Emergence of an Emirati Economic Corridor

An astronaut on the International Space Station gets a spectacular view of the UAE at night. December 11, 2013 NASA Earth Observatory


Al Mamoura Complex, host to some of Abu Dhabi’s key institutions such as Mubadala and the Executive Affairs Authority, is 140 km from Emirates Towers, equally host to Dubai’s key institutions such as Dubai Holding and The Executive Council. By contrast, other states’ political and commercial capitals are much further apart. Washington, DC and New York are 360 km from one another; Berlin and Frankfurt 550 km, Abuja and Lagos 750 km; Beijing and Shanghai 1,200 km; and Delhi and Mumbai 1,400 km.


Moreover, ever since the founding of the UAE in 1971, both cities have been physically moving towards each other, with the pace of development accelerating since 2010. This is effectively reducing the quiet land in between and, if it continues, will blur the boundaries between Abu Dhabi and Dubai.


The Abu Dhabi-Dubai Corridor (1970-2020)

Source: The Delma Institute, 2017


The organic joining of cities is not unprecedented. It has happened often enough that Patrick Geddess noted in 1915: “[I]ndustrial towns and cities uniting into vast city-regions, ‘conurbations’, which the broadest surveys are needed to realise. Conception of urban Lancashire as the vastest of conurbations, exceeding Greater London itself, and yet now demanding comprehensive foresight and civic statesmanship as a whole.”


Randstad, which is Dutch for ‘border city’, is the amalgamation of Amsterdam, Rotterdam, The Hague, and Utrecht. Amsterdam and Rotterdam are the furthest apart at 90 km. Randstad’s physical and economic blur goes some way in capturing how this would play out in the case of the UAE’s two largest cities.


Abu Dhabi and Dubai, connecting


Ten years ago, it may have seemed as if Abu Dhabi and Dubai were pursuing similar plans, but today they rarely compete and are developing comparative advantages. Abu Dhabi remains an energy producer, pushing out about 3m barrels of crude oil per day. The city state also owns Abu Dhabi Investment Authority, the world’s third-largest sovereign wealth fund. The emirate has made significant investments towards industrialisation and is attempting to emerge as a high-tech industrial player through Mubadala, a $125bn fund with investments in infrastructure, technology, energy, and aerospace, and Emirates Defence Industries Company, which manufactures arms and munitions, military vehicles, and precision weapons systems, among other things.


In short, Abu Dhabi’s economic diversification bet is financial and industrial – much like the East Asian models of Japan, Korea, and Taiwan, as well as Germany.


Dubai, on the other hand, continues to focus on the services sectors of logistics, trade, hospitality, and professional services. Emirates Airline is ranked first globally, Dubai Ports World is the fifth-largest terminal operator in the world, and Dubai ranks fourth in Mastercard’s Global Destination Cities Index. There the economic diversification bet is on a services economy and a business-friendly destination for foreign direct investment – much along the lines of London, Hong Kong, and Singapore.


It is also worth noting that what was once an accidental ‘conurbation’ phenomenon is becoming increasingly intentional. When originally conceived, Abu Dhabi’s Masdar City and Dubai’s Jebel Ali Port were not actively conscious of each other, let alone planning to bridge the two cities; they were simply industrial projects at the logical outskirts of their respective town centres.


However, there are signs that this is changing. Dubai South, a real estate development, markets itself as easily accessible from the downtowns of both cities; in Dubai’s Expo2020 bid video, the emirate prominently featured Abu Dhabi’s Masdar City; and at the opening of the Dubai Parks and Resorts complex, the ruler of Dubai noted its proximity to both cities as advantageous. These examples follow the successful two-phased merger of Dubai Aluminium (DUBAL), a Dubai government-owned company, and Emirates Aluminium, a DUBAL-Mubadala joint venture, into Emirates Global Aluminium, which itself is located fairly equidistant from Masdar and Jebel Ali.


Unique offering


In a five-hour flight radius, the UAE provides a unique offering. It has world-class infrastructure, an efficient bureaucracy, low levels of corruption, and negligible crime. These traits are rather unique considering the broader neighbourhood. Even more rare, UAE cities are exceedingly postmodern in their projection of identity: The national identity does not demand participation, only recognition and respect. Beyond that, the country is not a melting pot, but rather a tossed salad; a place where people are not expected to change simply because the cities are continuously changing.


Air Travel Time from Major UAE Airports

Source: The Delma Institute, 2016


Throughout its history, but specifically since the turn of the century, the UAE has benefitted from high demand for, and low supply of, cities like Abu Dhabi and Dubai; no other country in the region comes close to providing such global cities. This is especially opportune in a new global era of xenophobia, where populist leaders in the West are increasingly doubting the benefits of trading and connecting with others. Those from emerging markets and developed countries alike may find it easier to meet here than anywhere else.


However, the place these Emirati cities have carved out for themselves is not necessarily a permanent one. History teaches us that anything that fails to continuously reinvent itself is temporary; there is an ambitious mayor, governor, or president somewhere who is working hard to create what Abu Dhabi and Dubai have, after several decades, become. Equally, as Africa’s demographics play out and Asia continues to grow beyond itself into Eurasia, the ‘85 world’ – the 85% of the world living outside Europe and North America – will require a central and scalable hub; one that is not part of a large state, but rather a small one.


The opportunity is that as Abu Dhabi and Dubai continue to co-ordinate their economic strategies and physically crawl closer to one another, there is a real possibility for a global metropolis to emerge. These two cities could become a corridor for the 21st century – they are eight hours from Lagos, Shanghai, and London. But that possibility would require specific efforts such as even higher levels of investment in education, research and development, physical infrastructure, law, the arts, and technology.


As immigration to Europe and North America becomes more difficult, and as the ambitions of the citizens, companies, and states of the 85 world grow, the UAE has an opportunity to emerge as the postmodern capital of the 85 world. Everywhere else is too local, too conscious of its identity. The UAE, while culturally cognisant, is capable of hosting others without a sense of loss; this is one of the only places in the world where residents have found professional success without having to speak the local language. Can it now pursue something more?