November 29, 2009

The Dubai Effect

Max Boot is quite right that the Middle East needs Dubai, and not only because it embraces modernity and flouts the region's taboos. It's also an example of good government, at least by the Arab world's standards, and good economics if you look past its excesses.

The United Arab Emirates' most extravagant city-state has a more or less transparent market economy and a degree of personal freedom rarely found elsewhere in the Middle East outside Israel and Lebanon. The government doesn't micromanage the personal lives of its citizens as in Iran and Saudi Arabia, nor does it smother the economy with heavy state socialism as in Egypt and Syria. Its bureaucracy is efficient -- investors don't spend years acquiring permits and filling out paperwork before they can open a shopping center, a hotel, or a Starbucks. The Islamic religion is respected as it is everywhere else in the Middle East, but clerics don't make the rules.

Lebanon and Iraq have both been hailed as possible models for the rest of the region, but they aren't really. Maybe they will be someday, but they aren't today. Freewheeling Lebanon is more or less democratic, but it's unstable. It blows up every year. The Beirut Spring in 2005 ousted the Syrian military dictatorship, but shaking off Iran and its private Hezbollah militia has proved nearly impossible. Iraq is likewise still too violent and dysfunctional to be an inspiring model right now.

Many of the skyscrapering steel and glass cities of the Persian Gulf feel like soulless shopping malls. It wouldn't occur to anyone to suggest that one of these places is "the Paris of the Middle East," as Beirut has often been called. Dubai's outrageous attractions and socially liberal atmosphere, however, makes it something like a Las Vegas of the Middle East as a traveler's destination. And it really is something like a Hong Kong or Singapore as a place to do business.

It features prominently in Vali Nasr's compelling new book Forces of Fortune, where he argues that the Middle East may finally liberalize politically after it has first been transformed economically by a middle-class commercial revolution. Most in the West haven't noticed, but that revolution has already begun. And what he calls "the Dubai effect" is a key part of it.

"People in the region who visit Dubai," he writes, "return home wondering why their governments can't issue passports in a day or provide clean mosques and schools, better airports, airlines and roads, and above all better government."

He's right. Most Beirutis I know look down on Dubai as artificial and gimmicky, but just about everyone else in the region who isn't a radical Islamist thinks it's amazing.

Read the rest in Commentary Magazine.

Posted by Michael J. Totten at November 29, 2009 12:07 PM
One of your best articles in a while MJT, which is quite a complement. One good example is worth a million words. Dubai is that example for the Sunni Arab world.
Too bad they are going through a severe financial crisis. Hope they survive.
Posted by: anand at November 29, 2009 12:25 pm
Agreed with Anand.
Would also like to point to Bahrain as another model of pretty decent authocracy.
Posted by: fnord at November 29, 2009 1:02 pm
As the luxury market of the Middle East, Dubai's fortunes are entirely dependent on the fortunes of its neighbors. It's collapse is the first sign that the area is in severe economic distress.
In August, the financial news from Dubai was this (Via Middle East Online:)
DUBAI - Gulf economies are expected to see better-than-expected budgets in 2009 despite the economic slowdown, thanks to higher world crude prices, an economic report said.
"The strengthening in oil prices will be extremely positive for the hydrocarbon-dependant GCC (Gulf Cooperation Council) countries, which will see high oil revenues," EFG-Hermes investment bank said in a report Monday.
"We have revised upward our GCC macro forecasts in line with the changes in our oil price forecasts. The majority of the headline figures, including nominal GDP (gross domestic product), and the fiscal and current account, will see an improvement," the Dubai-based bank said.

As autocracies, Gulf states are very good at keeping bad news out of the press. They only let us know that there's a problem when they absolutely have to. As the most liberal of these autocracies, and as the most financially vulnerable, Dubai had no choice but to tell the truth.
Saudi Arabia and the rest will probably keep the news about starving residents, food riots and the rest mum until the situation has reached disastrous proportions.
Until that happens, we should probably pay less attention to the health of the middle east, and more to our own health. Should we concentrate on rescuing failing Gulf economies and their Euro remoras when we get most of our oil from our neighbors in the Western Hemisphere, or should we spend more time and money working with healthy economies in India, Brazil, China, etc.?
Posted by: maryatexitzero at November 29, 2009 2:40 pm
Meanwhile, filed under Same Old...
Saw this at Long War Journal on Friday:
"The Cabinet has granted Hezbollah the right to take up arms against Israel. "[T]he government underscores Lebanon
Posted by: Paul S. at November 29, 2009 3:55 pm
Mary: Until that happens, we should probably pay less attention to the health of the middle east, and more to our own health.
Unfortunately, when it comes to fossil fuels the entire industrialized world is in the same boat. We all need the oil, and even if the US got 100% of its oil from sources outside the ME, conditions in the ME would still have a major impact on price-at-the-pump. I agree with you that we need to worry about our own prosperity first and foremost, which is one reason why I wish Obama would have spent all this stimulus money and even the money for the alleged health care reform on developing alternatives to fossil fuels. The sooner we get over our dependence on oil the sooner we can develop realistic foreign policy in the ME. Anyone who thinks we wouldn't be doing things different in the ME if it wasn't for the oil needs to get their head examined. And its not just us, either.
Should we concentrate on rescuing failing Gulf economies and their Euro remoras when we get most of our oil from our neighbors in the Western Hemisphere...
Lol. You don't like the euros much I take it? Me neither. But one can hardly blame them playing the games they play in the ME. They really don't have much economic leverage, so they play political games instead.
...or should we spend more time and money working with healthy economies in India, Brazil, China, etc.?
I'm with you on that :)
Personally I think the idea of a "western world" is long since obsolete in any sense other than a cultural one. The Europeans have made it abundantly clear that they want to go their own way, so I suggest we let them do so. We should look after ourselves, and let them look after themselves. There's no reason why we can't maintain friendly relations with Western Europe but we need to get over the idea that we are tied at the hip to Europe.
Posted by: programmmer_craig at November 29, 2009 4:00 pm
On the other hand, Dubai wouldn't allow Shahar Peer a visa to play in a tennis tournament. (She had previously played in Doha.)
Posted by: Ted S., Catskills, NY at November 29, 2009 7:24 pm
....."We should look after ourselves, and let them look after themselves. There's no reason why we can't maintain friendly relations with Western Europe but we need to get over the idea that we are tied at the hip to Europe."
Releasing that Lockerbie bomber to Libya is the latest example that sticks in my craw as a former Pan American Airways employee. "Perfidious Albion" leaps to mind....though it was vigorously denied that England participated, as it was an action of the Scots alone...I don't believe that...but of course can't prove anything not being privy to the record. Obscure dealings are a hallmark of Whitehall.
I've posted my feelings on Middle Eastern oil/financial interests need to take up space here...whatever happens they've brought it on themselves; I only hope the contagion doesn't spread over here, as we're so interconnected these days.
Posted by: Morningside at November 29, 2009 8:09 pm
I wish Obama would have spent all this stimulus money and even the money for the alleged health care reform on developing alternatives to fossil fuels. The sooner we get over our dependence on oil the sooner we can develop realistic foreign policy in the ME.
I agree, developing energy independence should be our first priority. It would help us develop a more sane foreign policy and it would bring long-term benefits to our economy
Posted by: maryatexitzero at November 30, 2009 5:49 am
Dear Michael:
This is the opening paragraph of an article Johann Hari wrote about Dubai:
"Dubai is finally financially bankrupt
Posted by: Larss at November 30, 2009 7:13 am
Quick periodic reviews of the comments here and elsewhere seems to reveal a consensus to salute the oil producers with a stronger effort on our (American) part to have a Manhattan Project towards energy self sufficiency.
The emerging scramble inside the U.A.E. points to uncertainty inside another vital money, and its safety in that contentious area.
So, why isn't more independence apparent among our professional politicians in Washington? Being a politician doesn't endow that office holder with wisdom; even a change in administrating parties cannot overcome this inertia.
We can run on all day picking at each other here, why not use this acerbic talent in emails towards our politicians in State capitols and in our National Capitol?
That's why I repeat...Writers..Righters...Unite!
...observe where the alternate populism is steering us.
Posted by: Morningside at November 30, 2009 8:20 am
I am aware of the terrible labor conditions and mentioned them myself. Obviously I don't approve.
But I stand by my characterization of the place as a benign dictatorship. It isn't fascist, and it isn't communist. It is nothing at all like Saudi Arabia, Iran, Libya, Gaza, or Syria, places that have real aggressive dictatorships. It's all relative, and I made that clear in my very first paragraph.
Posted by: Michael J. Totten at November 30, 2009 10:27 am
I like to believe that the western industrial revolution could only have happened following the Enlightenment. So nations that do not follow the traditional rules of free societies and still get rich, such as Dubai, to a lesser extent China, make me angry.
My biggest criticism of your piece (it
Posted by: jachapin at November 30, 2009 2:39 pm
Energy independence for America...we should be well on our way there by now. But when was the last large scale nuclear power project begun? And what will generate the ADDITIONAL electricity to keep vehicle batteries Greens are fond of charged? And what could natural gas reserves be used for (think...vehicles)?
As long as ideology anchored in emotion, rather than science and critical thinking prevail, Same Old will to.
Posted by: Paul S. at November 30, 2009 3:50 pm
Dubai and U.A.E are only part of our complexities over there. In the Washington Post this morning was the headline: "U.S Offers New Role For Pakistan", over an article by one Karen DeYoung. I have no idea about the credentials, ability, and reasoned opinion of any Post reporter in that area, but go ahead and read it...can be easily brought up on the Post's website.
Pasted immediately below that article among the "comments" is a quote from Google News:
"....I've got a real problem about expanding this war where the rest of the world is sitting around and saying, 'Isn't it a nice thing that the taxpayers of the United States and the U.S. military are doing the work that the rest of the world should be doing?'" said Sen. Bernie Sanders, I-Vt."
Well said, Senator Sanders of Vermont. This is the type of thinking which should be applauded; his office should receive supportive emails.
Now, I have a real problem with Dubai and the U.A.E.'s current financial problem becoming an American problem, in exactly the same way as the domestic stability of this Afghanistan-Pakistani situation has become a major American strategic issue and problem. And, an issue/problem which the rest of our 'partners' are apparently perfectly satisfied to let American lives be spent along with obscene amounts of American dollars...and, this expected to continue indefinitely on an annual basis.
Lets not hear any carping about America's contributions, if any, to the current domestic political/financial instability over there. We did what we had to do militarily after being attacked on our East Coast with deadly effect.
With the above in mind, it's past time for America to leave Central/South/West Asia in an orderly manner. Easier said than done...indeed. The political mess over there was centuries in the making and will be centuries in the un-making, if ever. We are fooling ourselves if we think we can effect any lasting changes to an hereditary mind set.
I don't think America should be "offering a new role for Pakistan."
Isn't it past time for some substantial help from over there?
Posted by: Morningside at November 30, 2009 6:32 pm
Morningside: I don't think America should be "offering a new role for Pakistan."
We're off topic for this post but I totally agree with you there. The US shouldn't even be trying to promote some "new role" for Pakistan until the Pakistanis decide for themselves what roll they want to play. Then we can decide whether or not we want to support them in that.
Posted by: programmmer_craig at December 1, 2009 1:46 am
My problem with Dubai is that I don't think it "flouts the region's taboos". The city's role is to provide the region's elite with an escape valve, an out of bounds place where they can go play at being Westerners, while hypocritically maintaining their pure "Islamic" values at home. Sort of the role Las Vegas had in the US in the 1960s. A place like Dubai can only exist because the rest of the Middle East is so messed up, a healthy Middle East wouldn't need Dubai. Dubai can never be a model for the Arab world because Arabs, probably correctly, don't take the place or its leaders seriously. Arab leadership, and Arab liberalism, needs to come from the traditional centers - Baghdad, Damascus and Cairo.
Posted by: Ivan N at December 2, 2009 5:53 pm
Another perspective:
"Dubai is finally financially bankrupt
Posted by: Solomon2 at December 3, 2009 8:09 am
Marty Peretz also weighs in with the Pro-Israeli hawk view:
"My colleague Zvika Krieger has written a piece for the Wall Street Journal about Dubai and its desert fraternity. He sees great virtue in what they have built. I don't. Least of all have they built an Arab society. If there is anything civil or relaxed in these places, it is because that is the price of having tens of thousands of wealthy foreigners--and, in some places, hundreds of thousands--semi-retiring in your midsts."
Posted by: Ivan N at December 3, 2009 11:31 am
I wouldn't say that the "pro-Israeli hawk view." That's just Marty's view.
Here is the view of Martin Kramer, another "pro-Israeli hawk" who is considerably more conservative than Marty:
In time, and beneath the glitz, all sorts of interesting cultural interactions might take place. It will also be a very American-inflected exchange. Alexandria in its heyday revolved around Europe. Beirut tilted both to Europe and America. Dubai seems destined to vacillate culturally between New York and Las Vegas, for better or worse.
One afternoon in Dubai, I had a bit of spare time on my hands, so I went out to the brand new Ibn Battuta Mall, named after the 14th-century Muslim traveler who journeyed from his birthplace in Morocco across North Africa and Asia to China. The mall is set up as a series of arcades, themed around the various highlights on Ibn Battuta's route: Andalusia, Tunisia, Egypt, Persia, India, and China. The place gives new meaning to the familiar phrase "shopping mecca." The Persian arcade is a giant dome, itself a work of art on a considerable level, no doubt meant to be admired by the many Iranians who come through Dubai. Smack in the middle of it, as this photo shows, is a Starbucks.
Orientalist kitsch? Definitely. But Arabs have built it. Such cross-cultural play is possible only where people are comfortable with amalgams. To see the incredible mix of people strolling this mall, happily shopping for designer labels and making their choice at the 21-cinema "megaplex," restores one's faith in the Arabs' potential for embracing a global future. It's no doubt fragile, this odd experiment in our own style of consumerism, on a stretch of hot sand a world away from us. That's all the more reason not to turn Dubai into a whipping boy for our disappointment with the rest of the Arab world.
Posted by: Michael J. Totten at December 3, 2009 12:33 pm
Everyone here has some good points. Larss was right to point out the horrific things Dubai does with foreign labor. Honestly - let me preface by saying that I basically agree with M.T. that Dubai is good for the middle-east - Dubai is a misshapen freak of a place. The same leaders that are encouraging women to be burned for not having a veil head off to Dubai and drink and fuck prostitutes. If you know that as a citizen, do you draw the lesson that everyone should be allowed to live like them - draw the lesson of reform?
Or do you look at them and observe that they are sick, and that the moral escapades they engage in in Dubai, on the backs of slave, are all a part of that sickness?
By the way, this is not an Islam thing exclusively. Martin Luther did not look at the corrupt, hypocritical Catholic church in 1300 or whenever and conclude, "Wow, this teaches me that the sancitity of marriage is obsolete, and social liberalism for the rich elite should be extended".
He concluded, "this system is shit, and we should burn it and start over with something pure".
Or for another POV, I watched Taxi Driver this weekend - Travis Bickle would get this.
Anyway, Dubai is still a good place, maybe, if the leaders, or maybe their associates, the guys a few rungs down, actually learn from the Dubai experience that personal freedom can be fun isn't such a bad thing. And then they go back and seek to let people experience the same thing in their societies. In other words, if they moved from being hypocrites to trying to stop being hypocrites, by changing their fundamentalist creeds.
But I'm afraid sometimes that the rich/poor gap is so extreme that there's nothing really trickling down to Arab societies.
Also, FWIW, the Dubai economic crisis has the potential to be really, really large. They're a soap bubble on the global wave, and they're leveraged to the hilt. I wish I could find the couple of articles I read on this - there were quotes in there from finance guys that shocked me, to the effect of "Dubai has been an obvious time bomb for several years now and they're going to need money in the hundreds of billions to avoid going totally bust". I *should* have known, but I was surprised. Looking back, it's obvious.
They sure picked the best aspects of western society to imitate, didn't they..
Posted by: glasnost at December 6, 2009 12:47 pm
Have you read the recent article highly critical of Dubai in the Independent?
I'm curious of your opinion on it, it would seem to be enormously damning.
Personally, I think I'd rather see more Iraqi kurdistans (or even Israels) than Dubais as the model for the region, but perhaps that's too much to hope for.
Posted by: Robin Goodfellow at December 8, 2009 9:37 am
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