The Really Big D — Dubai!

Dubai 006 We had one of our most fascinating country visits as we spent five days in Dubai, a large city and one of the seven members of the United Arab Emirates.  We could tell as soon as we landed in the Dubai Airport that this wasn’t a normal place.  It was the most astounding collision of ancient Arab traditions and the twenty-first century.  The airport itself is sparkling, modern, full of shopping locations, and people of all cultures.  Just seeing the wide range of clothing (from shorts and tank tops to traditonal and often gorgeous Arabic robes) was spell-binding.  I could have spent a full day just at the airport and never been bored.

Dubai 062 After a bit of a challenge checking into our hotel, we got on with our exploration of Dubai.  The place to start is the skyline, which now includes the world’s tallest building, Birj Dubai, which is a few months from completion.  It tops the building we saw earlier in the trip in Kuala Lumpur, and is already 630  meters high, visible from up to 60 miles away.  But that’s hardly Dubai’s only construction project.  Depending on the person you talk to, Dubai has some 24-33% of all of the world’s construction cranes, in an area smaller than Delaware!  There are still some remaining structures from the old Dubai, but for the most part, this is a modern Oz of a city, all constructed in the past ten years.

Dubai 019 And the construction isn’t just on “Dubai” proper.  They are developing these offshore complexes that include newly formed land in some particular shape (palm trees, the universe), shopping areas, villas, and condominiums.  The scope of these projects is vast.  The smallest “palm” is a $60 billion development project.  A newer one (a bigger palm in shape) will have enough housing for 1.3 million people, the current size of Dubai!  It’s just absolutely staggering.  And we’re not talking “low cost housing”; these are plush luxury units, and to date all seem to be getting bought by someone.

While in Dubai, we had dinner with a great family (Jihad Fakhreddine, his wife Carla, and son Jamaal), who are long-time friends of our relatives Jim and Caroline in Seattle.  They are truly citizens of the world, having lived for 15 years in Silicon Valley, five years in Switzerland, and have been in Dubai now for three years.  Jamaal, age 14, speaks several languages, including English, Spanish, German, and Arabic.  Jihad is running a medical technology company here, and the entire family were incredibly nice, sharing lots of insight and context on this interesting part of the world. 

We learned so much about their lives, their school, Dubai, and the world, and really appreciate their hospitality.  I can hardly summarize a three hour dinner in a paragraph or two, but we learned that Dubai is largely ex-pats (80%), English is the dominant language, real estate is expensive and getting more expensive (to rent a decent house can cost $20,000 (U.S. dollars) per month!), and schools are expensive (in some cases, $20,000-$30,000 per year even for first graders).  

Our families spent a fair amount of time talking about U.S. politics.  I don’t know whether I’m excited or depressed when I meet people living thousands of miles from the U.S. that are more informed about our country and its politics than 99+% of U.S. citizens.  Maybe we should have a set of foreigners elect our next President :-) !  But their views on our current foreign policy, immigration policy, and the relative merits of the candidates were highly informed and spot on.

Dubai 008 Other things we did in Dubai, all really fun, included a local calligraphy demonstration, a meeting with someone who explained Dubai customs and culture, a quick look at the world’s largest indoor skiing center (we didn’t try it, but you can see it on the right), a great half day for the kids at Wild Wadi (an incredibly well done water park), shopping (many people spell Dubai “Do Buy”), a desert safari, and time in the pool or the Arabian Sea. 

Dubai 022 The mystery to me was, and to a large extent still is, what drives the Dubai economy.  By now, I’m sure you’ve concluded that Dubai must be the source of some big oil gushers.  Not true.  Only 6% of Dubai’s GDP comes from oil and gas.  Only one of the seven Emirates (Abu Dhabi) is a big oil producer.  They share much of that revenue with the other six emirates, but Dubai’s money is coming more from its development projects, and its role as a gateway for the Western world to the Middle East. 

Dubai 154 Dubai has an interesting form of government, at least if you’re Sheikh Mohammed.  The Sheikh controls, and to a large extent owns, all of Dubai (in photo on right is one of his private residences).  That’s hard to comprehend, given how much Dubai is worth.  But he seems to make all the decisions, owns all or part of the important companies (construction, airline, hotels, you name it), and cuts others a slice of ownership if and when he sees fit.  Years back, he made Dubai a tax-free zone, and is drawing to his country lots and lots of business activity from all over the world.  He is a BIG RISK TAKER, and now amount of money put up for a project seems too much.  And, in just a decade, he seems to have transformed a fairly barren desert region on the Arabian Sea into a bustling center of commerce that is rivaling Singapore in the Far East.

Dubai 163 Dubai is clearly currently benefiting from a real estate bubble of uncertain duration.  As more and more $1-50 million residences are built, they seem to be gobbled up by very rich people who spend almost no time in them.  One such buyer is, in the words of one of our guides, “Baaarrrrrrraadddd Beeeerrrrriiitttt.”  “Who, we said?  After several repetitions, we figured out that this person is Brad Pitt.)  Many of these purchases have to be pure real estate speculation, and we all know how that ultimately ends.   But almost everything developed in Dubai seems to be to a standard of excellence, and the place is emerging as a global center of commerce faster than you can start your Rolls Royce or Ferrari :-) .

Dubai 013 We stayed at a hotel owned by . . .  Sheikh Mohammed.  We didn’t stay or even visit Dubai’s seven-star hotel, the world’s only seven star place.  Guests are delivered to the hotel either in a gold-plated Rolls Royce, or by helicopter landing on the saucer shape at the top of this structure.   But if you have a spare $5,000 you want to get rid of in a hurry, book one night at this hotel, and you’ll soon be parted from your money. 

Dubai 104 As we left Dubai, our airport experience said a lot about the area.  Our flight was scheduled to depart at 4:40 a.m. (meaning a 2:00 a.m. hotel pick-up — Ugh!!), and the airport operates 24 hours a day.  As we walked to our gate, we passed through some of the best shopping areas in the world.  We had tried unsuccessfully to buy a very specialized camera battery, but found and purchased it at 3:20 a.m. in the Dubai airport!  The airport is modern and efficient, the planes the latest and best, and the staff highly professional and courteous. 

Dubai 024 I never like to use the word unique, which is misunderstood and overused.  But Dubai is unique.  The climate is dry and scorching hot in the summer.  The ocean is nice enough, but not something you’d call uniquely beautiful.  The air quality is lousy due to all the construction.  There’s little culture at night.  Yet it’s a bustling, world-class city, attracting all sorts of new people and new money.  The people seem quite happy with the Sheikh’s rule.  There’s no unemployment and almost no crime (we learned that if a tourist is caught making an obscene gesture, they are likely to spend three years in jail!).   If I were doing a Ph.D. in Economics (again!), I might well focus on the hyper-rapid development of the Dubai economy.  And for any of you traveling in this part of the world, make Dubai a place you visit.

Feel free to check out our Dubai photos, which aren’t the most beautiful of the trip, but give you a feel for modern Dubai.

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