Feature

Magic Kingdom or Glass House?

The inside story of massive wealth, hope for a Middle East in flux, and a dream that could be shattered by one terrorist bombing… Dubai, a city that never sleeps

What I have achieved for Dubai is only 10 percent of my vision for it.
— Sheikh Mohammed bin Rashid Al Maktoum

“The Earth Has A New Centre,” announces a massive billboard for a new mall on Sheikh Zayed Road, an eight-lane expressway in Dubai — a city that was, not so long ago, a patch of sand. As a yellow Ferrari driven by a local in a white dishdasha and baseball cap roars up behind my rental car, and Hummers with black-tinted windows pass busloads of labourers who stare out, saucer-eyed, at this strange new planet, I find myself thinking that the billboard refers not only to the Dubai Mall, soon to be the largest in the world, but to Dubai itself.

The world’s largest mall. The world’s tallest hotel. The world’s tallest building. The first underwater hotel. The largest waterfront development. The fastest-growing tourist market. The Earth has a new centre and it is a tiny desert kingdom gone mad.

Uncovering the secrets behind this phenomenon is what has brought me to Dubai, a glittering emirate of 1.5 million people, 80 percent of them expatriates. If not for the discreet presence of Western military personnel and security contractors in transit to Afghanistan and Iraq — like the kbr (a former subsidiary of Halliburton) grief counsellor from Texas I met on the flight over — one would never know that Dubai is situated at the heart of the region’s war zones, right next to Saudi Arabia and across the Strait of Hormuz from Iran.

How did this extraordinary boom town arise in the midst of a Middle East in flames? My quest to find out leads me to Blair Hagkull, an expat real estate developer and part of the wave of global professionals who have come to Dubai (most since 9/11, when the boom began in earnest) to seek their fortunes. Driving to his office, I glance down at my notebook, scrawled with page upon page of detailed directions. In a throw-back to a Bedouin past, drivers in Dubai typically use landmarks rather than street names to navigate a cityscape that becomes more confusing with each new megaproject. Before my arrival, I spoke to an architect friend who travels frequently to Dubai (architects now journey there as merchants have for centuries, as an essential stop on the trade route). Dubai, he said, is “a private company owned by the ruling family. And it’s all about real estate.”

I squint at a line in my notes, trying to remember who told me, “Dubai is Arab leadership, British intelligence, and American lifestyle,” leaving out only Third World labour as the fourth leg of this table. With its population drawn from 180 nations, including the army of low-wage labourers building towers to Heaven, is Dubai another Babel? Will God curse it for its hubris, for attempting to make in the inhospitable desert a glittering Shangri-La? Is it the apogee of human civilization, an “end of history” built on free-market capitalism if not liberal democracy, or is it just a mirage, the oil boom’s final glorious homage to itself?

Arriving, finally, at a glass-encased office tower, I enter by the wrong entrance. I want the other side, indicates the young South Asian doorman. How do I get there? He hasn’t the slightest idea. He makes $200 a month, sends the money home. I find my own way around the building, hopping over construction debris.

Blair is a baby-faced Canadian in his early forties. Before joining a multinational real estate consulting firm, he was an executive for Emaar, a government-run development company that helps to fulfill the vision of Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai. And what a vision it is: Emaar is building, among other projects, the Dubai Mall and Burj Dubai, to be the tallest building in the world. “At one time the US was the gateway to opportunity, attracting the best and brightest,” Blair says. “Now they come here. And whenever there’s an unfortunate event in the region, Dubai prospers.”

An overview of Dubai’s brief history reveals that through shrewd leadership and entrepreneurial acumen — and perhaps a dash of luck — calamitous regional events have indeed always been good for Dubai. At the turn of the nineteenth century, when Persia seized the central trading port of Bandar Lengeh and hiked tariffs on Dubai’s side of the Gulf, Dubai (then ruled by Sheikh Mohammed’s great-grandfather) welcomed local trade and Persia’s leading merchants by dropping its tax rate to zero. During World War II, when British planes used Dubai as a landing strip, the emirate became home to a thriving black market in smuggled rations.

In 1971, Dubai, along with six other sheikhdoms, gained independence from Britain as the United Arab Emirates. Not long after, during the Lebanese civil war (1975–1990), Dubai began replacing Beirut as the leading Middle East tourist destination, and an ambitious young Sheikh Mohammed defied critics by launching Emirates Airline and making Dubai International Airport a global transit hub. Meanwhile, shortly before the Iran-Iraq war of the 1980s, Dubai built Jebel Ali, the largest man-made port in the world, which became a free trade zone, safe haven, and repair depot for damaged oil tankers navigating the war-torn Strait of Hormuz. When Saddam Hussein invaded Kuwait in 1990, dozens of Kuwaiti companies were convinced to relocate their head-quarters by officials who argued that the emirate was far enough away to be safe. When the Gulf War ended, Jebel Ali became the base for Kuwait’s post- war reconstruction, the same officials arguing that Dubai was close enough to be convenient.

Then came 9/11.

From his airy office tower, Blair describes the “twin waves” that explain Dubai’s remarkable growth since that incendiary moment. The first was “the post-9/11 repatriation,” when Arab investors, who lost opportunities and feared their accounts abroad could be frozen, repatriated funds from the US and Europe and began seeking investments closer to home. At the same time, educated young Arab professionals, feeling unwelcome in New York and London, migrated en masse to Dubai, which offered the opportunities, salaries, and lifestyle choices they were accustomed to. Then came the second wave, “the oil boom.” Instability resulting from the Iraq War and escalating post-9/11 regional tensions conspired with roaring demand from China and India to send oil prices into the stratosphere, leaving Gulf states awash in un-anticipated petrodollars. Between 2002 and 2006, the price of oil tripled, surging from $20 (US) to more than $60 a barrel. Export earnings for the Gulf Co-operation Council, a loose coalition of Kuwait, Saudi Arabia, Bahrain, Qatar, Oman, and the uae, more than doubled. By 2006, the gcc’s foreign asset holdings had hit nearly $1.6 trillion — equal to China’s.

These massive oil revenues are being reinvested not only in real estate and corporate acquisitions at home and abroad, but also in the federal debt, a figure now approaching $9 trillion, more than one-quarter of it foreign-held. Although oil-exporting countries are the fourth-largest holders of US Treasury securities (after Japan, China, and the UK), such measurements don’t tell the whole story. With Gulf countries buying heavily from Asian countries that recycle petrodollars into US Treasury certificates, analysts estimate that up to 45 percent of the US deficit is financed by oil money. The result, however indirectly, is that Gulf oil is helping to finance wars over Gulf oil.

The greater the instability, the higher the price of oil — and the greater the incentive to invest in the sanctuaries that remain. Which brings us to Dubai. “You know how a dog’s year is like seven? It’s like that here,” says Blair, underscoring the stunning growth rates that rival those of China and India. Of the trillion dollars in projects planned or underway in the Gulf, more than $300 billion is concentrated in Dubai alone. The emirate, not in spite of calamity but because of it, has become the largest single beneficiary of a swirling confluence of events — an ironic development, given that according to The 9/11 Commission Report, “The vast majority of the money funding the September 11 attacks flowed through the uae.” The Emirates has cracked down on money laundering, but there remains an undeniable link between the towers going up in Dubai and the ones that went down in New York.

Blair leans forward in his leather chair. “In the West, on the globe, America is the centre. If you shift the globe 180 degrees and look at Dubai, you talk about a part of the world most people don’t know, much less can spell. Yet we’re at the nexus.” (Dubai links Europe, Asia, and Africa — one-third of the world’s population within a six-hour plane trip.) “The political leadership has led a very satisfied populace,” Blair continues. Indeed, despite being unelected, Sheikh Mohammed elicits praise from both his well-taken-care-of local constituents and expat professionals who are simply following the good times while they last.”

“Dubai is peaceful because no one stays here very long,” a British management professional who lives in a four-bedroom villa with his wife, two children, two suvs, and two Ethiopian nannies, told me. “They don’t give a damn about the political situation because they’re going back. And the locals are rich because they own all the companies.” (Outside of designated free trade zones, all foreign companies require a local “partner” who generally receives a lump sum in return for a signature on the paperwork.) Still, while crime rates are low, labour strife (not to mention human trafficking) is the fly in the scented ointment. In contrast to the jet-setting professionals, foreign labourers make between $100 and $250 a month and have no bargaining rights. Local newspapers are riddled with stories of worker suicides, abused domestic servants, withheld pay and passports, and riots and work stoppages, which have marred the construction boom of late. The official response has been to legalize the deportation of strike leaders and promise improvements that rarely materialize. Sheikh Mohammed has chastised locals for relying so heavily on foreign labour, declaring that some have more domestic servants than family members (as do many expats).

I tell Blair it’s too bad that the sheikh doesn’t grant interviews. I’ve been hoping to meet him. It strikes me that the ruler is engaged in a delicate dance between twin devils: the Western interests making Dubai their regional base for oil ventures, arms sales, and all manner of goods and services designed to siphon off surplus oil money and the growing regional underclass increasingly vulnerable to calls to arms. Dubai is a symbol of the West in the Middle East, as Sheikh Mohammed well knows, and his recent $10-billion (US) endowment to improve education and stimulate job creation in the Arab world exemplifies his sly genius. Through his new foundation, he aims to bridge the knowledge gap — as well, perhaps, as the cultural and socioeconomic divides between East and West that are the trapeze wire on which he stands.

But Blair has other concerns. He is living the property consultant’s dream, returning to Canada for summer vacations. (His kids, he says, know only summer.) Historically, he tells me, real estate projects have always gone looking for capital, but here capital comes looking for projects. “In Dubai,” Blair says with the conviction of a motivational speaker, “we dare to dream.”

“You want to see what a million dollars looks like? ” asks the bull-necked young Brit seated next to me at the Noodle House in Emirates Towers, where I am reading the Gulf News over a plate of pad Thai. Clad in khakis and a button-down shirt, he lifts a plain cardboard box from the floor and tosses it to me. I shake it gently, wondering at the lack of heft. A million dollars? All in large bills?

Jasper, the Brit, says it’s software designed to measure how much oil remains in the ground beneath Dubai. The emirate is set to run dry around 2020, though this hardly matters since its own oil accounts for only 5 percent of total revenues. Never rich in oil, Dubai has shrewdly diversified into tourism, leisure, real estate, financial services, and manufacturing, and its world-class port has made it a re-export depot for the world. Anyway, Dubai has more oil than it publicly states, says Jasper.

Bjorn, a gregarious Norwegian in his forties, sits across from Jasper. Prior to engaging me in conversation, the pair spoke passionately in an alphabet of acronyms that left me at a loss as to their mutual business interests. “Oil?” I ask Bjorn, since every Norwegian I’ve met in the Middle East works in oil. He grins. “Halliburton,” he says, handing me his card. If anyone can accurately measure the remaining oil in an Arab sheikhdom, I think to myself, it’s Halliburton, which is moving its headquarters from Texas to Dubai.

Not only Halliburton but General Electric, at&t, Microsoft, Intel, Cisco, cnn, Goldman Sachs, Morgan Stanley, and scores of other banks and energy giants are among the blue-chip multinationals that have made Dubai their Mideast base, attracted by the tax-free environment, modern infrastructure, multinational workforce, and Dubai’s famous tolerance for everyone from the fully veiled to those preferring miniskirts and martinis. Indeed, one of Dubai’s most striking characteristics is its intercultural harmony. With English as its lingua franca, the emirate is globalization incarnate. I spent an afternoon at a café eavesdropping as two local university women clad in black abayas discussed relationships, politics, and religion with a body-pierced Jewish traveller from the United States. He argued that Dubai was mistakenly mimicking a US that is losing traction around the world; the women just liked the way the foreign presence lets them meet people from around the world. “If only everyone would sit and talk like this,” one of the young women observed, “people would understand one another.”

A demure Asian waitress, whose name tag reads “Fang Fang,” comes up behind Bjorn and hovers expectantly. She takes our order — two pints, one Pinot Grigio — and the conversation runs like oil from the ground. Jasper, the scion of an oil family that has worked in the Middle East for three generations, is the first of his lineage to break with Shell and take a job with the petroleum sector of the Dubai government. Though not yet thirty, he’s a veteran of the international oil business. Saudi Arabia is running out, he declares. The Saudis have damaged their oil fields by extracting too much too fast, and everyone knows they’re lying about how much is left.

Jasper isn’t alone in that opinion. Saudi oil reserves have been shrouded in secrecy ever since the national oil company, Saudi Aramco (the world’s largest), bought out its partners in 1980. Saudi Arabia is the third-largest foreign oil supplier to the US, after Canada and Mexico, and the only nation considered capable of increasing production to meet a rapidly growing global energy appetite — particularly as the next-largest easily accessible oil reserves are in Iraq. Yet a detailed study of technical surveys by Matthew Simmons (in his 2005 book, Twilight in the Desert) suggests that all is not what Saudi officials publicly claim: overproduction is indeed harming existing fields, and Aramco has found no major new reserves in more than thirty years. Like Jasper, Simmons predicts a sharp decline in Saudi production in the near future (it fell 8 percent in 2006). Meanwhile, US dependency on foreign oil is expected to increase by one-third in the next two decades.

Iran is the real oil power, Jasper argues. With nearly 10 percent of the world’s oil, Iran’s reserves are smaller than Saudi’s, but its vast untapped fields make it the “jewel” of the “iocs,” as Jasper calls the international oil companies. Long-standing US sanctions have barred American oil companies from the Iranian game, leaving the fields open to Chinese, Japanese, and European companies (though Halliburton was secretly working in Iran until 2004) that have recently come under stiff US pressure to stop signing new Iranian contracts.

Almost as mysterious as the true extent of Aramco’s reserves was Dick Cheney’s visit to Saudi Arabia in November, the same month a Saudi security adviser floated the idea of raising production to lower oil prices in order to strike an economic blow to Iran. Still, even if Jasper and analysts like Simmons are right, the Saudi secret weapon may prove as illusory as Iraqi wmds.

And then there is Dubai, tenuously poised between the regional rivals while doing a brisk business with both. Jasper and Bjorn agree that most negative events in the region end up benefiting Dubai — except terrorism, should it happen here, or a US or Israeli attack on Iran, a hundred miles away, which Jasper anticipates but Bjorn doubts will happen. “Even if it did, that would boost oil prices, and that’s good for Dubai,” argues Bjorn. “Oil is still cheaper than Evian,” observes Jasper, holding up a glass of water and gazing into it like a soothsayer. Fang Fang brings us our drinks; we toast. “This place, it’s like — all I can think of is the California gold rush,” Jasper says. “But if there was a terrorist attack it would be a ghost town.”

Such speculations haunt Dubai’s well-heeled expats as much as whether the real estate bubble is about to burst. Is al Qaeda really holding off on bombing Dubai because it has financial interests there, as residents speculate? “It’s the question on everyone’s mind,” said an elegant Palestinian-Cypriot architect at a dinner party I attended. “One bomb and you’d see everyone run for cover,” added her British husband. “Dubai is what it is because al Qaeda needs it as much as the US does,” said an American architect at the table.

“The US,” says Jasper, draining his pint and slamming the empty glass down on the table, “has fucked up big time. They lost a lot of capital by re-electing Bush. Then Israel admits it has nukes, and no one does anything. Now all the Arab states want to go nuclear.”

Indeed, it was widely reported in 2003 that Saudi Arabia had concluded a secret deal to acquire nuclear weapons technology from Pakistan, driven by fears of Israel’s nuclear arsenal (and anger at international complicity), Iran’s nuclear program, and concerns that the fifteen Saudi hijackers involved in 9/11 had created a rift in the famous US-Saudi friendship. But that was then — a time when Iraq appeared to be “mission accomplished.” More recently, gcc countries announced that they are pursuing a “peaceful” nuclear program that will be a “model” to others. Perhaps sensing it needs Mideast allies after all, in May the United States announced its full support for the initiative.

“Where the US really messed up,” Jasper continues, “is with Dubai Ports World.”

The purchase by dpw of UK ports operator p&o, which owned the management contracts for six American ports, ignited a firestorm of controversy over an Arab government firm managing US ports (despite the fact that many US ports are already foreign-run). The outcry quashed the deal, and the American contracts were sold at a generous profit. Still, the issue continues to irk Dubai’s expats, who see the emirate as a model for what the US says it wants in the region: tolerant, progressive, Western-minded — a place where the state religion is not Islam but capitalism. Why forbid Dubai from running American ports while using it as the number-one foreign port of call for US warships? And the uae spends billions on American military hardware, while Dubai allows US military personnel on r&r to drink themselves silly (provided they are quiet about it), and provides a tax haven for growing numbers of American multinationals. “Here’s a country that lets the U-2 land,” says Jasper. “And now they’ve been demonized. Patience is running out.”

Bjorn’s wife has called three times, once for every round Fang Fang has brought us. The two men take their leave, but not before Jasper explains why Dubai prospers. It’s not luck. “Sheikh Mohammed is a genius. And the only other geniuses I’ve met in my life all work for him.”

That evening I have dinner at the home of Ali, an Iranian economist. Clad in shirt sleeves, he barbecues kebab in his courtyard and tells me about Iran’s capital flight, which has Iranians buying up prime Dubai real estate. They’ve joined the wealthiest strata of Iraqis, Palestinians, Syrians, and Lebanese, so-called “insurance seekers” buying apartments and villas here as security against political instability in their homelands. Then there are the Indian, Pakistani, Russian, and other European business people, rapidly growing numbers of Chinese, and the global jet set for whom Dubai is the latest brand-name destination, right up there with Paris, London, and New York. But will it last? “Dubai,” Ali warns, “is a glass house that could be shattered by a single Kalashnikov.”

I am crashing through sand dunes in a white 4X4 with a newlywed Pakistani couple. They live in Dublin; he a swarthy middle-aged ophthalmologist, she a pretty child psychologist who looks barely old enough for grad school. They speak six languages each, including Urdu, thank God, since they can plead for our lives with our carefree Pakistani driver. As we roar up another vertical wall of sand, I can only muffle my screams. “Was all of Dubai once like this? ” asks the ophthalmologist as sand crashes over the windshield. He blinks at the seemingly endless desert landscape and marvels: “It’s amazing what money can do!”

That thought follows me to Burj Al Arab, the world’s only “seven star” hotel — though, admittedly, it awarded the seven stars to itself. Dubai Holding, which owns the Burj, has sent Lejla, a gorgeous six-foot Swedish public relations rep in a navy blue pantsuit, to show me around. (Dubai Holding is one of three corporations, including Emaar and Nakheel, which, through combined projects worth $100 billion (US), manage Dubai’s white-hot property market.) Curved like a traditional sailing dhow, the Burj is situated across a small bridge on an artificial island. The expansive lobby is decorated in the colour of fire-works: greens, blues, reds, electric yellows. A young man in a white robe greets me, dousing my hands in rosewater. A portrait of Sheikh Mohammed is framed near the entrance; Lejla has no idea how I might go about meeting him.

Up the escalator to the main floor, amid jewellery stores and a synchronized dancing fountain, the restaurants and lounges offer menus in English, Arabic, and Russian. The Russians are everywhere. They appreciate ostentation. A group in dark tailored suits huddle together on a plush banquette, chain-smoking, like characters in a Martin Scorsese film. When I snap their photograph, they fix me with a cold stare.

Earlier, a ruddy British construction manager named Ian told me about staying in a hotel where every night Russians gathered out front, packing up “everything from boxing gloves to Land Rovers” to be sent home. All night he was kept awake by the screech of packing tape.

Lejla takes me inside one of the $15,000-a-night rooms; the bathroom is almost the size of my apartment. She shows me the pillow menu — thirteen varieties, each one “washed with the clear, calcium-free water of the Bavarian Forest in Germany.” The room is blue and gold, and the window furnishes a panorama of one of three multi-billion-dollar man-made “Palm Islands” Nakheel is building to expand Dubai’s waterfront from 45 kilometres to 1,600. Donald Trump, Lejla tells me radiantly, is building a hotel on the Palm’s trunk. The frame around the television set is gold-plated, she explains, and there’s a channel that lets you see who is coming to the door. “That way you know if it’s a hit man,” I say, but she looks at me blankly. “For the Russians, I mean. . .” She doesn’t share my sense of humour.

Later that evening, over dinner with an Italian who designs “concept” restaurants, I hear about the Syrian jeweller who was murdered by a group of Russians at the Burj a few months earlier in a diamond deal gone wrong. The Syrian’s head was allegedly smashed so hard against that of his colleague (a Russian) that it doubled in size. But these aren’t the sorts of subjects that PR pros like Lejla grace with their attention. To make up for my faux pas, I make polite noises about the custom white Rolls-Royce Phantom that serves as the hotel’s limousine and the private helicopters that land on the helipad. It was there that Tiger Woods was photographed teeing off, and Andre Agassi and Roger Federer played a celebratory round of tennis.

At the government tourist office, a handsome young official named Abdullah shows me a computer image of The World, a new series of islands being built off the coast in the shape of a map of the globe. “You can achieve your dreams here,” he says, his infectious optimism warding off any doubts. He thinks Richard Branson has bought “Britain.”

While he doesn’t know where I might meet Dubai’s ruler, Abdullah explains the secret to Dubai’s remarkable growth: “Safety, secure, clean, safety.” Safety, the rarest commodity in the Middle East. “People from around the world, they want Dubai to be safe because they have billions invested here,” he says, smiling his perfect smile. He is in his early thirties, and I ask if he can remember Dubai when it was nothing but a fishing village on a small creek. He recalls how old pearl divers, friends of his grandfather, used to live in palmfrond huts that locals still make to camp in the desert. I have seen their encampments at night, on the dunes next to the highway, lit by generators, by a television’s flickering blue glow.

From Abdullah’s office tower, I look out over the creek that started everything, that made Dubai a global trading hub long before the term “globalization” came into fashion, and where the dhows still arrive from and sail to Iran each day, bringing Persian carpets and pistachios and carrying back everything from electronics to Jack Daniels to Lord knows what. I watch one ancient dhow pull out of the creek burdened with new cars. Iranians and Indians have always mixed with Arab trading families, and they now outnumber locals in the uae. The local dialect blends Farsi and Hindi with Arabic, and many of the ruling families have Persian roots, speaking a version of Farsi at home. As other Arab states have grown cold toward Iran, Dubai remains a critical ally, bound by trade and blood.

While the creek speaks to the past, Cityscape, the world’s largest real estate exhibition, held annually in Dubai, offers a glimpse of the future. If Dubai is truly “all about real estate,” Cityscape is its Mecca — a three-day display featuring the latest wonders of the world. As one of North America’s leading urban planners, recently recruited to work in the uae, told me, “Launching megaprojects is the blood sport of the emirates.”

Without so much as a security check, I enter the exhibition halls inside the Dubai World Trade Centre, a name that must have seemed audacious at the time it was built in 1979, when there was little here but sand dunes, a sea-port, and a vision in the mind’s eye of Sheikh Mohammed’s father, Sheikh Rashid. Outside are endless building cranes — Dubai is said to have one-fourth of the world’s total — and billboards that announce “Coming Soon.” Dubai is already a cosmic wonder, sprouting magical palaces and space-age skyscrapers, but the cityscape of tomorrow has only just begun.

The massive, air-conditioned halls are filled with Arabs in gleaming dish-dashas, Asians, and Westerners in suits, all milling about feasting on free gourmet sandwiches. They peruse elaborate booths replete with architectural-scale models, glossy brochures, and free dvds featuring the latest planning proposals. The booths display fantastical imaginings like Dubailand, a three-billion-square-foot development that includes hundreds of projects and dozens of megaprojects, one of which is Falcon City of Wonders — a residential, commercial, and theme park development that will include a replica of the Eiffel Tower (not the only one planned for Dubai), the Egyptian pyramids (designed as living quarters), the Taj Mahal, the canals of Venice, the Great Wall of China, the Roman Colosseum, and a Pharaonic-themed playland with the Nile River running through it. If, after 9/11, Arab tourists who once vacationed in Europe and America no longer felt welcome, Dubai has brought the world to them. The Queen Elizabeth 2, bought for $100 million (US), will soon sit off Dubai’s man-made Palm Jumeirah island as a floating hotel.

At the booth for a particularly surreal project — a series of bending towers that curve outward like the tubular petals of a flower — is a young architect from the American firm designing it. In an unguarded moment, he tells me he’s not sure his company can actually build the thing, but “it sure is fun to have the money to try.”

Not all of the developments are for Dubai. Many, like King Abdullah Economic City (built by Emaar), are for Saudi Arabia; others are for Qatar, Oman, Bahrain, Kuwait, and Dubai’s sister emirates. The Gulf states — and many cities in the developing world — are following Dubai’s grandiose lead, jealously competing to become the glistening land of modernity, and fuelling the belief that growth conquers all. If they have learned that lesson from the West, they have done so all too well: the uae now has the largest per capita ecological footprint in the world. It is hard to believe it can last.

I find myself back again at the exhibit for Falcon City of Wonders, sucked in by excited onlookers, the magnetic pull of money. The posh British accent of a PR rep booms, “People will live in the Hanging Gardens of Babylon!” Having eaten nothing all day but designer chocolates imprinted with the names of property-development corporations, I feel faint. Suddenly, a current of electricity reverberates through the air. Flash-bulbs burst all around me. I look up and there he is, barely an arm’s length away, in a perfect white robe, trimmed black beard, and immaculate white headdress. It is Sheikh Mohammed himself: the centre of this new world.The ruler pauses, his glacial gaze unflinching as he surveys the architectural model for Falcon City of Wonders. Then he strides past me, flanked by an entourage of similarly clad men. Two bodyguards wearing suits and earpieces stumble over one another trying to keep up. Admirers pull out their camera phones. Whispers ripple through the crowd, and I follow the sheikh as he sweeps into the adjoining hall.

This room, with swooping ceilings, is covered in white plush carpet, lit by pink mood lighting, the air delicately scented like an imaginary tropical island. Soft techno music plays, and a single red orchid hovers in each of the crystal vases distributed throughout the vast expanse. Beautiful young women, all with identical long silky brown hair, wear matching white dresses with red satin sashes; they hand out brochures. It’s a 1970s fantasy, a mythical Age of Aquarius when the world will pass from the era of war and misery into the era of love, light, and humanity. And gorgeous young women, of course.

Sheikh Mohammed and his entourage stride to a platform overlooking the model for yet another man-made island. It is a $36-billion project to be built in Abu Dhabi, which sits on the world’s fourth-largest oil reserves and is both investing in Dubai and following its lead. The expression on the sheikh’s chiselled face is supremely confident. A Western businessman who worked for him told me that the ruler reminds him of desert creatures: lean, sinewy, shrewd, wasting nothing. Nor does the sheikh so much as blink when a short, pudgy Indian in a business suit, struggling for a better view, tumbles off the platform and falls down the white carpeted stairs, spilling real estate brochures in his wake. The sheikh is near me, or I am near him, but I am blinded by camera flashes. Seconds later, when I open my eyes, he is gone.

I hurry back out into the main convention hall. I need to find him, to understand why an expat friend who left North America for Dubai six years ago now says, “The people here really appreciate the ruler’s vision.” I want to feel that certainty, to take comfort in the steely, confident gaze of a man so powerful he has only to think something or, as they say here, to “dream it,” to make it so. I want to believe that his vision of the future will not be swept up by the sand dunes that creep incessantly across the highways, fought back by the endless lines of cars and transport trucks — because as Dubai goes, so goes the world.

Dubai is a spectacular boom town that mirrors and magnifies the obsessions of the modern age: war, oil, 9/11, consumerism, celebrity, real estate hysteria, environmental degradation, globalization, the gap between rich and poor. On one level, it represents all that the world aspires to; on another, its greatest failings. Passing a Russian woman dressed like Cleopatra and a man in a Napoleon costume, I arrive at a display for MotorCity, a residential complex that will house the Dubai Autodrome and the world’s first Formula One theme park. There, a young Lebanese engineer tells me that Dubai is “all the world in one small country.” Next to him I hear the lilting accent of a Pakistani business-man remarking to a colleague, “It’s forever larger and grander, and the earlier one is dwarfed by the new one, and no one knows what the hell is happening.”Dubai, I think to myself, is capitalism perfected. Insiders call it “Dubai Inc.” without a glimmer of irony. Yet it is also a castle built on our most primal instincts and needs: the lust for pleasure, the spoils of oil and war, the temptation to get something for (almost) nothing in the form of the cheapest of labour, and the need for a sanctuary from the chaos such enterprises inspire. It is a glorious phoenix with gossamer wings.

Suddenly, I stop short at the oddest booth of all, the one for Poland — Poland? Its sign reads, “Fall in Love with Warsaw.” I realize, with the kind of certainty that has evaded me until now, that I must get the hell out of here.

Outside, in the warm December air, I head for the stairs behind the trade centre. There, a familiar sight: a swarm of workers in overalls gather at a new construction project. They earn as little as $4 a day. It’s more than they would get in the factories of India, Pakistan, and Bangladesh, making jeans and shower curtains for Western consumption, but in the lavish light of Dubai it isn’t even a decent tip. I have visited the camps where they live, smelled the open sewage outside their dormitories, know that many of them can’t read the contracts they have signed. They send money home and visit their families once every few years. Past the billboards, past the cranes, if one squints, one can see on the surface of every construction site tiny human forms. Nothing in Dubai could exist without this labour.

I look around at men in dishdashas talking on mobile phones, Western real estate reps on smoke breaks, and Brits in tailored suits stepping out of black Mercedes suvs. Their Pakistani drivers head to a parking lot where they will wait patiently, occasionally getting out to stretch their legs, or, at the required times, to pray.

At last I have seen the ruler at the centre of this kingdom, surveying his dreams fulfilled. When Joan Didion set her famous essay “Some Dreamers of the Golden Dream” in California’s San Bernardino Valley in the late 1960s, she probably had never heard of Dubai, though she could have been describing its mindset: “The future always looks good in the golden land, because no one remembers the past. Here is where the hot wind blows and the old ways do not seem relevant.”

Yet there is more to be said of Dubai, because real estate is about location, and Dubai’s location places it at the crossroads of not only travel, trade, and global ambition, but of history. The golden dream that characterized Didion’s fabled California has migrated to points east — India, China, Russia, the Gulf — and nowhere is it better exemplified than in this place of prosperity, of self-reinvention, of the eternal present. Hot winds continue to blow, while celebrations carry into the night.

It’s Id al-Fitr, the most joyous date on the Sunni Muslim calendar, when families gather together, having slaughtered a sheep as Abraham did rather than sacrifice his son. It’s a festive time; by Id morning, December 30, my phone is buzzing with talk of New Year’s Eve. A group of twenty-five or so young Iranian and Arab professionals have plans afoot. vip tables. A hot DJ. An extra ticket.

Snapping on the television, I am caught off guard by the images of Saddam Hussein’s execution. My mouth tastes like vinegar. Why now? Why would they kill this man, a criminal by any standard, on a holiday that is the Muslim equivalent of Christmas? Why would they slaughter him like Id’s sacrificial lamb unless they wanted to create a martyr?

Details emerge, the official versions contradicted by grainy footage from a camera phone. Mocked by his Shia executioners, Hussein refused to put a sack over his head, refused to accept the insults. Someone shouted out the name of Moqtada al-Sadr, the Shia cleric charged with murdering Sunnis, as Saddam went to his death for murdering Shia. Blood vengeance.

In Dubai, and throughout the Arab world, there are those who believe that the timing was intentional, part of a divide-and-conquer strategy designed to increase the Sunni-Shia rift. Support for this view was furnished by the New York Times, which reported that the “goal” of the US administration “is to see an American-backed alliance of Sunni Arab states including Saudi Arabia, Jordan, Lebanon and Egypt, along with a Fatah-led Palestine and Israel, opposing Iran, Syria and the radical groups they support.” Since Israel’s war with Lebanon, Sunni Arab states close to the US have been rocked by the popularity of Hezbollah leader Sheikh Hassan Nasrallah among their own restive populations. And the rise of Iran, a consequence of dispatching its two regional rivals, Saddam Hussein and the Taliban, has given them reason enough to foment anti-Shia sentiment. Stories of the “Persian menace” have become a fixture of the tightly controlled news media in US-allied Arab states.

Planning the fate of the Middle East is a mammoth project, and people do not always respond as expected. En route to the New Year’s party, I pick up a newspaper. Saddam is on the cover with the noose around his neck. I show it to a young Iranian woman in a black minidress. The Iranians should be pleased, their archenemy is dead, but she flicks her head dismissively. “I think it’s not him.” One of the body doubles, most probably. Iranians never believe what official sources say, even on the occasion that it’s true.

Lips kiss on the rooftop of Wafi Mall. A beautiful Indonesian in a sequined fuchsia dress leads us to our tables in the vip section. “Come, darling,” she says, touching my arm. She has lived here for two years. What does she think of Dubai? “So-so,” she says, glancing sidelong at me as we weave through the fashionable crowd — South Asians, Arabs, Europeans. “It’s Dubai, darling.” She turns away, her mane of black hair concealing her expression.

The music is disco, hip hop, and house, everyone young and good-looking, living the Dubai dream. The group I’ve come with — no one would think to divide them into Shia and Sunni, Persian and Arab (and anyway, some are dating) — pose for photographs in party hats. Sequins, sushi, bottles of vodka and Red Bull on the tables. Someone fills my glass with champagne. “Tell them about this!” shouts a short stocky Lebanese man from the dance floor, the lights flashing, the music pounding. “Write about this!”

Back at our tables, a Palestinian, asked about Saddam, shakes his head. “Not good,” he says. A woman interrupts, pouring ice cubes down his back, then pulls him onto the dance floor. I am approached by two Lebanese men with shaved heads who tell me I must stop talking politics and dance — this is New Year’s Eve, this is Dubai!

“We hated Saddam,” says Farhad an Iranian, his arm draped around a sexy Palestinian New Yorker who’s visiting Dubai on vacation. “It’s good that he’s gone. But he was just a puppet.” Farhad lived in Canada for more than a decade — a self-described hippie, working on ski hills, taking nature photographs, smoking weed. Now in his thirties, he’s taken a job in import-export, rented a beautiful apartment, and tries not to think about his abandoned art. “I used to be so idealistic,” he says. “Now I understand we are all just part of the system. It’s not luck or goodness, but power that decides.” He talks about Iran, how what happens there will determine the future of Dubai.

The Palestinian New Yorker on Farhad’s arm, who speaks with a nasal Bronx twang, has a cousin of twenty-four who is too bitter to drink. “This fucking war” has prevented his marriage, he tells me. He is referring to Iraq. “My girlfriend was Shia, I’m Sunni, and her parents wouldn’t allow it.” He squeezes a bottle of Perrier by the neck. “She was not the kind who would fight them. Now they’ve arranged for her to marry someone else.” He saw her earlier in the evening; she was with another man.

“It’s not luck or goodness, but power that decides.” The Sunni boy can’t marry his Shia girl. Long tentacles stretch outward from Iraq, invisible in the throbbing lights of the disco, in the euphoria of Dubai and its dreams, which — like the oil wells of the nations that surround it — share a heartbeat with the West. They have touched us even here.

At midnight — after the champagne, the countdown, the deafening cheers — the beautiful Indonesian woman who led us to our tables finds me on the dance floor among the hundreds of partygoers. She kisses me three times, in the local fashion, and says, “Happy New Year, darling.” Then, like the sheikh at Cityscape, she disappears into the crowd. All I have time to do is whisper “good luck.” It’s not nearly enough.