Emerging global cities: comparison of Singapore and the Cities of the United Arab Emirates.

Dubai: The Emirate of Dubai, world renowned for the Burj al-Arab 7-star hotel, is built along the edge of a narrow 10-kilometres long, winding creek which divides the southern section of Bur Dubai, the city's traditional heart, from the northern area of Deira. Dubai's oil reserve has reduced over the past decade and is now expected to be exhausted within 20 years. Given the depleted natural resources, this emirate has diversified its strategy for development with added emphasis on providing a service base for financial services, IT, tourism, sporting events, and transit trade, in its bid to become the financial, business, and high tech centre for the region. In the aftermath of September 11, 2001 and the U.S. government's decision to clampdown on funds and investment from the Middle East, according to the Financial Times about $200 billionn of Arab funds have been withdrawn from the U.S. Much of this will be reinvested in Dubai strengthening the city's position as a global financial and business center in the Middle East North Africa region.

Sharjah: The Emirate of Sharjah extends along approximately 16 kiometres of the UAE's Gulf coastline and is a major industrial base for the UAE. Sharjah is the junior partner to Abu Dhabi and Dubai in terms of contribution to overall GDP. As with the other two main emirates Sharjah has also made a concerted effort to diversify its economy in to trade, retail, tourism as well as its capacities in producer service functions. The government has sought to boost foreign investment and trade in several ways, including the setting up of the Sharjah Airport International Free Zone (SAIF Zone) and the development of the Hamriyah Free Zone (HFZA). Shaijah was recognized by UNESCO as the Cultural Capital of the Arab World in 1998.

The overall institutional set up in the UAE is a two tier system comprising the federal level and individual emirate levels. The rulers of the seven emirates in the UAE comprise the Federal Supreme Council which elects the country's President and Vice President at five-yearly intervals from amongst its members. The different emirates, however, have a large degree of independence in deciding and implementing their social and economic development strategies and policies.

KEY FINDINGS

The most important message emanating from this work is to reconfirm the central role of institutions in economic development and competitive position of cities in the world economy. In Singapore a clear definition and openness of the intended goals for the country along with the initiatives that are made available to both public and private organizations through a focused, harmonised, transparent and accountable institutional structure has allowed the regulations and business markets to align their interests. This unification has resulted in Singapore attaining immense growth and global recognition.

Active feedback with the international business in developing policies has allowed businesses to realign their respective objectives, thereby avoiding shocks and increasing adaptability. This two fold advantage of effective implementation and continuous dialogue on policies is set to be taken further with the establishment of the Singapore Business Federation, whose primary mandate is to cater to the business community in Singapore. Notably, the responses from public and private organizations bore similarities that reflected the transparency and openness in the business culture. This is one of the keys to a successful city, where interests and aspiration of the business community are in line with the institutions and vice versa.

As a result of the strong institutional participation in business facilitation and efficient servicing, there is an air of business security created. This is further substantiated by a strong legal sector. Singapore has been commended by all respondents for its ability to maintain a just legal framework that is pragmatic and highly efficient. The move by an international company to include Singapore laws for any arbitration in their regional assignment is an adequate reflective of the same. In addition to the sound legal environment, the regulations for conducting businesses were also seen as highly adequate. Except for the rising property prices, the availability of local finance and over regulation, all other issues ranging from the policy stability, corruption and business set up were seen to be pro-business. The accountability and openness of the institutional structure, moreover, allows for early identification of problem areas and implementation of strategies for rectifying the situation, be it in terms of enhancing the city's cultural and leisure facilities or liberalization of the banking sector.

The most important issues facing Singapore in terms of its future development strategy is ensuring the supply of high calibre knowledge based workers and managers for the expansion of its corporate services and knowledge based services as well as fostering greater innovation. The former is dependent on maintaining the city's attractiveness to foreign talent as well as expanding training of home grown talent through its well developed education system. The latter on the other hand can be partially explained by the stage at which the country has entered this innovation train. ADB (Asian Development Outlook 2001) outlines that areas such as Singapore and Taipei relied on initial acquisition of technology, through collaborative R&D and joint ventures with multinationals to seed the innovation. It then marketed this innovation through the development of necessary physical infrastructure and telecommunications for firms to practice the same and sustain. Therefore the actual cultivation of R&D ventures is restricted . Another aspect to nurturing innovation may be sought in a cultural change to set the mind free and allow expression of individual initiatives outside the current tendency for "in the box" and secure work culture and practices.

In the case of UAE, Dubai is clearly the most dynamic and institutionally most developed of the three examined cities. Similar to Singapore it has a focused economic vision built around its traditional role as the trade and transport hub of the Middle East which it now wants to expand to regional higher value added functions in corporate and IT services, niche research and development activity and tourism. Abu Dhabi is also following a similar development strategy but with a greater focus on the development of capital intensive petro-chemical industries and services. Sharjah has a substantially smaller economy. Its economic vision is in the first instance based on the more modest objectives of exploiting niche markets for establishing itself as a regional manufacturing base relying on its lower cost factors to attract largely small and medium enterprises. At the same time the city is also aiming at expanding its gas and oil industries, developing a niche cultural tourism industry as well as its higher value a dded functions for capturing at least a part of the market for regional corporate services and HQ functions. This is parallel to its desire for becoming the higher educational hub of UAE and the greater region while maintaining its strong local cultural and identity.

In terms of their regional ambitions and international investment all three UAE cities have to some degree a privileged position as none of their potential competitors can match the combination of incentives offered by their political and economic stability, high level of infrastructural development, business support facilities and quality of life. Indeed, all three cities and particularly Dubai have succeeded in exploiting this advantage in establishing themselves as the premier regional HQ and corporate service location as well as tourist destination. Based on the Singaporean experience, however, their long term success and further growth as regional centres for higher value added functions is dependent on addressing certain institutional concerns/issues highlighted in this research. These can be divided into common areas of concern emanating from federal regulations and structures and those that are specific to the individual emirates. The former relates to the need for reform of federal regulation in cert ain areas such as local partnership and agency requirements, labour laws and property ownership as well as enhancing the quality of the legal system. To a certain degree imminent UAE entry into WTO will enforce reform of the more restrictive federal regulations such as the local partnership requirement.