The Dubai Disaster

Shelley’s Ozymandias is being dredged up because of the economic disaster in the desert emirate of Dubai.  International business media are ringing alarm bells over the Middle Eastern city famed for its lifeless skyscrapers and celebration of artifice. The Wall Street Journal reports “Dubai’s debt debacle is stoking a new fear for investors across the globe…The Dubai government roiled markets this week with its move to delay debt payments owed by its flagship holding company, Dubai World. The company is stressed by tens of billions in debt that funded spending on glitzy real-estate projects from the Middle East to Las Vegas.” It continues, “investors feared Dubai’s move would plunge global financial markets into the kind of chaos seen earlier this year.”

I worked for the Dubai government for a couple of years in the late 1990s, helping to start a business TV channel that was aimed at addressing the concerns of those protesting at the seminal WTO riots in Seattle. By the time that a relative of the ruler realised that the channel’s perspective was not what he had intended, I was on my way. It was a fascinating experience.

Dubai is emblematic not of arrogant developing world leaders but of the relations between business schools in the West and the economic challenges faced by developing nations. If we leave to one side the fact that 80% of the place is indentured labour living in “work camps”, the Bugsy Siegel-style rush to transform it into a “world class” city was actually not without its successes. But casting a shadow over the towers of glass and concrete that were going up in 1998 were a few multinational consulting firms – PR, Marketing and most determining of all, McKinsey & Company management consultants. Dubai’s strength was its massive Jebel Ali Free Port and Aluminium smelter. The port is the most frequently visited by ships of the U.S. Navy outside the United States. Its ability to handle Nimitz Class aircraft carriers also means that it can process vast cargos from the East, bound for Western consumers. But, management consultants don’t like manufacturing. For them, it is white-collar jobs and the nebulous term, “Financial Services” which signifies sophistication and development. Dubai, with its plentiful solar power resources could have made things, even made them for its own people to insulate it from the massive slump in world trade.

It’s no wonder the ruler, who I met on numerous occasions, Sheikh Mohammed bin Rashid Al-Maktoum, seemed so insouciant. McKinsey was obviously handling business behind the scenes. The Prince spent time on horses and on deciding which favoured Emirati national to bestow his patronage. It was unfortunate that so many of them had been educated in Western business schools. Those schools, it seems were really only good on services such as passenger airlines and Sheikh Mohammed’s uncle, Sheikh Ahmed certainly used the knowledge to create a good brand for well-heeled long-haulers.

The ruler also sponsored a cultural revolution unique in the region, making Dubai feel cosmopolitan because of its lack of hang-ups when it came to alcohol and fashion – a lot of fun if you’ve got money and couldn’t care less who built your house. Cultural liberalisation didn’t stretch to film and music – I was politely told that we could never play The Clash’s Rock the Casbah on TV and Hollywood feature films were peculiarly foreshortened by the morality police.

Sheikh Mohammed listened to the MBA-mob on most economic ideas but stood his ground when told to take a stand on the made-up crisis over ownership of three islands in the Persian Gulf. The U.S., under President Clinton, constantly tried to stir up trouble between Dubai and Iran and Sheikh Mohammed was having none of it. Rhetorically, Dubai stands with the Palestinians and I remember a bizarre photo in the main newspaper of piles of rocks being exported to the besieged West Bank from Dubai to help child stone-throwers protesting Israeli atrocities. Sheikh Mohammed acutely understood geopolitical alliances – the importance of regional superpowers like Iran and Saudi Arabia. However, his ties to U.S. financial wonks made the neighbouring emirate of Sharjah, the investment opportunity of choice when it came to the communist party of China. That, with hindsight, may have been a big mistake.

But just as hired British urban planners rejected radial, organic development opting instead for the construction of one long road in the desert with skyscrapers on either side (it just leads to traffic jams because people get farther and farther from each other on the Sheikh Zayed Road), McKinsey told Dubai to invest in property, tourism and a stock market. I could tell when I interviewed Kito de Boer, McKinsey’s Middle East Director, that he saw my questions about the viability of friction-less capitalism as symptomatic of my lack of an MBA. I obviously just didn’t have the makings of a McKinsey Man.

The Asian Economic Crisis of 1997 may have been just a few months back, but there was a crazy optimism amongst incoming expats, partly based on the internet bubble. Massive tax breaks were implemented by the consultants for encouraging old and new media organisations to relocate to Dubai. I witnessed the flooding of an artificial reservoir beside what is now a massive apartment complex near Jumeirah and inquired where Dubai would get water from since ground water supplies were dwindling.  I was laughed at. There was more than enough money – they could afford to bring desalinated water on ships for the tenants, I was told.  And with legal codes slow to evolve, the celebrities and so-called white trash really were tenants because the actual freeholds of the land, rather like in central London, are owned by the few.

The tourism economy, meanwhile, was run with an iron fist. Human Rights Watch reported that conditions for hotel construction workers were such that they were being treated as “less than human.” The weather forecasters told lies to keep skyscraper-builders toiling in ILO-illegal heat.  Mendacious agents were sent to the subcontinent to sell the virtues of leaving home and family for high income. Those workers found they couldn’t go back.

Human trafficking was notorious. Mass imprisonment followed attempts by workers to go on strike.

I went to Abu Dhabi a couple of times and saw a much more conservative, modest place. It was before Abu Dhabi opened its $3 billion Emirates Palace hotel. It wasn’t as conservative when it came to advanced weaponry, though. BAe Systems is now Britain’s biggest manufacturer and the UAE bought loads of expensive, impracticable planes. I had the pleasure of attending the largest arms fair of the twentieth century there in 1999. If you looked far enough in the big hall, past the son of Kalashnikov, you could even buy landmines. The now-dead Joe Modise, hero of the violent struggle against apartheid and then defence minister of South Africa was proudly telling me why he wasn’t disconcerted by selling the brand Armscor. Mandela, who I also met in Dubai, had ordered him to sell as many weapons as he could. Death machines are big business and it was notable that the fair was in Abu Dhabi.

Back then, the tensions between poorer Dubai and Abu Dhabi were palpable – they were at war as late as the end of the 1970s. The violent Dubai succession of rulers mean that one of Sheikh Mohammed’s mothers (polygamy is the norm) was actually the daughter of a man killed by the grandfather of the president of the UAE.  That was when Dubai was known for its natural pearls and the British left because of the new Japanese cultured ones – only to learn that the UAE had struck oil. British foreign policy in the Arab world, despite David Lean’s mythology, has never been good for Britain. A succession of Tony Blair’s pathetic secretaries of state trooped to Dubai when I was there to suck up to what they saw as neoliberal progress. They should have spent more time in the UAE’s capital.

Abu Dhabi has the bulk of the foreign currency earning geology – around 10% of global oil reserves and 4% of gas lie in the UAE and Abu Dhabi is the lender of last resort for Sheikh Mohammed’s empire. It has the oil and gas money to refresh Dubai’s coffers and easily pay the $60 billion debt that has been announced to the markets. All the myriad subsidiaries of Dubai – from Travelodge hotels to the London Stock Exchange – will be anxiously awaiting the news from the Eid al-Adha meeting between the UAE’s most powerful families, the Maktoums and the Al-Nahyans.

At the moment, international corporate media is as quick to damn Dubai as it was to laud it. Except that the Dubai story isn’t the story of Ozymandian arrogance in the desert. It is the same story that has been played out in country after country, around the world. Developing nations were advised by the same investment companies that are driving capitalism into the abyss in New York  that there can only ever be one mode of development. Those same companies ignored the histories of places, ignored reality when silly plans for stock exchanges foundered, when legal codes of property ownership failed to be drawn up.

Instead of doubting neoliberalism’s charms, the brightest Emiratis were more concerned that Dubai’s cultural freedoms might attract the wrath of Al Qaeda-style reaction. I certainly heard of young Pakistani construction workers, attracted to fundamentalism as a panacea for poverty, pointing to the twin Emirates Towers after 911. Representatives from the guardians of Mecca and Medina themselves turned up to curtail George Clooney filming the movie, Syriana, in Dubai.

But, in the end, it turned out that environmental degradation, geography, culture, religion, bedu history, tribal allegiances, the spread of little bin Ladens all had little to do with the ticking time bomb that was muffled by the sound of cranes. It was actually just American business schools and the Chicago charlatans that were the problem.  What happens to all those in the labour camps of Dubai is open to question. As for Dubai’s ruler, it is perhaps no wonder that he recently told media critics to “shut up.”

AFSHIN RATTANSI has helped launch and develop television networks and has worked in journalism for more than two decades, at the BBC Today programme, CNN International, Bloomberg News, Al Jazeera Arabic, the Dubai Business Channel, Press TV and The Guardian. His quartet of novels, “The Dream of the Decade” is available on Amazon.com. He is executive producer of a new TV show, “Rattansi & Ridley” which broadcasts internationally, every Saturday at 2032 GMT on Press TV. He can be reached at afshinrattansi@hotmail.com


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Afshin Rattansi is host of RT’s award-winning Going Underground news and current affairs show broadcast around the world. He will be joining Julian Assange on the eve of the referendum for a live webcast from the Ecuadorian Embassy in London as well as a special edition of Going Underground on Saturday.

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