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Winston Mok

The Strait of Hormuz blockage is being felt far and wide. While the world struggles with higher pump prices, key energy exporters such as the United Arab Emirates (UAE) and Qatar face severe economic setbacks. In Gulf states serving as air hubs, expats and affluent locals are scrambling for the exit.
The discovery of oil transformed Arabian deserts into rich petro-states. Knowing this wealth would not flow forever, the states leveraged their strategic locations to become air traffic hubs. Emirates and Etihad have emerged as major carriers; Doha’s airport facilities are deemed more impressive than Singapore’s; Qatar Airways is named the world’s best airline on several rankings, beating Cathay Pacific and Singapore Airlines.
Dubai is now among the world’s top 10 container ports – the only one outside East and Southeast Asia. In comparison, Hong Kong has long lost its leading port position, having evolved in its distinctive role within the integrated system of the Greater Bay Area.
Before Art Basel Hong Kong last month, the inaugural Art Basel Qatar was held in early February in Doha. Dubai hotels arguably offer greater luxuries than those in East Asia. Dubai properties attracted East Asian buyers from Shanghai to Singapore. Hong Kong’s low taxation is outmatched by Dubai’s zero taxation.
But the appeal of living no-tax in glamour all comes to naught when there are missiles and drones flying over you – which may land on you at any time.
The Arabian Peninsula is rich in oil but poor in water. The arid land is not endowed with adequate water resources to sustain the international population its modern economies depend upon.If Iran hits the Gulf’s desalination facilities, living in a luxury flat offers little comfort. With the UAE’s survival at stake, the mirage lifts – and we see clearly how fragile the greatest success story in the Middle East always has been.

Geography can be both a generous and treacherous patron. The UAE rose to global prominence partly because of its location. Sandwiched between Israel and Iran, however, it now cannot escape collateral damage from the Iran war. Not only are energy exports impeded, but Iran has also attacked the oil and gas facilities of its Gulf neighbours.
Iran is pouncing on the region’s ports and airports, factories, bank offices and data centres. How resilient is the UAE’s artificial intelligence dream when its data centres are at risk of strikes by Iran? As much as geography has allowed Gulf states to thrive, their promising future is unravelling from that very geography.
The economies of some of the most prosperous Gulf states are built on guest workers – from labourers to CEOs. Their relationship with the host country is transactional. No matter how long they stay, their status remains temporary. When trouble comes, we witness the exodus of the globally mobile.
While the Gulf has perfected the art of attracting people meant to leave eventually, the Pearl River Delta is quietly doing something far more difficult – drawing people to settle. The dramatic rise of Shenzhen, now a world-class tech hub, was also built on geography – its proximity to Hong Kong. But that geographical advantage is based not on natural endowment but historical divergence.
It was the deliberate construction of complementarity across a jurisdictional border that has served as productive tension between two different institutional systems. Of all the special economic zones created by Deng Xiaoping, Shenzhen is the most spectacular success because of its geography.




Over time, Shenzhen would surpass its teacher in many ways. Now, the geographical advantages are bidirectional. Whereas Shenzhen was once Hong Kong’s manufacturing hinterland, its status as a global tech hub now reinforces Hong Kong’s position as a global financial centre. The Northern Metropolis in the works, particularly the Hetao cross-border science zone, will advance a complementary integration.
Shenzhen-Hong Kong-Guangzhou is ranked by the World Intellectual Property Organisation as the world’s top innovation cluster. Encompassing these three cities and the broader Pearl River Delta region, the Greater Bay Area has emerged as the world’s most dynamic metro region. The Greater Bay Area is testimony that geography can be constructed by connecting infrastructure.
East Asia is built on the most dynamic and sustainable resource: human capital. Shenzhen has flourished by drawing the best and brightest from all corners of China. Many stay and raise families. As Huawei Technologies relocated some research and development facilities to outside Shenzhen or families pursued better educational opportunities in Hong Kong, talent might move across the municipal boundary but stays within the Greater Bay Area.




This region is where they choose to belong. Many have switched their hukous to Greater Bay Area municipalities. Those who stay in Hong Kong for more than seven years become permanent residents.
It is a tale of two regions at two ends of Asia. The Gulf built its stunning facade with workers who were always meant to leave. The Greater Bay Area built its miracle with people who chose to make the region a better home. It is the difference between sand and concrete.
Sand when shaken simply redistributes; concrete, solidified by compression and time, only grows stronger. The Gulf received its geography as a gift and built magnificently upon it – but without roots. Geography is a starting condition – committed human capital is the only lasting foundation that holds when the storm comes.


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For Gulf states, geography is both a generous and treacherous patron

A couple stands looking at the Dubai skyline, with a view of the Burj Khalifa, the worlds tallest building, seen from Creek Harbour on April 3. Photo: AFP

An Emirates aircraft prepares to land as smoke rises from a fire near Dubai airport on March 16. Photo: AFP

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An Emirates aircraft prepares for landing as a smoke plume rises from a fire near Dubai International Airport on March 16. Photo: AFP

Passengers at Dubai International Airport in the United Arab Emirates. The UAE this week quietly banned most Iranians from entering the country or transiting its airports. Photo: Xinhua

The head offices of Iran’s Bank Melli in Dubai’s Deira district on March 9. The UAE is home to more than half a million Iranians, many of whom are connected to ruling elites in Tehran. Photo: AFP

A man rides a scooter at the Dubai Marina on March 11. Dubai, as a business hub, residence and tourist destination, has long “acted as a pressure valve for the Islamic Republic”, analysts say. Photo: AFP

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Is the Strait of Hormuz a ticking environmental time bomb?

Oil tankers and cargo ships line up in the Strait of Hormuz as seen from Khor Fakkan, the United Arab Emirates, on March 11. Photo: AP

An illustration shows the location of the Strait of Hormuz, which is critical for oil and gas exports. Photo: Reuters

An LPG gas tanker at anchor in the Strait of Hormuz, amid the US-Israeli conflict with Iran, in Shinas, Oman, on March 11. Photo: Reuters

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Smoke plumes billowing from the Jebel Ali port and desalination plant in Dubai, United Arab Emirates, after an Iranian strike on March 2. Photo: AFP

An Emirates aircraft flies past plumes of smoke from an ongoing fire near Dubai International Airport in Dubai on March 16. Photo: AFP

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Sandwiched between Iran and Israel, oil-rich transport hubs like the UAE now face the fragility of their newly built economic prosperity


Sandwiched between Iran and Israel, oil-rich transport hubs like the UAE now face the fragility of their newly built economic prosperity.


US-Israel war on Iran

United Arab Emirates (UAE)

Qatar

Emirates

Aviation

Transport and logistics

Greater Bay Area

Shenzhen

Iran

Kuwait

Oman

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


For Gulf states, geography is both a generous and treacherous patron

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Sandwiched between Iran and Israel, oil-rich transport hubs like the UAE now face the fragility of their newly built economic prosperity

Sandwiched between Iran and Israel, oil-rich transport hubs like the UAE now face the fragility of their newly built economic prosperity