Bye Bye, Dubai

by Martin Peretz | December 1, 2009

I haven't seen anything by Tom Friedman or Fareed Zakaria about Dubai. But who knows? Maybe they are confiding to their diaries, although I don't think their type enjoys diaries. (I don't like them either, except the diaries of others.) Anyway, there's nothing good to say about Dubai, and Tom and Fareed don't like to displease their friends. Unless they are no longer their friends.

The first day's bad news on the Arab debt was modulated by the suggestion that Abu Dhabi would provide instant relief for the $60 billion shortfall of Dubai World, a subsidiary of the royal family headed by Sheikh Mohammed bin Rashid Al Maktoum. At a Dubai bankers' conference early in November, Sheikh MbRAM simply lied about both the economic prospects for his country and its ties to its much richer neighbor. You can read about this in Monday's Wall Street Journal in an article with the tell-tale subhead, "U.A.E. Pledge Is Little Comfort to Dubai." The U.A.E. consists of almost all the emirates in the Gulf. Cousins they might be, and not just metaphorically. But, as you know, "I and my brother against my cousin..."

Of course, such good news as the interpolators imagined didn't last. Abu Dhabi wasn't about to pony up in any way that would leave the British and other counting houses that have invested in Dubai's ludicrous economy anywhere near whole. Moreover, the motive of Abu Dhabi's financial reticence is not mercenary. The rulers of the two emirates are, in fact, cousins. So there are many quarrels to settle before the coinage and the cash.

It's not only Abu Dhabi which has distanced itself from financial calamity. Dubai has also posed the query: "Who, me?" The debtor, said Sheikh Mohammed, is not Dubai. It is Dubai World, an independent and separate entity. In these situations, legal distance is the best defense. 

So Dubai was a scam in the sense that sovereign cash did not guarantee any of the loans or bonds or other investment vehicles collected for the tallest this, the coldest that, etc. These Arabs may be silly in tying to build a civilization on sand. But they are not fools about guaranteeing other people's money invested in their fantasies. 

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. And all that stuff about Harvard et al is guff. They have rented out their names to the cornerstones of institutions for which they will not vouch. As for Qatar, Krieger has fallen for that royal principality as peacemaker in Lebanon. Hezbollah has a third of the Beirut cabinet and has rearmed mightily in the south in violation of Security Council Resolution 1701, which "ended" the second Lebanon war. Surprise! My, my: a United Nations resolution being undermined by Arabs--Arab terrorists, no less.

Do you want to see a vivid picture of the society Dubai built? Look at the 19-photo Lens Blog feature of the New York Times, "Showcase: Dubai's Improbable Tale." It is an eye-opener. It is more than that: It is a mind-bender. The photographs are by Lauren Greenfield. The editing and commentary are by James Estrin. A revelation.

Source URL: http://www.newrepublic.com//blog/the-spine/bye-bye-dubai