Oman’s $2.6B ‘Smart City’ Megaproject Is Disrupting the Dubai Archetype | WSJ Breaking Ground

Summary

The video explores Oman's efforts to modernize its capital, Muscat, without losing its traditional character, as part of its post-oil future. Key projects, such as Sultan Haitham City, aim to balance development with the country's local atmosphere, contrasting the 'Dubai model' of skyscrapers and transience. The city is designed for denser housing but preserves individual privacy, with a focus on expats, tourists, and locals. However, challenges remain, including balancing urban growth with social equity and maintaining Oman's unique identity amidst regional pressures to adopt flashy, large-scale developments.

Takeaways

• 🏙️ Muscat is described as the anti-Dubai due to its low buildings and deep history, but Oman is modernizing its capital with projects like Sultan Haitham City.
• 💰 Oman is investing billions of dollars in new developments as it plans for a future without oil, aiming to modernize while retaining its local atmosphere.
• 🏘️ Sultan Haitham City is designed to house 100,000 people, with a mix of homes for locals, expats, and tourists, featuring low-rise buildings and practical urban planning.
• 🌍 Compared to mega-projects in the region like Saudi Arabia's The Line and Egypt's New Administrative Capital, Oman's ambitions are smaller but more focused on maintaining a local, sustainable feel.
• 🚶‍♂️ Oman values its local culture, with a high homeownership rate (89%), and seeks to avoid the transience seen in cities like Dubai, where only 15% of residents are locals.
• 🏗️ Housing remains a significant issue in Oman, with many citizens waiting years for lots of land, contributing to urban sprawl and traffic problems in Muscat.
• 🏡 Sultan Haitham City aims to encourage denser living while preserving privacy for families, with a planned metro system connecting the new and old parts of Muscat.
• 🛫 Tourism is a major focus of Oman's future economy, with the government betting on the country's rich history, stability, and picturesque setting to attract visitors.
• 🏢 Muscat's skyline is expected to change with new developments, like the $1.3 billion waterfront project, which includes high-rise towers geared toward high-end clientele.
• ⚖️ Experts caution that while flashy projects may attract investment and tourism, they risk widening wealth inequality, potentially leading to long-term social issues.

Q & A

What distinguishes Muscat from cities like Dubai?

Muscat is characterized by its low buildings, long history, and a large local population. Unlike Dubai, Muscat maintains a more traditional and modest urban landscape, emphasizing local culture over international investment.

What is Sultan Haitham City, and why is it significant?

Sultan Haitham City is a new development in Oman designed to house 100,000 people across multiple neighborhoods. It represents a model for modern urban development in the Middle East, with a focus on practicality rather than grandiosity.

How does Sultan Haitham City differ from other ambitious projects in the region?

Unlike large-scale projects like The Line in Saudi Arabia or Egypt's New Administrative Capital, Sultan Haitham City is more modest in scope and budget. This reflects Oman's smaller population, financial resources, and commitment to maintaining local traditions.

What are some of the key features planned for Sultan Haitham City?

The city will include more than a dozen neighborhoods, 25 mosques, 39 schools, and housing for both locals and expatriates. The buildings will mostly be six stories or less, focusing on a more human-scale urban environment.

What challenges is Oman facing with its housing policies?

Oman has a high homeownership rate (89%), but its citizens typically live in low-density areas. A housing lottery provides free land, but it can take years for recipients to receive lots far from developed areas, leading to sprawl and traffic issues in Muscat.

How does Oman's approach to urban development differ from the 'dubaization' model?

Oman aims to preserve its local character and resist the 'dubaization' trend of building from scratch with flashy skyscrapers. Instead, it focuses on practical, human-scaled developments that serve both locals and expatriates, rather than purely international investors.

What role does tourism play in Oman's development plans?

Tourism is a key part of Oman's strategy to diversify its economy. The country aims to attract visitors with its historical sites, picturesque setting, and political stability, while avoiding the need for large-scale, flashy developments seen in neighboring countries.

What potential problems might Oman face with its future urban development?

As Oman develops projects like Sultan Haitham City and waterfront developments, there is a risk of increasing wealth disparity. This could lead to social unrest if inequality grows, as seen in other regions during the Arab Spring.

How is Oman's new mass transit system expected to impact Muscat?

The planned mass transit system will connect Sultan Haitham City to the older parts of Muscat. It aims to reduce traffic and improve accessibility, but similar projects in the region have faced high costs and lengthy development times.

What are the long-term goals of Oman's urban development strategy?

Oman seeks to modernize while maintaining its local character and avoiding over-reliance on oil. The government wants to balance practical housing solutions for its citizens with tourism and international investment, ensuring sustainable growth without losing its identity.

Outlines

00:00

🏙️ Oman’s Unique Approach to Modernization

Muscat, Oman’s capital, is seen as the 'anti-Dubai' due to its low buildings and rich history. However, as Oman shifts towards an economy less dependent on oil, major projects like Sultan Haitham City are being developed to modernize the city while preserving its distinct identity. Unlike neighboring cities with grand, flashy projects, Oman’s developments focus on practical solutions that cater to its local population, with the hope of maintaining a balance between tradition and progress.

05:03

🏠 A Growing Population and Housing Needs

Oman’s population, currently at 5.2 million, is expected to grow by 50% by 2040, necessitating new housing developments like Sultan Haitham City, which aims to house 100,000 people across multiple neighborhoods. Despite the smaller scale of its projects compared to other regional megaprojects, Oman emphasizes local culture and values. Most of Muscat’s population consists of Omanis, contrasting with cities like Dubai, where the majority of residents are expats.

🏡 The Challenges of Urban Development

Muscat’s sprawling development is the result of Oman’s housing policies, where citizens are entitled to free land through a lottery system, but the process is often slow and leads to homes being built far from the city. As Muscat grows, traffic becomes an increasing issue. Sultan Haitham City is designed to introduce denser neighborhoods while preserving the privacy of individual villas, which is a cultural priority in Oman. A new mass transit system is also planned to connect the new city to the old city, helping to reduce traffic.

🎢 The Economic Balance of Tourism and Housing

Oman is betting on tourism as a key part of its economic future. With its natural beauty and historic sites, the country hopes to attract more tourists while maintaining a balance between flashy new developments and traditional, human-scaled cities. Sultan Haitham City, while focused on locals, also includes housing for expats and tourists, which is crucial for Oman’s tourism growth. However, there are concerns that the country might be tempted to follow the Dubai model, focusing more on international investments rather than local needs.

🏗️ The Risk of ‘Dubaization’

As Oman continues to modernize, some worry about the influence of the 'Dubaization' model, which prioritizes creating large, transient developments over maintaining local culture. Dubai’s approach has led to iconic skyscrapers and temporary populations, but Oman aims to avoid this, seeking a development path that doesn’t erase its past. However, with projects like a $1.3 billion waterfront development that includes taller buildings, Oman may still be influenced by its more affluent neighbors, potentially altering Muscat’s traditional skyline.

💰 Wealth Disparity and Long-Term Concerns

While Oman’s current developments are focused on modernization and attracting international investments, there are concerns about the long-term impact on wealth inequality. Projects aimed at high-end clients, such as the new waterfront towers, may increase wealth disparity, a problem that has led to unrest in other regions. Oman’s ability to balance flashy developments with local needs will be critical in maintaining social stability and preventing future inequality-driven conflicts, similar to those seen during the Arab Spring.

🌆 Balancing Tradition and Modernization in Muscat

Muscat faces a critical challenge: how to modernize without losing its local character. While new developments like Sultan Haitham City aim to preserve Oman’s cultural identity, there is a risk that the country’s plans for high-rise towers and large-scale tourism could shift the city’s focus toward international investors, mirroring neighboring metropolises like Dubai. The challenge lies in finding a balance between preserving Muscat’s intimate, human-scaled atmosphere and embracing modern, spectacular developments to attract global attention.

Keywords

💡Sultan Haitham City

Sultan Haitham City is a new development project in Oman designed to accommodate 100,000 people across various neighborhoods. It aims to break away from the 'Dubai archetype' by offering a more practical and localized model for urban growth. The city's design includes homes for locals, expats, and tourists, and focuses on creating denser yet private living spaces, preserving Oman's cultural identity.

💡Dubai archetype

The 'Dubai archetype' refers to the highly ambitious, modern, and extravagant urban developments seen in Dubai, characterized by tall skyscrapers and luxury projects. In contrast, Oman seeks to develop in a way that preserves its local culture, avoiding the extreme growth seen in Dubai, which is centered on attracting international investment and tourism.

💡Housing lottery

The housing lottery in Oman is a system that grants free land to Omani citizens. However, this system often results in long waiting times, and the plots are frequently far from developed areas, which has led to the sprawling nature of Muscat. This system highlights one of the key housing issues Oman faces, as it works to accommodate its growing population.

💡Dubaization

'Dubaization' is a term used to describe the urban development model pioneered by Dubai, where cities are built from a clean slate with a focus on transient populations, luxury skyscrapers, and temporary structures. The video warns that Oman may be tempted to imitate this model but stresses the importance of maintaining a balance between modernization and local identity.

💡Urban sprawl

Urban sprawl refers to the spread of a city’s development over a wide area, often resulting in low-density, car-dependent communities. In Muscat, urban sprawl has become a significant issue due to the dispersed nature of housing developments, which has caused traffic congestion and inefficient land use. The government hopes Sultan Haitham City will help reduce this sprawl.

💡Tourism

Tourism is a key focus in Oman's economic plans for the future. The country is investing in projects like Sultan Haitham City to attract more international visitors by leveraging its natural beauty and historical significance. Unlike its neighbors, Oman does not rely on extravagant attractions, but instead seeks to draw tourists with its safer, more stable environment.

💡Metro system

The proposed metro system for Muscat is a part of Oman's efforts to modernize its infrastructure and reduce traffic congestion. Connecting Sultan Haitham City to the old city, this mass transit system reflects the country’s ambition to create more sustainable and efficient urban transport, although such projects are expensive and challenging to implement in the region.

💡Free healthcare and education

Oman, like many oil-rich Gulf nations, provides free healthcare and education to its citizens. These benefits are part of a social contract that ensures stability and loyalty among the population. The video suggests that such policies, including housing provisions, have helped maintain social cohesion in Oman, but warns that increasing wealth disparity could threaten this balance.

💡Omani identity

Omani identity plays a central role in the country’s urban planning decisions, with a strong emphasis on maintaining local character and culture in the face of modernization. Omani leaders have made it clear that they do not want Muscat to become another Dubai. This desire to preserve tradition is reflected in the design of Sultan Haitham City, which aims to house Omanis in denser areas while retaining cultural values such as privacy.

💡Wealth disparity

Wealth disparity is a potential issue raised in the video, particularly as Oman embarks on ambitious development projects. While projects like Sultan Haitham City aim to modernize the country, there is concern that high-end developments, such as the proposed waterfront towers, could exacerbate inequality and lead to social unrest, similar to what was seen during the Arab Spring.

Highlights

Muscat has been described as the 'anti-Dubai' due to its low buildings, long history, and large local population.

Oman is looking to modernize its capital with projects like Sultan Haitham City as the country plans for a future without oil.

Sultan Haitham City is designed to be a practical Middle Eastern model, breaking away from the Dubai archetype.

Sultan Haitham City will house 100,000 people across more than a dozen neighborhoods, with homes for locals, expats, and tourists.

Oman's ambitions for Sultan Haitham City are smaller compared to neighboring projects like Saudi Arabia's 'The Line' or Egypt's New Administrative Capital.

Oman's smaller scale is due to fewer resources, but also reflects the country’s focus on preserving its local atmosphere.

The majority of Muscat's population is Omani, unlike Dubai where only 15% of the population are UAE nationals.

Sultan Haitham City aims to balance denser neighborhoods with the privacy of individual villas, a nod to traditional housing preferences.

Oman's government provides free land to citizens via a housing lottery, but the system has led to sprawling, low-density developments with traffic issues.

Sultan Haitham City will also include a new mass transit system connecting the old and new parts of Muscat.

Oman is positioning Sultan Haitham City to boost tourism, leveraging the country's history, picturesque setting, and political stability.

Muscat’s new waterfront development will significantly alter the city’s skyline with taller buildings, though some fear this may lead to Dubai-like gentrification.

The government faces challenges in balancing large-scale urban development with maintaining local character and preventing wealth disparity.

High-end developments like Muscat's new waterfront could exacerbate inequality and lead to social unrest, as seen in other parts of the Middle East.

Oman’s leaders aim to reconcile large-scale, spectacular developments with human-scale, local-centered urban planning, a difficult but crucial balance.

Transcripts

- [Narrator] With its low buildings, long history,

and large local population,

Muscat has been described by some as the anti-Dubai.

But now, as Oman looks towards an economic future

without oil, the country is trying to modernize its capital,

pouring billions of dollars

into projects across the country.

One of them is this, Sultan Haitham City.

It's a new model for a Middle Eastern development

that breaks the Dubai archetype.

As other countries in the region struggle

to execute ambitious visions, Sultan Haitham City

is intended to offer a more practical model

for a Middle Eastern city.

Its buildings are mostly six stories or less,

and there are thousands of homes for locals,

alongside ones for expats and tourists.

But some experts worry the country's ambitions

may already be outgrowing the project.

Muscat is wedged between the Gulf of Oman

and the Hajar Mountains.

It's home to about one-third

of the country's rapidly growing population.

Oman has a population of about 5.2 million people,

but by 2040, it anticipates that number may increase by 50%

to 7.7 million.

To house them all,

the country is investing in a lot of projects.

One of the most significant that's underway

is happening here.

Sultan Haitham City is designed to house 100,000 people

across more than a dozen neighborhoods,

along with 25 mosques and 39 schools.

Though for a landmark project in a Middle Eastern capital,

the scale and budget are relatively small.

The Line in Saudi Arabia, for instance,

is expected to house 200,000 people

after the first phase completes,

with a projected cost of $100 billion.

And Egypt's controversial New Administrative Capital

designed to hold more than 6 million people

will cost an estimated $58 billion.

Oman's smaller ambitions are both because the country

has less money and fewer people,

but also because the country

highly values its local atmosphere,

where native Omanis actually live in the city

and work in service jobs.

In Dubai, for instance,

only 15% of the city's population are from the UAE.

- When I visited Muscat a few years ago,

one thing that was crystal clear by my Omani hosts

was that they do not want Muscat to become another Dubai.

They were really insistent on that.

- [Narrator] It will take a while to see

if the new model succeeds.

Sultan Haitham City won't actually be done until 2045.

Oman needs time to convince local people

they want to live here.

While Oman has a high home ownership rate,

the government claims 89% of its citizens

own their own homes,

the country is still facing some major housing issues

and the government needs to figure out

how to get people to live in denser cities.

Under the current system, Omanis typically live

in single-family homes in low-density areas.

Citizens are entitled to free land via a housing lottery,

but they often wait years for lots

that end up being far from established developments.

In Muscat, this has led to a sprawling capital

with lots of traffic.

- The biggest issue in the region,

and not just in Muscat or Oman, is housing.

- [Narrator] Leaders in the region

have gotten extremely rich off their country's oil,

but they make sure to spend enough on their people

to maintain stability.

In particular, they've paid for things

like free healthcare, education, and homes.

- And this is really how regimes in the Arabian Peninsula

have been able to secure the loyalty of their citizens,

through housing policy.

- [Narrator] But lots of the land

these countries have left to dole out

is farther into the desert, which is expensive to develop

and will become increasingly unsustainable

as resources decrease.

- So there will have to be a sort of a reality check.

- [Narrator] Sultan Haitham City is designed to put locals

in much denser neighborhoods than most currently live in,

but maintain the privacy of individual villas.

The government is also planning a mass transit system

for Muscat that would go here,

connecting the new city to the old city.

Metro systems have been a long-time goal

for countries across the Middle East

that want to reduce traffic

and improve their international image,

but many have found them exorbitantly expensive

and time-consuming.

But this project

isn't just about fixing the housing system for locals.

Much of the development's housing is for expats and visitors

because the megaproject

is also a key part of Oman's bet on tourism.

Oman doesn't currently get as many tourists

as some of its neighbors,

but the country is hoping it can draw visitors.

With its picturesque setting and range of historic sites,

it's one of the oldest cities in the Middle East.

It's also safer and more politically stable

than some of its neighbors.

So in theory, it shouldn't need flashy

and impressive projects to draw visitors.

But some wonder

how long it will be able to resist the temptation

to imitate neighboring metropolises like Dubai.

- It is very difficult to resist the seductive allure

of a place like Dubai.

It really has this hold

on people's urban imaginary in that region,

and they see what is happening in Dubai and elsewhere

and they simply want to capitalize on that as well.

- [Narrator] But this approach

often prioritizes international investment

over local people.

- I've coined the term dubaization, which at its core means

that there is a certain mode of urban development

that Dubai is promoting,

where you basically start from a clean slate.

You erase all that has existed in the past

and rebuild it in a different way

that is based on transience and temporality,

on people not staying for the long term,

but for a certain amount of time.

And then of course, the building of all these skyscrapers

and towers and spectacular iconic structures.

- [Narrator] Oman is already planning additional projects

in Muscat, like this $1.3 billion development

on the city's waterfront.

Early rendering show the development may include buildings

much taller than the country has allowed in the past.

- It will significantly transform the Muscat skyline.

So you have that skyline that was very low-key.

Now you have these 30, 40-story high-rise towers

in the center of the city geared towards high-end clientele.

So this is not social housing.

That is quite problematic.

- [Narrator] And while shiny new developments

may attract investors and tourists,

they often fail to help locals

and can lead to more wealth disparity.

This isn't as much of an issue in oil-exporting countries

while resources remain plentiful,

but it could cause issues long term.

- When you have a society where inequality is high,

then this immediately will lead to social unrest

and social scientists will confirm that.

The Arab Spring was really a manifestation of that.

Of course, it was brutally repressed and put down,

so for the moment, things are sort of stable,

but in the long run, I don't think that this will last.

- [Narrator] For Muscat, the question

will be whether it can successfully maintain

its local character as it navigates how to modernize,

or whether plans like its new waterfront

will fundamentally alter it

in the direction of neighbors like Dubai.

- There is a way to try to reconcile these two tendencies

to both have the spectacular

and the more intimate and human-scaled.

I don't think that these have to be mutually exclusive.

How can you achieve both?

It's difficult.

(pensive music)