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Dubai Development Plan by Martin Hvidt
The author, Martin Hvidt from the Center for Contemporary Middle East Studies of the University of Southern Denmark analyzes, in his article, the development path of Dubai. Hvidt highlights that the progress made by Dubai can be compared with the success of Silicon Valley, USA. Less than in fifty years, a 30,000 population settlement turned into the 1.4 million city-states. The reason for such a breakthrough is the implementation of the strategic trajectory model. The achieved results became an unusual case in the history of the economic analysis. The research carried out by the author is part of a single country comparative studies, and the Dubai case is a stark evidence of the cultural, economic and political progress of the North Africa and Middle East.
There were few reasons for such a lap. The first reason, the cooperation between several institutions was rearranged. As a result, this caused changes in the interaction between economic, political, institutional, and cultural sectors of the city and the country overall. The interaction was established in a way that supported the multicausal development of all sectors within the strategically developed model. Accordingly, less than in six years, within the period from 2000 until 2006, the average GDP rate per person had grown from $19,000 to a significant $33,500. The second reason for tremendous success was the increase in investments. The money flow in the region caused the development of the infrastructure. As a result, this allowed attracting more money in financial services, logistics, construction, port operation, and tourism.
I look at the development character of Dubai, it is hard to define from the first glance what its starting point is. Usually, the state's development path is easy to define as capitalistic. In the case of Dubai, the stress should be done on the fact that this is the city, which developed according to the approaches, which are applied to the development of states. Nevertheless, the notion, which can be applied towards an understanding of the uniqueness of the Dubai experience, is state-sponsored capitalism. As a result, the economic performance was much higher than when is used the standard capitalist model. The role of the state was hard to oversee In the middle of the twentieth century, the analysis of the economic platforms was done. The point was to find out which of them gave better results. In the end, there were two schools left which were backing neoliberal and statist position. The economic situation at the end of the century caused the turn from the statist position to neoliberal position. The reason behind such change was the hegemonic position of the biggest economic institutions of the IMF (International Monetary Fund) and the World Bank.
Within the time, the situation was managed by the change of the statist position to the neoliberal position, which is popularly known as Santiago consensus. This economic switch concluded that the state should take part in economic and social life as much as possible. This would help go away from the comparison with the Third World countries. In addition, this allows gaining autonomy, which gives opportunities to develop according to the state's needs. The notion, which describes this idea of economic development, is called embedded autonomy. Despite the bureaucracy, everyone has sufficient freedom of powerful society clusters to develop in the business sector. Moreover, this development is supported by tight connections within the private-business area. This fact, however, does not minimize the influence of the government on the development plans.
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The uniqueness of the Dubai development is the understanding that huge economic sectors were developed commercially without passing the way from the agricultural to the nonagricultural economy. Haggart used the term entrepot growth to describe development path of cities like Dubai. Few others are Singapore and Hong Kong. The peculiarity of entrepot is the ability to organize, develop and support the economy, which provides services and invests in commercial sectors, thus allows establishing the export connections on the local, regional, and world level.
Dubai is neopatrimonialismic. This means that it is anchored in the political and social order by culture. This approach made customer the one who obtains protection, benefits from investments and materials. As a result, a combination of two different notions of patrimonialism and patriarchy gave a chance to integrate the culture of the Gulf tribes into the economy, especially, into the oil sector. Such decision allowed preserving the identity of the region in the time of huge investments. Accordingly, the cultural stability and identity attracted those, who were interested in the collaboration.
As it was mentioned above, the government was the one who supported the business sector and led it according to the created plan. Nevertheless, in the environment, when everything is changeable, businesses still had a chance to reorganize the work process. Fast decisions made to keep the position in the region moved the economy further on the development path. Even though the region has never been agricultural, investment flow attracted specialists from the whole region. This allowed creating strong international relationships and obtaining reliable partners. Important to mention that, on the development path, Dubai missed the industrialization part and put all forces towards the creation of the brand, service and appropriate relations with customers. As a result, the investment sector is growing, thus allows creating new approaches for development.
To conclude, the strategic trajectory model gave tremendous results. However, its implementation is not possible everywhere. The key to Dubai's success is the fact that the region had a strong culture and was united by the idea to gain more by creating a product, instead of being a consumer and devastate the region.