As the Iran war reaches the one-month mark, a conversation has emerged across social media, policy circles and investor networks about how cities in the Gulf can not only recover but also reposition and reinvent themselves in its aftermath.
History offers a useful lens. At the dawn of the 20th century, Vienna stood as one of the great capitals of the world. As the centre of the Austro-Hungarian Empire, it was not merely a national capital but the political, intellectual and financial hub of a vast multinational realm stretching across Central and Eastern Europe. Around 1910, Vienna ranked among Europe’s largest cities and produced an extraordinary concentration of cultural and intellectual innovation – from Sigmund Freud and Ludwig Wittgenstein to Gustav Mahler and Gustav Klimt.
Yet the shocks of the 20th century transformed the city’s position. The collapse of the Austro-Hungarian Empire in 1918 stripped Vienna of its economic hinterland, leaving a city built to govern an empire suddenly serving a much smaller state. Two decades later, Nazi persecution forced much of Vienna’s Jewish community – an essential pillar of its intellectual and commercial life – into exile. Vienna was rebuilt and remains a prosperous European capital, but it never regained the global centrality it once enjoyed.
The story illustrates an important lesson: cities decline when the human networks that sustain their economic ecosystems disappear.
History, however, offers many counterexamples – cities that endured immense destruction yet quickly regained their global significance. London during the Second World War suffered devastating aerial bombardment during the Blitz, with entire neighbourhoods reduced to rubble. Tokyo in 1945 lay largely destroyed after months of bombing. Paris endured occupation and war. Yet all three cities recovered with remarkable speed, reasserting their roles as major global centres of finance, culture and commerce.
Why do some cities rebound while others struggle for decades? The answer lies less in reconstruction spending and recovery plans than in the underlying advantages that attract people, investment and ideas in the first place. There was no shortage of investment and reconstruction in post-war Vienna or Berlin for that matter, but those who were forced out left for good.
Cities thrive when they accumulate what is sometimes called a “place surplus”: a combination of advantages such as connectivity, institutional quality, economic opportunity, creativity and vibrant communities. The more diverse these advantages are, the more resilient a city becomes. When crises occur, the physical damage may be severe, but the deeper sources of a city’s gravitational pull remain.
Urban thinkers have long emphasised that the vitality of cities ultimately rests on human networks. As the journalist-author Jane Jacobs famously argued, cities function as dense ecosystems of interaction where economic and social vitality emerge from the everyday encounters of people living and working together. When those ecosystems remain intact, recovery becomes far more likely.
There is also a deeper historical dimension to how certain places sustain these advantages. For millennia, the Gulf region has functioned as a crossroads of global exchange. Long before the rise of modern aviation hubs and sovereign wealth funds, the waters of the Arabian Gulf linked trade routes stretching from the Indian Ocean to the Mediterranean. Merchants, goods and ideas circulated through this corridor for thousands of years.
In that sense, today’s Gulf cities are not an anomaly but a modern expression of a much older role. As the urban scholar Saskia Sassen has argued in her work on global cities, places that thrive in the world economy are those that organise and facilitate flows – of capital, people, information and trade. The Gulf has long been a geography of flows. What we see today is simply the contemporary infrastructure of an ancient function.
This perspective helps explain the resilience of the Gulf’s major cities today.
Collectively, the economies of the Gulf Co-operation Council exceed $2 trillion in output and occupy a pivotal position in the global energy system. The region holds about a third of the world’s proven oil reserves and remains a major supplier of globally traded energy. But the Gulf’s significance extends far beyond hydrocarbons.
The region has become one of the world’s most important transport hubs. Airports in Dubai, Doha and Abu Dhabi connect Europe, Asia and Africa through some of the busiest international routes on the planet. Within a single flight radius lies the majority of the world’s population. Ports such as Jebel Ali have become critical nodes in global logistics networks linking manufacturing centres in Asia to markets across Europe and Africa.
Equally important is the Gulf’s role in global labour mobility. The GCC hosts tens of millions of migrant workers, making it one of the largest international labour platforms in the world. Every year, workers in the region send more than $100 billion in remittances to families across Asia and Africa. For countries such as India, Pakistan, Bangladesh, Egypt and the Philippines, these flows represent a vital economic lifeline.
And contrary to popular misconceptions, the skills and professional composition of these workers span the entire spectrum, and in some cities they constitute the majority of business and home owners.
Yet the most distinctive source of the Gulf’s resilience may be social rather than economic.
Across cities such as Dubai, Abu Dhabi, Manama and Doha, a unique cosmopolitan social ecosystem has emerged. People from dozens of nationalities live, work and build their lives together in environments where professional networks, neighbourhoods and schools span continents. English often serves as the common language of daily interaction, while careers and friendships connect residents to multiple regions of the world simultaneously.
Over time, this has given rise to what the late sociologist Ruth Hill Useem described as a “third culture”, a shared way of life that transcends traditional national identities. Many residents may hold passports from India, Britain, Egypt or the Philippines, but their everyday experience reflects a distinctly global urban culture shaped by mobility, entrepreneurship and openness.
This cosmopolitan community has become a powerful form of “place surplus”. People are attracted to the Gulf not only for employment but for the experience of living in a global environment where nationality matters less than opportunity and talent. Networks of business, finance, logistics and technology grow naturally out of this diversity.
Cities decline when their communities fragment or disappear, as Vienna’s history reminds us. The Gulf’s cities, by contrast, are continually reinforced by the arrival of new talent and new ideas from around the world. All of this would not have been possible without a sustained policy of openness to foreign talent. Just witness the recent UAE government decision to allow expats abroad with expired visas to return without a new entry permit.
The fate of cities is rarely determined by the crises they face. What matters far more is the strength of the social and economic fabric that made them vibrant in the first place. Where that fabric weakens, decline can follow. Where it deepens, recovery tends to be swift.
By that measure, the Gulf’s great cities, built on openness, connectivity and a cosmopolitan community that spans the globe, appear less fragile than some commentators assume.
