Indeed. Dubai is one of the fastest-growing cities on the planet—a bustling trade, services, tourism and financial hub for the Middle East and Asia, and increasingly even Europe. Its economy is expanding at about 16 percent a year, roughly double that of sizzling China. Business people and multinational companies from Microsoft to Goldman Sachs are flocking in, along with some 6 million tourists a year. With more shopping malls per capita than anywhere else in the world—not to mention the Dubai World Cup, the glitziest horse race around—Dubai is fast developing into a destination that weirdly couples Vegas with Hong Kong. “Sheik Mo,” as often admiring expats call him, presides over all as part modern CEO, part traditional Arab ruler, part merchant prince and part showman.
In a region where everything is political, Dubai’s greatest distinction—and the secret of its prosperity—is that it is almost utterly apolitical. Here, globalization’s triumph has been almost complete. Economically, it is inspiring imitators throughout the Arab world. Everyone, it seems, is setting up free-trade zones, cutting taxes, creating industrial “cluster cities” and undertaking gargantuan feats of real estate and infrastructure in an attempt to lure tourists, trade and investment along the lines of the “Dubai model.” Even Muammar Kaddafi of Libya—he of the green book of “Islamic socialism” —has reportedly been toying with the idea of establishing a Dubai-style “open city” to help bring his long-closed country into the international mainstream.
What remains to be seen, however, is whether Dubai will inspire political imitation as well, especially in a region plagued by failure and stagnation. To be sure, Dubai is no democracy. Sheik Mohammed has almost limitless power to mold his city as he chooses. Yet neither is Dubai a traditional Arab dictatorship, where the Mukhabarat (secret police) breathes down your neck.
It’s also unlike Egypt or Iran or Syria or other troubled states in another sense. The populations of those countries may be poorer and less satisfied with life, yet Egypt and Iran, at least, have vibrant civil societies—bloggers and intellectuals and activists who challenge the state (and often serve jail time as a result). In Dubai, there is no real opposition to the ruling Maktum family. That’s partly because “locals” make up only one eighth of the population—and benefit from an elaborate welfare system—and partly because the historic Dubai social contract between ruler and ruled is mostly a mercantile one (and the merchants are mostly happy).
But it’s also because Dubai is well run and honest, in stark contrast to almost every other government in the region. The World Economic Forum ranks the United Arab Emirates as the most competitive economy in the Arab world. When Dubai is isolated from the rest of the U.A.E., it gets even better, ranking ahead of Japan, Britain, even Germany in terms of government efficiency and economic competitiveness, according to a report by the prestigious Swiss IMD International Business School. “The story of Dubai is the story of good governance,” says Fadi Ghandour, a Jordanian businessman who spends half his time in Dubai. “Good governance does not require democracy or free elections. What is required is a good leader with a vision and accountability, and Dubai has one in Sheik Mohammed.”
It would be wrong to call Dubai undemocratic, in this sense. It is more ademocratic, says the journalist Othman al-Omeir, the well-known publisher of the online liberal Arab newspaper Elaph.com. “Sheik Mohammed has shown us that efficient management of the state, a lightly regulated private sector and social freedoms might be more important at this moment in Arab history than free elections.” Of course, Sheik Mohammed does not rule alone. Like other Arab rulers of the Persian Gulf, he consults with local notables through the age-old system of majlises, gatherings of citizens to discuss public issues—though some grumble that these “consultations” generally amount to statements of what he plans to do. Other U.A.E. nationals complain that development is moving too fast, that their local traditions are being subsumed in a world of 21st-century shopping, frolicking tourists (some of whom can be seen topless on beaches) and the incessant sound of construction cranes.
Of course, any society that experiences such dizzying development will feel growing pains. The sheik himself often likens economic development to war. “Let our victims be poverty, backwardness and ignorance,” he says. In a region where some 100 million jobs need to be created by the year 2020 just to keep up with the overwhelmingly young population, and where one in two young Arabs have said they’d prefer to leave their home country, this “war for development” could be exactly what’s needed.
This kind of talk might impress the technocratic and business elite of the Arab world’s “Davos crowd,” but it doesn’t win as much applause from the broader Arab street beyond Dubai. Yet while most Arab opinion polls give high marks to the region’s revolutionaries, not its modernizers, Arabs and Iranians regularly vote with their feet by leaving places like Beirut, Gaza and Tehran for Dubai.
The city-state remains oddly apolitical in another sense. How does Sheik Moham-med compare with other Arab rulers, one might logically ask—the Hosni Mubaraks and King Abdullahs? The answer is that he doesn’t. Sheik Mohammed is not a head of state. His little city is part of a larger federation, the United Arab Emirates, albeit with significant autonomy. Though he is also prime minister and Defense minister of the U.A.E., he generally leaves the foreign-policy portfolio to the capital, Abu Dhabi. As a result, he doesn’t get too deeply involved in the high politics of Israeli-Arab peace, of the Iraq War, the Shia-Sunni rift. Thus when the Saudi King Abdullah—who has emerged as a regional elder statesman, a sort of “wise man” of Arab politics—hosted Arab and international leaders in Riyadh at the Arab League summit in March, Sheik Mohammed was nowhere to be found. He was preparing to visit India, where he signed some $20 billion of deals and joint ventures.
With his mercantile instincts, some compare Sheik Mohammed to Lee Kuan Yew, who guided the rise of Singapore as a global financial and trade center. The sheik himself brushes aside comparisons. But recently he inaugurated the new Dubai School of Government, in partnership with the Lee Kuan Yew School of Public Policy and Harvard’s Kennedy School. And he has little time for politics. He once told a Brit-ish ambassador, “Whenever Tony Blair or Gordon Brown wants to see me, I’m happy to do so, but please don’t bring me a stream of ministers. I don’t have the time. But bring me any British CEO,” he added. “I have time for that.”
Sheik Mohammed strategically holds democracy at bay with economic development. Indeed, he has said as much on several occasions. “If the cart is politics and the horse is the economy, then we have to put the horse before the cart and not the other way around,” he once famously declared. He also lives by the dictum of his father, the late Sheik Rashid, who was known for the statement “What’s good for the merchants is good for Dubai.” Dubai rulers have lived by that motto since they took over the city-state in 1831. A local ruler who decided to flout these rules would not only be bucking more than 170 years of tradition—he would also most likely be writing his own obituary, as the small but tightly grouped system of leading families and Maktum princes would find a way to push him out.
For the past 150 years, resource-poor Dubai’s challenge has been how to escape the shadow of its wealthier, more powerful neighbors. The answer was to promote openness—little regulation, no taxes, low customs fees and minimal government intrusion into business affairs. It worked then, as it does today. Dubai’s strategy remains the same variant on “build it and they will come”: build the infrastructure for business to flourish, create a pie big enough for everyone, leave the merchants alone and let rising prosperity solve your political problems. The merchants continue to stream in; the latest wave have been Chinese.
Dubai is also blessed with geography. It’s a shorter flight to Mumbai than to Cairo. It has benefited as much from Iranian capital, Indian merchants and South Asian labor as from its Arab neighbors. Today it stands at the confluence of the New Silk Road—the growing trade and business corridor between the Middle East and Asia—and benefits from the rising fortunes of India, the economic incompetence of Tehran (which would be a more natural Silk Road hub) and the excess liquidity in search of investment available in the oil-rich Gulf states.
Meanwhile, Dubai has avoided getting sucked into regional conflicts. “I don’t know who’s a Sunni and who is a Shia,” says Sheik Mohammed. “And I don’t care. If you are good to your neighbor and work hard, then Dubai has a place for you.”
A city-state with some 150 nationalities, Dubai is remarkably free of ethnic and religious conflict. As Sheik Mohammed sees it, religious and ethnic strife are almost prehistoric so long as globalization holds sway and growth continues. “Why not?” he asks when criticized for building the world’s tallest office tower, or plotting to make Dubai a financial center on the scale of Geneva or even London. The questions, of course, become harder to answer when the subject turns to the exploitation of laborers that goes into Dubai’s building boom—a situation Human Rights Watch referred to as modern-day slavery. The organization has described “wage exploitation, indebtedness to unscrupulous recruiters, and working conditions that are hazardous to the point of being deadly” and complained that local laws offer “a number of protections, but for migrant construction workers these are largely unenforced.” The negative publicity has helped improve the treatment of laborers somewhat; bad press is not good for a rising emirate fed by international commerce with almost limitless ambition.
“It’s staggering,” says Ali Al-Shihabi, a Princeton-educated investment banker. “There are seemingly no limits to what Sheik Mohammed sees for Dubai.” Economic growth of 11 percent annually? A tripling of GDP by 2015, or $44,000 per capita—making Dubai one of the richest places on earth? Plans for Emirates Airlines to grow into the single biggest airline in the world, larger than Lufthansa or British Airways? It sounds like megalo-maniacal fantasy, yet not to Sheik Mohammed. Trained as a fighter pilot, he once famously said of his plans: “I have only one speed. Full throttle.”
He regularly criticizes his fellow Arab rulers for falling behind the rest of the world, particularly in developing their economies. “There is a wide knowledge gap between us and the developed world in the West and in Asia,” he recently said. “Our only choice is to bridge this gap as quickly as possible, because our age is defined by knowledge.” With that, he made a bold announcement: he would endow a $10 billion fund for regional education “to build a knowledge-based society.”
It’s interesting to speculate what might happen in other Arab nations if only their rulers were as focused on development and economic opportunity as Sheik Mohammed. Ali Al-Mosawi, a Baghdad-based businessman and frequent Dubai visitor, once marveled: “If Saddam Hussein had only a small amount of Sheik Mohammed’s instincts, he would still be in power today, he would be loved and Iraq would be one of the richest countries on earth. Instead, he looted and raped the country and he is now dead.” Amr Hamzawy, the noted political scientist at the Carnegie Endowment for International Peace in Washington, says: “Dubai can’t really be compared to Egypt or Iran or Saudi Arabia. Their histories are far too different, but all of the states can learn from Dubai’s efficiency.”
Sheik Mohammed, however, has little time to reflect on history or indulge in comparisons. “What you see today is only 10 percent of my vision,” he says as he sits in his office, juggling those phone calls. “I’m sorry,” he says again. “I must go now. This one is urgent.” And in an instant he is gone, trailing a scent of oud and a sense of possibility as Dubai’s dream hurtles forward.
