- The city of Dubai in the United Arab Emirates is known for extravagant, newly built landmarks like the Burj Khalifa, the Palm Jumeirah, and the Dubai Mall.
- In just over two decades, the city has transformed from a desert backwater port to a thriving metropolis with the third-most skyscrapers in the world.
- While the rapid development has produced a futuristic city, it has come at the cost of hundreds of thousands of workers and produced a city that can feel soulless.
- Dubai markets itself as a liberal Hong Kong in the Middle East, but it hides the fact that it is still ruled by an autocracy and that legal rights frequently don’t hold up for foreigners.
- During a visit to Dubai’s downtown, I became aware of just how radically the city has developed, as well as the consequences – both positive and negative – of that development.
Three decades ago, Dubai was little more than desert.
The city exploded in prosperity after the United Arab Emirates discovered oil in 1966, leading to a development boom that has resulted in the world’s tallest building, the second-biggest mall, one of the most luxurious hotels, and more skyscrapers than any city besides New York and Hong Kong.
From the outside, Dubai looks like an unmitigated success story. Whereas many other Gulf nations – like Qatar, Saudi Arabi, and Bahrain – still rely heavily on oil exports to drive their economy, Dubai is driven by tourism, real estate, tech, shipping, and financial services.
Oil and gas now accounts for less than 1% of Dubai’s economy, down from 50% at one point, according to Bloomberg.
The development has been aimed at becoming the Middle East’s Hong Kong or Singapore – an easy place to visit, spend money, and do business.
But for those looking at Dubai and wishing their country or city would use it as a model, Dubai may be more of a cautionary tale. The shiny, glass towers hide the trampling of the hundreds of thousands of migrant workers that built them. They hide the often opaque and arbitrary legal system, and the fear over what happens to the economy when the cranes stop building and the flow of foreign investment dries up, as happened in 2009.
I recently spent a day in Dubai’s downtown to see the fruits of the city’s rapid development.
Before the discovery of oil in Dubai in 1966, the city was an unremarkable port in the Gulf region. While it had existed as a trading port along important Middle Eastern trade routes since the 1800s, its main industry was pearling, which dried up after the 1930s.
Source: Government of Dubai
The discovery of oil changed everything. While Dubai’s reserves were nothing compared with those of neighbouring Abu Dhabi, Dubai’s ruler, Sheikh Rashid bin Saeed Al Maktoum, was determined to turn the city into a trading hub.
But even as recently as 1979, the city was trudging along. By most accounts, things changed in the 1990s and early 2000s. In 1985, the city opened the Middle East’s first major “free zone” — a place where foreign companies could operate with almost no taxes or customs and with streamlined bureaucracy — at Jebel Ali.
Source: “A History of Future Cities”
Meanwhile, wars in Iraq and Afghanistan pushed up the price of oil, resulting in tons of capital for Gulf states. And general instability increased the attractiveness of Dubai as a place for investment. In the years after 9/11, Dubai’s economy kicked into full gear.
Source: “A History of Future Cities”
With the accelerated wealth, Dubai’s ruler, Sheikh Maktoum bin Rashid Al Maktoum, put into effect a plan to turn the city into the world’s top tourist destination. The building of outlandish landmarks — like the Burj Khalifa, the world’s tallest tower — was key to the plan.
The Burj Khalifa is impossible to miss as you drive through Dubai. I spotted it as I took a Careem, an extremely popular competitor to Uber headquartered in Dubai, up Sheikh Zayed Road, the main highway in the city.
Sheikh Zayed Road connects downtown Dubai with other major developments in the city, like the Palm Jumeirah, the world’s largest man-made island, and the Dubai Marina, a massive man-made marina that acts as a second downtown.
I got out of my car around the Emirates Towers stop on the metro. Dubai’s 49-station, 46-mile metro is automated and driverless. The Red Line runs like an artery through the heart of Dubai.
As I looked around, it was hard not to be stunned initially by the number of skyscrapers in the area. The city has 190 skyscrapers, trailing only New York and Hong Kong.
Source: Skyscraper Center
I grew up in and around New York City, so I was surprised to find myself staring up at the buildings. But there is something striking about the architecture in Dubai. Each building seems to have a unique design.
Despite the bustling highway and the numerous buildings that crowd the landscape, there are few — if any — people walking around.
When compared with a city in the US or Europe or Asia, Dubai feels like a ghost town. Here, there was a Zoom convenience store on the street level, but little else.
Part of that is because of Dubai’s climate. During the long summer, stretching from mid-April through October, outside temperatures are unbearable — regularly around 105 degrees Fahrenheit (41 degrees Celsius) and as high as 118 F, with plenty of humidity.
Source: Dubai Airports
That has influenced development to be extremely car-focused. Highways and parking are everywhere. But that makes it an almost impossible city to walk, even during Dubai’s winter, when temperatures are in the more comfortable mid-80s F.
While Dubai has worked to develop industries in trade, tech, and finance, there is little question that real-estate development has driven the economy throughout the past two decades.
It seems buildings are going up everywhere. But that’s nothing compared with the mid-2000s. In 2007, Morgan Stanley estimated the city had 20% of the world’s construction cranes. Most of the development was driven by the state-owned Dubai World company and Emaar Properties, a formerly government-owned enterprise that is now publicly traded.
Source: Khaleej Times
The top-down development had its consequences when the bills came due. In 2009, Dubai suffered a severe economic crisis when property values crashed by more than 50% from their peak. By some estimates, the UAE owed as much as $US123 billion to debtors.
Source: The Guardian
Oil-rich Abu Dhabi bailed out Dubai to the tune of $US20 billion, and the economy has been mostly thriving since. But there is a sense that some of the lessons of the crisis were never learned. The Al Rostamani Tower, a mazelike skyscraper, was completed in 2011. Like many of the others along Sheikh Zayed Road, it combines luxury apartments with office space.
One of the earliest developments in the area was the Emirates Towers. Like many Dubai developments, it is directly connected to a retail complex — so you never have to step outside.
As a result of the crisis, numerous massive development projects were stalled, never completed, or abandoned. The World, a collection of 300 artificial islands, is only just now being developed again. The Palm Jebel Ali and Deira, two palm-shaped artificial islands designed to be bigger than the Palm Jumeirah, have both been stalled indefinitely.
The development of extravagant landmarks began again after the crisis. The Museum of the Future, first announced in 2015, is expected to be completed in 2020. The museum of one of several extravagant projects under construction to show off at the World Expo in 2020, which Dubai is set to host. Reuters reported in July that massive government spending for the Expo was propping up economic growth.
The museum, designed to be a “platform to demonstrate and test” the latest technologies, is considered one of the most complex buildings in the world. It will be run by the Dubai Future Foundation, a government organisation working to make Dubai a tech hub for the Middle East. It’s housed in a plant-covered building next door.
Source: Dubai Future Foundation
The DFF building looks as futuristic as the museum it will run. But the DFF, like just about every initiative in the city, is government-run to the point where it’s impossible to tell where the public sector ends and the private sector begins. Dubai is betting that top scientists and innovators will see government involvement as a benefit — allowing them to implement ideas faster — rather than a detractor.
Source: Dubai Media Office
The Dubai economy was developed as a series of cutout special “zones,” each for a different industry. The laws in each zone are different depending on the industry. One of the earliest was the Dubai International Financial Center, a free zone with the goal of making Dubai the Middle Eastern Hong Kong.
While the zone opened in 2002, the horseshoe-shaped centrepiece complex opened in 2004. Unlike the rest of the UAE, the DIFC is governed by Western business regulations designed by the consulting giant McKinsey, with the goal of attracting multinationals. For the most part, it worked. Within a few years, it filled up with global banking giants like Credit Suisse, Citibank, and HSBC.
Source: Next City
The DIFC has its own court system, and unlike in the rest of the UAE, you will not go to jail for being unable to pay your debts. But after the collapse of the Abraaj Group, a private-equity firm once worth $US14 billion, investors are now questioning whether the DIFC is as rules-based as once believed. “The finance world often resembles a small clubhouse of members who look the other way at wrongdoing,” lawyers who work in Dubai told The Wall Street Journal in August.
Source: Wall Street Journal
The first (and only) real street life I saw at the DIFC was the Dubai Fitness Challenge. There were a couple of people playing a game that looked like a cross between tennis and ping-pong.
Source: Khaleej Times
There were several yoga and cross-training classes, seemingly attended mostly by expats.
But other than that, the area was dead. This was between 4 and 5 p.m. on a Wednesday. I’m talking almost no one in the area, aside from construction workers. It seems Dubai may be trying to change that. Gate Avenue, a ground-level, $US272 million development that cuts through the center of DIFC and will add 660,000 square feet of dining, retail, and entertainment outlets, is under construction.
The DIFC is expanding aggressively as part of a plan to double the number of companies in the zone and create a neighbourhood of 50,000 professionals by 2024. In addition to Gate Avenue, other office and residential towers are going up.
Source: Arabian Business
I found it almost impossible to navigate through the DIFC outside. The only way to do it is to pass through a network of underground/indoor corridors that double as a mall. If you’re wondering what life will look like after pollution and climate change make the outdoors unlivable, Dubai can give you an idea.
After getting lost in the labyrinth a few times, I found my way outside. There are more than 30 free zones aside from the DIFC, each for a different industry and governed by a different set of rules and laws. Media City and Internet City, for example, are exempted from internet censorship, though some say that has started to be rolled back.
Source: “A History of Future Cities”
The construction never seems to end. But the buildings, like the Park Towers, are mostly luxury properties. Avoiding another real-estate collapse relies on all those towers filling up with wealthy tenants. That may be a problem — residential property prices have fallen by more than 15% since 2014 and continue to drop.
Visas for foreign white-collar workers are tied directly to jobs, meaning many do not set down roots but stay for a few years and then leave. And according to Hasnain Malik, the global head of equity research and strategy at Exotix Capital, it’s not clear that Dubai’s white-collar industries are growing fast enough support demand.
That’s just the surface. Beneath that is how this vast, futuristic city of gargantuan landmarks was built: on the backs of migrant workers hailing from countries like Nepal, India, Pakistan, Bangladesh, and the Philippines.
Nearly 90% of Dubai’s 3.1 million residents are expats, many of whom are migrant workers brought in to work on construction projects or in service jobs. Most come alone on the promise of much higher salaries than in their home countries, so they can send money back to their families.
Source: Asia Times
But Dubai and the UAE have long been the subject of complaints of mistreatment of workers. Migrant workers say they often face brutal work conditions, shifts of 12 hours or more, recruiters promising exaggerated salaries, and companies withholding paychecks or holding workers’ passports so as not to let them quit or return home.
Source: New York Times
The “kafala,” or visa sponsorship, system has been singled out as perpetuating some of the worst abuse. The system requires employers to sponsor employees’ visas for a fee, which the employers frequently pass on to workers. Many workers are in debt to their employers for the cost of arranging their contracts, visa, and travel to Dubai.
Under the kafala system, if a worker tries to leave their job without permission, they can face fines, prison, or deportation. As a result, many have little legal recourse if they find themselves in a bad situation or one differing from what recruiters promised.
Source: Human Rights Watch
Foreign white-collar workers have also complained of having little legal recourse when things go wrong. The New York Times reported last year that Fernando Donis, an architect, found he could do little when he accused the government of stealing his designs for a building known as the Dubai Frame, a new landmark attraction in the city.
Source: New York Times
“There is a huge dependence on migrant workers who have employment terms that are no different than indentured servitude,” Sarah Leah Whitson, the director of the Middle East and North Africa division of Human Rights Watch, an advocacy group that documents abuses of migrant workers, told The Times. “This is a system that’s put in place to entrap workers.”
Source: New York Times
In recent years, Dubai’s government has appeared to work to fix the situation. Training sessions are now held regularly to educate workers on their rights. The UAE has adopted a system to ensure on-time salary payment and has passed laws to establish working hours, paid sick leave, and stiff penalties for employers or recruitment agencies that fail to guarantee legal rights, use violence against workers, or fail to accurately convey the expected job description or salary to workers before bringing them to the country.
Every day, buses take workers back and forth between massive labour camps with dormitories, where they typically sleep four or five to a room. The government now inspects labour camps to ensure that they are up to code.
While recent reports from Human Rights Watch and the United Nations acknowledged improvements, both said labour abuses continue. HRW said the reform laws still allowed employers to charge workers the recruitment fees that can put them in debt.
The entire experience of being in Dubai can be disorienting. As I walked into the Dubai Mall, the second-biggest mall in the world and one of more than 65 malls in the city, it was clear that Dubai society has three tiers: the Emiratis and superrich on top, the foreign white-collar workers below them, and, at the bottom, the migrant construction and service workers.
Most of the workers come of their own accord, out of a serious need to make money because their home countries are impoverished. That makes it all the more tragic that the existing system seems set up to exploit them.
It’s hard to argue that the Emiratis didn’t do what was best for them. Dubai has become the third-most visited city in the world and weaned itself off oil revenue almost entirely — no small feat. But as I walked from one massive luxury shopping complex to the next, I wondered whether Dubai is living on borrowed time.
Dubai and its wealthy developers seem not to think so. With the world’s tallest tower already built, Dubai’s big-name developers’ next move is to build an even bigger one. The Dubai Creek Tower is set to outscale the Burj Khalifa, and the mall below it is designed to dwarf the Dubai Mall to become the biggest in the world. It all feels like a kid playing “SimCity” with unlimited money — a game that gets old quick.
Source: Time Out Dubai