Solutions to Overcome the Problems Associated with Dubai Land - Research Paper Example

Dubai land Table of Contents Executive Summary 3 Chapter Background Summary 4 Chapter 2: Introduction to the Case Study 5 Problem ment 5 Research Aims and Objectives 6 Structure of the Report 6 Chapter 3: Problem Statement and Plan of Analysis 6 Literature Review 6 Relevant Theories 8 Data Analysis 9 Data Sources 10 Chapter 4: Analysis and Findings 10 Analysis 10 Findings 12 Chapter 5: Proposed solution to problem 13 References 16 Executive Summary This research paper is based on all the studies that have been obtained from the case-study of Dubai land. Dubai land is an amusement park that is being developed in Dubai. It is one of the largest leisure projects in the world. There are several problems due to which the development of the Dubai land project got delayed. In this research paper the major problems have been identified based on which detailed analysis has been done. Some theories have also been incorporated in order to have a clear understanding about the implication of the problems associated with Dubai land project. In order to complete the paper successfully secondary data analysis has been preferred because this research required in-depth analysis of the problems associated with Dubai land. Furthermore, some ideas from the theories have been identified and based on the ideas the analysis has been done. After detailed analysis subsequent findings have been generated. The findings provide the information about the outcome of the problems and it helps to resolve the issues that have aroused in the development process of Dubai land. In this paper some solutions have also been mentioned, which can be help to overcome the problems associated with Dubai land. Chapter 1: Background Summary Dubai land is the largest leisure project in the world. It includes numerous facilities including tourist attraction features. Dubai land encountered several problems while it was being developed. The assignment highlights the major problems that post-phoned the completion of the mega-project in its proposed time-frame. According to the case the major problems associated with UAE have been mentioned. UAE is also suffering from several regional and international tensions due to the interference of extremists in the land. According to the case it is clear that Dubai is one of the favourite tourist spots in the world. The development of Palm Island is one of the best examples of mega-project of Dubai. The Palm Island has been built on the sea artificially, which shows the enhancement of engineering technology in the country. Therefore, mega-projects like Dubai land have always been appreciated in Dubai and there is a gradual shift in the economic sector from oil industry to hospitality sector. Construction of mega-structure has become one of the most important features of Dubai and most of the private owners of middle-east have invested their money in the development of tourist spots in order to gain maximum profit. Dubai’s goal of boosting tourism initiated from the need to create alternative income streams and diversify their traditional business limited to fossil fuel. It is believed that the world has a new centre after Dubai’s step towards tourism. The development of the mega-project Dubai land however got delayed because of some problems that existed in past due to financial crunch. The economic condition of most of the countries suffered due to the global recession and the progression of Dubai land was post-phoned by government and legal agencies in order to overcome the temporary hardships. This assignment provides detailed analysis of the problems associated with the development of Dubai land and along with incorporation of theories that provide relevance to the problems. The assignment will provide arguments by people and judgements based on the analysis. Finally the assignment will come-up with methodical solutions that can be implemented in order to overcome the existing problems. It is also significant from the case-study that existence of famous amazing parks like Disney land might reduce the importance of Dubai land but most people believe that development of mega-project like Dubai land will definitely bring joy in the Dubai city and it will also be beneficial in the economic growth of the nation. Chapter 2: Introduction to the Case Study Problem Statement Dubai is the World’s fastest growing city on Arabian Gulf and it is well known for its mega-projects. Dubai land is believed to become the world’s largest amusement parks including shopping malls. Several problems have affected the development of Dubai land, among the problems the major issue is scarcity of Water. The availability of fresh water in UAE is limited. Only 10 percent of the entire water production is available from ground water. The remaining 90 percent is obtained by desalination of sea water, which is a very expensive process. Processing sea water for consumption purpose has resulted in increase of the price of water in the Middle-East. Apart from water there is another issue that has affected the growth of the country i.e. international tensions and terrorism. Emergence of the well-known militant group Taliban came into existence due to the extended support from official emirates during the Soviet-Afghanistan war in 1980. After the terrorist attacks in United States of America, Muslim investors started investing their capital in development and construction of Dubai because they feared that their assets might be seized due to aggressive anti-terrorist legislations. This factor deterred some Western companies from investing in Dubai. The development of Dubai land was put on hold in 2008 because it was observed to be the most leisure developments ever proposed and the expense was too high for an amusement park. Labour security is also a factor that became a problem during the development of Dubai land. Research Aims and Objectives For proper understanding of the problems associated with the development of Dubai land collection of data is essential. In order to gather accurate information, experts view and opinions from theorists are also necessary. The problems associated with the development of Dubai land are complex and detailed research has been incorporated in the assignment from relevant journals. The aim of the research paper is to focus on the issues that have affected the development of Dubai land in past and recommendations have been provided to overcome the issues related to the development of the amazing tourist-spot. Structure of the Report The assignment is divided into several sections based on the research analysis. In the plan of analysis, reviews from experts, relevant theories and data analysis have been mentioned. The information obtained from experts has been mentioned with pivotal examples. Chapter 4, of the assignment deals with the detailed analysis and it also provides the findings obtained after the research analysis. In the fifth chapter, recommendations have been provided that can be helpful to overcome the problems associated with Dubai land. Chapter 3: Problem Statement and Plan of Analysis Literature Review According to the International Journal of Tourism Research, There are various factors that have affected the completion of Dubai land project. The global crisis one of the major issues that had negative effect on Dubai land project (Brown, 2011, p.71). Apart from the global crisis, recession has also affected the successful completion of Dubai land project. The journal also states that for any country financial crisis is a big issue. Financial crisis has reduced the interest of development of mega-projects like Dubai land because investors could-not afford to invest huge capital, while their profits were low (Smith, 2009, p.17). Moreover the country’s financial condition is mostly based on oil wells and food and water are available at high price. Hence government agencies of Dubai can-not afford to invest on expensive leisure projects. There are people who have argument against the development of Dubai land because of the huge capital that is required to be spent behind completion of the project. People believe that more attention is required on the basic needs of citizens and tourists in Dubai (Kevin, 2014, p.9). Inappropriate distribution of water and resources has left the life of poor people with struggle. On the contradiction to the arguments HE Khalid Bin Sulayem, Director General of Dubai Government’s Department of Tourism and Marketing has stated that they are conscious about the responsibilities that leaders of tourism should carry and they are responsible for ensuring people that the tourism sector takes account of the needs of the world it operates (Charles, 2014, p.38). The Director General has also set the cut-off date for completion in the year 2015. It is clear that the Dubai land project has also been affected due to political tensions and regional tensions in Dubai. Furthermore, Dubai has been facing challenges from investments from western investors. The main reason behind the issue is the terrorist activities that occurred in past. The terrorist activities like September 11 had major effect on the United States of America. UAE supported the active militant group Taliban during the time and the United States incorporated strict laws on their investors against investments in Islamic countries (Drakes, 2006, p.71). Apart from the international tensions Dubai has also been suffering from problems that occurred due to labour exploitation. It is well-known that the companies of Dubai hire workers from Asian countries and they are made to work for longer duration against limited salaries (Wood, 2001, p.19). The labour exploitation has also become a problem for the Dubai land project because skilled workers refuse to work in Dubai after knowing the consequences. Leading researchers have observed that the problems are inter-linked with each other (Luvin, 2004, p.64). The financial crisis in the country is not just because of the global recession it is also due to the scarcity of natural resources like water and lack of western investment in the country. The depiction of oil and natural gas was observed long back in Dubai due to which the development of tourist places like Palm Island and Al-Burj happened (Tosato, 2013, p.91). The problems associated with Dubai land are in existence because of the huge capital that is required to be expensed behind the mega-project. Hence there is a requirement of steps to be implemented in order to overcome the problems that have resulted in suspension of the completion of Dubai land project. Relevant Theories The Labour Theory of Value The labour theory of value talks about the importance of labours in the society. It is significant that almost all commodities are ultimately produced by labours. Labours are required to build mega-structures and in order to build them they need tools and instruments (Dooley, 2005, p.40). The tools and instruments are build by labours, which shows the importance of labours in human society. From the past labours have been exploited to work in hazardous and risky environment and it is still in existence. Famous theorists Karl Marx, David Ricardo and Adam Smith made modifications on the older version of labour theory because they believed that the old theory had ethical, philosophical and moral implications in it (Rubin, 2007, p.61). In Dubai labours are paid salaries but they are allowed to work in environments involving risks and it has let the moral of Dubai go down. The suspension of mega-project Dubai land also happened because labours did-not want to work in hazardous situations (Keen, 2001, p.84). The lack of work-force affected the development of Dubai land significantly. Minsky’s Theory of Financial Crisis in a Global Context The Minsky’s theory of financial crisis was written in order to understand the influence of financial crisis in a domestic economy. Hyman Minsky proposed the theory for proper understanding of complex crisis issues like inflation, debt-deflation etc (Arestis, 2006, p.402). The theory focuses on the systematic development of financial fragility, disruption of stability and debt-deflation. The theory has direct relevance with the suspension of development of Dubai land project because it provides the reason due to which financial crisis occurs in a nation and it is directly proportional to loss of interest from required investment in a particular project (Harcourt, 2013, p.77). Undoubtedly, the Dubai land project was aimed for betterment of tourism in Dubai and it would have helped in growth of economy in the country but financial crisis did-not allow the project to be completed in its desired time-frame (Goldstein, 2009, p.69). Data Analysis In this assignment the problems related to Dubai land has been highlighted and the reasons have been mentioned due to which the problems occurred. Some relevant theories have been mentioned, which can be helpful in sorting out the problems and resolving those problems. Since Dubai land is a mega-project hence it has many problems associated with it along with several controversies from people but successful completion of the project can be helpful for economic growth of the country. Based on detailed research and analysis of the theories observations and findings have been provided in the next chapter of the assignment. Data Sources This assignment focuses on the problems related to development of Dubai land. For successful completion of this assignment, analysis from theories and journals is required. For this assignment secondary data sources have been used because it requires collective information from many sources. Secondary data sources provide the ability to collect wide variety of data in a short period of time due to which it has been preferred. Based on the problems associated with Dubai land important evidences have been implemented in the assignment and the findings generated from after the analysis have been detailed in the following chapter. Chapter 4: Analysis and Findings Analysis From the previous chapter it is clear that suspension of the Dubai land project occurred due to several problems. Global financial crisis is the most important reason due to which the progression of the project paused. According to Minsky’s theory, financial crisis of a nation or the world occurs due to many reasons. One of the major reasons behind financial crisis is high inflation rate (Freeman, 2011, p.149). Over or under employment is also a reason due to which financial crisis occurs in an organization. It is important to understand the ongoing issues related to health and public safety against terrorist activity has become major concern for the world. In this situation most of the countries focus on public welfare rather than growth of national economy. It is absolutely correct that growth of economy is helpful for social growth of people and it has the potential to fight against the ongoing issues but huge investment on projects like Dubai land can be dangerous for development of country like Dubai. It is well-known that Tatweer has proposed the project looking ahead to development of tourism perspective but during immediate requirement of capital the nation can face difficulties (Muhle, 2011, p.99). Previously, United Arab Emirates earned money by supplying oil and natural gas to many countries in the world but reduction of fossil fuel has been a matter of concern for the country. Development of tourism from this perspective looks beneficial but it might have immediate ill-effects after spending enormous amount on a leisure project like Dubai land. From the financial crisis point of view it is important to understand the reason behind arguments by famous researchers and theorists. Dubai and other cities of the middle-east have scarcity of water due to which many people suffer (Harvey, 2009, p.37). The country must focus on projects that can meet the existing requirement of water in the cities. It had been estimated in 2004 that the average production of water was 61,463 MIG, out of which only 10 percent was obtained from natural water resources rest amount had to be processed (Hein, 2011, p.7). In the year 2011 the water production was raised to 110,000 MIG per day, which was not found to be enough because of excessive requirements in industries. Moreover, the process of water production in Dubai and other cities of Saudi-Arabia is desalination, which is very expensive. Hence there is always a requirement of huge flow of money in the entire region for safety and security of people related to health issues. It is also known that Saudi-Arabia has been affected due to terrorist activities and being an Islamic country the people have faced many problems. The activities in the Western part of the world has resulted in decrease of foreign investment in the middle-east including Dubai. Dubai is also undergoing through a major issue related to labour management. The organizations of Dubai hire labours outside the country and make them work in hazardous environment in lower salaries (IMF, 2012, p.45). This method of labour exploitation is no longer entertained by skilled labours and the project of Dubai land has to pay more in order to get sufficient work-force. According to the Labour theory of value, labours are the most important asset for an organization because they are responsible for building almost everything in an organization. Hence labour exploitation should not be done with wrong perspectives because it can affect growth of an organization. Findings The Dubai land project was announced on 23rd October 2003. The progression of the project was stopped in 2004 because of the problems associated with the project. First of all, the mega-project required huge funding, which could hamper the other developments of the city. The government had exceeded the invested figure up to $6 billion from the private sector. The total cost of the project was estimated to cost around $64 billion (Ramos, 2012, p.55). The current economic and financial crisis in the country has loosened the faith of investors on the Dubai land project. The economic issues have gradually slowed down the construction work of the project and the estimated time for completion of the project is 2015. Many investors also believed that the exploitation of labour force might end-up in conflicts and their investments might get lost. Based on the analysis it is also clear that the global recession affected the economic condition of many countries including Dubai. The managers post-phoned the ongoing development of mega-projects like Dubai land because it was not beneficial for the economy of the country. Dubai land is a leisure project and its completion might not be worthy immediately (Ehteshami, 2013, p.102). Tourism is an uncertain business and the existence of similar projects in the world like Disneyland might reduce the interest of the project. The arguments might not be subjective but they are true and from development perspective the project was post-phoned for a longer period of time. Apart from the financial crisis there was another concern, which was equally important. The difference in ideologies of interest groups also slowed down the development of the project. After the problems encountered Dubai land most of the people were afraid to support the progression including private investors because they needed assurance in-case of any severe consequences. Various groups have different arguments about the mega-project. For example, the government, interest groups, environmentalists and communities have different opinions about Dubai land. Initially, the government had supported the progression of the project looking-forward to the development of Dubai but there were several consequences that could not be ignored. The communities questioned about the safety of people in-case of any natural disaster. Undoubtedly, government could-not move forward with the same ideology as in the year 2003 (Tamer, 2009, p.12). The expense cost of Dubai land was reduced and the completion date was post-phoned in order to assure people that the investment would not hamper the social life of the people of Dubai and at the same time the economic balance would be maintained to the optimum level. The project is among the special interest of the government because it has the potential to generate the gross domestic profit of the country based on tourism. Chapter 5: Proposed solution to problem Based on the analysis and findings it is significant that Dubai land is among the best leisure project ever proposed in the world. The area on which it has been built is twice the size of Manhattan city and it is going to be the most important tourist attraction spot for Dubai. The emergence of several problems had affected the progression of the project and it is believed that the project would be completed in 2015 (Metcalfe, 2011, p.106). Initially global recession attacked the development of the project and the foreign investors backed-off looking for favourable opportunities. Apart from the global recession the country’s financial crisis also stopped the management from progressing with the plan. The Western investors did-not invest on the Dubai land project because of the political tensions that had surrounded the country (Taylor, 2002, p.98). Moreover, the emergence of labour conflicts also affected the development of the project. Hence the problems originated due to lack of complete investment on the project and finally it had to be paused until appropriate opportunity could be regained for initiation of the Dubai land project. In order to overcome the issues, the government of Dubai should have taken actions on financial crisis before announcement of the project. The most important issue was insufficient capital hence the government of Dubai could have encouraged private investors of Dubai and international investors to fund the project and share the profit obtained from Dubai land. The investments from private owners could have helped in completion of the project in proposed time and it would have been beneficial for the economic growth of the country (Christensen, 2008, p.88). It is quite clear that completion of the project might not gain public attention immediately hence the project would have got appropriate time to gain its fame. Apart from private investments, it is the duty of the government to reduce the political tensio0ns with other countries. Dubai should have supported the Western countries for execution of terrorist activities that originated in the middle-east (Seba, 2011, p.29). The extended support would have helped the country to obtain financial support from western countries and there would have been a fair chance for the country to develop the mega-project. Scarcity of water in the entire middle-east has been a problem that people have been facing from distant past. In order to overcome the issues related to production of water Dubai government could have applied methodical ways to store rain water and harvest it when required. Production of water from the desalination of sea water is done on a large scale in United Arab Emirates but it is an expensive procedure and poor people still suffer from the shortage of water on a large scale (Knapp, 2010, p.31). Labour exploitation has also showed-up to be a trouble in the development process of Dubai land and government agencies could have been made to work for betterment of labour in private sectors (Kemp, 2012, p.42). It is very necessary to understand the role of labours in an organization and providing labours better working condition could have helped in development of mega-projects like Dubai land. From the above recommendations the most important solution that could have been implemented is reduction of international political tension. It is well-known that UAE is an oil-based country and most of the countries in the world trade with them for importing oil and natural gas. The depiction of oil from the oil-wells of UAE and entire middle-east is significant hence the countries could have taken initiative to work together for betterment of themselves and other countries. The United Nation’s request for peace was denied by some countries of middle-east resulting in initiation of political tension between them (United Nation, 2006, p.9). The factor has a direct impact on the economic and social life of people because investment of private owners from western countries has been refrained for Dubai. Increase in the investment would help in development of the life of people and the current issues related to safety and security of people would have been minimized. The investment on Dubai land is also related to the social development because it can help in generation of capital from citizens of other countries (Gillespie, 2011, p.549). Hence government should take initiatives to reduce the challenges associated with foreign investments and encourage private owners to spend in mega-projects like Dubai land for betterment of the society. References Arestis, P., 2006. A handbook of Alternative Monetary Economics. New York: Springer. Brown, A., 2011. 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