Wednesday, April 21, 2010

Gulf states run the risk of duplicating strategies


And where there is a mega-project, there is the artist's impression of what the future holds - sketches of towering office blocks, villas, marinas and ports. Often, the images are accompanied by statistics highlighting the benefits the developments are intended to bring.

"This visionary development project will promote economic diversification, create over a million new job opportunities, homes for 4m-5m residents - and . . . contribute $150bn to Saudi's GDP," boasts the Saudi Arabian General Investment Authority website of plans for four economic cities.

This is all great stuff for power point presentations - but what will appear in reality?

One of the most notable aspects of travelling around the region is how Gulf states seem to be following similar paths.

To borrow some of the official language, this is about "leveraging off" hydrocarbons resources; moving down the "value chain"; developing "clusters"; attracting "knowledge-based industries", and creating skilled jobs deemed best suited for nationals.

In simpler terms, the race is on to become the regional financial, air and trade hub, with tourism, culture and media also in the mix.


The regional race to develop knowledge economies started because of two factors: a native generation born in the relative purple, and the universal recogition that a rapidly growing population of idle youth is bad news. As the article points out, though, one cannot have an economy composed entirely of knowledge workers. It is merely a capstone on a pyramid built of service and labor foundations.

And as the article also points out, every other city cannot be a hub for every other trade. The question of who will live and work in all those slick new buildings and research labs, or even who will study in all those imported universities, is going to become a touchy subject in a region that is by and large very culturally and religiously conservative. I have to especially wonder what Saudi Arabia is going to do in this regard. Unless they plan on making all their "economic cities" more like those expat compounds that dot the country, I have low hopes for their ability to attract skilled foreign (or even national) workers there for the long haul.

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