Published: January 2007
Sudden City
A feverish dream of the future springs from the sands in Dubai.
By Afshin Molavi

There once was a sheikh who dreamed big. His realm, on the shores of the Persian Gulf, was a sleepy, sun-scorched village occupied by pearl divers, fishermen, and traders who docked their ramshackle dhows and fishing boats along a narrow creek that snaked through town. But where others saw only a brackish creek, this sheikh, Rashid bin Saeed al Maktoum, saw a highway to the world.

One day in 1959, he borrowed many millions of dollars from his oil-rich neighbor, Kuwait, to dredge the creek until it was wide and deep enough for ships. He built wharves and warehouses and planned for roads and schools and homes. Some thought he was mad, others just mistaken, but Sheikh Rashid believed in the power of new beginnings. Sometimes at dawn, with his young son, Mohammed, by his side, he’d walk the empty waterfront and paint his dream in the air with words and gestures. And it was, in the end, as he said. He built it, and they came.

His son, Sheikh Mohammed bin Rashid al Maktoum, now rules Dubai, and around that creek has built towering dreams of his own, transforming the sunrise vision of his father into a floodlit, air-conditioned, skyscrapered fantasy world of a million people. With its Manhattan-style skyline, world-class port, and colossal, duty-free shopping malls, little Dubai now attracts more tourists than the whole of India, more shipping vessels than Singapore, and more foreign capital than many European countries. The people of 150 nations have moved here to live and work. Dubai has even built man-made islands—some in the shape of palm trees—to accommodate the wealthiest of them. Its economic growth rate, 16 percent, is nearly double that of China. Construction cranes punctuate the skyline like exclamation points.

Dubai is also a rare success story in the Middle East, a region with a history of failure and stagnation. Whether Dubai represents a glitzy anomaly or a model to be copied by other Arab nations is a question worth asking these days, as the Islamic world struggles to cope with modernization. Abdulrahman al Rashid, a Saudi journalist and director of the Al Arabiya news channel, put it this way: "Dubai is putting pressure on the rest of the Arab and Muslim world. People are beginning to ask their governments: If Dubai can do it, why can’t we?"

Dubai, it must be said, is like no other place on Earth. This is the world capital of living large; the air practically crackles with a volatile mix of excess and opportunity. It's the kind of place where tennis stars Andre Agassi and Roger Federer play an exhibition match on the rooftop helipad of the opulent Burj al Arab megahotel; where diamond-encrusted cell phones do a brisk business at $10,000 apiece; where millions of people a year fly in just to go shopping.

Over the past decade, I've traveled to Dubai often and grown to appreciate the quirky multiculturalism of a city where one can eat in an Italian restaurant run by an Egyptian, with an Indian head chef and Filipino waiters who break into operettas every half hour. Or watch, in the wee hours, a mob of English expatriates weaving home from a pub as the Muslim call to morning prayer echoes through the streets.

Many Americans first heard of Dubai, one of seven emirates that make up the United Arab Emirates (U.A.E.), when a state-owned company, Dubai Ports World, purchased a British firm that managed six U.S. ports. Some members of Congress reacted with alarm, charging, correctly, that the 9/11 conspirators used Dubai as a key financial transit point. Others supported the deal, noting that the U.A.E. had proved a staunch ally in the war on terror, and that U.A.E. ports host more U.S. Navy ships than any port outside the United States. In the end Dubai decided to pass on managing the U.S. ports. "We're too busy for politics," Sultan bin Sulayem, the head of Dubai Ports World, told me. "The Americans didn't want us on that deal. Fine. We move on. There's lots of business to be done."

Indeed. Dubai has created one of the most dynamic business environments in the world. "It's not just the buildings and the islands and the hotels," says Ali al Shihabi, the Princeton-educated director of a leading investment bank. "It's the soft stuff: the laws, the regulations, the liberal social environment." With no corporate or income taxes, a top-notch banking system, and a legal code that favors property and ownership, Dubai embodies old Sheikh Rashid's motto: "What's good for the merchants is good for Dubai."

And then there's his son, Sheikh Mohammed, the 57-year-old ruler of Dubai, whom Edmund O'Sullivan, editor of the Middle East Economic Digest, calls a "radical modernizer" and the "most significant figure in Arabia since King Abdulaziz"—the founder of modern Saudi Arabia who leveraged his country's oil reserves to become a major world player.

Unlike a traditional Middle Eastern autocrat, Sheikh Mohammed (known to many as Sheikh Mo) manages Dubai like a good CEO. Besides keeping a full schedule of public appearances, he's often seen driving himself around the backlots of Dubai, surveying his construction sites, as his father did, at the crack of dawn. He'll sometimes show up unannounced in the workplace to ask tough questions, fire poor managers on the spot, and reward the hardest workers. From these he handpicks Dubai's next generation of executives, including many women. "Hire the best women you can find," he told Anita Mehra Homayoun, the head of marketing for Dubai's airport, when he tapped her for the job in 1996. Mehra Homayoun herself rose through the ranks of the airport's duty-free shopping operation and caught Sheikh Mo's attention by organizing car raffles and celebrity golf and tennis tournaments, and by attracting top retailers to the airport's duty-free empire. "Sheikh Mohammed makes you believe you can do anything," she said. "His vision is contagious."

Another of the chosen, Mohammad Alabbar, grew up, like many Dubaians, in a tent made of palm fronds. His father supported a wife and 12 children with his fishing net. Then, in 1966, Dubai struck oil, and Alabbar went to college in the United States on a government scholarship paid for by oil revenues. (Though a windfall early on, Dubai's modest oil reserves now account for only 6 percent of GDP.) After graduation, he impressed Sheikh Mo during a six-year stint in Singapore, where he turned stagnant retail enterprises into thriving businesses. That led to a posting as Dubai's director of economic development, a role that showcased his ability to boost commerce by cutting red tape. As a reward, the government granted him land at little or no cost, and he started building.

Today he travels the world in a private jet and oversees Emaar, one of the richest real estate development companies in the world. "We have come a long way," Alabbar told me at the project site of the Burj Dubai, a towering, torpedo-like structure that will be the tallest building on the planet when it's finished in 2008. "But we must always remember where we came from. Our kids must know that we worked very, very hard to get to where we are now, and there’s a lot more work to do."

Who actually does that work is a touchy subject. Dubai is not, demographically, an Arab city-state: Fewer than one in eight residents are citizens of the U.A.E., and South Asian guest workers make up more than 60 percent of the population. Many educated Indians live a comfortable life in Dubai, and a few have become rich. ("Dubai is the best city in India," quip the fortunate.) For others, however, Dubai is a dead end.

The local press had been reporting labor unrest the evening I visited one of the squalid neighborhoods where tens of thousands of guest workers live. The laborers' barracks stood among many battered, squat buildings along a dirt and gravel road littered with garbage. Hundreds of men with sun-soaked brown faces scuttled past in tank tops, baggy slacks, and torn flip-flops. Some of these workers joined in recent strikes, fed up with being treated as "less than human," in the words of Human Rights Watch. The average laborer makes about five dollars a day, working 12-hour shifts in scorching heat. (Human Rights Watch reported nearly 900 construction deaths in 2004, including deaths from heatstroke.)

Listen to their stories, and you learn that many workers are trapped here, mired in debt to unscrupulous agents back home who charged them exorbitant fees for their work visas. "If I didn't have to pay back my fee, I'd go home today," one man told me. "We have nothing," said Kutty, a short, sunken-cheeked 25-year-old from the Indian state of Kerala. "We are living a nightmare here, and nobody cares."

Reacting to such abuses—and the bad publicity they generate—the government recently announced it would allow workers to unionize, and ordered all contractors to halt work for four hours a day during the heat of July and August.

Dubai's troubles don't end there. Creating man-made islands offshore, for example, may have been a brilliant, if outrageous, business decision—waterfront properties sell for 7 million to 30 million dollars—but in the process, environmentalists say, Dubai has killed coral, destroyed turtle nesting sites, and upset the marine ecology of the western Persian Gulf. And behind the glittering skyscrapers lies a late-night world of fleabag hotels and prostitutes, Indian and Russian mobsters, money launderers, and smugglers of everything from guns and diamonds to human beings.

The night I stopped by the Cyclone Club, the prostitutes on hand hailed from Moldova, Russia, China, eastern Europe, the Caucasus, and various countries in East Africa. Their clients were Arabs, Europeans, Asians, and Americans. Music throbbed, drinks flowed, and soon the couples headed for the exits. I met a Chinese woman who goes by the name Muri. "I only go Cyclone two times a week," she said in halting English. During the day she works as a chef at a Chinese restaurant. Her clients, she said, tend to be Europeans or Americans on leave from the war in Iraq. "The Arabs like the European girls and Russians." I asked if she knew of trafficking rings that deal in Chinese girls. "Yes, of course," she said, wrinkling her eyebrows. "Very bad. Some girls very young."

A few days later I asked a top aide to Sheikh Mohammed whether Muri was right about the influx of Chinese prostitutes and traffickers. "It's not easy to stop the ones who come to Dubai by choice," he told me, "but we have no tolerance for traffickers." The U.S. State Department, however, reports that Dubai's efforts to curtail the trade fall short of even "minimum standards," and estimates that some 10,000 women in the U.A.E. may be victims of sex traffickers.

Dubai's relaxed approach to these and other problems does prompt criticism, though carefully muted. "We need to slow down, things are going too far," one prominent writer told me, referring to unrestrained development running roughshod over local culture. He asked that I not use his name. Said another native, "I know that some of my Arab friends only visit us because we have foreign prostitutes here. This is shameful."

Dubai's tolerance can also be a good thing. Alongside its bars and nightclubs, there are mosques and churches and Hindu temples, and, for a city with so many competing religions and nationalities, it is remarkably free of ethnic conflict. "I don't know who's a Sunni and who's a Shia, and I don't care," Sheikh Mohammed told me during a brief meeting. "If you work hard, if you don't bother your neighbor, then there is a place for you in Dubai." Even Israelis can do business (quietly) with Dubai.

While the Dubai model—built on freewheeling capitalism, entrepreneurship, and religious moderation—might be a blueprint for other developing nations, Dubai is uniquely positioned for the 21st century largely due to the vision and ambition of one man. Other Arab leaders might emulate Sheikh Mo or his methods, but in the end—and some would say thank goodness—there's only one Dubai.

Before I left the emirate, I decided to do what millions of visitors have done over the past decade: Go to a shopping mall. Dubai reportedly has more shopping malls per consumer than any other city in the world, and day or night they are packed with the kind of crowd one typically finds in Dubai: veiled Saudi women browsing Victoria’s Secret; teenage Emirati boys in ghetto gear flirting with eastern European girls in black leather miniskirts; Senegalese and Egyptian and Iranian and Kazakh and Korean families, strolling amid the fountains and stores as Western pop music, globalization's soundtrack, plays over the loudspeakers. At one mall, the Hamarain Center, the theme song to Titanic, by Céline Dion, was played so often that local retailers complained.

I chose the Mall of the Emirates, one of Dubai's newest megamalls, a 2.4-million-square-foot behemoth that features an indoor ski slope. Entering is like crossing the threshold into an alternative reality: a lavish, artificial world of high-end clothing boutiques, edgy music stores, cafés, and restaurants that culminates at a massive, plate-glass window with ski lifts in the distance. I joined the crowd at the window to watch skiers descending a snow-covered "mountain," children throwing snowballs at each other, and instructors guiding beginners through their first runs.

I spotted what looked to be a group of Dubaians on a family outing. A middle-aged Arab man in a rented overcoat walked gingerly through the snow in street shoes. Nearby, a woman in a black abaya, also wearing a rented coat, nervously held the arm of an Asian woman, perhaps her Filipina housekeeper. A teenage boy with a wispy mustache approached them, skis strapped to his feet. He chatted for a moment, then labored off toward the lift for another run. The woman let go of the Filipina and took a few steps. Then she smiled, squatted down, and picked up some snow, a small white miracle in the desert of Arabia. She seemed to be enjoying herself. The temperature of the real world outside was 110 degrees, but in the dream world of Dubai it was just about perfect.