab sailed
down Dubai’s streets. The song, one of my favourites already, was made more poignant by the fact that I could choose to pay for the cab I was using, in crypto.
For all the flak that Dubai gets online, it’s hard not to appreciate what a small fishing town has made of itself in a few decades. What’s more spectacular is that it doesn’t owe its wealth to oil reserves (like its neighbours do), but to innovative and daring decision-making by its leaders, who’ve displayed brilliant foresight on multiple occasions.
And that seems to be happening in Dubai yet again. From trade to tax-free structures to finance to tourism, Dubai has now chosen technology to be its next big pivot.
A spanking new technology hub has now taken firm roots in Dubai, attracting a steady stream of tech entrepreneurs and investors.
Exemplary handling of the pandemic, policies designed to foster startups in the tech space, and a wholehearted embrace of blockchain/crypto and web3 technologies saw sector investment increase from around $300M to about $1.4B between 2020 and 2021.
Case-in-point for such policies is the creation of the Dubai Multi Commodities Centre (DMCC) crypto center. The DMCC aims to attract foreign firms with eco-systems set up to focus on the tech business, foreign ownership of companies, tax benefits, IMPEX exemptions, and fast-track visa services.
Now place in this contrast with policy interventions regarding new tech across most other nations.
Bans, strict regulation, discouragement of adoption, and repressive tax structures. All in the name of “protecting the masses”.
There is a lot of credit to authorities having apprehensions regarding the volatility of crypto assets, but
to see ham-fisted bans followed by a scramble to set up digital currencies for fiats and further launch of policy documents regarding novel tech innovation (mostly devoid of substance), smacks more of protectionism for existing systems rather than populations.
It’s almost as if authorities seem mortally scared of what they cannot immediately comprehend, or replicate, or scale for, and hence decide to throw the baby out with the bath water.
Yes, there is an inherent risk with nearly everything new. The idea is to face those challenges and foster the good that lies within.
I am very sure that the initial motor cars were met with the same skepticism by a horse carriage run economy. This is what happened when Japanese imports hit America, and Detroit was favoured by tax barriers. This is what happened when Harley Davidson successfully lobbied for
same kind of protections.
Sure Motown and HD flourished for a while behind protectionist barriers, and didn’t have to innovate to compete with the rest of the world.
But the world kept moving, and trade barriers couldn’t (and still can’t) last forever. We all know the eventual fate of Detroit and how it’s not improbable that HD might stop existing as a motorcycle
company altogether. Competition hit them. It was inevitable they weren’t prepared for it, as they simply hid from it.
As they say, the only constant is change, and change is happening.
It is now up to Delhi whether it wants to head in the direction of Detroit or Dubai.
The horse carriages will be replaced by cars inevitably anyway.
For the times, they are a’changing.
