DUBAI 2002-2012 / The Role of Infrastructure Construction in Free Zone Development

 

As mentioned in previous posts, infrastructure construction in Dubai is one of the most significant factor in Free Zone Development. The main infrastructure construction includes Metro and highway network, Jebel Ali Port and Al Maktoum International Airport, which have a profound impact on the Free Zone Development in Dubai.

Initially, ­­­­­the highways and the metro form a network connecting the whole city and also establish connection with other Middle East cities. Due to the rapid urban expansion from Dubai Creek to Jebel Ali, the original main highway Sheikh Zayed Road can’t meeting the greatly increasing needs. Two metro lines and several new highways were constructed successively after 2000 to meet the needs for transportation connections, including Sheikh Mohammed Bin Zayed Road, Al Khail Road and Dubai-Al Ain Road. Sheikh Mohammed Bin Zayed Road cut through the new developed inland areas and is planned to be the main artery connecting Dubai to Abu Dhabi. Al Khail Road and Dubai-Al Ain Road connect the coastal areas of Dubai to the inland areas and inland cities such as Al Lisaili and Murqquab.1

Figure 1 Highway Network in Dubai
Figure 1 Highway Network in Dubai © Mina Akhavan and Ilaria Mariotti, 2015
Figure 2 Metro Lines in Dubai
Figure 2 Metro Lines in Dubai © UrbanRail.Net, 2015

What’s more, infrastructure construction attracts a large number of Foreign Direct Investment (FDI) to Dubai in the early stage of Free Zone Development. Besides local property developers, such as Nakheel, Emaar, Dubai Properties, many developers in different background from all over the world involved in infrastructure construction.2 According to “FDI Bulletin – Emirate of Dubai 2005-2006” from Dubai Statistics Center, the value of FDI in construction ranked no.1 in 2005 and No.2 in 2006 respectively.3 Due to the tax exemption in free zones, the trend of globalization and foreign investment become part of the main driven force in infrastructure development in Dubai. In this aspect, it’s quite successful to set up the free zones.

Figure 3 FDI Bulletin - Emirate of Dubai 2005-2006
Figure 3 FDI Bulletin – Emirate of Dubai 2005-2006 © Dubai Statistics Center, 2006

Besides, the infrastructure construction is crucial to developing Dubai into a global transportation hub. Because of its location in the intersection of Europe, Africa and Asia, it has a great potential to develop transportation industry. A wide range of infrastructure are constructed in Dubai Airport Free Zone and Jebel Ali Free Zone, so as to support the large amount of goods transportation. Moreover, the two free zones are just right next to each other, so some transportation facilities are constructed to connect the two free zones. The infrastructure construction help to form a joint water-air transportation hub, and attract more potential foreign investors. From 2002 to 2012, Dubai Airport Free Zone and Jebel Ali Free Zone became the top 2 economic zones in Middle East.4

Figure 4 Dubai Airport Free Zone and Jebel Ali Free Zone are the top 2 in Middle East
Figure 4 Dubai Airport Free Zone and Jebel Ali Free Zone are the top 2 in Middle East © Jacqueline Walls, 2013

To sum up, the infrastructure construction plays a key role in both attracting FDI in urban development and supporting the free zone development.

Reference List:

  1. Mina, Akhavan and Ilaria, Mariotti, “The role of infrastructural investments in attracting FDIs: the case of Dubai”, 2015
  2. Randeree, Kasim, and Abdul Ghaffar Chaudhry. “Leadership in project managed environments: Employee perceptions of leadership styles within infrastructure development in Dubai.” International Review of Business Research Papers 3, no. 4 (2007): 220-232.
  3. “FDI Bulletin – Emirate of Dubai 2005-2006”, Dubai Statistics Center, 2006
  4. “Middle East Free Zones of the Future”, Jacqueline Walls, 2013, http://www.fdiintelligence.com/Rankings/Middle-East-Free-Zones-of-the-Future

 

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