In the current essay I would like to compare two sister cities that nowadays, drastically change in terms of economic welfare – Detroit and Dubai. As a fact, Detroit is the most populous city in the state of Michigan. Today, the population of Detroit is 708,452 people, with the suburbs – 4.4 million people. In turn, the population of Dubai – the largest city of the United Arab Emirates – is 2.3 million people, with the suburbs – 3 million people.
It should be noted that both cities experienced an unprecedented economic growth in the middle of the XX century. Particularly, Detroit was one of the main centers of engineering in the United States, the center of automotive industry of the U.S. Headquarters and industrial facilities of the largest car manufacturers (Ford, General Motors, Chrysler) are still situated in Detroit. In other words, in the XX century Detroit experienced a boom in its development – it literally flourished, becoming one of the richest cities in North America. Along with this, in 1940s, enormous oil and gas reserves were found in UAE and other Persian Gulf countries. As a result, Dubai experienced a rapid economic growth – from a fishermen village to one of the most innovative cities in the world.
Undoubtedly, the cities have chosen different scenarios of development and hence, this determines why they are so different economically nowadays. In particular, Detroit concentrated its economical efforts on the development of one industry – automotive. Moreover, it is essential to note that this choice was done to the detriment of other sectors of economy. For instance, since the mid 1920’s, Detroit was one of the first cities, where a network of highways and road junctions was built. On the other hand, the public transport system was not developed. In contrast, automobile corporations lobbied the elimination of tram and trolley lines. Simultaneously, there were several advertising campaigns to purchase a private car, which mentioned that public transport is not prestigious and is the “transport for the poor”. As a result, people began to buy personal vehicles and hence, gradually relocated from the city center to its suburbs. Moreover, the cost of real estate began to plummet. Since the most solvent population was leaving, Detroit began to experience financial problems. Jobs were cut, shopkeepers, bankers, pharmacists began to move to suburbs, where still was an effective demand. In Detroit left only those, could not afford to move – the unemployed, living on welfare or low-paid workers. On July 18, 2013 Detroit authorities officially declared bankruptcy because of the inability of the city to pay nearly $ 20 billion debt, as stated in Detroit’s disaster: A once-great city’s collapse is a cautionary tale.
On the contrary, Dubai continues to competently manage its finances. Dubai’s authorities are trying to diversify the economy and eliminate the dependence of the city on oil and gas sector. It can be said that Dubai gradually becomes the largest commercial, financial and tourist center of the Middle East. In fact, all these efforts are extremely successful. Even today, Dubai is the third most important re-export center in the world (after Hong Kong and Singapore). Moreover, Dubai’s authorities greatly simplified the financial legislation and nowadays, Dubai does not have some significant types of taxes. For instance, income tax for organizations, capital gains tax, tax on personal income and tax on repatriation of earnings. Another significant value of doing business in Dubai lies in special free economic zones as stated in The Dubai Model: An outline of key components of the development process in Dubai.
Also, it is essential to note that in contrast with Detroit, Dubai actively invests in further transport infrastructure development. Particularly, the city has two seaports, several bus stations and two major international airports. There are well-developed bus network, and actively developing Dubai Metro, which was opened on April 30, 2009. Along with this, it seems that Dubai tries to overwhelm its visitors with unbelievable luxury of unprecedented scale. Among others, Dubai has: the tallest building in the world – Burj Khalifa, the largest indoor ski resort, the underwater hotel, the world’s tallest arch bridge, several artificial islands, Burj Dubai – the only seven star hotel on the planet. Obviously, with all these Dubai’s authorities try to substitute the historical insignificance of the city and become one of the major tourist centers of the world.
In my opinion, Detroit should learn a lesson that it is unacceptable to “put all eggs in one basket”. With the development of automotive industry, Detroit’s authorities completely forgot about harmonious development of the city. As a result, the crisis of the U.S. automotive industry has left the city in terrible condition. In turn, Dubai shows a clever usage of funds and invests oil and gas revenues to develop infrastructure, tourism and through economic policy – make Dubai one of the leading financial centers of the world. I believe that Detroit’ fate should be a clear example for other cities, how they should not develop their homes.
Detroit’s disaster: A once-great city’s collapse is a cautionary tale. 2013. Web. 21 August 2013. <http://www.post-gazette.com/stories/opinion/editorials/detroits-disaster-a-once-great-citys-collapse-is-a-cautionary-tale-696287/#ixzz2cbGunpOm>
Martin Hvidt. 2009. The Dubai Model: An outline of key components of the development process in Dubai. Web. 21 August 2013. <https://files.itslearning.com/data/ku/6655/martin%20hvidt%20the%20dubai%20model.pdf?>