[Editorial] Lessons from Dubai

Former economic ministers of Korea who were dedicated to the economic development of Korea in 1970s and 1980s recently visited Dubai, UAE, which is on the fast track to become an international hub of finance and logistics. They all agreed that Korea’s goal of becoming the Northeast Asian hub is just a pipe dream if Korea’s leadership fails to free itself from ideology. The delegation included main players of the so-called “miracle of the Han River” and they were deeply impressed by the “miracle of the desert” that is Dubai, while at the same time worrying about what’s happening in Korea.

Former Prime Minister Nam Deok-woo and other members of the International Business Center Forum, a gathering of former economic ministers and economists, pointed out that it will be difficult for Korea to show impressive economic growth again with the ideology-oriented policies and excessive regulations of the current administration when they had a seminar in Dubai. A Korean businessman selling the mixed-use residential building in Dubai said, “It only took 7 months from buying a subdivision for development to completing a building to making the building ready for sale.” It is a surprising story for Koreans who usually feel frustration because the same process takes a few years due to excessive regulations in Korea.

Dubai was also not that friendly toward foreigners and foreign capital in the past. But it designated free economic zones where businesses are free from taxes and restrictions on remittance in 1985 and now it has more than 5,400 businesses from 120 different countries. It also has a plan to build the world’s best hotels, theme parks, artificial islands, and duty-free shops attracting 15 million visitors by 2010.

The leader of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, gave people choices of religions and lifted regulations on alcohol, even though Dubai is an Islamic country, to realize his goal to build an economy strong enough not to depend on oil exports by 2011. When foreign businesses ask officials of Dubai to do something in their favor, they used to say, “Inshallah” (If Allah wills it), but now they say, “We will do what we can do.”

The CEO-type leadership that Sheikh Mohammed bin Rashid Al Maktoum has shown is what Korea lacks most.

He took decisive deregulation steps, saying, “Economy is a horse and politics is a carriage. A horse draws a carriage but a carriage can’t draw a horse.” In contrast, we see many impossible trials of making a carriage drawing a horse in Korea. Needed leadership is missing. What we see is a big government, free economic zones that are not free from regulations, anti-business sentiment, and regulations. Not only those who played critical part in “miracle of Han river” but also the general public, feel frustration over current conditions of Korea.