A Formula for Expansion vs. Greenfield Development

By Rami Sarafa

One of the principal norms we’ve extensively explored is the tension between master-planning new developments and the expansion of existing infrastructure or urban areas. If we consider the widely accepted tenant of macro/microeconomics known as “factor conditions,” it is perhaps easier to analyze this dichotomy and achieve a development norm. Succinctly defined, factor conditions are the resources, geographical features and historical attributes of modern states, which are out of their control and/or inherited. These variables shape countries’ respective development needs and thus their respective societies. If you consider the factor conditions of an area, you can more effectively understand if inhabitability should be active or passive, intentional or reflexive, premeditated or dynamic. If a population can benefit from positive factor conditions while alleviating negative ones, then they should be a dynamic part of the process, and mutatis mutandis. [Mutatis mutandis is a Latin phrase meaning “changing [only] those things which need to be changed” or more simply “[only] the necessary changes having been made”. – Wikipedia – John M]

In better understanding this potential norm or formula, we can compare two different cases. China’s positive factor conditions include strong infrastructure, sufficient water resources and decent human capital; negative conditions include overcrowding, environmental waste, and precarious “social harmony.” It thus makes sense for policymakers to pursue a project like Tianjin that leverages an existing urban area to achieve broader goals of development and diversification. The eco-city can utilize domestic labor and expertise to provide additional housing and jobs in a more “eco-friendly” environment. Through the creation of employment and economic opportunity, the principal goal of “preserving social harmony” can also be balanced.

In the case of Saudi Arabia, positive factor conditions include massive capital and energy resources, and a growing domestic population; negative conditions include scarce water resources, cultural/religious distinctiveness and limited human capital. In the desert kingdom, it makes sense for developers to pursue a Greenfield project like King Abdullah Economic City.  Tapping into capital and hydrocarbon wealth can help develop infrastructure/utilities in areas that can absorb future populations without stressing existing, built-up areas. Through the creation of a new urban area, principal goals of spurring innovation and diversification to develop human talent, while minimizing cultural/religious impediments can be more effectively pursued.

Ultimately, it is short sighted and shallow to assume a uniform model of urban development for all societies. The respective needs bourn by each country’s factor conditions should be addressed differently and thus more effectively. It is possible, however, to achieve consistency through a framework such as “balancing factor conditions.” Greenfield projects make sense if the potential benefit of a “new beginning” – a development catalyst of sorts – outweighs extensive resource and capital expenditure. What we view as “nowhere” today can be our future economic lifeline and urban center tomorrow as Dubai’s success story as a global entrepôt confirms. To simply say expansion is always the right approach would assume that existing developments are already sustainable, which is not the case.

Dubai 1990 vs. 2012