The Dubai Model
Main Points of the Dubai Model of Economic Development
Fifty years ago, Dubai was an insignificant, poverty ridden settlement of 30,000 people, Martin Hvidt, author of the 'Dubai Model' points out. Today, with a population of 1.4 million, it competes with the biggest players in the world in tourism, logistics, port operations, financial services and construction. As such, we should take the time to study the Dubai Model and see what lessons can be learned, copied, or borrowed. The main characteristics of the 'Dubai Model are:
- The outcome of conscious policies conducted by a “late–late” developing state in order to “catch up” with the “developed world.”
- The developmental state paradigm stresses the critical role of state intervention in these countries’ economies and focuses on the institutional and political bases of effective state intervention. The term “developmental state” closely resembles what Niblock calls “state-sponsored capitalism” or what Kohli calls “cohesive-capitalist” states.
- Developmental states are furthermore characterised by an active and interventionist role for governments in the pursuit of a strong developmental agenda.
- A deeply felt urge to “catch up” to colonial masters, and the developed world in general, is often a central motivation for this.
- The concept of “developmental state” is closely associated with the so-called East Asian model of development. This model dates back to the 1920s, when Japan commenced its development drive to catch up to the First World, and has since the 1950s spread throughout East Asia. It builds upon significant government interventions in the economy. As Jei Guk Jeon argues, the East Asian model is based on a pragmatic mix of state guidance with private initiatives; he points to Park Chung Hee’s “guided capitalism,” Chiang Ching-kou’s “planned free economy,” and Lee Kuan Yew’s “half socialist half capitalist” principles of economic development.
- "This model encompasses two key features:
- (a) High investment rates stemming mainly from foreign direct investment [FDI], and
- (b) An outward orientation emphasising labor intensive manufactured exports.
- Multinational corporations often play a dominant role in both aspects—supplying FDI (Foreign Direct Investment) and mass-producing goods for the export markets.”
- Since the 1990s, this model — especially the development experience of Singapore — has served as an important inspiration for development planners in Dubai. As highlighted by Nabil Ali Alyousuf, director general at The Executive Office in Dubai, Singapore became a reference point for Dubai because of the similarities between the two countries — especially in vision and proactive leadership. Like Singapore and Hong Kong, Dubai is a small city–state and entrepot. These three have followed a special development path—a path that Haggard terms “entrepot growth” and that the development literature considers atypical.
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