In the late 1950s, Dubai faced a seemingly insurmountable problem: the creek on which the emirate depended for its trade was silting up. The solution was a daring one. The then-ruler, Sheikh Rashid bin Saeed al-Maktoum, decided to dredge the waterway and open it up permanently to international traffic.

Forty years later, Dubai’s growth was once again confronted by geography. In a bid to diversify its economy, the emirate had decided to turn itself into a winter holiday resort. The only problem was it had few beaches worth the name. And so, like his father before him, Sheikh Mohammed bin Rashid al-Maktoum proposed a radical solution. A new palm-shaped island would be dredged off the coast of Dubai, effectively doubling the emirate’s coastline.

So successful was the idea that two more palm islands are now planned, adding 520 kilometres to Dubai’s coastline by 2015. “The Palm was an answer to a practical challenge,” says Chris O’Donnell, chief executive of property developer Nakheel. “One of the major pull factors for tourism was – and still is – the beautiful water and beaches of the Arabian Gulf and the year-round sun.” However, “Dubai only possessed 72 kilometres of coastline. By creating a new island, a great deal more coast-line and beaches could be added to the tourism offer.”

Dubai has retained its pioneering spirit ever since. Since the discovery of oil in 1966, the emirate has poured its petrodollars into new ports and airports, roads, bridges and causeways, as well as basic infrastructure such as power and desalination plants.

And its neighbours have quickly followed suit. What were little more than villages 50 years ago have been transformed into modern cities, each with its own collection of skyscrapers and offshore islands.

Dubai remains the template for urban development in the Gulf. The emirate was the first to build tall. In 1979, it opened the World Trade Centre building, which many believed would be a commercial disaster as the 39-storey, 149-metre-tall tower was built on what was then the outskirts of the city.

They were proved wrong. The tower now commands a prime location at the centre of a fast-growing metropolis. The success prompted others to enter the high-rise game. In Saudi Arabia, the 176-metre-tall Riyadh Television headquarters building was completed in 1981 and, in 1984, the 126-metre-high National Commercial Bank opened in Jeddah.

Skyscraper activity cooled during the 1980s and early 1990s but restarted in the late 1990s. In Saudi Arabia, contractors began work on the Faisaliyah Centre and Kingdom Tower projects, which remain the most distinctive landmarks in Riyadh to this day.

Other high-rise developments followed across the GCC, but once again Dubai set the benchmark. In 2003, local real estate developer Emaar Properties launched the Burj Dubai, which, when completed in late 2008, will be the tallest building in the world.

In most other cities, land is limited and high-rise towers are built out of necessity. Dubai’s approach is different. Here, tall buildings are used to anchor masterplanned developments, to give them a focal point and, ultimately, to raise land prices in the surrounding area.

Mohamed Ali Alabbar, chairman of Emaar Properties, the developer of Burj Dubai, promises “residential, commercial, hotel, entertainment and leisure outlets with open green spaces, water features, pedestrian boulevards, an old town and one of the world’s largest shopping malls”. He adds: “This project will create a new architectural landmark – a city within a city.”

So far, the pitch has worked. Spurred on by the apparent commercial success of Burj Dubai, Kuwait’s Council of Ministers in 1996 approved the master plan for the City of Silk, a development that will feature a kilometre-high tower known as Mubarak al-Kabir.

Bahrain has decided to go one step further, with a 1,020-metre-tall tower. And Dubai now hopes to reclaim the title of the world’s tallest with the estimated 1,200-metre Al-Burj tower.

But governments need to build out as well as up. As populations grow, space on prime coastal land in the Gulf is in short supply. Abu Dhabi island is the most extreme example. Buildings are ageing rapidly in the harsh climate and there is little room left. So the government has elected to develop greenfield settlements on nearby tracts of land, such as Raha Beach and Saadiyat, Lulu, Reem and Yas islands.

The decision echoes the policies of bigger and older cities such as Cairo, which in the 1970s began building satellite cities such as 10th Ramadan and Heliopolis to tame urban sprawl.

This rapid urbanisation will have some obvious consequences. In time, Abu Dhabi and Dubai will merge in a 180-kilometre stretch of continuous development, but the conurbation will only work if the transport links are there. Some transport investment plans are already in place. Dubai has begun building a metro system and Abu Dhabi is planning a similar link, while an inter-emirates rail link is being considered that will connect Ruwais in the south with the northern emirates.

Gulf integration will also improve regional links between urban centres. Saudi Arabia is planning several major rail projects to improve the connections between its cities. The Saudi Landbridge will run from east to west, linking industrial and residential centres on the Red Sea and the Gulf. A 2,400-kilometre line will connect the north and south, and a high-speed rail system will connect the holy cities of Mecca and Medina.

Once these nationwide projects, together with the planned GCC rail network, are completed, they will provide the backbone for development to move out of the cities and into vast areas of the region that today are little more than desert.

But it is planning that will make the difference between the futuristic cities of estate agents’ dreams and the sort of slums that can be found on the edges of Algiers or Baghdad. The mundane decisions about infrastructure made by bureaucrats in the next five years will have a greater impact on the cities of 50 years’ time than all the wishful thinking of architects and the rulers of the past half century put together.