Dubai Model of Development

8/8/2019 Dubai Model of Development

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Myths and Realities of Development

Dubai and South Korea


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Conventional Wisdom of Development

IMF

World Bank

Neoliberalism Structural Adjustment


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Defining Development

How do we measure development?

GDP

Inequality Social indicators

Combination of Factors?


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Structural Adjustment

Guarantees of fiscal discipline no more budgetdeficits

Reduction of public expenditures

Financial liberalization

Trade liberalization

Promotion of foreign direct investment

Privatization of state-owned businesses Deregulation of economy

Protection of property rights


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East Asian Developmental State

Peter Evans Embedded Autonomy (1996)

Alice Amsden

Chalmers Johnson In Taiwan, Japan, and S. Korea, government

intervention played a decisive role in

promoting economic development. Shielding Infant Industry

Subsidies


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What do you know about the UAE?

Population: 5,432,746

Confederation made up of the following 7 Emirates:Dubai, Abu Dhabi, Sharjah, Fujairah, Ras Al Khaimah,Ajman, Umm Al-Quwain

Per Capita Income: $37, 941

World Record Growth Rate of 13.4% between 2000-2005

Independence: 1971

Largest Sov. Wealth Fund in the world: 875 Billion Real GDP in 2006: 175 Billion

Ethnic Diversity: 19% Emirati, 23% Arab and Iranian,


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What did Dubai look like 50 years ago?


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Population: 30,000


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Population: 1.2 million


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Dubai Model of Development

Government led Development

Fast Decision Making

Flexible Labor Force

Leapfrog Industrialization

Internationalization of Service Provision

Supply Generated Demand (first mover)

Market Positioning via Branding Development in Cooperation with world class

partners


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Government Led Development

The Executive Office (TEO)

Five men including the ruler oversee developmentinitiatives (Sheikh Mohammed, Sheikh Hamdan,

Mohammad Bin Ali Al Abbar, Ahmed Bin Sulayem,Mohammad Abdallah Al Qarwawi)

Dubai World, Dubai Holding, Emaar, DubaiMunicipality

Centralized decision-making Decisions are made quickly without the need for

consultation

Exemplified in the construction boom


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Interview with CEO of Dubai Dry Dock

Geoff Taylor

If I want to spend 40 million dollars on an extension ofthe repair facilities here at the Dry Dock, I will pass therequest to the head of Dubai World, Mr. Sulayem who

is right under Sheikh Mohammed. Usually I will get ananswer within 30 minutes. In England I would have towait 5-6 months for the request to go through variousassessments and boards. Here they are much moreforward thinking, dynamic, and a lot more trusty. They

trust that the person who runs the businessesgenerally tends to understand the business, and assuch are in the best position to see businessopportunities.


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Flexible Labor Force

The Dubai government can import specialized

labor quickly-- without any bureaucratic or

logistical hassle.

Construction workers

Consultants

Highly Skilled Workers


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Bypass Industrialization

EPZ

Development of a Service Economy

(knowledge economy) Tourism

Health Tourism

Film Industry

Financial Services Hub

Biotechnology


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Internationalization of Service

Provision

Due to the small size of its domestic market,

growth requires expansion overseas

Active acquisition of businesses that fitDubais strategic profile

Dubai Ports World

E

maar (GatedC

ommunities) Emirates Airlines (Regional Logistics Hub)


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Supply Generated Demand

Martin Hvidt: All businesses grapple with the question of when toinvest. There are two general answers to this question: Either waituntil the demand for the good or service on wishes to sell ispresent, or simply to supply the goods or services and let itgenerate its own demand.

Risky and would not be possible without public/private partnership

Dubai Internet City

Media City

Palm IslandsThe World

Dubai Land


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Market Positioning via Branding

What makes Dubai such an attractive location

for tourists?

C

onstruction of Iconic Buildings


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Development with world class

partners

Dubai Health Care City Mayo Clinic and

Harvard Medical School

Hotel Sector Internationally respectedpartners collaborate such as Hilton, Sheraton,

and Hyatt


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Economic Logic of the Dubai Model

Service Provision

Private Education for Expat Children

Electricity

Telecommunication

Visa Renewal

Licensing

Hospitalization

Real Estate


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Alternative Explanations


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The Dark Side

How do you Institutionalize the Dubai Model?

Human Trafficking

Terrorism International Mafia

Domestic Apathy and Disengagement

Expat Rights

Documents

Dubai Model of Development