Cities

Dubai: a modern parable

With its debt, excess and exploitation, the glitzy emirate is not alone in a world living on credit. But, writes Jonathan Freedland, its riches could have been spent so much better.

When future generations sit their children down to tell the story of the great crash of the early 21st century, they will surely begin with the parable of a place called Dubai. As the decades pass, and the details become hazy, it will sound like a Bible story or one of Aesop’s fables. “This, children, is the tale of a desert king who yearned to rule the most luxurious kingdom in the world. He wanted the tallest building on the planet and hotels of an opulence beyond imagination. Gold and silver tumbled from the sky, until the sands were covered with the fastest cars, champagne flowed all night and people dined on gold-dipped, foie-gras-fragranced, lobster-infused maki rollseach one costing £100.

“Even nature itself could not stand in the way. Where there were no beaches, the sheikh ordered that beaches be made, crafting them so that, when the gods looked down from the heavens, they would see the shape of a palm tree or a map of the world. He spent so much money, so fast, it was impossible to keep up. There was only one problem. The money was all borrowed. And one day, it began to slide back into the sand …”

Perhaps it won’t end exactly that way, but the story is bound to have staying power. For Dubai is a perfect metaphor for the crisis currently crippling global capitalism. The dream of Sheikh Mohammed bin Rashid al-Maktoum, the autocrat who rules Dubai, was unsustainable in every sense: economically, morally and environmentally. But there is no room for first world condescension here, wagging a finger as we tell the Arabs they were deluded to think they could build a financial centre to match the western citadels of London, New York and Frankfurt. We cannot condescend to Dubai because its flaws are ours – even if they are lit in outlandishly vivid colours.

That’s why the money men are already asking themselves who will be next: will it be Greece, wonders the Financial Times, while others fret for Latvia, Hungary and even Ireland. They all made Dubai’s mistake, if not quite at the same pace. They pulled out the credit card and went on a wild spending binge – and now the bill has fallen due. But it wasn’t just them: we’ve all been at it. Japan is on course to have a public debt twice the size of its gross domestic product next year, while the US debt is set nearly to equal the country’s economic output. The United Kingdom is not far behind, with a debt forecast at 89% of GDP. We’ve all been living on tick [credit].

In this sense, the sheikh who wanted the Burj al-Arab to be the world’s only seven-star hotel is not that different from the Florida couple who moved out of the trailer park and into a condo. They both bought something they couldn’t afford with money that wasn’t theirs. Dubai was simply a sub-prime statelet in a sub-prime world.

Of course it was economically unsustainable, but the difference between us and them is one of degree rather than kind. Their boom was fuelled by rising property prices that nobody thought would ever fall, and by cheap money that kept flowing through the tap marked low interest rates. That sounds familiar, and not only as a description of our recent past. It fits our present, too. Today’s regime of near-zero interest rates means that we’re trying to get ourselves out of the current hole by the very means that got us into it: spending cash that was borrowed on the cheap.

We in Britain have more reason than most to avoid smugness in our view of Dubai. The great criticism of the emirate that sought to be a magnet for finance and tourism is that it was built on nothing. There was no real economy; Dubai didn’t actually make anything. Can post-industrial Britain, reliant on the City [London’s traditional financial district] and on service industries, really say we are so different? The truth is, we don’t make much either.

Nevertheless, something else sticks in our craw about Dubai. It’s that the eye-popping luxury was built on the backs of foreign workers, toiling in a form of human bondage. Over a million men and women from India, Bangladesh, Nepal and across Asia have turned Dubai from a sleepy village of pearl-divers and fishermen into a shimmering Arabian Las Vegas – and have been rewarded with next to no rights and meagre pay. They sleep in labour camps, each one crammed with 3,000 or more people. In the strict hierarchy of the emirate, their role is to serve the expats and wealthy natives. It is all but a slave society.

We are right to find that morally repugnant. But we should beware the mote in our own eye. For if the west enjoyed economic boom times for the 15 years that preceded 2008, it did so thanks to low inflation. How did inflation stay so low? Because labour costs were kept down, thanks to millions of Chinese workers prepared to sweat for wages we would consider close to slavery. So, yes, we can be repelled at those ladies buying Hermès bags and Manolo Blahniks by the crateload in the Dubai shopping malls. But they weren’t that different from the folks snapping up the bargains at [the European budget-store chain] Primark. Both groups rely on the fact that, far away and out of sight, somebody is prepared to work very hard for very little money.

Environmentally, Dubai makes the jaw drop. The air conditioners blowing full blast into the open air, to make the gardens cooler, the de rigueur 4×4s and the indoor ski resort, where sub-zero temperatures are maintained even in the middle of a baking desert – no wonder the UAE ranks second in the global league table of per-capita carbon emissions (beaten only by its Gulf neighbour, Qatar). But our own consumption of fossil fuels hardly makes us blameless. In this, as in so much else, Dubai is just like us – only more so.

Still, the universality of the Dubai parable should not obscure an equally important, and specific, part of the story. Despite the sheikh’s best efforts to pretend otherwise, Dubai is not some invented wonderland that could have existed anywhere. It is part of the Persian Gulf – and utterly revealing of that region’s ugliest face.

For Dubai, like the rest of the emirates and the other Gulf states, did not use its enormous wealth to develop its own people, let alone the peoples of the wider Arab region. Instead, as Durham University’s Christopher Davidson puts it, “they just imported what they needed ready-made”.

So the oil-rich Gulf states buy in the architects and the chefs who might present the glitzy front of a westernised society – skipping out the awkward intermediate stage of nurturing the talents of their own people. A choice example is Qatar, which solved the problem of sporting achievement, not by training its children at athletics, but by paying foreigners to become Qataris. It worked a treat in 2000, when Saif Saeed Asaad won an Olympic bronze for weightlifting. Only the pedantic pointed out that Asaad was actually Angel Popov of Bulgaria, competing under his new name.

There is another route open, one that would dream not of hotels shaped like sails, fake archipelagos and parties fit for Paris Hilton, but of a region packed with universities and seats of learning to rival the great scholarship of the Islamic golden age. Imagine that, a Gulf region that might serve as an inspiration for the whole Arab world, rather than a playground for its richest kids. There could be a fable in that, too.

www.guardian.co.uk

Copyright Guardian News and Media Limited 2009

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