Dubai
Unsustainable urbanisation, authoritarian crypto and criminal haven
The ambition: a Super-futuristic Global City
Most people know Dubai as a futuristic global city. It’s symbols include above all the Burj Al-Khalifa, but also the artificial islands and the artificial ski slope. Dubai also aims to forecast and even create the future, with all kinds of “creative” “hub” “cities” and a Museum of the Future. Not much of this has materialised. Are we actually aware of any inventions in the last few decades that have originated from Dubai?
Dubai has a population of 3.9m, up from just a few thousand at the beginning of the 19th century. 90% of the population are expatriates, the overwhelming majority being of Subcontinental origin. As far as the streets and the shops are concerned, Dubai is much more an Indian or a Pakistani city, than an Arab one.
Thus the population has grown, but mostly from guest workers imported to build and run the city. The indigenous Emirati population itself has increased to only about 300 thousand.
Dubai is proud of hosting the tallest building in the world. It has the second most five-star hotels in the world after London. In 2023, it was the third most visited city in the world after Istanbul and London. This also means that more people visited Dubai than the Islamic pilgrimage center of Mecca, and by far!
But what is the point of all this?
Actually, Dubai is the place that highlights the neoliberal logic at its most extreme: growth for growth’s sake. Everything needs to grow. You need more real estate, because it is the sign of the boom that makes your already purchased real estate increase in value. This is not the law of supply and demand, this is the law of the bubble. When this happens in China, it gets pointed out as an unsustainable model. When it happens in Dubai, it is a welcome bonanza.
The problem with much of the rest of the Middle East is that countries are underdeveloped, and this leads to constant social and hence political turbulence. Dubai, however, is overdeveloped. Its modernisation has been inorganic. Contrast this with Japan, which has had a very organic form of development.
A brief historical overview of Dubai
Like many of the supercities of today’s globalised capitalism (Singapore, Hong Kong, etc.), Dubai was originally a creation of the British Empire. Dubai was created in the 1830s, and has been ruled by the Al-Maktoum family from day one. No more than about three thousand people lived around the Dubai creek in 1900. Similar to Kuwait, Qatar and Abu Dhabi, Dubai was part of what was called the chain of Trucial States. The British Empire signed treaties of protection with local rulers (emirs, sheikhs, kings, sultans), who in turn pacified these port cities in the Gulf through repression. The brits were concerned about Napoleon’s ambitions on India. The legal term Trucial States created an artificial community between diverse local sheikhdoms, but was an improvement on the previous widespread denomination, the Pirate Coast.
Dubai and Deira were twin villages that sat on either side of the creek (khor in Arabic) that served as a small port. It was this creek that created Dubai’s advantage over neighbouring Abu Dhabi, since cargo for both cities could be offloaded here. Sharjah in the north also had a creek, but when Dubai had theirs dredged first, Sharjah fell behind. Dubai then managed to preserve their advantage by switching over to other activities.
The two shores of the creek were connected by the abra, small boats shuttling back and forth. A few still serve, but are marginal and appear extremely outdated in an age when millions drive over the creek on eight lane superhighways in their SUVs. Buildings were built with prominent barajeels, high Iranian style wind towers, and mashrabbiya, Arabian wooden screened windows. The S-shape of the creek reminded some visitors of Venice, and allowed a limited port activity that never really became rich, but got by on entrepot trade and smuggling. Two souks on either side of the creek offered wares from far away lands to the desert dwelling population inland. Not much of the original village remains today, except for the Bastakiya district, which Prince Charles (now King Charles), a well-known conservationist, is credited to have intervened to save. Dubai was a place in-between places. Even as late as the 1950s its population was no more than 30,000 residents, and already by then most had been born outside of Dubai. This was to become the norm until today. The British turned a blind eye on the smuggling, which still characterises Dubai today.
Traditional culture in Dubai had been influenced by the then much richer Persia and India. According to Onley (2005), traditional dress was more influenced by these two external powers than by the Gulf arab attire. Thus the white pristine white thawb Gulf Arabs wear today is a late adoption, a sign of prosperity. Local cuisine is still much more South East Asian than Gulf influenced. Local trading elites were traditionally of Persian (Shia) and Indian Subcontinental (nowadays Pakistan, Sunni) extraction. Wave after wave of Persian merchants and skilled artisans moved from Persia across the narrow Gulf to Dubai, including the last such great wave after Khomeini’s revolution. Persian businessmen are still a marked presence in Dubai, and Iranian companies carry out so much trade through tax-free Dubai that the sheikhdom is Iran’s largest trading partner.
The Maktoum family has ruled Dubai ever since 1833. Not a single ruler has been murdered or overthrown in almost two hundred years, which is amazing in the Gulf region, where political intrigue, fratricide, assassinations and coups are the norm. (In fact this peaceful continuity is remarkable even in comparison to the US, where four sitting presidents were murdered in the same period: Lincoln 1865, Garfield 1881, McKinley 1901 and Kennedy 1963.) Whenever there was a revolt against the ruler - including latter day democracy movements, the British helped put them down.
Much like in the rest of the Gulf, pearl diving was the main source of income. The British insisted that pearls had to be traded through British India, from where they were sold around the globe. The pearl trade came to an abrupt end when the Japanese invented artificial pearls in the 1930s.
Slavery was only abolished in the Trucial States as late as 1963. Most slaves, originating from Africa, became UAE citizens and face no more discrimination. This is why some Emiratis have dark African skin.
The brits finally gave the UAE independence in 1971. The British had always insisted that they were civilising savages in their empire. When independence came, it suddenly became obvious how the opposite was in fact the case: illiteracy remained above 70% and there wasn’t a single university in the country. The British had in fact kept the emirates underdeveloped.
The oil age begins
Oil discoveries in the Gulf started out in the 1920s. Dubai struck oil late, the first exports started as late as 1969. Even then, it became clear that Dubai had no more than 4% of the UAE’s oil. Nearly all the local oil lay under Abu Dhabi. The other emirates, Sharjah, Ras Al-Khaimah and the others had effectively non.
The peak of the importance of oil in Dubai was in 1975, at 2/3 of GDP. However, in the seventies the oil revenues were boosted by high oil prices due to the first and second global oil shocks. By the end of the millennium this ratio was down to a mere 10%, and nowadays its negligible. Dubai is not an oil city, even though it is sponsored by other oil cities. The entire idea of Dubai as a super-city came about exactly because of the awareness of the relative limitations of the oil boom.
By about 1985, everybody in Dubai had air conditioning. There was a massive boom in property prices, which encouraged further investment in property by locals. Tourism is estimated to be about a third of GDP nowadays.
Political economy: the family-state-corporation model of Dubai
Ahmed Kanna calls it a “family-state”. Forbes ranks UAE and Dubai royals as some of the richest in the world.
Sheikh Rashid ruled the state from 1958 until his death in 1990. His son, Sheikh Maktoum took over, and ruled until his death in 2006, when his brother, Sheikh Mohammed took over and rules Dubai until today.
The average male Emirati receives a $55,000 handout from the royal family. They get free land, free water, interest free loans for house construction, and extremely cheap electricity. Education is free, even if it is undertaken abroad. There is no income or property tax. The regular revenues from the state to Emirati citizens makes the country a natural experiment in Universal Basic Income. The outcome? Most chose to work, even though they have no material compulsion to do so…
One early sign of a family-state is how the Dubai World Trade Center (see below), the first skyscraper in the middle East and the blueprint for the city’s later development, was personally owned by Sheikh Rashid. So were all the public utility companies.
Abdulla (2006) calls Dubai a “city-corporation”. There are antecedents of this model, such as the City of London or Hong Kong. Numerous free trade zones provide complete tax exemptions, as well as exemptions from the general UAE rule whereby firms have to have at least 51% local ownership.
Most of Dubai is run by parastatal corporate entities, all run by relatives of the Ruler.
Nakheel Corporation is fully owned by the state of Dubai. It is the developer of Palms Islands, Dubai Waterfront, Dubai World (the global map shaped islands) and several large malls, including the one that architecturally features the travels of Arab discoverer Ibn Battuta. This mall has buildings that are Chines, Persian, Indian, etc., including a life size copy of the Taj Mahal. Nakheel was at the center of Dubai’s debt crisis in 2009–2010 due to over-leveraged investments. It underwent a $16 billion debt restructuring and received government support to stabilize operations. By 2024, it had $110 billion worth of projects under development, making it one of the largest real estate developers globally
DP World is another example. It runs not only the ports in Dubai, but also those in Jeddah (Saudi), Djibouti and Constanza (Romania). For a brief period it also ran numerous US ports, through its purchase of P&O. However, this was considered to be a security threat by US politicians, who forced DP World to withdraw. DP world is title sponsor of the DP World Golf Tour and partners with McLaren F1 Team.
Dubai Holding is an umbrella organisation for the free trade zones (Dubai Media City, Dubai Internet City, and the Jumeirah Group of hotels and resorts. It runs Burj Arab for instance. It is developing a futuristic project called Mall of the World, envisioned as the world’s first temperature-controlled city. This is a 48-million-square-foot development, which will include the world’s largest shopping mall, a 7-kilometre pedestrian-friendly street network, covered by a retractable glass dome to provide a temperature-controlled environment during summer. It will also include a cultural district with a theatre district, modelled after New York’s Broadway and London’s West End, a “Celebration Walk” inspired by Barcelona’s Ramblas.
Emaar Properties (1/3 state owned) runs Dubai downtown. It was founded in 1997 by Mohamed Alabbar. Emaar is a publicly listed joint-stock company on the Dubai Financial Market (DFM). Major shareholders include the Dubai government (via the Investment Corporation of Dubai) and institutional and individual investors globally. Iconic developments include:
• Burj Khalifa: The world’s tallest building.
• The Dubai Mall: The world’s most-visited retail and lifestyle destination.
• Downtown Dubai
Eighty percent of Emiratis hold jobs in government offices. The rest work in state owned corporations (such as Emirates Airlines, or the Free Trade Zones), as well as in banks. These firms also have quotas for Emiratis.
All in all, Dubai is yet another example of how the state can in fact be extremely efficient in overseeing and developing an economy. (Other examples include the Far Eastern development states, Israel, and Ireland with its National Development Plans.) The failed attempt of the Soviet Union to create a state lead economy should not lead anyone to the conclusion that the state can never be an efficient owner, or should play no role in the economy. Dubai government units are constantly monitored for performance, and there is a complex efficiency assessment system. The functioning of ministries and other government agencies is regularly measured against international benchmarks, such as Singapore.
One clear symbol of just how business oriented Dubai is can be found in the designation of weekend days. The UAE used to observe the traditional Islamic weekend of Thursday-Friday until 2006, at which point they shifted to Friday-Saturday to harmonise somewhat with the West. Friday is the Islamic holy day, and the West observes a Saturday-Sunday schedule (Saturday being holy for Jews and Sunday for Christians). However, even this intermediate level of harmonisation was not enough for Dubai, which then outright shifted to a Saturday-Sunday weekend schedule in 2021, completely harmonising the business week with the West. To reserve room for the Islamic holy day of Friday, the emirate adapted a 4 1/2 day week, ending work on Friday noon, enabling the faithful to attend prayer later in the afternoon. (Neighbouring Sharjah even has a 4-day working week, making it a natural experiment for reduced working hours!)
The Supercity
Dubai is the most cosmopolitan city in the world. 95% of Dubaians are foreigners, from 200 countries. By far the overwhelming majority are from the Indian subcontinent. In an everyday sense, Dubai is much more of an Indian or Pakistani city, than an Arab one.
As for all of the UAE, Emirati citizens make up 15% of the total population of about 6 million. The city of Dubai itself is also extremely male heavy: females make up only about a quarter of the population and no more than 14% of the workforce. Emirati women are at a constant threat of not being able to marry, as Emirati men marrying foreign women pass on their Emirati citizenship to their children. (As opposed to Emirati women marrying foreign men, who do not receive Emirati citizenship, not even when the husband is an Arab from a neighbouring country.)
There are many people in the Gulf called bidoun (Arabic and Persian for “without” not to be confused with the bedouin, plural of Arabic badawii, meaning desert dweller), who have no citizenship. There are also the Ajam, who are Arabised Persians.
The supercity was built by men from South East Asia, most of them from India. They live in overcrowded dorms, secluded from the city proper. Whatever little money they make they send it back home to their families. Human Rights Watch has continued to criticise their working conditions and labour rights.
There is a constant fear that foreigners, highly outnumbering locals, could one day take over Dubai.
The beginnings of the supercity project
Dubai’s supercity project can be traced back to humble beginnings. 1961 was a key year. The first step was the dredging of Dubai’s iconic creek, which allowed larger ships to enter. This project, finished by 1961, had been financed by Kuwait, by this time the oil-rich uncle further up in the Gulf. Dubai simply would not have had enough money. Similarly, the first paved road, the first bridge across the creek as well as the first water system were only completed in the same year of 1961, financed by the emir of Qatar, who had married the daughter of Dubai’s ruler.
The public electricity system also started up no sooner than 1961, very late in light of how extremely over-electrified Dubai is today. 1959 saw the establishment of Dubai's first telephone company, 49% owned by Sheikh Rashid and local businessmen. The water company (Sheikh Rashid was chairman and majority shareholder) constructed a pipeline, and by 1968 Dubai had a reliable supply of piped water. The involvement of Sheikh Rashid in these utility companies laid the foundations not just of basic infrastructure, but also of the family-state-corporation modell.
The dredging of the creek, the construction of the first bridge on it, as well as the tunnel underneath it, were all works undertaken by the British firm Halcrow (whose Middle Eastern arm was registered in Switzerland), which played a decisive role in the early development of the city.
The ports: Port Rashid, Jebel Ali Port, and the airports
Having realised the economic potential of the dredged creek, Sheikh Rashid quickly ordered the creation of an artificial harbour, Port Rashid. Initially, it was planned for four berths, but Rashid had it increased to sixteen berths during construction, significantly raising costs. Today it operates with thirty-five berths. Yet even this soon also proved to be too small. Thus next came Jebel Ali Port, an entirely artificial busy international container shipping port, the largest man made harbour in the world. One million cubic meters of earth were dug and dredged to created, with 5000 tons of cement from Mombasa, Kenya being imported to create the concrete base. This is a 3,700 km sea route!
Part of Jebel Ali Port is used by the US Navy as its largest overseas port.
An airport was also built, even though fellow emirate Sharjah had already had one close by. Both the seaport and the airport were instrumental in facilitating one of Dubai’s most lucrative long term economic activities: smuggling. This involved the illegal trade of gold to India, where it was more expensive, and hashish and cocaine from Afghanistan. Any modern port can only aim to examine about 5% of its transit volume, the rest pass through unchecked. Dubai is one of the top ten global transit ports.
Dubai International Airport has become a global tourist hub. It has attracted an enormous amount of transcontinental flights due to the central geographical location of Dubai between Asia, Europe and Africa. The growth of passenger numbers has also been hugely boosted by the success of state owned Emirates airline. The airport has also laid great emphasis in astonishing travellers with its now famous duty-free shopping facilities.
Yet, Dubai has been building a new airport, Al-Maktoum, with a capacity of 120 million passengers per year, with six 4.5km runways and a 92m control tower, of course the highest in the region. One terminal is to serve Emirates only, a second all other airlines, and a third one budget flights.
Tourism in Dubai has exploded. Nowadays it is estimated to contribute at least a fifth of economic output. Most top end hotels were actually built by the government.
The Dubai World Trade Center
The first skyscraper in the entire Middle East was the Dubai World Trade Center, inaugurated by Queen Elisabeth II in 1979, when it was still under construction, about a year away from completion. Its thirty-eight stories (150m) were filled by multinationals and the US consulate. On top sat a 25m television mast. In most places Dubai has no bedrock, so high rise buildings have to be built on extremely long concrete pillars lowered into the sand. One early sign of a family-state is how the Dubai World Trade Center, the first skyscraper in the middle East and the blueprint for the city’s later development, was personally owned by Sheikh Rashid. In fact the local Arabic name for it was Burj Rashid, or Rashid Tower.
During construction, the ruler ordered an additional few floors to compete with a rumoured building in Abu Dhabi, which was eventually never built, in order to remain the tallest building in the Middle East. Rashid also complained that he could not see the tower from the sea, so workmen applied 65,000 kg of white paint to its exterior.
Burj Al-Arab
The difficulty of basing Dubai’s economy on tourism was that there was not much to see and visit. Unlike much of the Middle East, there were no historical ruins, and the few that had existed were mostly demolished during modernisation. And yet the plan worked: tiny Dubai today receives more foreign visitors than enormous India with its monumental historic heritage. Tourism makes up about a quarter of the city’s GDP.
Burj Al-Arab was made famous globally by and ad with André Agassi and Roger Federer playing tennis on its helipad. Often mentioned as a seven star hotel, it is shaped like an Arab sail. It is situated on an artificial island, and has a make-belief underwater restaurant, where sharks and divers approach you as you dine. Each floor has its own reception and its own butlers, and consists of luxury suits. Its spectacular atrium, the world’s tallest, can be visited by outsiders for a fee.
The Burj Al-Arab is very popular with the Russian nouveaux riches. For $2500 a helicopter will take you to its helipad straight from the airport. According to calculations, the hotel will never become a profitable investment: it is more like a symbol for the city. Burj Al-Arab is owned by Dubai Holding, that is, again, by the government.
Emirates Towers
Emirates Office Tower (354.6 m) and Jumeirah Emirates Towers Hotel (309 m), connected by a retail boulevard. Completed in 2000, these triangular structures were Dubai's tallest buildings until the Burj Khalifa's completion and remain architectural landmarks.
Towers has the world’s largest floor mosaic in a single restaurant. It is also owned by Dubai Holdings, that is, the government.
Palm Jumeirah, Palm Jebel Ali, The World, Palm Deira and the Dubai Waterfront
Dubai is well known the world over for its artificial archipelagos, in the shape of palm trees, crescents, and even the world map.
The highlight of palm Jumeirah is the 1500 room hotel Atlantis, operated by Kerzner International. It has all sorts water attractions, including an aquatic habitat with 65,000 sea creatures. Not only is its owner, Sol Kerzner an orthodox Jew, somewhat unusal for an Arabic economy, he had also been involved in high profile corruption cases in South Africa.
All of the these artificial archipelagos are owned and operated by Nakheel Properties, a firm owned by the Dubai government.
The plots were sold off in three days. With the money collected, Palm Jumeirah was built. Jumeirah Beach Hotel boasts a man-made coral reef. You dredge away the natural sea bed, and then you build a man-made coral reef…
Burj Khalifa
Burj Khalifa is the world's tallest structure, standing at 829.8 meters. Completed in 2010, it holds several world records, including the tallest building, highest number of stories (160), and highest outdoor observation deck. The tower's design, inspired by Islamic architecture, features a Y-shaped floor plan with a buttressed central core and three wings. This innovative structure optimises stability, residential and hotel space, and wind resistance.
Key features include 57 elevators and 8 escalators. It encompasses residential, commercial, and hotel spaces. Construction took 6 years and 22 million man-hours, using 330,000 cubic meters of concrete and 39,000 tonnes of steel reinforcement. The construction involved innovative techniques, including concrete pumped to a record height of 601 meters. The wet concrete had to be mixed with ice to prevent it from drying to early. Imagine the environmental footprint of this in the desert! Burj Khalifa was wind tunnel tested at speeds up to 200 km/h. Its unique foundation includes a 3.7-meter thick reinforced concrete mat, supported by 192 bored concrete piles.
The Burj Khalifa was built through a joint venture involving three major construction companies: Samsung of South Korea and BESIX of Belgium. Not to have only foreign constructors, a UAE firm called Arabtec was also included, but this firm no longer exists. US firm Otis installed 57 high-rise elevators. Two double-deck elevators transport passengers to the observation decks on the 124th and 125th floors at speeds of up to 10 meters per second.
In fact Dubai is already in the race again to build the world’s first 1km tall tower. The so called Dubai Creek Tower, whose construction was temporarily halted during Covid, will resume construction soon. It will be in competition with Saudi Arabia’s Jeddah Tower first reach the one kilometre mark.
Museum of the Future
The Museum of the Future in Dubai is an architectural landmark designed to explore the future of science, technology, and innovation. It was opened on February 22, 2022, and is located in Dubai’s Financial District near the Emirates Towers.
The building is torus-shaped, symbolizing humanity (the structure), Earth (the green hill it sits on), and the unknown future (the central void). The façade features Arabic calligraphy of quotes by Sheikh Mohammed bin Rashid Al Maktoum, Dubai’s ruler, engraved into stainless steel panels.
From the outside, this is a very impressive building. Inside, however, it is a major disappointment. Actually, the entire idea of the future is a flawed idea. Some exhibits are not of the future, actually, they simply represent already existing technology. Just one example: I saw artificial corals exhibited. This is already deployed technology, and a really bad idea. As for actual future technology: you simply don’t know what it will be. If you did now, it would already be existing technology, as there would already be proof of its viability. As a consequence of this flawed logic, much of what they show you is cringe.
What is being implied here, and actually sometimes explicitly stated, is that the future will be created in the Middle East, and Dubai will be at the centre of this shift. Well, however much money the Gulf has been able to throw at this ambition for decades now, not much has materialised. Associations with the region still include “oil”, “luxury” and in worse cases even “terrorism”, but definitely not “innovation”. Actual innovation comes from Shenzhen, Seoul, Tel Aviv and Silicon Valley. Case in pont: there is an entire room devoted to “Dubai’s space programme”. What actually is this Dubai Space Programme? Well, there has been a so-call Emirates Mars Mission. It was launched on July 20, 2020, from…. Tanegashima Space Centre in Japan. There has also been an Emirates Lunar Mission. It was launched in December 11, 2022, …. aboard a Falcon 9 rocket from Cape Canaveral, Florida. The mission sent the Rashid Rover, developed in Dubai, to the Moon. The rover’s landing attempt failed. Thus it seems like the so-called Dubai Space Programme consists of the Emiratis throwing a lot of money at foreign technology.
Dubai Marina
Dubai Marina consists of gigantic apartment towers, some more than fifty storeys high. Some 400,000 inhabitants reside in some 200 skyscrapers. Dubai Marina is a premier waterfront district, renowned for its luxurious lifestyle. It was developed by Emaar Properties - the state again - and completed in phases starting in 2003, this artificial canal city spans 3.5 kilometres along the Persian Gulf, transforming a former desert area into a bustling hub. It was created by excavating desert terrain and filling it with seawater, forming a 3-kilometre canal. It is home to over 200 high-rises, including Princess Tower (414 m, world’s tallest residential building) and the twisting Cayan Tower (310 m). There is a 7-kilometer promenade lined with cafes, restaurants, and shops, offering views of luxury yachts and the Arabian Gulf. Dubai Marina Mall Features 150+ retail outlets, cinemas, and waterfront dining. It also features 5-star Hotels: Address Dubai Marina, Ritz-Carlton, and Grosvenor House. Dubai Marina is linked to Palm Jumeirah via a bridge.
Dubai Marina was built using land reclamation techniques, with sand from the seabed, costing billions of AED.
Emirates, the airline
In the eighties, Dubai had no airline of its own. The Gulf was dominated by Gulf Air, jointly owned by Abu Dhabi, Bahrain, Qatar and Oman. Kuwait had its own airline. It was a huge gamble for Dubai to start its own airline. Especially that they named it Emirates, with the implication that is was a UAE carrier. They started with a dozen leased planes, flying the obvious routes to Pakistan and India. However, Abu Dhabi soon launched Etihad, which was in fact the official UAE airline, and Emirates became Dubai’s airline. This did not stop it from becoming much more successful, in fact becoming one of the biggest airlines in the world. Emirates claims to have been profitable in every single year of its existence, except the second, and claims to operate without government subsidies.
Emirates was able to make use of the rapid expansion of global air travel globally, as well as Dubai’s excellent strategic location as a hub between Asia, Europe and Africa (similar to the other success story of Turkish Airlines and Istanbul). Dubai airport has become one of the busiest transit hubs in the world, with several terminals. A second airport has also been built in the meantime.
State owned Emirates airline is yet another example of how the state can indeed operate businesses not only successfully, but even extremely successfully. Another example is the UAE telecom, Etisat, which is also state owned, and is one of the largest and most successful telecom companies in the world.
Foreign ownership of real estate
As we have already mentioned, DUbai is a property pyramid scheme. One more decision that accelerated the real estate boom in Dubai was allowing foreigners to own property. It is the only place in the entire Gulf which allows this. Owning property often comes with the right to permanent residency. Gated communities in Dubai have California-sounding names like “Lakes”, “Heights”, “Springs” and “Greens”. The city was creating jobs faster than apartments, which lead to a fast explosion of property prices. Investors cashed in.
Financial centre
Dubai is attempting to become a financial centre, in spite of the infamous Islamic Bank scandal. The Dubai Islamic Bank (DIB) fraud case was the largest financial scandal in Dubai’s history, involving the embezzlement of 1.8 billion dirhams (approximately $501 million) between 2004 and 2007.
Dubai Internet City
This is meant to be a free trade zone for internet companies. No income or corporate tax are levied, and the zone issues unlimited work visas. Microsoft, for instance, received fifty years of free rent in exchange for the biggest Microsoft sign in the world being portrayed on a building in the zone. IBM, Oracle, Hewlett Packard and others followed. Internet city is estimated to host around three thousand employees. Yet most of them work in service centres. Real ICT R&D in the region takes place in Israel, where universities provide plenty of qualified staff.
Media Production Zone
Dubai is paradoxically geographically and excellent location as a regional media HQ, in the middle of the conflict zones of the region. Poor Iraq, Afghanistan or Yemen fight wars, rich Dubai benefits from the media presence. Yet domestic media in the UAE itself is censored. The zone encompasses two copies of New York’s Chrysler Building.
Dubai Healthcare City
Developed in cooperation with the Harvard Medical School. There are some 4000 medical professionals working here.
The Diamond trade
The Dubai Diamond Trading Center has joined the top tier of diamond cities, such as New York, Antwerp, Tel Aviv and Mumbai. Since much of the diamond trade is Jewish, Dubai had to accommodate and accept trade with Jewish diamond merchants, who regularly visited the city. Even Israeli merchants arrived regularly, despite the fact that officially the UAE was part of the pro-Palestinian pan-Arab blockade of Israel, and had no diplomatic relations with the Jewish State. (Qatar alone did.) This did not stop Dubai from hosting Israeli businesses. Most Israelis have a second, US or EU passport, but they often arrived openly with the Israeli one. By now the UAE has official diplomatic relations with Israel, and there are regular civilian flights to and from Ben Gurion airport.
Most diamond cutting in the Middle East takes place in Tel Aviv. Dubai has become a kind of transfer pricing centre for diamonds, where most sellers and buyers cheat the tax systems of their various home countries. Israelis had been able sell to rich Arabs who were willing to buy, even though there had previously been no direct flights between Israel and the UAE (the diamonds themselves used to be routed through Switzerland), and no phone connection. By now all this has changed.
Heavy industry
Surprisingly, Dubai even has some heavy industry, most notably an aluminium plant, the heat of which is used for salt water desalination.
Foreign investments: the sovereign wealth funds
Bursa Dubai has become a significant shareholder in NASDAQ and the London Stock Exchange.
Dubai Investment Fund (DIF) and Dubai Investment Corporation (DIC) are Dubai’s sovereign investment funds. They hold gigantic amounts of assets both within Dubai and globally. We shall have a separate post about sovereign wealth funds.
Totally unsustainable urbanisation
Architecturally, Dubai is inorganic. Its skyscrapers want to outcompete each other, leading to a hotchpotch at day, which is dissolved somewhat during the night. The cityscape aims to radically escape the past of poverty, almost Ceausescu-style, which only serves as a constant reminder of this very past. Star architects constantly talk of organic modernism, and then come to Dubai to build the opposite.
As an urban space, Dubai is unliveable. It is organised around cars. A large proportion of residents at any point in time are sitting in their air conditioned, gigantic SUVs. It’s the only way to get around, as the urban space is built around cars. The rest of the residents are in their air conditioned homes, air conditioned offices or air conditioned malls. It is virtually impossible to get around on foot or by bike. This author has tried again and again - and has failed. Try it if you do not believe us. Contrast this urban space with the Netherlands, for instance, where the 15-minute city concept thrives, and everything can be reached on foot or by bicycle. Dubai is more like a 50-minute city….and that is by car.
It is extremely expensive and GHG emittive to build on the sand of Dubai. As an example, the Burj Khalifa alone stands on 192 piles 47 metres deep to give it some static strength. Such skyscrapers and high rise buildings abound in Dubai. These are some of the least energy efficient buildings in the world.
Because desert sand is useless for building construction, Dubai has imported about 150 million tons of sand from Australia alone. Sand into the desert…
Palm Jumeirah consists of artificial islands that were created from millions of tonnes of sand dug up from the bottom of the Arabian Gulf. This once again required massive energy inputs, with similarly high GHG emissions, disrupting national sea habitats. The end result? Islands that are slowly sinking back into the sea.
The per capita water and electricity consumption of Dubai is number one in the world. The emirate has the largest ecological footprint in the world.
No democracy, terrible human rights record
The human rights record of Dubai, as part of the UAE, has been a subject of significant international scrutiny. The UAE ranks 172th out of 179 countries in terms of democracy according to the University of Gothenburg democracy index. Dubai, like the rest of the UAE, lacks democratically elected institutions. Citizens cannot form political parties or change their government. Freedom of speech and press is heavily restricted. Criticism of the government, royal family, or culturally sensitive topics can lead to imprisonment. Women, LGBTQ people and migrant workers face systemic discrimination in personal status laws (e.g., marriage, divorce, inheritance).
A haven for criminals
Dubai has attracted all sorts of criminals and scammers from around the world. The organised Crime and Corruption Reporting Project has produced a detailed report about crooks and criminals who have made Dubai their residence.
Crypto scammers hide here because of lack of and extradition treaty with most other countries. Dubai has recently tried to fashion itself as the global centre of the crypto world. Not that anyone uses bitcoin in everyday transactions in Dubai or the UAE. Crypto scammers who have moved to Dubai include, infamously:
Changpeng Zhao, or CZ, the convicted owner Binance, the world’s largest crypto exchange,
South Korean crypto crash boss Do Kwan was also headed for Dubai, when he was arrested at an airport in Montenegro,
The infamous inventor of the Russian Telegram channel, Pavel Durov even has citizenship in the UAE. He is supposed to be a hero of anti-authoritarianism. What is he doing living in authoritarian Dubai?
Offshore
Since there are no income or corporate taxes, Dubai can be considered an offshore tax haven. It attracts all kinds of dirty money from all over the world.
Dubai also continues to serve as a smuggling haven, reaching back to its history of gold smuggling to India and Pakistan, as well as smuggling all kinds of things to embargoed Iran.
Relations with the West
Even during British colonial times the colonisers were on the side of rulers and not on the side of popular bottom up movements. Much like in Hong Kong, the British had never strived to create democracy in the Trucial States.
Whenever the West - led by the USA - calls countries such as China or Russia authoritarian (rightfully so), and aims to decouple from them (mistakenly in the case of China, and rightfully in the case of Russia), one might ask the same question about the Gulf States. How are countries such as the UAE or Saudi Arabia not authoritarian? (Or indeed Singapore and a long list of other authoritarian Western allies across the globe…)
Book recommendations
Here are some book recommendations about Dubai for our paid subscribers:
