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    Middle East
     Jun 7, 2006
THE ROVING EYE
Dubai lives the post-oil Arab dream
By Pepe Escobar

DUBAI - Welcome to the ultimate sociopolitical model for the 21st century: a Blade Runner-esque melting pot of neo-liberalism and "subterranean" economy, Sunni Arab Islam and low taxes, souks and artificial islands, a giant warehouse and a tourist paradise, life in the fast lane and post-modern slavery. The model spells out an apolitical, consumer-mad, citizenship-free society.

Dubai, population 700,000, is a self-described "door to a market of more than 1 billion consumers". Its drive is to fashion itself not only as the first post-oil economy in the Persian Gulf but as one of the great postmodern world cities. Dubai represents the essence of globalization at work - globalization, of course, interpreted as the ineluctable triumph of Western laissez faire, where world trade

means economic rights trump political rights.

The Bedouin Sheikh Zayed bin Sultan al-Nahyan founded the Persian Gulf nation styled the United Arab Emirates - composed of seven city-states - in 1971. When he died in early November 2004, he was a multibillionaire owner of banks, industries and villas on Spain's Costa del Sol and Switzerland's Lake Geneva. But he still preferred falcon hunting and camel racing to being an Arab version of the Rothschilds.

Most of all, he had every reason to be proud of his family's intuition and business acumen - as already in the 1940s they had decided to drain Dubai's port while competitors were sleeping. And he was certainly proud of the way Dubai had evolved, a Hong Kong-by-the-desert with loads of glitz, no "war on terror" and, of course, no free elections. Sheikh Zayed was promised as he lay dying that Dubai would continue to flourish - even without gambling casinos. Not for long, it now seems. Arab Las Vegas, anyone?

During the Middle Ages, Gulf port cities were the essential node in the Arabian Peninsula's monopoly on trade between Europe and Southeast Asia. Today, Dubai as a city-state/world port city by the "Arabian Gulf" (locals wouldn't be caught dead referring to the "Persian Gulf") is positioning itself as the essential trade crossroads of Europe, Africa, the Middle East and the South Asian subcontinent. The richest of the seven city-states in the UAE may be the capital, Abu Dhabi, floating on a sea of oil. But 63% of the country's income now derives from commerce and tourism, and the bulk transits through Dubai.

In this mish-mash of wealthy Arab women covered in silk black chadors, Indian families in saris, young poseurs with Iranian pop T-shirts, armies of men in dishdashas and fake gold Rolexes, phalanxes of Japanese minibuses and American delivery vans, and the frenzy of trading simultaneously in English, Arabic, Bengali, Urdu, Turkish, Farsi, Russian, German, Tagalog, Thai, Gujarati, Afrikaans or Swahili, the lingua franca is indisputably English, not Arabic.

In the totally deregulated airport, anyone may land piloting any sort of aircraft. As much gold as is extracted all over the world transits every year through Dubai, legally or through smuggling. Even as it strives to replicate Singapore, Dubai feels more like Houston - but with better restaurants, much better cars, much smoother roads and much more alluring state-of-the-art architecture.

An army of abnormal citizens
Only 25% of the multicultural 2.4 million people living in the UAE are citizens - or "nationals", as they are known in local lingo. In Dubai they represent only 15%. No wonder Dubai boasts no fewer than 85 foreign private schools.

Dubai may be run like a huge corporation. But unlike a US multinational that delocalizes to profit from cheap labor, Dubai imports cheap labor in droves. The result is immigration without citizenship - a model that fascinates assorted American neo-cons and neo-liberal right-wingers, with the added bonus that unlike Mexicans and Central Americans in the US, immigrants to Dubai totally renounce their political rights on the altar of economic improvement. Neo-liberals refer to Dubai as proof that Islam is not incompatible with globalization.

It's fair to argue what distinguishes a citizen from a non-citizen in a state where there's no democracy at all. The power of Dubai's absolute ruler, Sheikh Mohammed bin Rashid al-Maktoum, could be defined as Genghis Khan-like. But if you're an immigrant coming from Iran's theocratic nationalism, India's bureaucratic nightmare or Pakistan's barely disguised dictatorship, the last thing you'll want is an interventionist state. So Deng Xiaoping's dictum - "to get rich is glorious" - ultimately prevails. Lee Kwan Yew applied it in Singapore - and it worked marvels.

Racism in Dubai - as in the US south - is pervasive, but off-limits to discussion, even as the fragile social pact between citizens and foreign residents, which in essence means "shut up and do your job", is faltering. A 15% minority could not possibly impose either its language or religion on a cosmopolitan majority - especially when religion is the Wahhabi interpretation of Islam. Thus (Western and Arab) men can get drunk in licensed bars, pubs and restaurants and (Western only) women can wear bikinis on the beach.

Every night an army of multicultural girls - from Southeast Asia, from behind the former Iron Curtain, and elsewhere - officially staying in Dubai as "kindergarten teachers" or "domestic help" descend in miniskirts, halter tops and high heels on the Cyclone nightclub and behave as if they were in Bangkok's girlie bars. At the same time some Internet sites are blocked "due to incompatibility with the religious, cultural and moral values of the United Arab Emirates". A famous Dubai joke has a real-estate agent telling a client to "buy a house in Jumeirah Beach. It's the safest place to be. Half the bin Laden clan lives there." Whatever its compromises, Dubai's empirical globalization process always seem to veer toward an optimum: a society of apolitical consumers.

The new medievalism
Unelected male elders of a single ruling family may control it with no opposition, Asians may be treated as no more than slaves, and Dubai remains in essence a protectorate - a status not substantially different from the tribal sheikhdoms dominated by the British until 1971. It's a wonder; but the Emirates' medieval feudalism somehow has managed to impress global perceptions as the most "progressive" state in the Middle East. Certainly that's not the perception of vast swaths of the Arab and Muslim street - which view the Gulf states en bloc as corrupt, anti-Islamic and sold to hegemonic Anglo-American, and not Arab and Muslim, economic and strategic priorities.

From the point of view of Pentagon hawks, this promontory advancing into the Strait of Hormuz - through which transits every day more than 40% of the world's oil - could not but represent one of the key strategic nodes of the global energy war. "Axis of evil" permanent member Iran is on the other side of the Persian Gulf. Any military scenario of an attack on Iran includes a crucial US beachhead positioned in Dubai and "protecting" the Gulf.

The al-Qaeda factor
For Salafi jihadis, Dubai may be worse than Sodom and Gomorrah put together. An al-Qaeda attack in Dubai would instantly turn the overbuilding capitalist frenzy into ashes. So why does it not happen? First and foremost because al-Qaeda and assorted Salafi jihadi funds still transit through Dubai.

Money-laundering in the financial mecca of the Persian Gulf has been virtually uncontrollable. The US government's case against Zacarias Moussaoui documented how money to finance the attacks of September 11, 2001, was laundered through the UAE. During the mid- to late 1990s, the air path from the UAE to Kandahar was crammed with private jets taking Arab notables on falcon-hunting trips in Taliban-controlled Afghanistan. Frequent fliers included UAE and Saudi rulers - the UAE and Saudi Arabia, along with Pakistan, were the only countries that recognized and maintained normal relations with the Taliban regime. Return flights laundered Taliban and al-Qaeda operatives.

During the 2003 invasion and occupation of Iraq, Dubai was neutral. Thus no al-Qaeda attacks. But in March 2005 al-Qaeda finally struck - but in Doha, in neighboring Qatar, home of a massive US air base, a Central Intelligence Agency base and an array of US Special Forces living in secluded compounds.

Bahrain houses the US fleet, but US warships are constantly in Dubai. A previous audio message by Saleh al-Aoofi, an al-Qaeda leader in the Gulf, had been explicit: "To the brothers of Qatar, Bahrain, Oman, the Emirates and to all the lions of jihad in the countries neighboring Iraq, every one of us has to attack what is available in his country of soldiers, vehicles and air bases of the crusaders and the oil allocated for them." Nevertheless, an al-Qaeda attack on Dubai remains unlikely.

The relationship between the Emirates and Iran is even more nuanced. During the Iran-Iraq War (1980-88), the UAE supported Saddam Hussein. Later on, when president Aakbar Hashemi Rafsanjani and then Mohammad Khatami were in power in Iran, there was a certain detente. Now the UAE - awash in billions of dollars of expatriate Iranian cash - fears Iran's messianic President Mahmud Ahmadinejad. Arab countries including the UAE are very concerned about Iran's nuclear program, which includes the Bushehr nuclear plant right on the other side of the Persian Gulf. Rashid Abdullah, the UAE's foreign minister, points out that Dubai is closer to Bushehr than Tehran - and would not be spared the ghastly consequences of a nuclear disaster (or a US attack).

Thus the Gulf Cooperation Council countries - Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the Emirates - appealed late last year for a "denuclearized" Middle East, including both Iran and Israel. Not surprisingly, neither has committed to the idea.

A wall of cash
The combination of the post-September 11 "war on terror" world plus oil at US$70-plus a barrel has translated into an unmitigated business bonanza for Dubai. According to data by HSBC, since 2002, Gulf states have been deluged with more than $300 billion in excess cash. HSBC says that the so-called "Gulf liquidity" is fueling, among others, booms on both the Egyptian and Turkish stock markets and in the Lebanese property market and is supporting Western equity markets and the US national debt. Unlike the 1970s, when petrodollars ended up in Anglo-American banks, now this wall of cash has translated into foreign direct investment (FDI). If only Dubai realized that $300 billion would buy the entire outstanding debt of the developing world.

The Emirates is the world's No 6 oil exporter, behind Saudi Arabia, Russia, Norway, Iran and Venezuela, with an average export of 2.4 million barrels a day, At least in Dubai, it's easy to spot where the money is going (apart from the overbuilding frenzy); for instance, to building up an aerospace industry, relieving its dependence on the US; and to targeting more foreign contracts for its airport management business. And there are plenty more options for "Gulf liquidity" to choose from in case problems arise with the US, as in the recent P&O controversy. The Germans want to build a high-speed train network parallel to the Gulf coast, and German arms dealers want to sell new communication systems, missile defense systems and submarines.

Crucial questions always come back to the fore. How come descendants of Bedouins and pearl divers have become high-tech uber-capitalists - the Asian tigers of the Persian Gulf - while the bulk of the Arab world has stagnated politically and economically? Could this economic boom be replicated in North Africa or in an Arab world - Syria, Egypt, Saudi Arabia - hostage to petrified social structures and disconnected political leaders? And what if the Pentagon had not messed up so ignominiously and Iraq, with the help of qualified Iraqis (no need to import cheap labor), could fashion a country, swimming in oil revenues, even more dynamic (and certainly more democratic) than the UAE?

Meet the CEO
Sheikh Mohammed bin Rashid al-Maktoum is the de facto chief executive officer of Dubai. Rumor has it that he's not exactly fluent in reading and writing his native Arabic because he did not finish school. He only acceded to power last January after the death of his elder brother, Sheikh Maktoum bin Rashid al-Maktoum. But he is widely credited by every "national" as the man with the vision to build, in the words of a businessman, "the first modern Arab metropolis in history".

As far as the Arab world is concerned, General Maktoum (he's also the UAE's minister of defense) has certainly been wise enough to warn his neighbors to clean up their act. He was not referring to George W Bush's now defunct (see the Iraq quagmire) "Greater Middle East" enterprise, but to urgent economic and social liberalization.

The UAE obviously has a crucial asset that escapes, for instance, both Syria and Egypt: oil. But the key point in the overall strategy was to liberate the Emirates from oil dependency and diversify the economy (a lesson for Saudi Arabia). Oil production in the UAE has fallen by more than 30% since 1998; but at the same time revenues from oil and gas exports are now only 37% of the budget. Dubai will run out of oil by 2025; the UAE as a whole only by the end of the century. The "diversification" may have been one-sided so far - it revolves around tourism, real estate and commercial projects. But it has worked.

To see the flesh and bones of globalization exposed, it just takes a drive toward the western border of Dubai, site of the largest man-made harbor in the world, a monstrous, 7-million-containers-a-year, 24/7 operation even when, as next month, the average temperature is an unbearable 50 degrees Celsius, humidity is 90% and seawater is 38 degrees. Just on the other side of the harbor are the US carrier battle groups that usually stop by, the vigilantes of the Persian Gulf. The whole port system belongs to - who else - the ruling al-Maktoum family, who devised the master plan to make Dubai a worthy rival of both Singapore and Hong Kong. Dubai Ports now operates harbors in China, Hong Kong, Australia, South Korea, India, Yemen, Djibouti, Saudi Arabia, Romania, Germany and Latin America, and is itching to take over the harbors of southern Iraq.

So Dubai is not really a city-state: it's a family business (only five families control the whole UAE). It's a bit like Singapore - or even better, a fact confirmed after a recent visit by Singapore's resident Confucius and founding father Lee Kwan Yew. Behind CEO Sheikh Maktoum are three technocrats responsible for what is called Project Dubai. The trio have their offices in the sleek Emirates Towers - constantly voted the best business hotel in the Middle East.

Mohammed al-Abbar is the head of Emaar - an enormous real-estate corporation with business interests throughout the Arab world. Abbar was a keen student of the Singaporean model. He's the man who translated Singapore to the Gulf.

Sultan Ahmed bin Sulayem manages the Nakheel construction conglomerate. Nakheel develops humongous, wow-factor-targeted projects such as the artifical Palm Islands and the artificial archipelago known as "The World" - the epitome of the global gated-condo craze.

Mohammed al-Gergawi is the political mind of the al-Maktoum family. He is the man in charge of strategic long-term projects - such as the positioning of Dubai as a major global banking and service center, media hub and leading center for medicine.

The way things get done in Dubai could be interpreted in the absolute majority of the bureaucratic-afflicted developing world as nothing short of a miracle. Usually there's an invitation. Then the next day a cluster of businessmen gets together - at the Emirates Towers. A sleek presentation then details the next megaproject - be it the new, expanded mega-airport, the world's tallest skyscraper, the largest artificial island, a new mega-mall. Dubai gets down to it, and sooner than anyone can count how many cranes are working at the site, the project is completed. One wonders what Osama bin Laden and Ayman al-Zawahiri could learn from these business meetings at the Emirates Towers.

Imagine if Iraq was like this
Spectacular, head-spinning announcements, spiced by suggestive rhetoric ("history rising", "a legend in the making") are Dubai's stock in trade - only natural when one in every five cranes in the world is busy working 24/7 in the city-state. It's a positively Shanghainese overbuilding frenzy. When one flies in from Tehran or, with a detour in Amman, from Iraq, the contrast is absolutely breathtaking. Along a Persian Gulf strip of less than 40 kilometers, there is at least $100 billion invested in projects already ongoing or planned for the short term; that's almost twice the FDI in China.

In early May, for instance, Dubai World Central was unveiled: the biggest airport in the world (equal to the combined capacity of Chicago's O'Hare and London's Heathrow), surrounded by an entirely new city for 750,000 people, in an area of 140 square kilometers, at a cost of $33 billion, financed by the government, and located in the free-trade zone of Jebel Ali.

And this came on top of the current expansion of Dubai International Airport, "the largest airport development project under way in the world", scheduled for completion next year, with as many as 18,000 people working onsite, and including five gates to handle the new mega-Airbus A380 exclusively. Dubai International will be linked to World Central by an express train.

Then there's the announcement of a $27 billion tourist complex, including the biggest hotel in the world (wasn't that supposed to be The Venetian in Las Vegas? Not anymore).

The $800 million Burj Dubai (Dubai Tower) is going up at a dizzying pace and should be completed in 2008. The height is officially secret, but it should be something like 484 meters, including the word's first rooftop spa. The tallest commercial tower in the world, designed by Japanese and Singaporean architects, will then knock out Taipei's Tower 101. Apartments and offices are sold out - although that does not mean much in Dubai, because speculation is endemic. Around Burj Dubai is mushrooming the inevitable, work-in-progress, multi-skyscraper mega-development called Business Bay.

The artificial islands shaped like palm trees off the Dubai coast have already become a pop icon from Beirut to Bangkok. Four major islands are springing up - with Palm Island Jumeirah already advanced, along with Palm Island Jebel Ali, Palm Island Deira and the overambitious, $3 billion The World - no fewer than 300 artificial islands made of sand dredged from the sea floor and designed to look like, what else, the world map. Builder Nakheel assures that most of the islands are sold to "local money", and the rest to Americans and Brits. By 2015, the company says, there will be 250,000 people living in The World, which will look "like Venice".

As for the original Palm at Jumeirah, it was conceived by none other than Sheikh Maktoum; according to Jacqui Josephson, "tourism and VIP delegations executive" at Nakheel, "he wanted to put Dubai on the map with something really sensational".

Hotel developer Sol Kerzner is building a fake lost city of Atlantis. Fake scuba-diving sites - Maldives, the Barrier Reef, the Caymans, the Red Sea - are also part of the package. Seven thousand South Asians work on one of the Palms: instead of causing what would be a perennial traffic jam, every day they are ferried from further along the coast. In another one of the Palms there will be houses on stilts that, seen from above, will spell out a poem written by - who else - the sheikh: "Heed the wisdom of the wise: It takes a man of vision to write on water. Not everyone who rides a horse is a jockey. Great men rise to great challenges."

Five years ago, Dubai's Internet City was literally desert sand. Today it is the Middle East headquarters of every major global information-technology (IT) company. A massive fish tank for Dubai Mall is using the biggest piece of acrylic ever created, which is going to take nothing less than a year's supply of the world's acrylic.

For the multinational shop-till-you-drop brigades, the Mall of the Emirates bills itself as the largest outside the United States, and the third-largest in the world - and that includes the only artificial ski resort in the whole Middle East (it looks like a freak, twisted steel tube standing out in the Dubai skyline). At the monster Souk Madinat Jumeirah, everything is fake - it's a fake souk inside a fake medina with its own five-star hotels and apartments crisscrossed by fake water channels.

Ibn Battuta - the legendary Muslim navigator - died and was reborn as a mall, complete with a fake Ibn Battuta medieval sailing ship and "Chinese", "Indian", "Persian" or "Moroccan" halls. The Giorgio Armani Hotel and the Palazzo Versace are coming. And so is a $500 million underwater hotel, a Chess City (32 tower blocks of 64 floors, each in the form of a chess piece), an apartment tower shaped like Big Ben, an Aviation City with its Cargo Village, an Aid City-cum-Humanitarian Free Zone, an Exhibition City, a Festival City, a Healthcare City, a Flower City ...

There's also Dubailand - the $4.5 billion Arab Disneyland, which will be bigger than Monaco, providing jobs for thousands of people. There's the new urban railway with 37 stops. The $1.7 billion Silicon Oasis for the IT giants (Internet City is now passe?). And the $6 billion Dubai Waterfront/Arabian Canal, bigger than Barbados.

No wonder the ultimate psychedelic night drive in Dubai is to glide along the ghosts of giant buildings buried in the desert sand, all surrounded by a mass of scaffolding and overhung by giant tower cranes; it's like watching a glowing, larger than-life, steel-and-glass equivalent of the buried terra-cotta army of Emperor Qin in Xian.

Meet the slaves
The social pyramid in Dubai is unforgiving. At the base is the average construction worker, inevitably South Asian, either Pakistani or Indian. He's invisible. But he and his fellow workers now comprise an astonishing 80% of the UAE's population. Human Rights Watch has repeatedly complained that this archetypal construction worker is never treated like a human being. But the UAE power structure couldn't care less.

He works a minimum of 12 hours a day in up to 50 degrees, with a half-hour break, six days a week, and earns no more than $150 a month. He lives in a camp, four and sometimes as many as 12 to a 15-square-meter room lost in the dreary al-Quoz industrial suburb. On his day off, exhausted, he watches Bollywood video discs and catches up with news from home in the Deira souk. One night at the Emirates Towers (in a standard room) would consume five months of his salary. He can only come back home to see his family - which gets an average of 50% of his monthly salary - once every two years. If he's really lucky - or an elderly expat, a former skilled worker - he may eke out a comfortable living as a taxi driver.

He has no rights. Trade unions are banned. If he speaks up, he's instantly deported. Or, in desperation, he may follow the path of thousands who escaped to massive slums crammed with illegal immigrants in neighboring Sharjah. If she's a woman and works as a maid or in a hotel, she can be sexually harassed - and there will be no recourse.

Dozens of construction workers died in 2005. Most of these Spidermen of the Gulf simply fell from the huge new towers, as slings and ropes are not exactly high-tech. A worker died of suffocation in Palm Jumeirah, where the local press discovered that many were being fed half a lemon a day working in 45-degree heat. An array of dodgy companies is addicted to delaying payment of salaries - or not paying at all - as well as confiscating passports.

Slightly better off than the South Asians are the Filipinos, some other Southeast Asians and some Eastern Europeans serving - or playing - in bars, restaurants, hotels, the whole tourist, fun-in-the-sun industry.

Well-paid (and white) Westerners - more than 100,000 - live lavishly as engineers, surveyors, managers, analysts, teachers. The overwhelming majority are Anglos - British, Irish, South Africans, Australians. Every major Western and Japanese IT and audio-video giant, as well as every major financial-services company, is based in Dubai.

But there are many constraints even for the well off. If you are a non-UAE national, you can only buy land in designated "free zones". Foreign companies can only operate by paying a UAE kafeel (sponsor, guarantor) to be their local representative (it is a kafeel who also monopolizes the "import" of foreign workers). Only UAE nationals can work for the government. And education and health care are free only for UAE nationals - certainly not for the South Asians.

Finally, at the top of the pyramid is the al-Maktoum family and its associates, controlling and investing the well of cash derived from oil, exercising total political and social control and building the futuristic version of Arabia based on trade and finance.

Dreamland
Everyone knows there's a property-market bubble and the stock market is bound to fall. The Dubai dream of gated condo/mega-mall/golf course/designer food, preferably on an artificial island, may not be exactly Arabian Nights material. In March there was a 48-hour strike by 2,500 workers at - of all places - Burj Dubai, the tallest tower in the world. The petrodollar dream remains attached to the absence of rights to most people building the dream. Without these "invisibles", the dream would disappear like a mirage - as if all the oil wells turned dry.

Sheikh Zayed's and Sheikh Maktoum's dream of modern Arabia will nonetheless continue to entice (quagmire Iraq is not exactly an alternative), confirming the image of an apolitical, consumer-mad, citizenship-free society. It's as if Dubai's ruling family had taken to heart the words of the late, great Indonesian writer Pramoedya Ananta Toer: "Just as politics cannot be separated from life, life cannot be separated from politics. People who consider themselves to be non-political are no different; they've already been assimilated by the dominant political culture - they just don't feel it any more."

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