The uniqueness of the UAE project financing and
infrastructure paradigm lies on the diversity of infrastructures, supporting a sustainable economy, innovation,
important environmental standards and initiatives, as well as
a range of specialized free economic zones. There is vertical
and horizontal integration across infrastructure projects,
creating value, enhancing a diversified economy and sustainability. Some of the infrastructure is top ranked globally.
The UAE also displays a remarkable vision and leadership in
policy making and supporting infrastructure development
and sustainability. All these reinforce the hypothesis that
UAE is a unique paradigm.
This paper serves a dual purpose. It fills the research gap
in the literature on infrastructure in the UAE. It can be also
used as an initial case study on the UAE’s infrastructure
development. The methodology that we follow is focusing
on the UAE and its distinctiveness. This is because there are
not any appropriate comparisons. Other countries do not
match the size and characteristics of the UAE. Countries like
Singapore and Hong Kong that might have been considered
comparable, have not based their development on oil, their
economic and geopolitical narrative is different, and most
importantly, concerning infrastructure they do not have the
range of specialized economic zones as the UAE.
2 Significance of the Study
Infrastructure investment and development occupies a large
part of UAE’s history. Surprisingly the related literature can
be considered quite limited, especially regarding financing.
We contribute to the literature by providing an overview of
major types of infrastructure in the UAE. Unique features of
infrastructure are presented and analyzed. This paper can be
used for research purposes and facilitate future research in
relation to the UAE. At the same time, it emphasizes
important policies, as Specialized Free Economic Zones and
their significance to the economy and sustainability. It also
highlights opportunities and challenges, as the development
of smart cities and the impact of global and technological
trends on infrastructure.
3 Global Infrastructure Trends
The World Economic Forum Global Competitiveness Report
has introduced a new version of its Global Competitiveness
Index, 4.0. The new index comes partly as a response to the
Fourth Industrial Revolution (4IR). It emphasizes, based on
worldwide consensus, the need for a holistic approach that
combines and integrates well-established aspects with new
and emerging factors of competitiveness (Schwab 2018).
Infrastructure is a well-established, fundamental pillar of the
enabling environment and driver of productivity. At the
same time, infrastructure can be combined with numerous
other pillars. Almost all the other 12 pillars are in a manner
enabled by infrastructure.
Infrastructure is also transformed by the Fourth Industrial
Revolution. Modern infrastructure is not only brick and
mortar. Infrastructure is increasingly integrating innovative
technologies. While the infrastructure and urban development industry (IU) has not kept up with digital technologies,
there are future scenarios anticipating the effect on global
megatrends on transformation of the industry, including the
adoption of advanced technologies at scale, and the use of
data and digital models (Schwab 2018). Smart infrastructure
and smart cities are the most illustrative example. Smart
infrastructure is about transforming cities to smart cities
through digital technologies. “A smart city uses information
and communications technology (ICT) to enhance its livability, workability and sustainability” (Berst and Logsdon
2016). “Smart cities put data and digital technology to work
with the goal of improving the quality of life…In particular,
smart technologies change the nature and economics of
infrastructure” (McKinsey Global Institute 2018). There is
no universally agreed smart city definition and it can mean
different things to different people and it varies across
countries (Government of India 2018). However, it can be
widely accepted that it involves the applications of new
technologies belonging to the Fourth Industrial Revolution.
In that sense, infrastructure is closely related to another
important pillar, innovation capability. Without innovation
capability, the infrastructure is going to remain backward
looking and eventually become obsolete. Similarly, additional pillar, notably macroeconomic stability and the
financial system, is essential in order to support and promote
change and sustainable development. Financial innovation is
also essential in order to find pioneering ways to both
finance infrastructure and sustain it. Many international
organizations have highlighted the infrastructure and
infrastructure investment gaps (OECD 2018). The influence
of the Fourth Industrial Revolution is likely to accelerate and
widen this gap. More investment would be necessary to keep
up with the pace of technological transformation and impact
on infrastructure. In addition, climate change and the scenario of low carbon future could further increase these gaps
(Mirabile et al. 2017). The world is entering a new phase and
emerging challenges arise. An important challenge is
financing sustainable and smart infrastructure.
4 UAE Policy and Infrastructure
The UAE has a vision to support and encourage infrastructure and sustainability. Vision 2021 promotes “sustainable
development and infrastructure” and “highlights the
164
P. Petratos
infrastructure paradigm lies on the diversity of infrastructures, supporting a sustainable economy, innovation,
important environmental standards and initiatives, as well as
a range of specialized free economic zones. There is vertical
and horizontal integration across infrastructure projects,
creating value, enhancing a diversified economy and sustainability. Some of the infrastructure is top ranked globally.
The UAE also displays a remarkable vision and leadership in
policy making and supporting infrastructure development
and sustainability. All these reinforce the hypothesis that
UAE is a unique paradigm.
This paper serves a dual purpose. It fills the research gap
in the literature on infrastructure in the UAE. It can be also
used as an initial case study on the UAE’s infrastructure
development. The methodology that we follow is focusing
on the UAE and its distinctiveness. This is because there are
not any appropriate comparisons. Other countries do not
match the size and characteristics of the UAE. Countries like
Singapore and Hong Kong that might have been considered
comparable, have not based their development on oil, their
economic and geopolitical narrative is different, and most
importantly, concerning infrastructure they do not have the
range of specialized economic zones as the UAE.
2 Significance of the Study
Infrastructure investment and development occupies a large
part of UAE’s history. Surprisingly the related literature can
be considered quite limited, especially regarding financing.
We contribute to the literature by providing an overview of
major types of infrastructure in the UAE. Unique features of
infrastructure are presented and analyzed. This paper can be
used for research purposes and facilitate future research in
relation to the UAE. At the same time, it emphasizes
important policies, as Specialized Free Economic Zones and
their significance to the economy and sustainability. It also
highlights opportunities and challenges, as the development
of smart cities and the impact of global and technological
trends on infrastructure.
3 Global Infrastructure Trends
The World Economic Forum Global Competitiveness Report
has introduced a new version of its Global Competitiveness
Index, 4.0. The new index comes partly as a response to the
Fourth Industrial Revolution (4IR). It emphasizes, based on
worldwide consensus, the need for a holistic approach that
combines and integrates well-established aspects with new
and emerging factors of competitiveness (Schwab 2018).
Infrastructure is a well-established, fundamental pillar of the
enabling environment and driver of productivity. At the
same time, infrastructure can be combined with numerous
other pillars. Almost all the other 12 pillars are in a manner
enabled by infrastructure.
Infrastructure is also transformed by the Fourth Industrial
Revolution. Modern infrastructure is not only brick and
mortar. Infrastructure is increasingly integrating innovative
technologies. While the infrastructure and urban development industry (IU) has not kept up with digital technologies,
there are future scenarios anticipating the effect on global
megatrends on transformation of the industry, including the
adoption of advanced technologies at scale, and the use of
data and digital models (Schwab 2018). Smart infrastructure
and smart cities are the most illustrative example. Smart
infrastructure is about transforming cities to smart cities
through digital technologies. “A smart city uses information
and communications technology (ICT) to enhance its livability, workability and sustainability” (Berst and Logsdon
2016). “Smart cities put data and digital technology to work
with the goal of improving the quality of life…In particular,
smart technologies change the nature and economics of
infrastructure” (McKinsey Global Institute 2018). There is
no universally agreed smart city definition and it can mean
different things to different people and it varies across
countries (Government of India 2018). However, it can be
widely accepted that it involves the applications of new
technologies belonging to the Fourth Industrial Revolution.
In that sense, infrastructure is closely related to another
important pillar, innovation capability. Without innovation
capability, the infrastructure is going to remain backward
looking and eventually become obsolete. Similarly, additional pillar, notably macroeconomic stability and the
financial system, is essential in order to support and promote
change and sustainable development. Financial innovation is
also essential in order to find pioneering ways to both
finance infrastructure and sustain it. Many international
organizations have highlighted the infrastructure and
infrastructure investment gaps (OECD 2018). The influence
of the Fourth Industrial Revolution is likely to accelerate and
widen this gap. More investment would be necessary to keep
up with the pace of technological transformation and impact
on infrastructure. In addition, climate change and the scenario of low carbon future could further increase these gaps
(Mirabile et al. 2017). The world is entering a new phase and
emerging challenges arise. An important challenge is
financing sustainable and smart infrastructure.
4 UAE Policy and Infrastructure
The UAE has a vision to support and encourage infrastructure and sustainability. Vision 2021 promotes “sustainable
development and infrastructure” and “highlights the
164
P. Petratos