News Summary Blog Assignment (5-23-14)

Chris Monsour

Chuck Stull

Economics of Global Travelers

23 May 2014

Link to Article: http://www.khaleejtimes.com/kt-article-display-1.asp?xfile=data/government/2014/May/government_May53.xml&section=government

(This article does not have to do with economic issues within the UAE, but rather the complete opposite. It is actually quite difficult to find any negative economic news regarding the UAE online!)

1. The article opens with a strong summary of just how well the UAE is doing in the world, as well as Dubai. "The UAE has the most efficient government, the strongest decision-making process and the lightest bureaucracy in the world, while Dubai topped all global cities for its lowest tax rate, bustling construction activity and swift airport access, two prestigious surveys by international institutions revealed on Wednesday." The International Institute for Management Development also ranks the UAE as number one globally for low government debt, effective corporate boards, and quality of air transport. Dubai was also ranked seventh as an urban gateway due to its efficiency of its airport connections to central business districts for which it ranked first globally.

2/3. The UAE, Dubai in particular, is a very popular destination for businesspeople and travelers due to the ease of access to the cities, airports, and other amenities. The urban sprawl around the country occurred recently due to how young the country is and because of this, the UAE was able to engineer precisely how they wanted their cities to be laid out. This was not the case for places like Detroit, Chicago, and New York, all of which have been around for over a century. Those cities could not sculpt their sprawl, but only witness it as it grew and grew.

City Analysis Assignment (5-23-14)

Chris Monsour
Chuck Stull
Economics of Global Travelers
23-May-2014


1. For the city of Dubai in the UAE, it falls directly in the heart of Central Places. There is a vast business district in the center of the city that is surrounded by other zones such as factories, airports, sea ports (including the largest port in the Middle East, Jebel Ali), and working-class neighborhoods. The business district is also associated with the hotel/resort district. The Burj al-Arab, Burj Khalifa, the Dubai Mall (one of the biggest malls in the world), and numerous financial headquarter centers are all spread out within downtown Dubai. There are smaller attractions and businesses surrounding the central business district before the sprawl turns into numerous airports including Dubai International Airport, as well as manufacturing plants, misc. factories, and lower-income housing.

2. Dubai offers the largest skyscrapers in the world, a vast ocean coast used for both tourism, ports, and marinas, overall opulence at its finest, and much more. Dubai is a great example of a city that truly has everything. It is one of the most magnificent destinations and urban areas in the entire world. The only thing unavailable there that I can think of is grass. As funny as it seems, because the UAE is one giant desert, there isn't much grass within the country. Dubai did not bother to lay out a lot of fake grass around the city. Grass may not be available in a higher order city either just because of the amount of infrastructure in such a close proximity, however other higher order cities might have more foliage than Dubai.

Junkyard Planet (Blog Assignment)

Chris Monsour
Chuck Stull
Economics of Global Travelers
14 May 2014

a. The vast majority of US scrap metal goes to China instead of India because it is cheaper. Desperate demand in China makes shipping to China more cost-effective than anywhere else, especially India, even if India has cheaper labor costs. India does not export enough products to the West Coast of the United States to create a strong demand for shipping routes going back and forth from California to India. Because of this, "the shipping companies aren't going to have much incentive to offer discount shipping rates for containers moving from Los Angeles to Mumbai."

b. The second page of this article explains the unsettling trade imbalance between China and other places around the world like the United States and Europe, mainly attributed to the fact that China is producing more and more while other places in the world such as the United States and Europe are consuming more and producing less and less. These trade imbalances not only harm economies to an extent, but they especially add stress to the shipping companies that are in the business of moving goods back and forth around the world. If China is exporting goods to the US but the US isn't exporting the same amount back to China, the shipping company has to figure out the cheapest and quickest ways to move their containers back to China so they can be restocked with more goods to ship back to the States. Shipping empty containers will damage the profitability of the companies. To most, including myself, this problem wouldn't have really crossed our minds. After reading more into it, the backhaul problem proves to be a pressing issue.

c. Geographic topics in this article mirror some of the geographic points brought up in Jared Diamond's, "Why Did Human History Unfold Differently On Different Continents For The Last 13,000 Years?" As said in this article, it doesn't make sense to ship containers to remote areas of the world when there isn't a huge chance for repeated business in that region. For example, the India to US route. Because India doesn't export many goods to the US, it doesn't make sense for shipping companies to frequent that route, both for cost-related reasons and geographic reasons. The Rocky Mountains and other geographical barriers in the US make it more expensive to ship something from LA to Chicago than from LA to China. Much like the Diamond article, people and industries flourished in the places that were accessible, popular, and offered opportunity for growth. This is exactly why massive sea ports pop up in the locations they do and it is also why there are certain shipping routes around the world that will always stay in place.

The Box: Shipping Container Article (Blog Post)

Chris Monsour
Chuck Stull
Economics for Global Travelers
9 May 2014

a. I found the paragraph describing how the shipping container built a new economy to be very interesting. Sleepy harbors that once saw little to no day-to-day action were moved into the front ranks of the world's ports overnight, while new, massive ports were sprouting up all over the world. It was very interesting to see how the container affected countries, particularly poorer ones. "Poor countries, desperate to climb the rungs of the ladder of economic development, could realistically dream of becoming suppliers to wealthy countries far away." The container left it's mark in globalization and world trade giving hope to countries and cities that never thought there would be a light at the end of the tunnel.

b. The author saw the development of the shipping container as crucial to globalization, particularly in the ways the container aided in stabilizing and developing economies in countries and cities, aided in the reach of firms that could once only service domestic areas, and aided in both national and international consumerism, giving consumers and countries more choices with the products they choose to purchase for consumption or business-use. A shipping container from Malaysia can end up in Ohio, 16 days later, unopened and unaltered by people. The container has changed the way the world market works, making it more convenient for all countries to participate in global trade.

c. Domestic manufacturers may suffer in the transformation of global transportation, much as how it was described in the article. If it is cheaper to buy headphones made in Asia than it is to buy them in America, Americans will measure up the reliability and price of the products and most likely opt for the foreign headphones. Though this is not always the case, it is the principle behind the matter. Cheap global trade makes domestic manufacturing and sales more difficult. At the same time, the evolution of global transportation has created a market of competition that constantly keeps market players such as countries and big businesses on their toes doing everything they can to attract and keep their consumers.



Even as it helped destroy the old economy, the container helped build a new one. Sleepy harbors such as Busan and Seattle moved into the front ranks of the world's ports, and massive new ports were built in places like Felixstowe, in England, and Tanjung Pelepas, in Malaysia, where none had been before. Small towns, distant from the great population centers, could take advantage of their cheap land and low wages to entice factories freed from the need to be near a port to enjoy cheap transportation. Sprawling industrial complexes where armies of thousands manufactured products from start to finish gave way to smaller, more specialized plants that shipped components and half-finished goods to one another in ever lengthening supply chains. Huge industrial complexes mushroomed in places like Los Angeles and Hong Kong, only because the cost of bringing raw materials in and sending finished goods out had dropped like a stone.¹

News Summary Blog Assignment (Week 6)

Chris Monsour
Chuck Stull
Economics of Global Travelers
7 May 2014

Link to Article: http://gulfnews.com/business/economy/dubai-needs-to-be-tough-on-property-speculation-1.1329036

Dubai needs to be tougher on property speculation. The quick turnaround, or real estate flipping, of properties in the UAE's jewel city of Dubai has caused the Dubai property market to overheat. Prices for general commercial and residential real estate in Dubai have skyrocketed by 20% in the last two years. The profit opportunity of building up hurting properties and selling them for a profit within a year has made the property market hard to enter for newcomers to the city, which in the end hurts the economy of Dubai. The government considered putting in a higher LTV (loan to value) rate from banks to borrowers, as well as increased transaction fees and penalties for those who flip their real estate within one year of its purchase. Much like our studies on supply and demand, the demand for property in Dubai was simply too high, which created a lack of supply. The occupied properties were then built up and transformed into expensive assets, which in turn created a lack of demand from the middle class who could no longer afford the once attractively affordable properties. I believe higher transaction fees will solve this problem as well as an increase in the real estate development of multi-unit housing in Dubai to accommodate more of the middle class citizens and ex pats. The rich landlords cannot simply hoard the city for themselves.

Part Five: Transportation

Chris Monsour

Chuck Stull

Economics of Global Travelers 

6 May 2014

1. Water Transportation

a.) The largest sea port in the UAE as well as the largest sea port in the Middle East is the Port of Jebel Ali located in Dubai. The port can support 70 ships unloading cargo at once and moves tens of millions of tons of cargo every year. 

b.) There are nine major ports in the country including the Port of Jebel Ali. Six of the ports are located on the Persian Gulf while the other three are located on the Gulf of Oman. The UAE is the largest importer in the Middle East with an estimated annual total of $274 billion in imported goods. The sea ports play very crucial roles in delivering the imports every day. The ports are also important for the export of goods from the UAE, which is ranked as the second-largest exporting country in the Middle East, falling behind Saudi Arabia. 

2. Land Transportation 

a. / b.) Etihad Rail, formerly known as Union Railway, is the largest railroad company in the UAE. The only railroads in the UAE are currently passenger trains in Dubai to lessen the amount of cars on the roads. Recently, over $11 billion has been invested in building new rail systems that are set to connect cities to one another and to aid in freight transport from the sea ports to the many cities spread across the UAE deserts. Etihad Rail is currently in the process of developing those rail systems. 

c.) Plans to develop longer and more stable highway routes through the deserts connecting the cities are currently under way. The E 11 Road that stretches from Al Silah in the emirate of Abu Dhabi to Ras Al Khaimah on the Oman border is currently the longest highway in the UAE. The highways of the UAE are well-maintained and often packed with daily traffic. There are many inner city highways within the seven emirates, however as previously said, highways connecting cities to one another are currently being funded and built. 

3. Air Transportation

a.) There are 21 total airports in the UAE with 10 of them being international airports housing commercial aircraft. Currently, Dubai International Airport is the largest international airport in Dubai. It is the 7th busiest airport in the world by passenger traffic, 2nd busiest airport in the world by international traffic, and 5th busiest cargo airport in the world. However, there are currently plans for the Al Maktoum International Airport, which is expected to be over 10-times bigger than Dubai International airport. It is referred to as "the world's first purpose-built aerotropolis", with a projected annual capacity of 160 million passengers and 12 million tons of freight. 

b.) 10 of the airports in the UAE are international airports and major hubs while the other 11 are both utilized for military and private/personal aircraft purposes.