Abu Dhabi, 2007

 

“Think about it: How many places in the world can you say, ‘I’m going to establish an airline,’ and boom, two years later you have 21 planes and 37 destinations? How many places in the world can you say, ‘I need 15,000 hotel rooms,’ and boom, you have 100 new hotels in the works? How many places can you say, ‘I want world-class hospitals, universities, and museums,’ and boom, the Sorbonne, Cleveland Clinic, Guggenheim, and Louvre are on the way?”

 

 

 

- Khaldoon Khalifa al Mubarak, Mubalada Development (Link to article)

I came across this article while reading up on Abu Dhabi and the UAE, and I’m fascinated by the potential Abu Dhabi shows. While we’ve all heard of Dubai, there’s still an even richer, even larger, and even more powerful giant rising up. Abu Dhabi is the capital of the United Arab Emirates, and has more oil and more land than its fellow emirate Dubai. Ever since they opened up property markets in 2005 to foreign investors, the property market has been booming, and there has been non-stop development in the emirate.

It fascinates me, the possibilities a government which is motivated to bring about development in its country avails. In a region characterized more by strife and corrupt governments, Abu Dhabi and Dubai are interesting cases, where an intense competition for boasting rights/international recognition have motivated both Emirs pour their revenues into economic and social development, rather than into their own pockets. Yes, here we are talking about an obscene amount of oil revenues here, but there is a crucial difference between these states and Iran that has enabled them to experience such growth.

Abu Dhabi, circa 1970s

After reading about this for a while, I’m of the opinion there are certain prerequisites for such a situation to augur development.

1. There has to be some sort of “maximum government” to take the lead in early economic development- instead of draggy democracies. We see this in China and India- China’s progress has been in many ways faster than India’s because of this. There are a thousand different variables that affect this; however, it does seem true that for early development, the hypothesis of greater “maximum government” is better seems to hold true.

2. There must be competition within the region- Singapore’s desire to succeed brought it success, and its success drove neighbouring countries such as Malaysia and Thailand to try to emulate this success, out of national pride or otherwise. Sometimes, the primitive human desire to “win” can outweigh these governments’ desires to line their own pockets, or engage in petty activities. Competition has always been good- and more competition, better.

3. Seemingly, decentralized, small governments are best for development, as opposed to a huge bureaucracy. Major rapid economic successes in Singapore and Dubai have been achieved by a small state governments- flexible, familiar with the ground, and fast to react. On the other hand, slow central bureaucracies have often led to underdeveloped (neglected) regions in countries. The ideal situation seems to be a “maximum government” giving a circumscribed carte blanche to state governments- allowing them to recommend changes, and instituting them to augur development.

Boundless potential for states with the right governments

4. A mindset geared towards development is also necessary- govenments and their people need to be able to prioritize development ahead of other “distractions” such as ethnic rivalries or interstate conflicts, for development to move along. Changing mindsets may not seem as big a problem as it appears to be- as long as the government itself is convinced of this and adheres to it, its citizens will naturally follow, often after having tasted the first fruits of economic success. Egypt and Saudi Arabia provide case evidence for this, as the past 30 years have shown us the decline of the Arab belligerent, and the parallel rise of the Arab tycoon.

5. Lastly- an education system, where the next generation can be prepared for the new economy.

In my opinion, this is an interesting case to observe, and look for chances of application in regions where there is abysmal lack of development, i.e. Africa. A radical proposition would be to create “model states”, whose economic development would be funded by aid agencies, to stir up competition in those regions. Hopefully, if there arises a “city on a hill” in those regions whose success can be emulated, the desire for national pride will motivate surrounding states to do likewise. What better incentive could be provided, to ensure growth!

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