Dubais Dramatic Drop

By Daniel Pipes
FrontPageMagazine.com | Wednesday, February 25, 2009

As the Muslim world settled into ever-deeper decline over the past decade, mired in political extremism, religious sickness, economic irrelevance, WMD, anarchy, dictatorship, and civil wars, Dubai stood out as a happy anomaly.

Under the leadership of HH Sheikh Mohammed Bin Rashid Al Maktoum, Dubai (one of seven polities within the United Arab Emirates) invited peoples from around the world to come make money and they did; about 83 percent of its population of 1.4 million is foreign. The emirate intelligently exploited the energy boom surrounding it and had the ambition not just to globalize but to become a leader at globalization. Dubai became renowned for the world’s only tropical desert ski slope, the world’s only 7-star hotel, and the world’s very highest building, all done with a new-agey twist. (Publicity for the skyscraper, for example, presents it as “an unprecedented example of international cooperation” and “a beacon of progress for the entire world.”)

But if Dubai seemed to be an exception to the general Muslim trajectory, it was only temporary.

In three distinct arenas – economics, culture, and sports – very recent developments show how much the statelet has in common with the impoverishing and separating Muslim world.

Economics

Dubai was the froth of the early 2000s, the purest example of a bubble economy based on rising prices and boosterism, a Ponzi scheme among the nations. Already in 2006, financial writer Youssef Ibrahim dissected its trompe d’oeil economy:

The huge oil revenues that have been pouring in for two years have nowhere else to go but into more and more real estate speculation. It makes for great business for the developers and their Western and Asian contractors, as well as for the owners - the sheiks, kings, emirs, and their big businessmen friends who own the deserts on which these mirage-like projects are being erected.

The formula from their perspective is straightforward: Sell desert land to investors at a premium. Then double the profits by financing the construction of artificial islands, lakes, and massive air-conditioned shopping malls, alongside pie-in-the-sky projects like the largest ski slope in the desert, a Jurassic Park complete with mechanical dinosaurs right out of the movie, and millions of housing units. Then get the hell out and let them eat cake.

Dubai’s leadership, Ibrahim notes, invested its profits “from selling Disneyland desert fantasies in enduring assets outside the Gulf,” such as port facilities and hotel properties.

When the music stopped last fall, with a world-wide recession and the price of oil tumbling over two-thirds, no one got harder hit than the Dubai dream machine. Just as it ascended with panache, so it now sinks con brio. One example, as reported by Robert F. Worth in the New York Times:

With Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.

This unique abandoned-car syndrome results in part from the emirate’s stringent work rules. As Worth explains, “jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai — once hailed as the economic superpower of the Middle East — looking like a ghost town.”

Signs of the new penury abound:

real estate prices, which rose dramatically during Dubai’s six-year boom, have dropped 30 percent or more over the past two or three months in some parts of the city. … So many used luxury cars are for sale, they are sometimes sold for 40 percent less than the asking price two months ago, car dealers say. Dubai’s roads, usually thick with traffic at this time of year, are now mostly clear.

Expatriates in Dubai are now so down on the country, Worth explains, some see it “as though it were a con game all along.”

There is every reason to think that the economic descent has just begun and has a long way to go. As this happens, foreigners are fleeing. Christopher Davidson, a specialist on the UAE at Durham University, notes that “When Dubai was rich and successful, everyone wanted to be its friend. Now that it has no money in the pocket, nobody wants to be pals anymore.”

Culture

When it comes to cultural extravagance, Dubai cedes first place to its neighbor, Abu Dhabi, which in early 2007, announced the “Cultural District of Saadiyat Island” to include satellites of the Guggenheim (costing US$400 million) and Louvre ($1.3 billion) museums, plus about two dozen other museums, performing arts centers, and pavilions.

Still, Dubai has ambitions, if more modest ones and the first Emirates Airline International Festival of Literature, opening on Feb. 26, is to serve as its literary coming-out party. A welcoming message from the director of the festival, Isobel Abulhoul, explains:

EAIFL is the first true literary Festival in the Middle East celebrating the world of books in all its infinite variety, with over 50 events featuring authors whose books range from some of the finest contemporary literary fiction to inspirational lifestyle titles, via the magical worlds of children’s, fantasy and science fiction writing. We invite you to share and enjoy their company in a relaxed Festival atmosphere, made even richer by our vibrant fringe which showcases the wonderful and diverse talents from our very special city, Dubai.

The festival boasts authors from twenty countries, including such big names as Frank McCourt and Louis de Bernières.

All good, but the EAIFL hit a bump before it even opened, one that threatens to overshadow the event itself. Never mind “the world of books in all its infinite variety”; the festival banned British author Geraldine Bedell because Sheik Rashid, one of the minor characters in her novel The Gulf Between Us (Penguin), is a homosexual Arab with an English boyfriend; to make matters worse, the plot is set against the background of the Kuwait War.

As Abulhoul wrote to Bedell, disinviting her. “I do not want our festival remembered for the launch of a controversial book. If we launched the book and a journalist happened to read it, then you could imagine the political fallout that would follow.” As for the Kuwait War, that “could be a minefield for us.”

Bedell responded that her novel “is incredibly affectionate towards the Gulf. I feel very warmly towards it, except when things like this happen. It calls into question the whole notion of whether the Emirates and other Gulf states really want to be part of the contemporary cultural world ... You can’t ban books and expect your literary festival to be taken seriously.”

Indeed, the biggest name of the Dubai event, Canadian author Margaret Atwood, stayed away in protest at Bedell’s exclusion (“I cannot be part of the festival this year.”), eventually agreeing to appear via video link-up in a debate on censorship to be staged by International PEN at the festival.