Jun 09 2009

sand castles

by at 7:11 pm under Uncategorized

I imagine that before even beginning a discussion of Qatari prospects, Jane Jacobs would first insist that the proper unit of analysis is not, in fact, Qatar as a whole, but rather its chief city, Doha/Ad-Dawha, even if the Qatari riyal remains pegged to the US dollar. Then, I think Jacobs would quote herself, and call Doha and its surrounding region a “cathedral in the desert”, because of its geographically unlikely rise. And, while it is true that there are economic opportunities for and in Doha and Qatar, Jacobs might remind us that these opportunities are leveraged against the oil-wealth which gives the Qatari ruling family its power. For this discussion, we should consider how Doha and Qatar fit the model for cities and economic agglomeration outlined by Jacobs, in order to think of the future of this city-region.

Doha is a clear example of what Jacobs called an “elephant” city. As the major center of economic, political, and cultural activity in the country, we might expect that Jacobs would also support the proposition that Doha determine its own currency. In the current situation, Qatar relies on the riyal, its national currency, which is pegged to the US dollar. As Jacobs argued, this system gives a doubly faulty feedback to Doha and to the other regions of Qatar. The desert of the Qatari peninsula is rich with oil, but its infrastructure, even basic elements like roads, simply cannot compare to that which centers on Doha. To paraphrase the old cliche, in Qatar, all roads lead to Doha, and this is no metaphor. Simply expand the map of which I have provided a sample, below, and you will notice that the architecture of the country’s transportation network has only a single hub – Doha. With its density, intensity, and economic power, Doha is the only large-scale economic actor in Qatar; as such, the riyal cannot provide accurate feedback about economic conditions to the rest of the country.

A satellite map of Doha, adapted from Google Maps.
A satellite map of Doha, adapted from Google Maps.

Doha’s rise appears poised to continue in the short-term ahead. The economics of agglomeration would predict that, since Doha has reached a sort of critical mass in terms of economic activity, it will follow the pattern of agglomeration that benefits all cities. The increasing returns enjoyed by Doha, and Qatar (by [a great deal of] extension, however, also describe a familiar trajectory recalled by Jacobs. We find in Doha a city on the upswing of its life cycle. Once Doha began replacing its oil imports with Qatari oil exports, it had begun the agglomeration towards its burgeoning status today. And only recently has Doha begun transplanting jobs from its city center into the developing suburbs around itself. But one wonders whether Jacobs would see a sustainable growth in this pattern, or the establishment of a cathedral in the desert, based on the monopolism of the Qatari economy.

Qatar’s economy is still monopolized largely by oil and gas. According to the WTO Trade Policy Review from 2005, over half of Qatar’s GDP was from oil and gas in that year. More strikingly, these two products alone constituted over 90% over the entire national exports. Jacobs might remind us that these two statistics are not the only important ones, however, and point us towards Qatar’s rates of inflation (around three percent per year recently) and unemployment (less than one percent) as more telling evidence of the country’s economic direction. As these rates indicate, Qatari economic prowess is also on the rise, and indeed, the most recent round of world trade negotiations is famously known as the Doha round, having begun in Doha in 2001. Aside from these two economic activities, as well as the growing tourism industry, Jacobs would certainly have us ask, how flexible is Qatar? The answer to this is still unclear.

So, what might become of Qatar? Jacobs would certainly tell us that the fate of this small nation is inextricably linked to the fate of Doha. As the primary hub for the economic network of the country, Doha and its immediate suburbs will probably continue to expand in the short term. We might add to this that such expansion will likely come at the expense of the other areas of Qatar. However, if Doha cannot sustain its growth, diversify its potential for production beyond the oil and gas resources and high-end tourist attractions, and continue to provide jobs for those who will flock to the region, then it might well collapse under its own weight, with the rest of the nation soon to follow, once the power of Qatari oil is consumed.

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