Can Dubai's Ambitions Reach Singapore's Success?

Singapore and Dubai are similar in many ways; both are dynamic and vibrant cities with the main contributors to the economy being tourism, banking/finance, and logistics. A recent study by Dr. Cedwyn Fernandes, Associate Professor at Middlesex University Dubai, shows that Dubai which is well on the path of establishing itself as a world class logistics hub, compares favourably with Singapore, the number one ranked country in logistics.

Published: Mon 10 Aug 2009, 1:37 PM

Last updated: Sun 5 Apr 2015, 9:32 PM

Singapore's current scale of operations in sea freight is far bigger than that of Dubai. Dubai has still some way to go before it can match the performance of Singapore as a logistics hub. The good news is that the main port of Jebel Ali is undergoing a major expansion which will increase its capacity by 5 million TEUs in Phase 1.

Furthermore,theDubaiInternational Airport is by far the largest in the region and its capacity will increase to 75 million at the end of 2009. The airport at Dubai World Central `Al Maktoum International', when fully operational by 2015, will have a handling capacity of 120 million passengers and 12 million tones ofcargo.DubaiLogisticsCity(DLC)will provide facilities for companies to offer value added services, including light manufacturing and assembly, in a single customs bonded and Free Zone environment. These massive infrastructural developments have been initiated to position Dubai as a world class logistics hub.

Currently, the UAE is ranked 20th and Singapore 1st in the World Bank's Logistics PerformanceIndex (LPI).Thestudy suggests some key areas of improvements that the UAE/Dubai needs to initiate such as better coordination across the various border agencies involved in exports and imports. Fees at Dubai ports and airports compare favourably with those at Singapore.

The study highlights that if Dubai is to continue to compete, it needs to retain cost advantages. In order to attract major logistics players to set up large operations in Dubai, the Free zone authorities can allot land at preferential rates to these companies and also provide accommodation for workers that is cheaper than market rates. Rather than pricing these facilities and services at market rates, it will be beneficial to considerthelongtermcontributionofthese companies to the overall economy. To encourage businesses to invest and relocate their operations to Dubai, attention needs now to be paid to developing arobustregulatorysystem.Thismeansa business friendly legal environment and consistent rules and regulations.

Dr Fernandes presented the findings at a recent conference at Ryerson University Toronto, Canada. Also, findings are outlined in a special report in the latest edition of Log-Middle East trade magazine.