Traffic problems threaten Middle East's high-flyers
As global car manufacturers continue to swell their profits by capitalising on the emerging Middle Eastern market, the region’s road network is struggling to deal with a pan-Arab epidemic of traffic chaos and gridlock
The high-rolling lifestyle of executives in the region’s ever-expanding cities could be threatened unless governments act now to alleviate traffic problems.
Rocketing car sales across the Middle East have hugely increased congestion and diminished road safety to the point that the reputation of places like Dubai as an efficient business platform could be damaged.
The car industry, however, continues to prosper. Born out of a joint venture between German sports car maker RUF Automobile and Bahraini businessman Rashad Janahi, work started last month on the Middle East’s first automobile manufacturing plant in Manama, Bahrain.
On the initial laying of the foundations, RUF Automobile chairman, Alois Ruf, said: “It is an exciting time to invest in the region.” And, it certainly is an exiting time for multi-national motoring giants, with soaring sales figures experienced across the board in 2005. Middle Eastern sales for Mercedes Car Group (MCG) climbed by 25% on the previous year, with almost double growth in Qatar and a 37.2% increase on 2004 sales in Jordan where 852 vehicles were sold.
Saudi Arabia experienced an increase of 21% with 2102 units sold, while sales in Bahrain jumped by 16.7%. Similar trends were recorded at BMW, where 13 753 units were sold across the region, a 31% increase on 2004. Joining the European giants in capitalising on the regional car boom were two major Japanese players.
Trading Enterprises Honda (TEH), sole distributors of Honda in the UAE and a member of the Al Futtaim Group, announced a 16% growth of sales across the entire range of Honda cars in the UAE in 2005.
Infiniti Middle East (IME), a subsidiary of Nissan reported a 710% rise in Middle Eastern sales, making it the fastest growing car brand in the GCC, selling 3155 vehicles last year compared to 444 units the previous year. As vehicle sales rocket, however, byproducts of the car boom could hinder the region’s healthy economic growth.
The expanding Middle Eastern economy needs a well developed road network because, according to Guenther Seemann, managing director of BMW Middle East, “time is money and in particular for a business hub like Dubai, going from A to B in a very efficient way is necessary or else negative effects will be experienced.”
Speaking before the Middle Eastern road exhibition, Roadex 2006, in Abu Dhabi in March, Wim Westerhuis, high representative of the International Road Federation (IRF), highlighted the severity of these negative effects: “Road deaths in Gulf countries cost between 1.5% and 2.5% of GDP and road safety is a matter of grave concern in the region. In the UAE, road deaths cost 1.6% of the GDP, whereas in Saudi Arabia and Kuwait this figure is 2.4% and 1.8% respectively.”
In stark comparison, the impact of road deaths on GDP is less than 0.75% in western countries like the US, the UK, France and Germany.
The IRF also predicts that the MENA region will experience a 67.5% growth in road fatalities between 2000 and 2020.
Another major problem which threatens to spoil the high standard of living in rapidly developing areas like Dubai, is congestion.
Westerhuis told CEO Middle East: “Here (in Dubai) it is a growing problem but measures should be taken as soon as possible. More attention will have to be given to develop a road system in the urban environment.
“Middle Eastern governments have neglected the importance of traffic issues and underestimated them.”
The UAE government made a significant step towards dispersing congestion problems last month as work began on the ‘Dubai Metro’ project. Expected to be completed by 2009 at a cost of US $4.2 billion, the transit system will consist of 70 km of lines, 42 stations and 87 trains each with the capacity to carry 600 commuters.
In solving traffic problems, however, Westerhuis believes that public transport projects have to overcome particularly difficult challenges in the Middle East. “How are you going to clear traffic problems if, in this climate, you have to wait at the bus stop for ten minutes in the heat? You must offer comfort to the consumer.”
In total, Dubai is expected to invest US $6.8 billion into developing the road and public transport infrastructure within the next two years. US $245 million will also be spent on a building a 70 km road linking the Emirates of Sharjah and Fujairah.
But, Westerhuis insists that if Middle Eastern traffic problems are to be dispersed, changing the attitude of the region’s drivers should be the priority over developing the road infrastructure.
“The roads in the Middle East are (generally) well built and comfortable, and pothole free. It is not the infrastructure that is at fault, it is mainly a behavioural question.
“People here are inclined to speed and switch lanes. Fatalities in accidents in the Middle East are three times higher than in Western Europe, despite Europe’s higher population density. We need to make young people realise that a car is a lethal weapon, and teach users to respect each other,” he adds.
There are some signs that regional governments are starting to take traffic issues more seriously.
In Qatar last month, for example, an agreement was made on preparations to operate a traffic safety institute, while Dubai’s Road and Transport Authority (RTA) launched a new call centre providing a traffic information service.
If rapidly growing areas of the Middle East are to continue enjoying an increasingly high standard of living, as much effort needs to be paid to improving traffic problems as is given to developing the mind-blowing buildings that adorn the region’s urban skyline.