Business is booming right now! I mean, the place has what, double-digit GDP growth? Like, that’s crazy!”
Brooke Butler tucks her silken hair behind her ears, flashes a wide smile, and digs into her dumplings. It’s Pan-Asian night at Entre Nous, the restaurant on the ground floor of Novotel Dubai, and Butler, a 24-year-old Texan with an exuberant demeanor and a slim volleyball player’s build, is taking a pause from a long day schmoozing real-estate executives. She has just spent several hours working the lavish stalls and displays of Cityscape, a four-day conference billed by its promoters as “The World’s Largest Business-to-Business Real-Estate Event,” taking place in a cavernous conference hall next door. After dinner, Butler is due at Çin Çin, a swanky cigar-and-wine bar, to meet the CEO of a real-estate company.
“I want to have a million dollars saved and then come home,” Butler says. In Dubai, it is a plausible target, even for a saleswoman only three years out of Dallas Baptist University; she is certain she’ll meet it. But how long will it take? When she arrived, fresh from being laid off by the San Antonio office of Liberty Mutual, for whom she sold home, auto, and life insurance, she thought that she would be in and out in two years. “I know a girl who made $2 million U.S. in commissions last year,” she said then. “And that’s tax-free! Within a year, I’ll be a millionaire. It’s not that difficult over here.”
Indeed, nothing seemed that difficult over here. At home, when word of “corporate restructuring” came from headquarters, she tried to look for another position. There weren’t any; not in the summer of 2008. “I said to myself, Should I get another lame job in the States, or should I live in Dubai?” A friend from college, Laura, had moved to Dubai a couple of months earlier, and when they spoke, she seemed relaxed and happy. That was that. “I woke up one day, got online, sent out my résumé, and less than one month later, I was here.”
Here, and employed. Butler found a job selling high-tech home and business automation systems. The work was made easier by the astronomical demand for top-notch properties and still easier by the fact of her origin: “A blonde American girl? Are you kidding me?” The contractors and project managers she pitched made corny, adoring jokes about her Texan drawl and lavished her with attention.
Even when she started having problems with her boss, Butler didn’t worry. She felt certain that in Dubai, she would never be at a loss for prospects. “I’m American,” she says. “They love Americans here.” Among her group of friends—30 or so expats from the U.S. and Europe—everyone had something going on. One woman had just formed a company to produce sleek investment guides with names such as Who’s Who Egypt. The employees there were like Brooke: young, pretty girls, typically American, typically blonde. Butler joined up. “Doing sales in Dubai isn’t like doing sales in the U.S.,” she says. “Here, it’s easy to get in to see important players. It’s crazy to think of the people I’m meeting by the breeze.”
Butler’s new plan calls for her to stay somewhat longer than she had first thought. “I’m thinking it’ll take about five years to make a million now,” she says. “Six or seven at the most.” The new timetable hardly troubles her. At home, her friends are fretting over their futures. In Dubai, everything feels … normal. “It doesn’t feel like you’re in the Middle East,” she says. “You really have to remind yourself sometimes, like, ‘I’m in the Middle East!’ It’s like you can be in this part of the world that’s booming but it doesn’t feel like you are. It feels like you’re in … New York City! You’re somewhere else.”
Over the past several months, as the U.S. economy has deteriorated and the credit crunch has spread around the world, American interest in Dubai has peaked. Anyone in a position of even moderate professional authority has been hearing from friends, relatives, colleagues, and classmates wondering if there is work available. “Once or twice a week since I’ve been here, I’ve gotten calls from New York from people looking for jobs,” says James Ruiz, a 42-year-old banker who has been in Dubai since April. “But in the last few months? From August on? It’s just snowballed.” Esther Tang, a 26-year-old employee of one of Dubai’s sprawling government-run conglomerates, currently receives as many as fifteen résumés a week. Tang is an active member of the Cornell alumni association’s Dubai chapter. At the end of 2007, the association had 6 members; as of last month, it had 70.
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.
“It’s almost impossible to understand,” says Richard Harris, gesturing with his chin at a long series of honey-colored apartment towers lining the highway. “All of this is less than two years old.” Harris, a 28-year-old investment banker from suburban Minneapolis, is driving his rented Toyota down Sheikh Zayed Road to lounge in the pool with a group of Americans he calls “the Thirty.”
Sheikh Zayed Road, Dubai’s main thoroughfare, is terrifying. “Supposedly it’s the deadliest road in the world,” says J. C. Butler, the co-founder of dubizzle.com, a popular, Craigslist-like Website. It’s not technically true, but it’s conceivable. The combination of Dubai’s radically multinational population and an almost state-sponsored culture of speed has resulted in frequent spectacular collisions on Sheikh Zayed, a great many of which have been caught on film and posted on YouTube, including a 200-car pileup in March.
At the wheel, Harris, with short, light hair and narrow unblinking eyes, seems untroubled. He exudes a steadiness and focus that set him apart from many of the Americans who live here. By and large, Americans in Dubai stick to themselves. “I think it would be awesome to meet a real local,” Brooke Butler says. “But most of the time when we go out, it centers around drinking with each other.” Harris tries to meet as many locals as he can, particularly ones with money. Before coming to Dubai, he worked at a hedge fund in Newport Beach, California. Last year, his uncle, a co-director of a boutique mergers-and-acquisitions firm with offices in New York and Florida, invited him to help identify an “emerging economy” where the firm could “put our own capital to work.” The company looked at China, India, Eastern Europe, and South America, and settled on Dubai. “It just seemed like there wasn’t a real understanding of the opportunities here,” Harris says. While many Westerners had already come, “a lot of them were overambitious and spread thin, movers and shakers—not a morally healthy way of making a living.”
Harris operates in essence as a one-man investment bank—identifying and pursuing corporate partnerships, providing advice on various transactions, raising money for a private-equity fund. He spends a great deal of time and energy courting the least visible but most deep-pocketed segment of the population. “I asked a friend of mine, a guy who is in real estate, how many iftar tents he had been to during Ramadan,” Harris says. In Islam, iftar is the traditional meal, held each night during the holy month of Ramadan, to break the daytime fast. “He said he’d been to two. He thought it was boring. I ate in iftar tents five days a week.” Harris’s diligence would appear to be paying off. During my stay in Dubai in early October, Harris canceled our first meeting because he was unexpectedly summoned, at 9 p.m. on a Saturday night, to present himself before representatives of the ruling family of Abu Dhabi, who wanted to see for themselves this impressive American with the strong financial pedigree.
Slipping out of his T-shirt and sandals, Harris jumps into a vast pool teeming with children behind one of the 40 high-rises that make up the Jumeirah Beach Residence—according to its promotional material, “the largest single-phase residential development in the world.” JBR, as it is known, stretches along a mile of the gulf coast, near the base of the Palm Jumeirah, one of three massive palm-shaped land-reclamation projects, dotted with luxury villas, that the sheikh has made the centerpiece of his global branding effort. In Dubai, more Americans seem to live in JBR than anywhere else.
The high-rise is home to Layla H., who is relaxing with six Americans at the edge of the pool, spitting distance from the beach. The pool has a cooling system, but the water is still lukewarm. Layla, who is petite and deeply tanned, is sitting on the pool’s ledge in a bikini, a can of beer at her side. In the summer, she explains, when the midday temperature is 105 degrees, you couldn’t even set foot in a pool that wasn’t cooled: “It would be like a Jacuzzi. It would be disgusting.”
Layla is 24, a graduate of Columbia; she has a biting air about her. When a pale, overweight French boy does a cannonball only a yard from where she is sitting, she flashes him a scowl and complains that Dubai can make people prejudiced. “You’re surrounded by people from different countries, with different ways of doing things,” she says. “It can be hard to handle.” Hardest of all to handle, she says, is the service. This is one of the ironies of Dubai. While the city has strenuously marketed itself as the luxury capital of the Middle East, it has not yet figured out how to train the support staff. The waiters in Dubai are often not very good at waiting tables, the bartenders not very good at serving drinks, the cabdrivers not very good at driving.
For a life of stability, comfort, and opportunity, however, this is a minor price to pay. “I looked at the cover of the Times the day after Lehman collapsed,” Layla says, “and I’m looking at those pictures of people carrying boxes of their stuff out, and I’m saying to myself, ‘I know that guy! I sat next to him in class.’ And I’m here hanging out by the pool. I mean, these people are my age—23, 24. When a bank goes down, they’re the first to go.” In Dubai, Layla says, these worries don’t exist: “It’s the Wild West.”
This is, of course, a frequently used metaphor for boomtowns and is meant to suggest that Dubai is so raw and undeveloped that you don’t have to rely on anyone or anything but your wits to prosper. Yet for Layla and most of the Americans in the pool, the cliché describes their experiences, as well as their attitudes, more or less accurately.
The group Harris calls the Thirty is oddly uniform in background. Indeed, almost all of the twentysomething men and women who compose it have at one point been employees of the same outfit—a Brussels-based sales company, incorporated in Cyprus, called Media Plus. It is difficult to get precise information about Media Plus; most of its former employees are cagey. Here, however, is how it appears Media Plus operates: It seeks out recent, enthusiastic college graduates with a penchant for suasion and a desire to travel; trains them at its Brussels headquarters in hard-charging, Mametesque sales techniques; and sends them around the world, primarily to developing countries, to sell video and print advertorials to government ministers and corporate executives. These advertorials are the sort you see late at night on basic cable or slipped into a daily newspaper in order to extol the natural beauty of, say, Kuwait.
For most of the Americans I spoke to, the Media Plus experience was a formative one. It taught them how to operate in an environment where regulations are few, access to decision-makers plentiful (especially for young, pretty American women), and their desire to stay long-term nil. Several have gone on to start their own companies in Dubai, although getting them to discuss their entrepreneurship is as difficult as getting them to discuss the training that led them to it. Sitting on the pool’s ledge, dangling her bronzed feet in the water, Layla says that she is in the process of opening her own business. She won’t say doing what. “I can’t really talk about it,” she says. “I hope that doesn’t sound too sketchy.”
“I looked at the front page of the Times the day after Lehman collapsed, those picturesof people carrying boxes of their stuff out, and I’m here hanging out by the pool.”
The W girls seem weary. They’ve traveled a long way—from the New York headquarters of the tony real-estate-marketing firm SHVO—to be here, at Cityscape, where their working environment is almost neurologically assaultive. Their home for the duration of the conference is a dimly lit two-tiered red-and-black box with hipster lounge music piped in through hidden speakers and four touch-screens perpetually commending the amenities that accompany an ownership stake in the W New York Downtown Hotel & Residences, currently going up down the street from ground zero. Jaclyn Savar, diminutive and blonde, stands by the bar clutching a paper cup of coffee as if it were a cane. “I’ve barely slept at all,” she says. She moved here four days ago, to work at SHVO’s new offices on Sheikh Zayed Road, and she’s still suffering from jet lag. Sales, at least, are brisk. Upstairs in the “closing room,” beyond a velvet rope, a young Arab man sits on a plush couch deciding which two floors of the W he would like to purchase.
Cityscape is considered by many to be a bellwether of Dubai’s economy—and tellingly, in past years it has operated more like a flea market than a real-estate conference, with buyers literally elbowing each other aside to put down money on villas and luxury condos on which the ground had not yet even been broken. Often, buyers would sell their rights in a property before leaving the conference hall, and an ownership stake would change hands as many as ten times between the unveiling of the architectural model and the spade hitting dirt. The results have been predictable. While there is much in Dubai that’s attractively inexpensive—domestic help of all kinds, taxis, gas—real estate is exorbitant. “Getting a job is the easy part,” says Esther Tang. “Finding a place to stay is harder.” Moreover, there is constant talk, particularly in recent months, of a property “bubble”—and of if, when, and how it might pop.
Paradoxically, Cityscape operates simultaneously to keep the property bubble expanding and to cause it to deflate in a steady, orderly fashion. The conference, says Christopher Davidson, is “the ultimate in bravado … a giant confidence-building exercise” intended to trumpet the message that Dubai is on the track of continual growth. This purpose has led Dubai’s leaders into vertiginous territory. On the opening day of the conference, October 6, the front page of the New York Times read “Financial Crises Spread in Europe.” On the same day, an Emirati paper, The National, announced the unveiling of plans for the Nakheel Tower, a 1.4 kilometer–high skyscraper that will surpass the still-in-progress Burj Dubai to become the tallest freestanding structure on the planet.
Yet Dubai’s leaders have also sent signals that all is not business-as-usual. The famously astute architects of the city’s success are aware of the congruence between their model of economic growth—borrowing money to build property that others will invest in on the assumption that the values will rise eternally—and the model of economic growth that has led to a historic collapse on Wall Street. They are further aware that many in the financial world question the sustainability of Dubai Inc. Moody’s, the financial-research firm, has warned investors that although Dubai’s economy has been growing at a staggering rate, its debt has been growing even faster; it now owes approximately $48 billion, 103 percent of its GDP. In response to such concerns, Dubai instituted a number of reforms geared toward “maturing the market”—a real-estate regulatory authority, rules forcing speculators to wait several weeks before flipping a property, the limiting of sales within the precincts of Cityscape itself.
The intention, and very often the result, has been to reassure people that a steady hand is on the wheel. “Sheikh Mohammed runs the country like an executive,” says K.S., the Iranian-American businessman. Even the newspapers, he explains, send a soothing, official message. “When the Gulf News”—a Dubai-based paper—“says that there’s going to be a 10 percent correction in the real-estate market, and that story appears several times in a matter of months, what is that about? That’s Sheikh Mohammed telling people like me, ‘Don’t worry. I’m going to scoop the froth away. I see speculators frothing the fuck out of the market, now I’m going to de-froth that motherfucker. It’s only going to go down a little.’ ”
Indeed, few people at Cityscape seemed terribly concerned about Dubai’s prospects. At the end of the bar in the W Hotel booth, Tariq Bsharat, whose wife had taken a job at SHVO’s Dubai office, was huddled over a stack of his old business cards, scribbling his new cell-phone number across the top. Before arriving in Dubai in late August, Bsharat, who holds an M.B.A. from New York University, owned a mortgage-lending business in Westchester. When the real-estate market began to implode, he and his wife decided they needed a change. It took just a few weeks of networking here before Bsharat landed a successful interview with Sorouh, a real-estate developer with a property portfolio worth more than $13 billion. “Three months ago, I was originating residential and commercial loans,” he said last week. “Now I’m handling business for a multi-billion-dollar megaproject.” Nor is Bsharat overly worried about what might happen if the local economy does deflate. Simply by getting off the plane, he has propelled his career into the executive realm; when he returns home he will be able to command an income far in excess of what he could have before.
It is telling, however, that Bsharat’s employer, Sorouh, is based not in Dubai but in Abu Dhabi. The conventional wisdom now is that what ultimately safeguards Dubai’s future is not its near-mythical energy and savvy but its oil-drenched sister up the coast. When credit began to tighten around the world, and skeptical stories about Dubai began to appear in the financial press with headlines such as a long way down, Abu Dhabi helped stave off panic by injecting $6.8 billion into local banks. This surprised some; there’s a long-standing rivalry between Dubai and Abu Dhabi, which considers its neighbor, in the words of one American, “like the obnoxious, overspending brother-in-law.” Yet it has become abundantly clear that Abu Dhabi still considers Dubai family and that no matter what crises occur, it will come to the rescue.
Whether a significant bailout from Abu Dhabi would force Dubai to change its profligate ways is a question observers have been asking lately. “Abu Dhabi could rescue Dubai,” says Christopher Davidson. “But what would be the cost? It would say to the world, ‘Dubai Inc. has failed.’ ” It isn’t certain anyone—even Abu Dhabi, for all the inter-emirate rivalry—wants this to occur. Dubai serves a purpose in the region. “Everyone is always complaining that Dubai is too expensive,” K.S. told me “But that’s the intention! They’re trying to make this into the Manhattan of the gulf. And Abu Dhabi? Abu Dhabi is going to be Brooklyn.” Indeed, Dubai serves a purpose in the world—particularly now. Americans are coming here because they want to make money, yes, but they are also coming because confidence is the lifeblood of economics, and nowhere else on earth so loudly proclaims: Everything is going to be okay.
Both of these purposes became clear on my third night in Dubai, when I was invited to the home of Saif Abdul Rahim al Zarouni, a 26-year-old Emirati-American and the CEO of a company that rents, manufactures, and sells construction equipment. Al Zarouni grew up in Florida, and now lives in a 7,000-square-foot villa on the Palm Jumeirah. It’s something of a center of social activity for expats in Dubai. I heard about it from Brooke Butler, who told me that she and her friend, Laura, had won a heated beer-pong tournament there over the summer.
Every Sunday evening, Al Zarouni invites anyone who wants to come over and watch American football on his large flat-screen TV. Dubai is nine hours ahead of the U.S., and the games are broadcast live. At halftime, Al Zarouni’s domestic servants—two diminutive Filipino women—serve a buffet dinner in the kitchen.
Around his business associates and his employees Al Zarouni wears the traditional Emirati dishdasha—a white flowing cotton robe and matching headpiece with black band. When I visited, however, he was in shorts, a T-shirt, and sandals, and was sitting on the couch going over the week’s picks, the TV tuned to the Seahawks versus Giants pregame show.
He suggested we take in the view from the backyard. Al Zarouni’s villa looks out to the coastline, where the view is of dozens of skyscrapers and towers and hotels and developments in various stages of erection, the whole of it extravagantly lit and teeming with hundreds of construction cranes. Dubai has the highest concentration of construction cranes in the world, and the sight of them working away on the skyline is not unlike the scene in War of the Worlds where Tom Cruise gets a view of the alien tripods munching away on the city.
“It’s the best view on the palm,” Al Zarouni said. “We bought the place as soon as they announced they were building it. My dad’s uncles and his friends scooped up the rest of the villas on the frond.”
Al Zarouni’s friend Mark Chandler was standing by the pool, crystalline and deep blue. He has been in Dubai for only a year.
“What were you doing before?” I asked.
“I worked at a bank. Wachovia. They’re not doing so well these days.”
The guests soon gathered in the living room, as the Giants proceeded to trounce the Seahawks. It was a geographically varied lot: two Canadians, a Spaniard, a German, a Saudi. But what Al Zarouni took note of was the number of Americans—a rising population in his Sunday-night ritual.
“For the first couple years I was here, I didn’t have any American friends at all,” he said, a plate of lasagne balanced on his lap. “I’ve met more Americans in the last six or seven months than in all the time before that.” Then, shrugging, he continued: “A lot of them seem to be girls from Texas.”
The shrug seemed to say: Today girls from Texas, tomorrow girls from somewhere else. People don’t stay in Dubai for long. Everyone is passing through. But for now they are here, waiting out the storm.
“Mark my words,” K.S. told me later that week, when I asked him about the city’s future. “It’s going to be a lot better here than anywhere else. And if it’s not, well … then the world’s going to shit anyway.”