The boom years of
the early 21st
century were good
for many people, but
perhaps no one
enjoyed them more
than Sheikh Mohammed
bin Rashid al
Maktoum, the ruler
of Dubai. Stripped
to its essentials,
Dubai is a
sweltering strip of
sand blessed with a
natural harbor known
as the creek, which
has been an entrepot
for merchants and
smugglers for
centuries. Building
on his father's
vision, Sheikh
Mohammed turned
Dubai into a 21st
Century boomtown,
luring western
financiers and
tourists with
gleaming steel and
glass towers, vast
beaches, and green
golf resorts.
Dubai is a clever blend of audacity and
architecture, a shiny monument to the egos and ambition that
turned a tiny emirate into a Middle East financial giant.
Russian oligarchs stroll along man-made islands shaped like palm
trees, and sheiks race down a ski slope built inside a shopping
mall.
Cranes like countless arms moved across a skyline that grew more
crowded by the day, if not the hour. The world's tallest
building went up, highways looped through the desert, the
airport never closed. Dubai expanded into a commerce crossroads
for Asia, Europe and America, a place of cigar salons, horse
races, a seven-star hotel and suitcases full of money.
Charmed by Mohammed's personality,
marketing skills and assurances, deposed politicians, oil tycoons,
powerful executives and investors poured in billions and willingly participated in Dubai's real estate bonanza — no
questions asked — as did professionals from Europe and Asia who flocked to the
emirate, paying for condos and villas before building even started.
Lacking the oil reserves of the emirate's neighbors, Dubai's
ruling family created a parallel economic reality fueled by real
estate, international investment and the art of the possible.
The emirate was fashioned into a sleek cityscape of startling
images: Islam balanced against the seduction of Western
capitalism, and tribal traditions brushing the fleeting trends
of globalization.
Sheikh Mohammed
lured investors with
futuristic projects
but now they're left
with $80 billion in
debt, little
confidence in Dubai,
and growing
questions.
When the confidence game came to an end, Sheikh Mohammed
called for a standstill on debt repayments at one of his
most important companies, Dubai World, rocking world markets
and raising huge questions about the future of Dubai.
Dubai was always a confidence game — a momentum play.
Unlike Saudi Arabia or Abu Dhabi, the hugely wealthy emirate
to the West, Sheikh Mohammed had scant oil production to
fuel his grandiose ideas. Instead he sold the world on his
vision of Dubai as a hub for the Middle East, western Asia,
and Africa, attracting investment from his wealthier
neighbors — both Arabs and Iranians — and increasingly, from
the West and Russia.
For a while, it worked.
Western bankers, investors, CEOs
and politicians looking for Dubai Investors fell over each
other to book space in his Dubai International Financial
Center, a handsome if somewhat over-the-top real estate
project aimed at being the Wall Street of the Gulf. They
went to Dubai to worship the Sheikh, whom they treated as a
sage.
The politician making the most trips to
pay homage to the Sheikh was Phil
Gordon,
Mayor of the City of Phoenix, Arizona,
who made 4 trips to Dubai in 2008 and 3
trips in 2009, with each trip done with
great fanfare but in truth, each was
nothing more than smoke and mirrors.
