The Rise of the Singapore-Dubai Model: Opportunities for Expansion in Africa, Latin America, and Beyond
“The city was reminiscent of a modern-day Persepolis. Its buildings, like towering pillars, tested the sky’s limit. The evenly paved roads belched with the smell of new tarmac, as if a million masons woke up every morning and by hand lay asphalt one grain at a time,” writes Iranian poet Soroosh Shahrivar on the allure of Dubai. In merely 50 years, Dubai has developed from a backwater trading post into an iconic city and economic powerhouse. The city today with one of the most recognizable skylines in the world had just a single skyscraper and essentially no infrastructure in 1979.
Like Dubai, Singapore has experienced enormous growth following an era of stagnation. The former British colony faced severe unemployment, a housing crisis, and political upheaval in the mid-1900s. Under Lee Kuan Yew and the People’s Action Party’s leadership, the small island with few natural resources grew into a global leader in oil refining, air travel, and shipping. Today, Singapore is among the wealthiest countries in the world. It ranks highly on the human development index, and, in most cases, higher than more established countries. This transformation is nothing short of remarkable.
From Irrelevance to Excellence
Singapore and Dubai are among the most influential and economically significant cities in the world, according to the Globalization and World Cities Research Network (GaWC). They join the likes of Tokyo, Paris, Hong Kong, Shanghai, and Beijing and rank below only London and New York. The criteria used to evaluate the global importance of cities includes the amount of direct foreign investment, financial infrastructure, corporate headquarters, expat population, and connectivity by air. With complex geopolitical backgrounds, limited resources, and minimal economic influence, how did Singapore and Dubai join this elite list?
Singapore and Dubai have built exceptional infrastructure without compromising on multiculturalism. Their governments developed glistening skylines full of luxury hotels, high-end restaurants, and world-class museums. Both countries have constructed major seaports and airports to transport astounding numbers of passengers, with Dubai International Airport serving a staggering 97.3 million people in 2019 and Singapore Changi Airport handeling 68.3 million passengers during the same period. At the same time, Singapore balances the religious and cultural interests of ethnic Chinese, Malays, and Indians with minimal discrimination. In Dubai, located in a part of the world notorious for religious intolerance, Christians and Jews are allowed to practice their religion freely. In both places, people of all faiths walk safely in the street, and there are diverse places of worship including churches and synagogues.
Democratic Governance Falters Despite Economic Growth
Despite their capitalist policies and cosmopolitan societies, neither Singapore nor Dubai is fully democratic. Dubai falls under the purview of the constitutional monarchy of the United Arab Emirates. The country received a measly 17/100 on Freedom House’s Freedom Scale because there is no freedom of speech or freedom of the press, and the civil liberties of citizens are heavily restricted. Singapore is significantly freer, and there are aspects of political pluralism in the country. However, the ruling PAP severely limits the growth of opposition parties. As uncomfortable as it is to admit, Singapore and Dubai have achieved economic prosperity without representative political systems; in fact, much of this growth has been made possible by government intervention that might otherwise have been stifled by outside forces.
Growth of State Owned Enterprises and Regional Benefits
In Dubai and Singapore, state-owned enterprises aggressively support the private sector to achieve sustainable growth. Temasek Holdings, an investment fund owned by the government of Singapore, holds majority stakes in Singapore Airlines, Singapore Telecommunications, and Mediacorp – the national airline, communications company, and media network. The Economic Development Board (EDB) facilitates foreign investment in Singapore and helps companies transfer their operations. In Dubai, the Investment Corporation owns Emirates NBD bank, Emirates Airlines, Emirates National Oil Company, and Emaar. Emaar Properties has built essentially all of modern Dubai, including the neighborhoods surrounding the Dubai Marina, Creek Harbor, and Downtown Dubai. Neither Singapore nor Dubai could have achieved significant levels of prosperity without widespread government oversight.
The rewards of recent government investments have extended beyond the city level and have presented extraordinary opportunities for the United Arab Emirates and the Middle East as a whole. The Dubai World Expo, hosted in 2022, showcased the best in art, culture, and innovation in the UAE and beyond. One estimate predicted that for every expo-related job created in the UAE, 60 new jobs were created across the MENA region. Just north of Dubai, the cities of Doha and Manama built ambitious skylines and positioned themselves as financial centers worthy of international investment. The developments in Doha have been accompanied by an increase in tourism; Qatar Airways carried 18.5 million passengers through Hamad International Airport in 2021, and it has grown into a significant competitor of Emirates. Dubai’s efforts to bridge the Arab world and the West likely helped Qatar win the nomination to host the 2022 World Cup. We will continue to see the impact of this rebranding in the coming years.
Deployment of the Singapore-Dubai Model
Which region should look towards the Singapore-Dubai model next? The most compelling answer is Africa. A global city would draw in foreign investment and finally launch the continent onto the global stage. In May 2014, the World Economic Forum identified Cape Town, Durban, and Johannesburg as cities likely to become more influential. That prediction has proved incorrect based on GaWC metrics; not a single African city has reached GaWC Alpha+, Alpha, or even Alpha- status. Urbanization is taking place in Africa; there are several cities that house upwards of 10 million people, but the population has not experienced corresponding increases in wealth.
While Singapore and Dubai are easily accessible, bureaucratic barriers and the lack of air links mean that African cities are relatively closed off to the world. New York City, the largest regional economy in North America, is connected to only three sub-Saharan cities by nonstop flight: Cape Town, Nairobi, and Accra. Ghana and Kenya require visas for American and EU citizens, as do many other African countries. This is one of the challenges of doing business in Africa. Due to unpredictable economic and geopolitical conditions across the continent, some multinational companies avoid Africa altogether. Others establish regional headquarters in Southern Europe or the Middle East, locations that are hundreds of miles away but offer the infrastructure needed to run a 21st-century business.
Africa is not the only region plagued by disconnection from the global economy; Latin America faces this problem, too. Though more developed than Africa in terms of GDP, Latin America has largely failed to globalize. Brazil and Argentina, despite being two of the largest economies in South America, are two of the most closed economies in the world. According to one estimate, trade amounts to less than 30 percent of their respective GDPs. This is partly due to limited connectivity by air; the Development Bank of Latin America estimates that one-third of flights connect Latin American cities, which limits cargo space for regional trade. This disconnect does benefit one city, but it’s not in South America: Miami hosts the Latin American operations of more than 1,400 international corporations. Ideally, all of these companies would operate more directly in the region, furthering economic growth and productivity in underserved areas.
Development in Africa and South America
In Latin America and Africa, cities will only flourish if they are committed to continually enhancing their connectivity and improving their international reputation. These initiatives can only succeed with significant government intervention and oversight. Tourism in Africa has shown tremendous promise, reaching more than 56 million international arrivals in 2018. The continent’s prime positioning near Europe and Asia makes it accessible to wealthy foreigners. Likewise, much of South America is accessible within a few hours from Miami or Dallas, two major air traffic hubs. Ultimately, consumers are attracted to world-class, boundary-pushing innovation. In Dubai and Singapore, it took palm-shaped islands and a multi-acre skypark to catapult the cities onto the global stage. Cities in Africa and Latin America must embark on memorable projects that solicit global interest, creating experiences that can be found nowhere else.
To pinpoint some promising areas of development, Lagos or Accra could become centers of technology or international trade. The cities lie on prime coastline with lucrative shipping routes, but their seaports have been prone to mismanagement, corruption, and decay. In Lagos, the Port Throughput processed 1,528,520 twenty foot equivalent units (TEU) in 2020, down from an all time high of 1,723,000 TEU in 2012. Singapore’s port has been successful for reasons other than its strategic location; its large capacity, good governance, and ease of doing business have grown it into the busiest in the world. And, building efficient ports has major implications for regional economic growth.
On top of infrastructure, cities in Africa and Latin America must develop reliable legal systems trusted by international organizations. Companies are wary of doing business in a country where courts are hesitant to enforce basic contracts. Rampant corruption, legal irregularities, and slow court systems must be eliminated. Dubai’s legal system is based on Sharia Law, and while medieval practices like blood money remain in the City’s legal code, the financial courts maintain a recognized and respected regulatory framework. International corporations are familiar with the laws and statutes and have faith in the judges to uphold them. In parts of Africa and Latin America, there is no such confidence. Governments will have to strengthen property law, enforce contractual agreements, and update their legal codes to compete with more established regions.
The parallels between the rise of Dubai and Singapore are widespread and revealing. Fueled by a relentless desire to innovate, government investment in legal systems, air connectivity, tourism, and trade has created a prosperous future for millions of people. As Africa and Latin America experience rapid population growth and urbanization, the Singapore-Dubai model offers a powerful framework to build flourishing cities in underdeveloped parts of the world.