The allure of Dubai isn’t hard to understand. In the midst of epochal global anxieties, Dubai, which rose from a sand-swept regional trading post into an international center of finance and tourism in less than a decade, continues to flex its muscles. This fall, as the U.S. Treasury Department took equity stakes in major U.S. banks to forestall their collapse, Dubai’s leaders were hailing the opening of Atlantis, a $1.5 billion seaside resort, and announcing massive new construction projects—lush, sprawling, skyscraping cities-within-cities.
Which is not to say that Dubai is immune from the global financial crisis. The local stock exchange has plummeted along with everyone else’s, and real-estate prices and sales have fallen by as much as 40 percent in the past month. Yet compared to the rest of the world, the mood in Dubai has remained startlingly calm. “Most people aren’t saying, ‘Dubai is done,’ ” K.S., an Iranian-American businessman and employee of one of Dubai’s major real-estate developers, wrote in an e-mail last week (he asked to be identified only by his initials). “What they are saying is, ‘The USA economic policies destroyed the whole world and dragged us down with it; once that enormous weight is off the world economy’s shoulders, Dubai will bounce right back.’ ” This almost otherworldly confidence stems from the determination of the city’s leadership to maintain its status, which it has the means to do. Dubai is a monarchy with a centrally controlled economy. All the major corporations that make up what has been called “Dubai Inc.” fall under the umbrella of the government. This stabilizes the economy to an extent that leads many to believe that Dubai could even benefit from the global crisis, as it becomes recognized as a safe haven for capital. Certainly it is one of the few places in the world where consumer confidence does not appear to be collapsing. On November 4, the city unveiled a giant new mall with an ice-skating rink and an aquarium. The place, not yet fully open, has been crowded; a big draw has been the Taco Bell, where one day last week the wait was 45 minutes.
Seen on a map, Dubai wouldn’t appear to be the most American-friendly environment. Located on the southern coast of the Persian Gulf, it is surrounded by Saudi Arabia, Iraq, and, slightly farther to the east, Pakistan. The coast of Iran is 100 miles due north, across the gulf. But Dubai does everything it can to stay above the geopolitical fray. According to Christopher Davidson, the author of Dubai: The Vulnerability of Success and a leading scholar of the United Arab Emirates—the national federation of seven sheikhdoms of which Dubai is a member—the city is “a patch of worthless sand that’s been transformed into multi-million-dollar real estate.” The capital of the UAE, Abu Dhabi, located 90 miles down the gulf coast, produces around 2.5 million barrels of oil a day, 9 percent of the world’s supply. Dubai turns out a small fraction of that, and its wells are expected to run dry by 2020.
What changed the city’s fate was a man who is often referred to as the “CEO of Dubai Inc.,” Sheikh Mohammed bin Rashid al Maktoum, Dubai’s ruler. Since the nineties, the sheikh has sought to make the emirate a world capital on par with Singapore and Hong Kong. Even before his rise to power, Dubai had been known for its pro-business agenda—as a city without taxes, burdensome bureaucracies, stifling religious conservatism, or political instability. The sheikh went further, expanding industrial zones in which businesses could set up shop free of tariffs, upgrading ports and shipping facilities, and building a world-class airport. He built shopping malls and luxury hotels. Unlike other Arab rulers, he fostered an atmosphere of hedonistic pleasure, in which prostitution is, for a Muslim country, startlingly out in the open, the alcohol flows (though officially only in hotels and sporting facilities), and despite an official ban on homosexuality, the enforcement standard is “don’t ask, don’t tell.” Most vitally, he inspired confidence, announcing projects of ever-increasing extravagance—the Burj Dubai, touted as the tallest skyscraper in the world; the Burj Al Arab, a “seven star” hotel in which every room comes with a butler.
One result of Mohammed’s enormous ambition is that approximately 95 percent of the city’s 1.5 million people are foreigners, the vast majority of whom are Indians, Pakistanis, Bangladeshis, and Sri Lankans flown in to actually build the sheikh’s dream. Among the Westerners, the majority are English, with a smattering of other Europeans, Australians, and South Africans.
Americans were late to the game, for obvious reasons. Until recently, their economic prospects at home were plenty good, and there was the distance to consider: A flight from New York to Dubai takes fourteen hours. But now Americans—in particular young, industrious Americans—don’t seem to mind going far, far away from home.