“We will learn from Dubai’s mistakes.” Thus spoke one of Abu Dhabi’s leading powerbrokers a few years ago as a new generation came to the fore in the emirate, keen to emulate the success – and avoid the pitfalls – of its brasher neighbour.
In many ways the United Arab Emirates’ capital has done just that. Dubai, built on trade even before the discovery of its modest oil reserves, has in recent decades turned itself into an entrepreneurial hub encompassing tourism, transport, services and finance. But, with its grand ambitions and dependence on debt, it has come somewhat unstuck during the credit crisis. By contrast, Abu Dhabi’s vast oil and investment wealth have given it the luxury of time and greater resources with which to plan.
While Dubai built beach resorts and city h
otels for tourists from Europe, the Gulf and Asia, the capital has foc
used on higher- spending leisure and, later, branches of the Guggenheim and Louvre museums are intended as a testament to that vision. Abu Dhabi has pursued industrial developments, from petrochemicals to steel, to tap into its cheap energy resources; Dubai has focused on services and trade.
But Abu Dhabi is also trying to move into sectors that helped Dubai to transform itself so successfully over the past decade, such as the media. The capital’s new and well funded film festival and art show compete with established events in Dubai – although the jury is out on whether these schemes will flourish in the same way. Finance could also become a pillar of the emirate’s diversification as it launches bespoke buildings in the Sowwah Square development aimed at the banking community. International institutions that set up in Dubai’s financial district are already wondering if they might have to open offices in the capital, which is the source for more business than indebted Dubai.
Yet the UAE capital has failed to avoid two of Dubai’s most obvious problems: clogged traffic and housing shortages. As in Dubai a few years ago, public transport has lagged behind population growth; inhabitants must wait another six years for a metro system.
When they meticulously planned the city’s future – but failed to deliver enough houses and offices to meet demand created by its myriad developments – Abu Dhabi’s new generation of leaders provided an unintended fillip for Dubai’s blighted property market. The area closest to the capital turning into a dormitory for Abu Dhabi workers willing to tolerate a three-hour drive each day for lower rent.
Simeon Kerr
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