
Pay no attention to the slaves behind the curtain
Oh, Dubai. Money was supposed to be enough, wasn't it? If you have infinite petro-dollars to throw around, a perfect city-state will emerge, right? In this sunny land, aristocrats both Gulf and global would be free to indulge their whims in a fantasyland without a care in the world, especially about such trifling things as slave labor, massive debt or all those travelers thrown into black holes on "drug charges."
But the wheel turns:
Just a few weeks ago, at the beginning of November, the emirate's ruler, Sheik Mohammed bin Rashid Al Maktoum, insisted at an investor conference that Dubai and its government-run businesses were in good shape. Those who were claiming otherwise should "shut up," he said in an unusually blunt outburst.
And now the emirate is unable to come up with a sum which was, at least by Dubai's standards, not that large. What is happening in Dubai is "unbelievable," says Eckart Woertz, chief economist at the Gulf Research Center.
The request to delay debt payments shocked the entire Arabian Peninsula and triggered deep concern throughout the global financial world. Stock prices on Asian and European exchanges plunged. The Dubai stock market fell by more than 7 percent on Monday, the first day of trading since the Eid al-Adha holiday, while Abu Dhabi markets slid more than 8 percent.
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Real estate prices have collapsed and are now only half of what they were a year ago. And yet new villas and luxury condominiums are still being completed every day - and are standing empty. Entire floors are deserted in the skyscrapers along sheikh Zayed Road, and giant banners with the words "To Let" are displayed across the fronts of buildings. Real estate experts estimate that only 41 percent of office space is occupied, and the vacancy rate is only expected to increase. In 2011, Dubai, a city of about 1.5 million, will have more office space available than Shanghai, which is 10 times as large as Dubai.
Couldn't have happened to a nicer bunch of tyrants. Johann Hari, rightly not pulling any punches, has Dubai pegged as a morally bankrupt dictatorship built by slave labor. The slaves, in this case, are imported workers shoved into horrendous tent cities, where conditions often prove fatal. When they try to fight back, they're beaten by Dubai's police thugs. The squalor is so bad that, according to Hari, "embassies were told to stop counting how many workers die in these conditions every year after they figured it topped more than 1,000 among the Indians alone."
On top of all that, Dubai is the most intense polluter on the face of the planet: it has the highest per capita carbon emissions, a full 250 times that of the United States.
Of course, Dubai grew as it did not just from oil revenues, but because corporations and governments from around the world poured billions into its delusions. Those same companies made billions back too, enjoying a tax free haven with cheap labor. It is depressing, but not surprising, that they did not ask too many questions, about the slavery or the debt. Dubai has acquired the reputation as an ideal city-state because, for the rich and famous, it often is. The rest of its populace don't get off so easily.
Dubai's impending bankruptcy should end the delusion that a better society can be created, whole cloth, out of wealth and technology. Those two forces dominate our discussion of globalization, to our detriment. Economic forces dictate this, we will hear, and spreading technology will bring about that. You'd think the world runs on nothing but coins and machinery.
Without anything else, those two will give you a glittering but oppressively hollow husk; exactly what Dubai has become. Missing in all this is an understanding of the power of culture. Dubai's culture was that of decadent aristocrats indoctrinated to believe in capricious power (notice how Maktoum prissily snapped when questioned) and limitless wealth. They behaved accordingly.
Not all the investors in the world can fix that. What we decide to create, every day, is shaped massively by our culture. We can change those cultures, we can create new ones, but where we choose to focus our collective energy plays a major role in what we end up with.
The sheiks chose to focus on shiny buildings and endless luxury; the globe's aristocrats went right along with them. For a time, they got both. But, as with any culture, there is always a cost.
That is why Dubai is not the future. Dubai is Versailles, and it will suffer the same fate.