Monday, July 05, 2010

That's more like it

It's back to basics with the official opening of the new Dubai World Central/Al Maktoum airport.

As I've said in many previous posts, Dubai is all about trading and always was. It's the reason for its very existence.

The city's economy has always been based on trading, on doing business. Spurts of growth have come as a result of forward-thinking investment in infrastructure based on growing the business base.

The feverish concentration on residential real estate over the past six or so years, particularly as it was unplanned and unregulated, had nothing to do with what Dubai's all about and it's caused most of the problems we're experiencing now.

In the sixties the investment in business infrastructure was the dredging of The Creek, using money borrowed from oil-rich Kuwait, to allow larger cargo boats to use it as a base.

The then ruler Sheikh Rashid also invested in excellent, for the time, telecoms infrastructure.

For access for business people and cargo he invested in Dubai International Airport and Port Rashid.

That good communications infrastructure led to international companies relocating their Middle East offices to Dubai when they left Beirut because of the civil war in the early seventies.

Then came Jebel Ali Port and money was also put into industrial development, such as Dubal, Ducab, all now highly successful and profitable.

I was here in those days and I remember the scepticism, and ridicule, about it all. They were dismissed as 'a waste of money' and 'ego trip developments'. Jebel Ali Port had no commercial future, it was far too big and not on any major trade routes, it was really for the US fleet to use as a base.

The same ridicule is not uncommon about the new airport. Why on earth does Dubai need the biggest airport in the world? What a huge waste of money on a grandiose ego trip. And there have been many gleeful posts on blogs and other sites saying with authority that it was one of the projects cancelled when the economic meltdown hit.

I remember an interview a few years back with someone high up in the airport management, I forget who it was. His point was that it wasn't about what we need now but is about planning ahead, anticipating what would be needed thirty or forty years in the future.

His made the points that land is at a premium in the emirate and if it wasn't reserved now for the airport it wouldn't be available when it was needed in forty or fifty years time. The airport wouldn't be the biggest in the world for some years, it would be constructed in stages depending on demand. And of course it was close to Jebel Ali Port to conveniently link sea and air cargo.

Appropriately the new airport has opened with cargo carriers, while passenger traffic is due to begin next March.



Gulf News has a report on the opening of the new airport here.

3 comments:

the real nick said...

JXB was and is a great idea and I'm not saynig this because we were heavily involved in its construction.
The problem for Dubai is now to a)finally pay the contractors after more than a year's delay, b) complete the airport's next phases, c) complete the adjacent Dubai Industrial City and Logistics city, d)find the money to do all of the above.

eric blair said...

I concede that there is merit in planning ahead. However, should planning ahead not also include a sewage system? a transparent, functional, and efficient legal system? perhaps some financial regulation?

Given that each Emirate has an excellent airport already, 3 airports serving a population of around 5 million people total, I would say there can be little dispute that an additional airport is grossly unnecessary, barring a population growth of say, an order of magnitude.

I also concede that Dubai has historically served as an excellent seaport. However, the demands of sea transport are very different from air transport. I like imported European produce as much as the next self-indulgent asshole, but that hard justifies the world's largest airport to ship me French cheese post-haste. Given that this country exports little produce or other items that must ship quickly by air, I fail to see the importance of an increased air cargo facility. Moreover, unless Dubai becomes the most frequented tourist destination, there is no reason to have the world's largest airport.

Seabee said...

EB, yes of course other areas are in need of change...and it's happening.

However, I was talking about the new airport, which was topical because it's just begun operating.

You need to research the reality of how world trade operates and the link between air & sea freight, and where Dubai fits into the trade routes.

The current airport is just about at capacity and traffic continues to grow massively, both passenger and cargo.

The country does actually produce exports in a big way (relative to its size) but more importantly is the world's third largest re-export centre. (In much the same way and for the same reasons, little Singapore has a huge port and airport operation).

Have a look at items like this on air traffic, and
this on exports,
and this on re-exports.