Bill Emmott - International Author & Adviser

Article

The Moon colony in Arabia
Ushio - December 2006

Science fiction books in the 1950s and 1960s often seemed to feature human colonies, in the far distant future, that had been established on the Moon, or on other planets, or on parts of the Earth that had been devastated by war or natural calamity. The residents of such colonies were super-beings, who were well-educated, powerful and perhaps rich. Working for them would be hordes of slaves, often depicted as mutant creatures, or “androids”. Such books were an amusing sort of escapism, but not to be taken seriously.

            And yet I have just been visiting a place that bears at least some resemblance to those science-fiction colonies, and wants to be taken very seriously indeed. It is called Dubai, on the Arabian peninsula, and it has become a popular tourist destination, for Europeans and for Asians. Citizens of Dubai, or of the federation of which it forms part, the United Arab Emirates, will be offended by my description of it as being similar to a colony on the Moon. But I don’t mean this as an insult. Let me explain.

            There is a good reason why, until oil was discovered and then soared in price during the 1970s, very few people lived in Dubai and its surrounding areas, and why those who did were extremely poor. It is that the area is a desert. It also has the sea and many beaches, but it is very hot and humid, especially during the summer months. It is not, in other words, a place that is naturally hospitable to humans. In that sense, it is like the Moon.

            Obviously, the combination of abundant oil and abundant money have changed that situation during the past 30 years. Air conditioning, desalination plants to produce fresh water, and long-distance air travel have all made Dubai more habitable and accessible. The rises and falls of oil prices during the past three decades have meant that the development of Dubai has also gone through booms and busts. Now, it is going through a gigantic boom.

            Dubai is like a vast, 24-hour construction site. It is said that 75% of the world’s tall cranes are currently being used in Dubai, for most of the buildings under construction are skyscrapers that require such cranes. Hotels, man-made islands, apartment blocks, shopping malls, even theme parks containing indoor ski-resorts are all being built. The rulers of Dubai have decided, wisely, that they need to create an economy that does not rely on oil, as the oil will run out one day. So they are trying to attract tourism, financial services, trading, other services, and many other activities. Some people call it “Disneyland in the desert”, but it is more than just that.

            Dubai’s growth is impressive. But there is still something strange about the whole idea. It is this. Normally, when a country seeks to achieve economic development, the reason is that it wants to provide jobs and rising incomes for its citizens. That is the motivation in China, or Britain, or Japan. Yet in Dubai, the jobs that are being created are mainly being filled by foreigners. About 80%--yes, 80%--of the labour force consists of expatriates. Most of those are lowly paid workers from India, Pakistan, Bangladesh and the Philippines, who come not quite as slaves but nevertheless with limited rights.

            That is why I made the analogy to science fiction “androids”. Again, I do not mean to offend all those South Asian workers. But their role is to do all the manual and menial jobs. In addition, there are many higher-paid expatriates, chiefly in financial services and hotel management. These people provide the profits that do, or will in future, keep Dubai going. The 20% of the population that are indigenous Arab residents, known as Emiratis, thus benefit from the tax revenues yielded by all these hard-working foreigners.

            But can this really be sustained once the oil runs out? Looking around, I had to wonder. Beaches and water-sports will always attract some tourists. But otherwise Dubai is a somewhat sterile place, thanks to the desert: it is like Singapore in size and concept, but without the beautiful flowers, the history and the easy access to Malaysia. Much of the tourist trade depends on the idea that people will come to Dubai to change planes, as they travel from Asia to Europe and vice versa. But that is not really necessary any longer, unless you are travelling from Australia. Planes these days can fly long distances, without refuelling. So Dubai’s risk is that it could share the fate of Anchorage, the airport where all flights from Japan to Europe and to America’s East Coast used to stop, but no longer do.

            The answer, though, probably does lie in Dubai’s position halfway between Europe and Asia. All the apartment blocks being built, all the hotel rooms being opened, all the financial companies being formed, do not make long-term sense except as a bet on the growth of China and India. Trade is already making Arab heads turn towards the east, and away from their old western partners, just as it did in centuries past. That trend will only grow in the future.

            What Dubai represents, however, is not just a bet on the future growth of the Asian economies. It represents a bet that with all the economic growth that is taking place in China and India will arise a large class of rich people able to afford luxury apartments and hotel rooms in other countries and, most important of all, that are keen to avoid tax and too much government control at home.

In other words, while Dubai markets itself today as a wonderful tourist destination, with hotels shaped like yacht sails and soon the world’s tallest building, in fact its development represents an effort to create an offshore hiding place, money-management centre and playground, for Asia’s richest people. It will succeed if it can become for Asia what Bermuda and many Caribbean islands have been for the United States. Dubai is thus a capitalist version of science fiction, but also very much a bet on this being Asia’s century. Go and take a look: it is worth a visit.

             


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