Saturday, August 23, 2008

Fantasy Cities For an Uncertain Future

Original Article

Oil money from the Gulf states is being invested in the creation of new cities – technological hubs, leisure paradises, ecological experiments – which are also attracting international speculation, says Akram Belkaïd.

It is almost 50ºC in the shade and the scrubby coastline is rumpled by swirls of ochre sandstorms. Here, on a bank of the Gulf 30km east of Abu Dhabi, the new town of Masdar (Arabic for “source,” or “spring”) will be completed by 2016. “It won’t be the future capital of the United Arab Emirates, but it will become much more than that -- the world’s first wholly ecological city,” claimed the enthusiastic guide, pointing to other well-advanced developments around the site.

To the east, the UAE’s new international airport is emerging from the ground. To the north, an immense tourist complex being created on the island of Yas, includes a Formula One racing circuit. But except for a few earthmovers and an occasional languid surveyor, the six sq km of land, which will be the walled city of Masdar, gives little indication of what is to come.

According to Foster and Partners, Masdar’s British master-planners, it will be “the world’s first community to be carbon neutral and zero waste, thanks to the use of solar and wind-power renewables and to strict recycling practices.” Electricity from a photovoltaic power station will supplement intelligent buildings that produce energy. No internal combustion engine vehicle will be allowed inside the high walls that will shelter Masdar from the desert and channel cooling sea breezes.

For a mere $22bn (total estimate), Masdar will have 50,000 inhabitants and over 1,000 businesses specialising in new technology and green energy. “Masdar residents will enjoy the world’s best quality of life in a town devoted to researching better means of protecting our environment,” promised Dr. Sultan Ahmad al-Jaber, who heads the Abu Dhabi Future Energy Company, the state body responsible for the project. Although environmental experts the world over love the idea of Masdar, which is also endorsed by the WWF, regional economists are less convinced of its relevance. (They are downright sceptical of leisure developments beyond reason and good taste, such as a proposed underwater clinic for cosmetic surgery.)

PR message

“Masdar has a powerful PR message,” the head of economic research at a leading Abu Dhabi bank conceded. “Constructing a town which uses just 25% of the energy and 40% of the water needed by an equivalent settlement in the West is a fine initiative. But the real question is whether it will be little more than a plaster stuck over the truth that the Gulf states are among the planet’s largest polluters.” Apart from hydrocarbon extraction, the region has important petrochemical and aluminium facilities, and huge sea-water desalination plants. Its consumer-oriented lifestyle means heavy annual increases in household waste. In 2005, the city of Dubai accounted for 120 million tonnes of waste, a figure expected to triple by 2014. The nightly ballet of rubbish removal in Abu Dhabi, Dubai, Doha or Manama demonstrates just how far the Gulf states have to go in improving recycling.

“We would like to make Masdar an exemplar for others,” said a top Emirates official, refuting the idea that it is a stunt to promote Abu Dhabi’s ecological credentials compared with neighbouring states. “This town will set a new world standard in sustainable development. Because it is hard to improve things in the Gulf’s existing urban centres we must be absolutely sure that the region’s future towns are compatible with the fight against pollution and global warming.”

Masdar is just one among many new towns proposed for the Gulf. A forest of cranes seems to cover the six countries of the Gulf Cooperation Council (GCC). According to a statistic frequently quoted in the international business press, the region accounts for a third of the world’s construction equipment. Beside tourist complexes, skyscrapers, multinational HQs and luxury hotels, the long list of construction projects includes at least 15 new towns. “This doesn’t include extensions to existing towns. A city like Dubai, which has tripled its land mass in 10 years, could legitimately be considered as a new town itself,” according to the architect Moussa Mabidi, who divides his time between the Maghreb and the Gulf.

The phenomenon of Gulf new towns is explained by what economists call the “Double D” factor, demography and diversity. The Gulf’s demand for housing grows by 20% annually, adding to a deficit currently assessed at half a million dwellings. This is a result of huge numbers of skilled expatriates being brought in to boost the local workforce. Because of the housing crisis and inflation, these migrant workers pay on average almost half their salary on lodging. Things could get even worse. “The Gulf’s new towns must be able to retain the expats who contribute to the region’s economic boom,” said Marios Maratheftis, an economist with Standard Chartered. “If they leave because they are unable to find housing, the Gulf’s ability to attract people will be hard hit.”

It’s not just an expat issue. From Bahrain to Kuwait the younger generation of locals also suffers from a housing shortage which, allied to problems finding employment, increases social tensions. “I’m not the only person who can’t wait to see these towns completed. People of my age just don’t have the means to buy homes similar to those built by our parents,” said Ali al-Wafi, a Bahraini taxi driver who hopes to save enough cash to move into one of the schemes planned for Durrat al-Bahrain. This new town of around 21 sq km will be created in the south of the island on 15 artificial crescent-shaped islands. It should be ready in 2015, an investment of $4bn.

’Economic cities’

As for the second D, construction of new towns, quite apart from creating many regionally-based civil engineering contractors, is developing the concept of economic diversity, particularly in Saudi Arabia, where seven such towns are being built over 450 sq km for a total investment of $500bn. These are far from being publicity or ecological marketing exercises; the kingdom is investing increased profits from its oil reserves in new “economic cities”, following the US concept of technology and complementary industry clusters.

Construction of King Abdullah Economic City (KAEC), started in December 2005, and should be completed by 2016. Much more imposing than Masdar or Durrat al-Bahrain, KAEC will stretch over 168 sq km and will cost $27bn; it is on the Red Sea coast, not far from Jeddah, and will include a container port, an aluminium foundry, a passenger terminal to handle 500,000 pilgrims en route for Mecca, and several thousand complexes to house two million people. “This town is at the heart of the Saudi approach to new economic cities,” claimed a spokesman for the Saudi Arabian General Investment Authority (SAGIA), in charge of new town development. “It will ensure the Jeddah region’s industrial future while offering housing options for Saudis.” Other new cities are focused on the knowledge economy, including Knowledge Economic City, planned close to Medina, which the Saudi authorities see as the regional equivalent of Silicone Valley.

This ambitious programme for Saudi Arabian economic cities does not convince all commentators. Many economists, including those locally based, wonder whether factories and facilities may end up like white elephant projects in the Third World. “The gamble involves a level of industrialisation so far unknown in the country,” said an executive of the Saudi British Bank (Sabb). “These future towns will only succeed if they trade globally, which in turn implies the need for foreign companies to invest. That is far from a given, even if the current economic climate is good.” Among the obstacles is the problem of employment nationality. “It’s a paradox,” said the Sabb executive. “The new towns ought to bring 1.3 million new jobs to the Saudis, but foreign companies remain unconvinced about local abilities and are pressing for Asian labour to be allowed in. There’s a risk of repeating the current economic model involving a heavy dependence on overseas workers, while young Saudis face serious unemployment.”

Several Saudi experts fear that KAEC’s success would come at the expense of Jeddah, the economic driver of western Saudi Arabia. “The two cities could be in competition, particularly over their port activities,” claimed Omar al-Badsi, a shipping agent. ’s hope that business doesn’t move across from one to the other because Jeddah residents probably couldn’t afford to live in the new town.”

Environmental impact

There is another issue: environmental impact -- not just air pollution caused by new Saudi industry but also the discharge of huge volumes of rubble into the Gulf. From Abu Dhabi to Dubai, Bahrain and Qatar, new towns and expanded urban areas are being created on land reclaimed from the ocean, sucked up from the seabed by machines which destroy flora and fauna. “The weak standing of civil society and the low calibre of environmental watchdog organisations in the region means that little is being done to prevent the extensive use of the seabed to create construction land,” said a Bahraini academic.

Doug Watkinson is in charge of developing Bahrain Bay, a new city project north of Manama with a budget of almost $3bn. He took evident pleasure in inspecting the site traversed by big trucks. Almost the whole of the two sq km has been extracted from the seabed, but he dismissed any idea that land reclamation harms the environment. “Our techniques, developed mainly in Singapore and Hong Kong, involve only a small residue of waste. We work very comfortably in the relatively shallow Gulf waters.”

Officially these projects are aimed at nationals, but in reality many target overseas investors with their promise of luxury homes. New legislation means that foreigners can now buy property throughout the region, which makes many locals wary. “If you believe the brochures and all the hype,” said Moussa Labidi, “these new towns will be centred on leisure-related luxury. The problem is that the Gulf’s middle classes are unlikely to have the buying power to live in them, unless they throw themselves into even more debt.” In June, the Central Bank of the United Arab Emirates issued a warning about the effect of speculation on household debt, advising regional banks to limit property loans. The warning caused talk of an impending crash.

“Building a new town is not simply a question of erecting the walls and waiting for a buyer, probably a rich foreigner,” said Salah HA Miri, architect and chief executive of the Blue City, a new town project in Oman, where the first phase will be ready in 2011. “We must also work to ensure that locals are not culturally alienated. Today’s profusion of steel and glass is doing nothing to help. The new towns of the Gulf say a great deal about the way in which the Gulf countries are changing.”

Akram Belkaïd is an author and freelance journalist.

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