x Abu Dhabi, UAESaturday 22 July 2017

Economic realities must guide plans for development

The Tourism Development and Investment Company deserves credit for explaining candidly that Saadiyat Island development has been slowed down for reasons of economic reality. Other big players in the UAE's public sector please take note. And does the whole 2030 plan need re-thinking?

The "Saadiyat story" of hotels, museums, golf courses, leisure centres and the like has exemplified the rapid development of the UAE, and in particular the city of Abu Dhabi, for several years. The master plan announced three years ago involved a projected cost of more than Dh90 billion, with nearly 30 hotels; major museums like the Zayed National Museum, the Guggenheim and the Louvre-Abu Dhabi; and much more.

A drive across the new Sheikh Khalifa Bridge shows the progress already. Saadiyat today is already unrecognisable from the island I first visited more than 35 years ago, which had a few fishermen's shacks and an agricultural research station run by the University of Arizona.

The vision of the island as a major international cultural centre is still on track, but as readers of The National learnt a couple of weeks ago, the timetable of the master plan is being revised. The pace of development, once frenetic, is being slowed down. According to James Pringle, the acting chief executive of the Tourism Development and Investment Company (TDIC), some of the major hotels will be completed later than originally planned.

The reason? TDIC has changed the timetable principally based on economics. "We have to be a commercial developer," Mr Pringle said. "It doesn't do the industry any good if you throw eight hotels into the market at once."

The hope is that the hotels that are being delayed will open by 2014, when at least some of the museums are expected to be ready. "We've made what I think is a realistic adjustment to sequence everything, from infrastructure to residential to lodgings, with the roll-out of the cultural district," Mr Pringle said.

As it happens, we already knew that there would be a slowdown at Saadiyat because contractors, developers and consultants have been aware of it for some time. There have been layoffs as a result. But what is new is that it's been publicly explained.

The TDIC deserves credit for clearly explaining the issues to newspaper readers.

Besides Saadiyat, it's no secret that some other government-related agencies and companies have been slowing down plans as a result of budget cuts. This makes excellent sense in my view if, as Mr Pringle noted in regards to TDIC, they become more commercially focused.

Development plans were drawn up in a very different local and global economy. Before the 2008 crash, world oil prices and confidence were high. In the context of an economic boom, it seemed perfectly reasonable to aim for massive, rapid growth.

Now it's different. As in the case of an individual household, if economic circumstances change for the worse, it makes sense to re-evaluate existing plans. If there's a slowdown in the projected growth of visitor numbers, then the need for additional hotel rooms slows at the same time.

It's never easy to accept that a long-term plan that has been committed to may no longer make economic sense, at least within the original timetable. One feature of good governance, however, is the ability to adapt plans to suit changing circumstances.

Abu Dhabi Government has that ability, which is reassuring. Perhaps, though, there is scope for a little more explanation of what's going on. Well-founded rumours of slowdowns, cutbacks and job losses tend to have a negative effect on business confidence. If the cutbacks aren't explained, then it's difficult to reassure businesses. Moreover, it's difficult for people to understand that there is a coherent government strategy to adjust long-term planning to take account of changing circumstances.

What little I know of the details of the cutbacks, across a variety of organisations, makes pretty good sense. They are essential. A slowdown in construction that, for example, leads to lower projected demand for water and electricity needs to be considered by planners.

At a macroeconomic level, it might make sense for the whole Abu Dhabi 2030 Plan to be re-evaluated in light of developments since it was first prepared. It was designed as a blueprint, a long-term goal looking two decades into the future. It was never intended to set mandatory targets with a mandatory schedule, irrespective of local and global economic changes.

So perhaps other agencies, following TDIC's lead, could offer some more explanations about slowdowns and cutbacks in expenditure. These government agencies know who they are. By so doing, they could strengthen confidence in the future, however uncomfortable the first part of the journey might be.

The outlines of the Government's strategy would come more clearly into focus, and that is in the interest of all.

 

Peter Hellyer is a consultant specialising in Emirati culture and heritage