The region’s new development zones exemplify this sort of thinking. Across the Middle East, governments facing considerable challenges to opening up their economies to foreign investment are developing special economic zones to lure capital within contained, controlled environments. Instead of attempting transformation at the national level, countries like Egypt, Jordan, the United Arab Emirates, Saudi Arabia, and Bahrain are experimenting with smaller economic oases that limit risk while allowing for bold action within their borders — a sign of focused yet flexible planning.
Incentives offered by the economic zones vary, but all such zones attempt to attract investment via tax breaks and favorable regulatory environments. Saudi Arabia’s six planned economic cities will all seek to thrive this way. In addition, some economic zones, such as Dubai Internet City and Dubai International Financial Centre, will seek to cluster industry around a central theme. One zone in Abu Dhabi is being planned as a world-class media cluster. It has started to attract media enterprises like Warner Bros. Entertainment, which recently announced plans to set up a film and video game production firm there. Among other things, the venture will develop films in English and Arabic, and video games that Warner Bros. will distribute globally.
As it turns out, the Middle East is an excellent place for these zones. Its strategic location between Eurasia and Africa has lured wealth-seeking foreigners for centuries. These bold projects belie — or slowly chip away at — an underlying aversion to risk at the national level.
Ambiguous Yet Determined
Some outsiders may not recognize the depth of the Middle East’s determination to grow economically. This may be because the outsiders are pushing to replicate actions and initiatives in the Middle East that, to them, have been tested and proven elsewhere. They find it difficult to interpret their discussions with Middle East decision makers; they come away feeling that the dialogue has been ambiguous or even unproductive. But in the mind of the Middle East leader, the dialogue has been very productive; these leaders are seeking to learn from the experiences of others, but also to think through and adopt tailored solutions that will work best within their country’s own context and environment.
Democracy is one issue that leaders have traditionally chosen to address indirectly and gradually. Although it may appear from the outside that the Middle East is not uniformly embracing Western-style democracy, the truth is that it is consistently progressing. Some part of the MENA region did, in fact, introduce universal suffrage early on, including Lebanon (1952), Egypt (1956), Morocco (1963), and Jordan (1974). Other parts are introducing gradual reforms. For example, during the recent restructuring of the Abu Dhabi government, a foundation was laid for municipal councils with local representation. Similarly, Saudi Arabia introduced elections at the municipal level in 2005. Women have begun to stand as candidates in these elections; they have been elected to membership in the chamber of commerce and industry in the city of Jeddah. In 2006, Kuwait’s parliamentary elections allowed women to cast ballots and stand as candidates for the first time. Today more than 30 women hold ministerial positions in the MENA region. (See Exhibit 3.)
After ensuring that these experiments are working, the thinking goes, a government can gradually roll them out to more visible areas with a greater chance of success. Decision makers are determined to build more democratic governance through gradual public involvement in the political arena.
Indeed, across the region, governments are proactively applying strategic management practices at the agency level — a clear precursor to such practices at the national level. Increased government accountability is evident in the unveiling, implementation, and public communication of strategic plans, and in the public review of these plans. The United Arab Emirates, for example, has unveiled strategic plans covering sectors such as education, transportation, and tourism — a determined attempt to streamline and modernize its government.
