Dubai Urban Planning and Economics - Essay Example

DUBAI URBAN PLANNING AND ECONOMICS Introduction Dubai with a landmass of 588 square miles is the second largest emirate after Abu Dhabi in the United Arab Emirates (UAE). It has a population of approximately 2.3 million according to 2008 statistics. A comprehensive delineation of the micro and macro level spatial planning parameters of Dubai, one of the emirates in the United Arab Emirates (UAE), would require a strategic level focus on the space related outcomes against the backdrop of a fast unfolding property development process that is currently under way (Sassen, 1998). At the micro level there is a series of constituent activities such as service provision and preparation. At the macro level there is yet another set of activities including the changes and modifications to existing infrastructures and the organizing of the event through to the end (Henderson, 1988). Event management industry is necessarily entwined here with the event to such an extent that all consequential and subsequent strategic decision choices available down the line from the planning consultant to the manager are determined by the very structural dimensions and contingency imperatives. While many stakeholders – internal and external – would show an equally great amount of interest in the successful outcome of the urban planning process, there can still be countervailing interests that seek to prevail over the rest. The degree of influence that each stakeholder group has on the next outcome of the planning process is determined by a number of internal and external factors such as the social, economic and political problems of each stakeholder group and a possible assessment of costs and benefits arising from the level of planning (Hoevel, 2007). Stakeholders such as citizens, private business organizations, contractors, suppliers, government concerns, property developers, foreigners working and residing in Dubai, condominium dwellers, local government authorities and so on all have a stake in such outcomes. Though Post-Fordist influences can be seen in Dubai to a certain extent it’s the single urban model of structure that Alonso, Muth and Mills advocated in the 1960’s is visible everywhere in Dubai. 2. Analysis 2.1. Contextual analysis of Dubai The City of Dubai, unlike many other Middle Eastern countries, is located at the heart of the Gulf for all commercial purposes. Overall this analysis focuses on the urban planning methodologies, infrastructure and structural flexibility intended to engender systematic and constant growth of the City over the years to come. Such huge urban planning activity necessitates national level efforts including organizational capabilities to face resource choices, i.e. how best to utilize a given amount of resources to maximize the benefits (Mills, 1979). Capacity utilization is another such effort. The existing capacity in the undeveloped city locales is no doubt limited by the space constraints. Many planners have pointed out that Dubai is very important for the whole region both as a tourist destination and an investment attraction. It’s against this context that Dhabi’s current level of urban planning and development must be considered. Dubai has come up against many other emirates in the UAE as one of the most attractive destinations for foreign investment. Urban economics is basically about spatial economic analysis that comes under a single branch of economics and thus focuses on the scarce resource allocation process on the land. However as the word urban implies it’s all about urban city centers as against expansive country landscape (Anas, 1988). Thus there is a particularly interesting aspect in urban planning activity. Dubai’s current level of development requires such an approach to understand its developmental efforts. Being an emirate there is very little that the city authorities would desire to do beyond the territorial limits (Wagner, 2006). Therefore it’s not difficult to understand why the city authorities have initiated a very ambitious infrastructure planning process. There is also another aspect associated with this development. Despite the ever increasing supply of investment destinations in other countries Dubai has managed to attract many tourists and investors due to the fact that Dubai has a very liberal culture for foreigners. It tolerates freedom even among its own citizens. There are a very few government institutions in Dubai and most of them are directly related to the administrative apparatus of the City. Property development firms have been coming up in Dubai at such a fast pace on a day-to-day basis (Quigley,1998). Apart from the government’s huge infrastructure building projects, private builders have been engaged in a flurry of construction activities. Service providers such as communication, banking & finance, transport, hotel accommodation, medical services, air lines and the food & beverage industry all would be geared to meet the new demand generated by the inflow of foreign tourists. The spatial planner’s task is to identify these demand related pressures and carry out the spatial planning process accordingly. How best to meet this competitive pressure depends on the planner’s ability to absorb excess demand through capacity creation. Here conflict of interests decisively places some limitations on the planner’s ability to meet this extra demand (Gertler, 2001). The current level of development in Dubai has been brought about by its strategic location in the Gulf in general and the UAE in particular. Urban planning activity in Dubai has acquired a very significant recogniton against this backdrop (Larsen,2010). While some of the modern economic basics related to taxation policy, demand for and supply of housing and location advantages have been noticed to be quite high, there has also been a trend towards mega projects like super fast train tracks and labyrinthine road networks. The spatial planning process in Dubai has to be studied against these newer and heterogeneous development processes as well. According to Arthur O’Sullivan urban economics can be divided into six sub-concepts – economic market forces in city centers, public policy related urban problems, local government budgets, urban transport, public policy related housing and land use in cities (O’Sullivan, 2003). Dubai authorities have well identified the need to expand existing facilities with particular focus on the efficiency of the systemic transformation from what it’s now into a well advanced center of development (Kahn, 2010). In fact it is going to be a model for the rest of the world. In this context urban planning process in Dubai will produce a number of implications including the most noted congestion problem. Urban planning principles require city authorities to put in place a number of initiatives such as design, planning and implementation strategies that in demand focus of attention on regeneration and density (Kessides, 2005). The positive planning environment demands that attention be paid to such variables as political conflict and economic prejudice. There have also been a number of exogenous factors that have contributed to this phenomenon. In the first place the greater degree of convergence between the research outcomes such as those directly related to negative aspects of spatial planning in the urban sphere and the economic policy implications arising from both Dubai authorities’ decisions and firms’ location decisions can be attributed to the behavior of policy makers. In other words policy decisions on spatial planning by private and government interests would basically have an impact on outcomes (Kresl,1999). 2.2. Trend analysis of Dubai Dubai has been receiving a lot of recognition in the international arena due to its well advanced urban economic planning and development process. Many multilateral and bilateral urban development projects have taken place in Dubai. Such big investment projects demand good urban planning and development. Urban economics also identifies urban planning related decision making as one of the most important aspects, both by individual firms in seeking to locate their businesses and city authorities in planning to develop the existing facilities (Arnott, 2006). At national level overall urban planning policy making is on full gear and can be seen in such latest projects as the Palm Islands, World and the Universe and Dubailand. Palm Islands are three complex clusters made by human labor and they have been designed to look like palm trees. Next there are those 300 odd islands designed to look like the world map. Such big names in the world like Six Flags, DreamWorks Animation and Universal Studios have heavily bought into these luxury properties. The economy of Dubai is basically characterized by services industry. As such the current level of spatial planning would be influenced by the future demand patterns for such services. Banking and financial services occupy the most important place while insurance, auto dealerships, retailing, oil futures, transport, aviation and consultancy services come closer. Dubai has been known for a variety of other economic activities though manufacturing is much less significant. Spatial planning thus goes along with service industries. Location decisions of private firms here are very important (Capello, 2004). The regional importance of Dubai has been one of the main factors behind its current level of attraction to the casual tourist and the investor (Hatfield,1997). Dubai has been known for its strategically important location related advantages such as being the facilitator gateway to the West and the rest of the Gulf (Philip,2001). Its neo-liberal economic fundamentals have helped the City to develop on a Western type development model though the political conservatism might have affected some of the outcomes to an insignificant extent. Figure 1: A typical model of spatial planning Source: Writer’s own diagram According to this model the planning process is tentatively designed as a process of continuity with separate logical phases. However it also has some shortcomings. For example starting from the design phase the process continues up to analysis. Thus its growth path is just illustrated by a few phases that can best be described as intermittent. Infrastructure development has been considered as a major instrument in sustainable development and economic competitiveness of the country. In fact inadequate infrastructure has long constrained the Gulf’s economic prosperity and competitiveness and it is lagging behind the rest of the developed world (Glaeser, 2000). Thus this report focuses attention on the spatial planning constraints associated with infrastructure building projects along with the diverse and complex causes and consequences of the congestion in Dubai. In fact it can be considered as a densely populated city in the Gulf region as against the other major residential cities. While many of them are temporary residents who have come from other regions for different purposes such as for business and temporary residence (Palermo, 2010). The impact on the City of these two categories of people can be noticed on a day today basis with the built up environment. This paper also focuses on the constraints in the City associated with design, planning and construction activities that have been going on for a number of years within the city. The related issues are engineering in nature as much as they are political, economic and social. Road and new rail networks that have been built in the recent past have given rise to a variety of social, political and economic issues. Spatial planning in Dubai is primarily determined by what the city authorities prefer to call “rapid transition from an oil dependent economy to a service oriented global economy” (Akerlof , 2009). In the process spatial planning has acquired a very significant level of acceptance within the city for its stupendous dynamism and correlated positive synergies. Vehicular traffic is the other considerable factor that has received much greater attention. Vehicular traffic increases due to rapid development but nonetheless the authorities’ desire to transform the city into a mega showcase of progress is constrained by the current urbanization process going too far with very little proper spatial planning (Barnes,1999). 2.3. Patterns of spatial planning in Duabi The structural and policy related implications of urban planning have been subject to a variety of interpretations in the recent past and in fact have become the pivotal point in the discourse on the relevance and significance of modern urban economics to the final outcomes. From the viewpoint of the planner there are three inevitable aspects related to the planning process. In the first instance the evolutionary process of technology has been invariably connected with the diverse and complex needs of the authorities. Secondly sometimes negative policy related outcomes have forced unpalatable choices to be made by planners and designers. Finally spatial planning has been critically evaluated for its immense contribution to relocation decisions of multinational companies (MNCs). Figure 2: City Development Process Overview Source: http://phoenix.gov/DEVPRO/devflow.html As a sub task both maritime and aviation spatial planning processes too have to be considered. Dubai is a tourist destination with a higher level of higher income tourist traffic annually. Thus there must be a corresponding level of parallel development in both its ports and airports. In some of the alternative methods can be used to minimize the road congestion such as build fly-overs. The innovative techniques are available such as precast trapezoidal box girder can be use to construction segments which is post tensioned together in the field. The precast girders can be used to minimize false work. Spatial planning involves some Environment Impact Analysis (EIA) as well. Such analyses must be carried out to assess the environmental impact of development planning on the existing eco-system. Thus the natural eco-system of the city requires attention. The following diagram shows how demand for and supply of services including leisure have been constantly growing in Dubai over the years thus imposing a considerable amount of pressure on the system (Lee,2000). This trend can be attributed to the ever growing tourism industry in the country. It’s a tourism and travel destination for visitors from all over the world. Against this backdrop spatial planning has become one of the most interesting and sometimes controversial issues because it has generated a lot of public interest. The country has used a lot of reclaimed land though the fully arid climate and the sandy gravel earth have very little to offer by way of comfort to the visitor. Figure 3: Demand for and supply of leisure in Dubai and urban planning constraints S1 S2 D2 D1 Quantity As shown in Figure 3, when the supply of leisure activities increases as a result of the expansion in leisure related activity, the price that citizens and tourists have to pay for leisure activities decreases. The Supply curve shifts from S1 to S2. Thus the subsequent shift in the demand curve would act as a constraint on the available resources. Prices would either increase or remain constant depending on the degree of shift. Their profits would rise and thus the employees of the company would be benefitted (Coulthart, Quang and Sharpe, 2006). 2.3.1. Urban economic planning outcomes in Dubai 2.4. Critical issues faced by Duabi City authorities in Dubai are currently in the process of developing and expanding some of the motorable roads and rail networks that are intended to take the pressure off the existing networks. The extent to which spatial planning activity takes place on the overall project planning level within the stipulated time interval is something that can only be determined with reference to resource mobility and the availability. The demand factor in Dubai for space – housing, education and commercial – has been cited as one of the most decisive in changing the spatial planning aspects. For instance Dubai authorities have been engaged in a more comprehensive planning initiative involving both public and private properties that expand over two thirds of the total free land area in the City (Edel,1972). Dubai is currently undergoing extensive regeneration. Thus the population of the region will increase. Many of the new residents will lack their own green space as the area would be more densely populated, thus a need would arise in this area for a common location for the people to spend their time leisurely. It is expected that well designed spatial planning will play a crucial part in the provision of leisure related services in the years to come. The amount of work would involve developing parks, museums, visitor centers, demolition and clearance of some of the existing dilapidated structures and other repair and conservation work. Some houses and buildings in the country would have to be demolished to bring about a change. Thus these houses and offices would have to be relocated elsewhere. This would involve a considerable cost. The money for these relocation activities would have to be borrowed from banks at high interest rates. The price of land in the area would increase as a result of this effort. The expansion work would prove to be an ideal economic proposition for shop owners and other businessmen (Frost, 2009). 4. Urban Economic Planning Constraints Faced by Dubai Figure 3: Infrastructure Lifecycle Source: http://www.esri.com/ The infrastructure lifecycle illustrates how spatial planning related outcomes – design dilemmas, resource inadequacies and implementation bottlenecks – could be connected with the infrastructure building process. However in Dubai this link is well managed with a policy framework that has been described as one of the most efficient in terms of planning and execution of projects with minimum delay (Rosenthal, 2006). Time related constraints in urban planning Many development projects in Dubai have been held up due to various reasons and the time constraints relate to the sequence in which projects must be completed. A project is classified as time constrained in situations where the critical path is delayed and the addition of resources can bring the project back on schedule and the project completed by the required date. The focus of scheduling in these situations is to prioritize and allocate resource in such a manner that there is minimal project delay (Pack,2001). Spatial planning basically helps in these difficult situations. Cost related constraints in urban planning in Dubai Many construction projects are cost constrained if the level of money availability cannot be exceeded. In those situations where budgeted money is not enough, project delay is acceptable, but the delay should be minimal. However, it is also important to ensure that the budget limit is not exceeded and the technical relationships in the project network are not altered. In general, projects with a shorter duration are less expensive. The longer the duration of the project, the higher will be overall project cost due to the increase in fixed costs such as overheads (Strange, 2008). Quality related constraints in urban planning in Dubai Quality of work depends on the total quality of the planning process. So it’s essential to discuss the quality related issues in planning. For example the existing planning process in Dubai has been necessitated by the eve r increasing demand for tourism and travel in the first instance. Services came second. However now the demand for and supply of banking and financial and other related services is increasing fast. Thus quality related issues have acquired a very important place in the discussion on spatial planning. Stakeholder interest related constraints in urban planning in Dubai With the launching of International Manual of Planning Practice (IMPP) in 2008, city governments like that of Dubai increasingly began to look at new environment sustainability practices. Spatial planners might belong to both private and public institutions. As such in Dubai they have been called upon to play a very positive role in both shaping and reshaping the built environment. Property investment companies in Dubai have been known for most of the strategic spatial planning related activities though most of them have been acting as collaborators in local projects (Benjamin,1999). Designers, operators, suppliers, builders including plumbers, trade contractors, masons, roofers and electricians are the most important stakeholders in this process. The responsibilities shift through these levels. Segmented processes are finance, construction, operation, procurement, planning and designing, engineering, and maintenance. Planners, developers and investors play a very critical role here (Jewell, 2001). Conclusion Dubai as one of the most modern tourist and travel destinations and a global commercial hub has been in focus for its trend-setting development processes. Its urban planning has thus become very important as an issue that within the context of urban economics and spatial development acquires a primary and immediate importance. Dubai authorities have been concerned of controversial issues and implications related to urban planning. These concerns have led to the current regulatory frameworks in place that impose restrictions on unplanned development. The authorities have been concerned of both congestion and pollution of the city and have passed laws to tackle these problems through proper and responsible urban planning. However there are a lot of other implications arising from the latest developments that are directly connected with the tourism industry, real estate development and social and economic infrastructure projects. Recommendations City authorities have to implement a nationally comprehensive urban planning model as found in New York and California. The regulatory regime must be expanded to include all activities of tourists. Spatial planning within the city limits proper must be handed over to a specialist private and public combination. 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