Singapore gambles on the future

Dubai is building even more hotels, but will it go as far as Singapore in the drive to lure more tourists?

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By  Stephen Corley Published  May 21, 2006

|~||~||~|Dubai is building even more hotels, but will it go as far as Singapore in the drive to lure more tourists? A common theme to which I return to in this column is the increasing need for Arab states to pour more of their record oil revenues into export industries rather than giant construction projects. More than US$1 trillion worth of infrastructure projects are in the pipeline at present. Despite calls in the press this week for more “mega projects” I believe there is enough construction and the GCC might be better placed in developing export-oriented industries. Diversification is the key to long-term prosperity here and a source of sustainable growth for the region. It’s gratifying therefore to hear an announcement from Abu Dhabi that it intends to invest US$100bn over the next five years in diversification projects. Unfortunately the bulk of that investment, according to the press release, is heading towards the energy and industrial sectors. In fairness Abu Dhabi is seeking to develop new manufacturing, tourism, logistics and service industries in joint ventures with leading global companies also but the primary recipient for funds will be energy projects. A lot of current growth is actually growth based on consumption. Cash is injected into the economy and spent on importing goods when the money should in my opinion be invested in developing the capacity to produce. Consumption led growth is also inflationary. Last week the UAE economy minister blamed last year’s hike in inflation to 6% on soaring construction costs, driven by regional demand for everything from cement to labour. Apart from the fact that the figure is laughably low – I assume it only applies to UAE nationals - there is a screaming need for a stricter fiscal policy that limits expenditure to the absorptive capacity of the country. In the meantime, however, some believe the absorptive capacity to be limitless. In Dubai’s epic struggle to build and create sufficient rooms to cater for the seemingly inexorable rise of the tourist, the government via Tamweer, is bringing us Bawadi. In a region well used to excess, the development is going to require a new set of superlatives. Rivaling Las Vegas, the hotels alone, offering 29,000 rooms in total, are presumably going to provide overspill to Dubai’s expected business and tourist community. Hard to know as the developers website is also under construction. But assuming they come - and they always do - I’m betting Las Dugas is going to have to offer something more than Disneyland. For in the Far East, Macao is spearheading a hotel and leisure development programme that will make Al Bawadi look like Legoland and Singapore looks set to throw off the shackles of its traditional growth blueprint and embrace the evils of the west – with casinos, no less. Perhaps we will embrace the free-economy triumphalists and the virtues of rcapitalism and copy our long-held role model. Prime minister Lee Hsein Loong is promising a generational change by bringing in what his father, Lee Kuan Yew and others had banned in the past. So, casinos and cabarets are about to arrive, and a whole lot of other entertainment and leisure avenues. The plan is to turn the city-state into an arts and entertainment hub for the region, building on its existing status as a business hub. “We want Singapore to have the x-factor” - which, I assume, is not a reference to a satellite television game show, - “ that buzz that you get in London, Paris or New York,” the Prime Minister is quoted as saying, adding that his country was in danger of becoming a “backwater”. Founding father Lee Kuan Yew has himself discarded his views on how to shape Singapore. Having opposed every attempt to relax very stringent anti gaming laws in the past he now agrees Singapore “has got to reposition itself in the world.” “The old model on which I worked was to create a First World city in a Third World region — clean, green, efficient, a pleasant, healthy and wholesome society, safe and secure for everyone. These virtues are no longer sufficient.” The city-state has no natural resources to boast of, so instead it filled its coffers with tax income emanating from a well developed hub status in industries similar to Dubai; business, shipping, shopping, air travel and re-export. Over forty years Singapore has achieved a great deal and the parallels between it and Dubai are astonishing. Disturbances in the region hardly ever had an echo in the city-state. The strange communal mix of indigenous Malays, Chinese, Indians and expatriate Europeans and Americans live in an atmosphere of share and care. They live together, they work together and they certainly progress together. And who's to say very soon that they're not going to be playing roulette together. Will Dubai's melting pot community follow?||**||

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