Do, Do Dubai, Do

My wife and I had the chance to visit Dubai last week. It was the first time either of us had been in that part of the world apart from stopovers. Welcoming the chance to escape the brutal New York City winter for a few days, we were fascinated to see the place for ourselves. It did not disappoint.

I must admit to arriving with a few negative prejudices. I suppose cynicism is part of my nature. I expected to see opulence and vanity projects and some absence of soul, however one might discern that. The idea of a city built in the middle of the desert also seemed to fly in the face of sustainability somehow.

Well, there was certainly opulence. Dubai is not cheap. It has probably overtaken London for cost of living, at least in the centre and its more Western parts. Rents have shot up, and our hotel cost much more than I expected. They have even learned the unpleasant American habit of slapping unexpected taxes onto bills. Perhaps most telling, I bought a meal for four for over a thousand dollars, a new high for me, which for the young people we were visiting clearly represented a regular night out. Now that, in my book, is opulence.

But as for vanity projects, the view was more nuanced and I came home rather sold on the Sheikhs and their vision. What we saw was a well thought out business plan executed with excellence. Dubai has redefined the concept of a hub and made it its own.

Imagine you run a large multinational organization. A nice thought? This might have something to do with oil and gas, but not necessarily. Where might you want to grow your business? Europe and the Americas don’t have so much potential. There is China of course, but where else? Africa seems to be coming up. India is a vast potential market. The rest of South Asia and the Middle East also has many people, from Pakistan to Iran to Kazakhstan and all those other stans.

You can set up small local offices in each of those markets, but it makes no sense for these to each supply their own services like marketing or finance. But if you choose to run these services from London or New York you are going to fail to appreciate local cultures and make awful blunders – probably you’ll end up failing like a colonial power, drawing straight lines, making unjustified assumptions, and annoying all your local partners. Your consultants and your agencies and your bankers will be just as naïve and fail along with you (well, not fail in their case, just take large fees for doing bad work).

What to do? You need somewhere with connections to all these places, somewhere where you can send local staff to develop without losing their culture completely, somewhere where it is easy to live and where business taxes are low and ambitious and talented people are happy to spend a few years.

Twenty five years ago, the sheikhs spotted precisely this opportunity and set about making it happen in Dubai. This is no vanity project. Nor is it an unsustainable edifice built on oil and gas alone, though of course it helps to have seed money to invest and sovereign wealth to offer some security to bankers. It is a brilliant concept, superbly executed, and it seems to be working.

Dubai the city seems to double in size every five years or so, and the population grows in proportion. There is still plenty of spare land to expand into, and even the city centre does not feel overcrowded, with plenty of vacant or underused lots. What Manhattan would give for those! The city hit the headlines during the financial crash, and indeed a correction was needed, banks having driven up prices too far and too fast. But I wish I had visited in 2008, for I am fairly sure I would have reached the right conclusion and invested in Dubai firms, for it seems clear that there is room for the positive trend to run through many more cycles.

Several things in the execution of the model are impressive. Take Emirates airline. It might not be all that profitable, and indeed neither of my planes were completely full. But it has a clear strategy, of acting as a hub with generous connections, good planes and strong facilities, backed up by smart advertising and sponsorships. I think that makes a better investment than Alitalia, for example.

Another example is the stunning architecture. It is classy and acts as a beacon, epitomizing the concept of “build it and they will come”. Isn’t it remarkable that the world’s tallest building is in Dubai, given the arrogance of the US and ambition of China? The policy is to build big and with quality and ahead of need. I visited a hotel at the Dubai racecourse that was stunning in its design and scale. A cynical Westerner might mutter “white elephant”, observing its low utilization and vacant surroundings, but my guess is that within five years this will be centre of a bustling new district.

There is also a lot more to Dubai than mega-projects. They have a well-designed metro and road system. They have invested in schools, and are working on medical tourism as an opportunity. Security is adequate without being intrusive.

Dubai feels almost as much as a world village as New York, yet is even more stratified. The Arabs and rich Africans provide source funds and enjoy life, the whites earn a good posting with their brands and services, Indians provide the engine room of commercial nous, and Filippinos underpin it all via service with a smile. Is this a half empty glass, displaying a humanity of separation and exploitation? Maybe, but I prefer the half full version: every person in Dubai is there to make something of their life and the city offers more chances than exist at home, and the chance to benefit a homeland through remittances as well. Occasionally, some horrid story of trafficking or exploitation comes to light, but which country is free of those?

Indeed, my main takeaway from the city is its energy, coming from a humanity striving to create. The place has not developed an underclass, or benefit dependents, old people, or even much obesity. Commit a crime and you will no doubt be deported. If you are not Arab and don’t have a job, you have no place in Dubai. No doubt these things will evolve over time, but I am confident the Sheikh will have an effective plan to deal with them when the time comes.

In the West, we are fed a lot of propaganda about Muslim countries. I do find the male dominance disturbing, though I recall it was not so many years ago that we had the same. Do I condemn the covered clothes? Perhaps, but when in Dubai I see Western women seeing the need to parade almost naked to “win” with our rules, I hesitate. There is also something to admire about a society where prayer and meditation are never far away. What is more disturbing is the apparent hypocrisy of some visiting Arab men from less liberal regimes, happy to drink and buy sex in Dubai while preaching abstinence for less wealthy people at home. Is the West free from hypocrisy though?

What disturbed me more was a thought about how humanity chooses its leisure. Think about it, part of the business model is to create an atmosphere that people will want to visit and live in. Of course you can’t create 1000 years of history when it is not there, but otherwise the makers of Dubai had a free hand. What did they come up with? Shopping malls! True, a shopping mall with a ski slope, a beautiful if unintentionally phallic waterfall, and a fantastic if schmaltzy musical fountain, but still shopping malls. Is that the best we can come with as a human race for our utopia? There must be more to life than shopping, surely?

So, all in all, Dubai was a wonderful experience, and, shopping malls apart, an experience that brought out the optimist in me. Humanity can achieve wonderful things when we apply our positive energies. Globalisation only grows the possibilities. There is also a lesson hidden away about political and economic systems. Without autocracy, such an audacious business plan could not have been implemented. But without capitalism, it could not have blossomed so colourfully. There is no one single right route to success.