Bookshelf

🎨 Impressions

Another one of the many books recommended by author Derek Sivers which I’ve then also picked up. His point that sold the book to me was that he was full of prejudices against Dubai and the UAE before actually getting to know both. He asked himself, why are there all these prejudices and are they even justified? I felt busted, so I decided to read the book myself and learn about Dubai so I’ll have a more balanced view of it as well.

I’ve been to Dubai before, but just once and just for a day in between connecting flights. My family and I used the opportunity to explore the current main attractions which were the Dubai Mall and the tallest building in the world, the Burj Khalifa. Both blew me away because I’m just a fan of great engineering. And you can’t argue with those achievements. But sure enough, all the negativity surrounding the oil rich sheikhs of the region was in the back of our heads, too.

The only way to beat prejudice is to gain knowledge. So here I am, reading a fairly long and detailed book about the history and culture of Dubai just after having finished a more general book about the country of the United Arab Emirates that was more of a travel guide in comparison.

Dubai is the star of the country. The capital, Abu Dhabi, is also known around the world these days, but Dubai still takes the cake. That’s why this book is Dubai specific.

The first roughly half of the book is about the early history of the region, which in this case means the culture of many nomadic tribes who tried hard and managed to survive the inhospitable area, consisting of mostly desert. The sort of person it takes to make it here you can only imagine. The crazy bit is that some of those are still alive today, because it’s not that long ago that Dubai was just a little fishing village. Crazy to think. And I wasn’t really aware, but sure enough the country has a history of being a British colony just like most of all other the countries on Earth. Those Brits, right?

It is remarkable, though, that the governing family of the Maktoums has been in power for over 175 years now, bringing great stability to the whole Middle Eastern region. I was surprised. They made it through the nomadic times, the British colonial times, and the current oil rich mega city times as well, without ever getting toppled or exiled by a revolution. And that, as far as I understand, completely without using violence. The contrary. The key to their success seems to be the generosity they display towards the citizens. The wealth is mostly shared with the Emirati citizens, who in turn support the royal family’s claim to power. More on that later.

When the discovery of oil happened in the 1960s and 1970s, and with it the newly found wealth flowed into the country, the sheikhs decided to use it not mainly for their own personal gain, although that happened as well, but mostly for realizing their vision of putting Dubai on the map of the world, making it a big and important city. And you and I can attest to the success of that attempt.

They were doing this very systematically. In order to become attractive to professionals from all over the world, the city had to become business-friendly. Low taxes and an openness to all kinds of different global approaches to business were the first steps. In the Muslim dominated country, that openness is not a given and a unique feature. Trade had to be increased as well, so a huge port was constructed. An airline and a flagship hub airport came next. Lots of office space, incredible infrastructure, housing, they just built and built and built and the people came. Now, there are around four million residents, with plans of increasing that to ten.

Just reading about all of the details involved in that growth was highly interesting to me. But I wondered when and how the often proclaimed negative aspects would come to light. That happened in the latter half of the book.

The bad conditions for foreign workers. Problems with prostitution. Quiet acceptance of human trafficking. Inefficiency with energy usage. The car-centric construction of the city and the way people behave while driving.

It has been a few years before that I learned that cities such as New York City and London have around 30% of foreigners living in them, but Dubai has over 90%. Less than 10% are actual Emirati citizens. This situation is quite complex. The Emirati receive lots of benefits from their government. Those amount to around 55,000 USD per citizen in a year. They pay less for electricity, water, gas. They receive world-class free health care, including treatments overseas should it not be available in the country. Education is for free, even secondary degrees in other countries will be paid for. For their own wedding they get a one-time bonus of 19,000 USD from the state. And afterwards, most land on well-paid and very relaxing government jobs. The life seems very comfortable. Unemployment amongst Emirati is quite high though, at around 20% – probably because there’s no real need to work. The pressure to innovate is low, too, there’s not much of a drive.

And apparently, they feel like the foreigners are overrunning them. In numbers, this is completely true, but the power structures are so that those foreigners have very little power and say in everything. They will never receive Emirati citizenship, even when born in the country. This has led to hundreds of thousands, if not millions of state-less people. People come to Dubai for work and stay there, have children, but they won’t get a passport from either country. You can’t become an Emirati. The only way is to be born to an Emirati citizen father. The passport of the mother isn’t important. So those state-less and right-less workers who have in fact built the city mostly get nothing of the rewards. They are paid well enough to survive and send money home to their families, but that’s it. No voting rights, of course. There’s no voting in the UAE.

Still, the fear in the Emirati citizens’ minds isn’t totally unjustified. I was intrigued to learn that the country of Singapore has a similar history. Up until 1965 it belonged to Malaysia, but lots of Chinese and Indian people migrated to the city and just declared independence. Today, the Malaysians are still the minority in Singapore and the country is still independent. That’s how the Emirati fear it might go in Dubai as well.

So the situation is tense and difficult between Emirati people and the guest workers. And in between are the expats, which is to say the business people living in the city. The middle class and upper class who benefit from the luxurious offerings of it. They are most often just staying for a few years and not really taking root in Dubai. It’s not clear to me if that’s the goal the sheikhs had in mind when planning it all, but it’s certainly what happened. They live separated from the Emirati and also the guest workers. There’s not much mixing going on and that might be intentional. In that way it’s fairly different from mega cities who describe themselves as melting pots of different cultures and equal rights for all. But it still seems to be a stable situation, as far as I can tell.

That’s another interesting aspect of it: Why does it all work, if it’s just so different from everything else that worked before? And will it work over the long-term?

My interest in visiting the city again and spending more time in it has grown tenfold since reading this book. I’d like to see it all myself and try and find out what the different people think who live there.

I think the book did a great job of conveying a sense of understanding in its readers. It showed all the magnificent achievements and how it got there, as well as all the alarming shortcomings. Not everyone needs to read it, but for people interested in Dubai it’s immensely helpful.

📔 Highlights

Foreword

The villagers trusted the family that ruled them. The family produced generous men who ruled by three principles: what is good for the merchant is good for the village; embrace visitors, no matter what their religion; and, you cannot win if you do not take risks.

Part I: Dubai Stirs

The guttural Arabic language and the austere land of Arabia that gave life to Islam are considered hallowed, to this day. As Muslims, divided Arab tribes found unity.

The UAE’s rulers now maintain power and legitimacy by giving generous subsidies to their citizens, known as Emiratis, essentially buying their support.

Dubai’s admirers regularly compare the city’s dynamism to that of Singapore and Hong Kong, or even the Hanseatic city-states like Hamburg.

Their exposed skin was so deeply tanned that it cracked like old cowhide. Men and women daubed black kohl, mascaralike, on their eyelashes, to protect their eyes from the relentless sun. It helped, but not enough to prevent most from getting cataracts.

one of the world’s most cosmopolitan cities, with some two hundred ethnic groups living in a rare atmosphere of tolerance.

Not one of the sheikhs who governed Dubai since 1833 was overthrown or murdered. By the chaotic standards of the region, 175 years of uninterrupted succession is probably unprecedented.

By the 1920s, most Iranians accepted Dubai’s invitation to settle permanently. They brought their families across and adopted the customs and dress of the local Arabs. Dubai was happy to have them.

The Lonely Planet travel guide to Iran describes Bandar Lengeh as “an infectiously lethargic place” that shuts down for a five-hour siesta every afternoon. Dubai, in effect, siphoned away Lengeh’s lifeblood.

Nearly half a million Iranians have fled to the good life in the UAE. In Dubai, Iranians outnumber local Emiratis by around three to one.

Iranians are a key cog in the machinery that has created this marvel in the desert. Dubai now hosts nearly ten thousand Iranian-run businesses that have diversified beyond the Iranian market and now ship anywhere in the world.

Cultured pearls flooded the market and killed pearling in the Gulf and everywhere else—permanently. If Dubai had built a backup industry, it might have preserved a reasonable standard of living. It did not.

As World War II ground on, the famine grew desperate. When there was no rice, fish, or dates, people ate leaves or the ubiquitous dhub, a spiny lizard that may have given Dubai its name.

Sheikh Rashid’s use of violence to maintain power is nowadays seen in Dubai as an embarrassing bit of family history.

The rebel majlis might have been destroyed, but Rashid realized the ideas it spawned had merit. He enacted every single one of them—except the royal pay cut—once he took power.

The hereditary authoritarian rule that Britain backed in the Trucial States continues today. Rulers of Dubai and the other UAE sheikhdoms still choose their successors from sons and brothers, preserving a system that is one of the least democratic in the world.

The stability that Britain brought to the Trucial Coast was, for the first hundred years, stagnation. The sheikhdoms remained Third World outposts because the British enforced their isolation and blocked foreign ideas. Dubai’s links to the world came despite—not because of—the British presence.

For their hardships, and those of their ancestors, they would be rewarded with custody of 8 percent of the world’s proven oil reserves. When the extent of the deposits became known, it was clear that Abu Dhabians were immediately among the richest and most privileged people in history.

For thirteen years after Abu Dhabi began pumping oil, Dubai drilled hole after dry hole.

Dubai was in business. But when the finds were assessed, they looked more like a letdown. Dubai had just 4 percent of the UAE’s oil, or 4 billion barrels of reserves. Nearly all the rest was in Abu Dhabi.

Sheikh Rashid wanted to make sure Dubaians got to see their oil. Not for novelty’s sake. Dubai, like most of the Middle East, is a rumor mill where conspiracy theories run wild. The leader might claim he’d struck oil, but until people saw it, there would be doubters sowing rumors.

By 1975, oil earnings dominated Dubai’s economy, bringing in nearly two-thirds of gross domestic product. That year stood as the peak of oil’s importance. By 1985 oil’s contribution slipped to 50 percent of GDP. A decade later it was down to 18 percent. By 2000, it slid to 10 percent. In 2006, oil sales brought a minuscule 3 percent of Dubai’s overall economy.

Dubai wasn’t exactly running out of oil. It hit peak production in 1991 at 410,000 barrels per day. But it had other prospects. Trade, construction, and services rose in relation to oil

In 2008, Dubai’s daily draw was 60,000 barrels. Abu Dhabi’s was 2.5 million.

But, unlike in America, integration was quick and nearly total. Black Emiratis face little discrimination.

The 1963 ban wasn’t much of a hardship for slaveowners. They switched from slaves to low-paid Asians who find themselves mistreated in much the same way.

“The British advice was not to give blatant handouts, but to give prominent families exclusive trade licenses. If you make one family, say, the sole importer of Mercedes cars, you make them billionaires very quickly,” he says. The revolutionaries gave up their fight to get rich.

Zayed went on to become the UAE president, ruling until he died in office in 2004. He is revered as the father of his country.

The sole vestige of democracy in the UAE is an advisory body in which half the members are elected by a hand-picked caucus. Political parties and civil society organizations are banned. Yet the tribal leaders in the UAE, especially Dubai’s Sheikh Mohammed, are broadly popular, seen as competent and benevolent.

In the longer term, rulers in Dubai and the UAE have stanched dissent the nice way, by paying off their opponents. In practice, a wealthy populace is a happy populace and not one to clamor for political rights.

Part II: Dubai Emerges

Rashid earned enormous respect in Britain and, in his later years, in Washington. He even managed to out-maneuver Saddam Hussein in the 1980s while remaining on cordial terms.

From then on, Dubai would ride an incredible growth spurt that has yet to stop. The dredging of the creek was the spark that started the whole thing.

Independence was a problem, not an opportunity. Sheikh Zayed of Abu Dhabi and Sheikh Rashid of Dubai pleaded with London to extend British protection. They’d pay all expenses.

They liked him for his easy informal ways and his friendliness, and they respected his force of character, his shrewdness, and his physical strength. They said admiringly: “Zayed is Bedu. He knows about camels, can ride like one of us, can shoot, and knows how to fight.”

Zayed made an incredible announcement: Anyone in the seven Trucial States who needed cash for any reason should come see him. People streamed in from every corner of every sheikhdom, traveling to Abu Dhabi by camel, by car, by dhow, and on foot. They lined up outside the leader’s palace, waiting for their turn to ask, and receive. Zayed kept up the handouts until he emptied the coffers.

Satwa teems with Filipinos, Iranians, and South Asians, and is home to Dubai’s best curry houses, tailors, and used book shop. It’s one of the few neighborhoods conducive to strolling.

Rashid’s secret, Ali al-Sayed says, was his bureaucracy-killing management style. “Sheikh Rashid did something the Arabs couldn’t do for hundreds of years: He kept lawyers away from the decisions. The biggest sickness in the Arab world is legal advisers saying, ‘This is forbidden, this is forbidden, this is forbidden.’ If a certain contract violated the law, he didn’t care,” al-Sayed says.

“What is there in Dubai to make it a tourist attraction? You have nothing but humidity, red-hot sun, burning sand and barren desert!” There is no motivator like ridicule.

Perhaps Emirates managers were less afraid of turmoil than the rest of the industry. Emirates was one of the last airlines out of Kuwait when the Iraqis invaded in 1990 and the first back in 1991 when the U.S-led coalition chased the Iraqis out. It made money flying to places others avoided, like Iran, Ethiopia, and Libya.

Emirates swears it gets no special treatment from its owner, the Dubai government. Executives at competitors like Air France and Qantas beg to differ. They say Emirates benefits from hidden subsidies that keep expenses far below the industry norm. A 2003 study by Switzerland’s UBS found costs 40 percent below those of Dutch carrier KLM. 

The Dubai crown prince was a dream client. He was enthusiastic. He understood engineering challenges. And he was decisive. “He had the ability to make big decisions without many facts, and to get them right,” Wright says.

Burj Al Arab did exactly what Sheikh Mohammed wanted. It became an instantly recognizable icon. Dubai’s skyline was famous. No one could confuse it with Bahrain or Kuwait anymore.

Before 9/11, World Bank figures show, Middle Eastern oil-exporting countries plowed as much as $25 billion a year into U.S. investments. Between 2001 and 2003, the figure only reached $1.2 billion. The missing money, a lot of it, was rerouted from America to Dubai.

It wasn’t just money that came back. Arab professionals who’d fled saw an opportunity to return to their neighborhood without suffering a pay cut. Dubai calls it the “reverse brain-drain.”

He brought Microsoft, Oracle, and Hewlett-Packard to Dubai. From nothing, the city soon had three thousand knowledge workers and nearly two hundred new foreign companies. Dubai gained decades’ worth of foreign investment in a year, simply by bundling offices with clever incentives.

Dubai relentlessly benchmarks itself against governments it sees as competitors. Hong Kong, Singapore, Ireland, New Zealand, and Australia are favorites. “This reflects the leadership style of Sheikh Mohammed,” al-Yousuf says. “He really runs this country as a corporation.”

Al-Hashimy, now a federal minister, says she was shocked by Americans’ scant understanding of her part of the planet. She found herself dumbing down her talks so audiences could grasp them, even in sophisticated cities like Chicago.

Dubai also resembles 1850s San Francisco, a male-dominated immigrant city that serviced the gold rush, just as male-dominated Dubai services the oil boom.

For Tel Aviv’s diamond merchants, Dubai’s Diamond Exchange is a godsend. It’s their only plausible gateway to a market that lusts after jewelry. It’s also one of the few platforms for Arab-Jewish cooperation.

Europeans and Israelis use Dubai to manipulate profit figures and reduce income taxes or, like the Africans, to avoid export tax. The scheme costs those governments revenue, and it fills the wallets of their corrupt bureaucrats and merchants. In short, Dubai makes money on crimes committed elsewhere.

When it came time to judge their reorganizations, Sheikh Mohammed said he would measure them against the world’s best governments: Singapore, New Zealand, Australia, and Canada.

Part III: Blowback: The Downside

“They are like candles burning and melting to light others,” says K.V. Shamsudeen, a counselor who deals with the financial problems of Dubai’s Indian workers. “Love becomes money for their families. They say, ‘My life is gone. Let them live in comfort.’

Kidney failure is especially frequent among skyscraper crews, because toilets are far away on the ground level. Those toiling on the upper stories don’t want to take time to go all the way down to urinate, so they don’t drink enough.

The UAE produces next to nothing, so food and other staples have to be shipped in. The world has recognized that America’s way of life can’t be supported much longer. But somehow Dubai didn’t get the message.

Each day three people die in UAE traffic wrecks, two of them killed by reckless drivers. The carnage is a public health crisis on par with a serious outbreak of plague or smallpox. Crashes are responsible for about 15 percent of all deaths in Dubai and the rest of the Gulf region, the biggest killer after heart disease. In neighboring Abu Dhabi, where driving is arguably worse than Dubai, road wrecks are already the leading cause of death.

The key to a true and effective development process is a vision that doesn’t allow small details to cloud its basic goals.”

“What about cyclists? Why not put in bike lanes?” I asked him. His face darkened. “The locals won’t allow it. They don’t cycle. They say, ‘Indians are the ones who ride bicycles. Why should we pay for something that they use?’ It’s a backward mentality,”

Part IV: Dubai’s Challenge

Ninety-five percent of Dubaians are foreigners, and they come from 200 countries. There are only about 100,000 citizens among the city’s 2 million inhabitants. Dubai is probably the world’s most cosmopolitan city.

Urban Iran makes a stand: the soft Farsi chatter, the smoky outdoor kebab houses, and the Jackie O lookalikes in their Gucci headscarves and Tehran-chic manteaus. There are Ethiopians and Ghanaians parking cars and hustling fake watches, Filipinos strolling in shorts and tank tops, and a rising force of Chinese laborers and prostitutes. The only people absent, it seems, are locals.

Most Dubai expatriates have never held a meaningful conversation with a UAE citizen. Understanding of their historic struggle is almost nil.

Singapore seceded from Malaysia in 1965 under similar circumstances. Chinese and Indian immigrants overwhelmed the local Malays and then declared independence. Malays now form less than 15 percent of Singapore’s population.

“Citizenship is identity. That’s what I’m worried about,” she says, her green eyes shining with intensity. “What if they don’t love this land as much as we do? I would want to live here even if there was nothing, like my ancestors did.

Fewer than 10 percent of the Emirati workforce toils in private companies, where 99 percent of employees are expatriates.

The educational system needs to prepare students for the jobs that exist: management, trade, engineering, information technology, accounting. But two-thirds of citizens get degrees in arts, education, and religion.

Dubai’s hedonistic excess has offended Muslims for years. It has yet to attract a major al-Qaida suicide campaign. The idea that terrorists “hate us because of our freedoms,” the preferred explanation offered in America, has never been correct.

The government effectively froze the growth of Dubai’s Iranian community at the behest of the United States. Iranians now find it more difficult to travel to Dubai.

Iran and Dubai have hundreds of years of ties, through marriage, shared cuisine, traditions, and religion. The Arabic spoken in Dubai has a Persian inflection. Neighborhoods and families are named after towns in Iran. And a minor functionary from halfway around the world tells people to break those ties—at great personal cost—and they do what he says.

With so much under its belt, some Dubaians saw the coming recession in the manner that a fattened bear views a cozy cave at first snowfall. It was time for reflection and a long snooze until, at some future date, it would reemerge lean and hungry.

The global contagion kneecapped Dubai’s economic pillars one by one: tourism, real estate, shipping, financial services. Strive as it might, Dubai’s fortunes remain linked to the oil price.

Dubai is simultaneously the planet’s most cosmopolitan and tolerant city, a beacon of peace and prosperity where all of mankind is welcome—as long as you work. This is the city’s greatest achievement. And, amazingly, this model of social harmony sits in the Arab world.

Cairo, Beirut, and Damascus still produce far more books, art, and music. They’re still the cities of the Arab soul. But cultural leadership is starting to migrate to the Gulf.

The city entered the modern age and then blew right past it. It’s now somewhere out in the future, with Sheikh Mohammed at the controls. He knows that building roads and skyscrapers was the easy part. Incubating an enlightened society will be harder.