Dubai Report: A city on edge

The burgeoning emirate faces problems with recruitment, high costs, racism and traffic. But Dubai's hook is the promise of perpetual renewal, says Jonathan West.

Last Updated: 09 Oct 2013

I first arrived in Dubai in 1996. At that time, no-one had heard of the emirate, and not even London's great Foyles bookshop had a guide to the desert city. The only information I could find was a tiny chapter in Lonely Planet's Middle East book - obviously written as an afterthought. It told me nothing.

As my plane circled, all I could see were empty plots of land, and the odd villa. Not one of the city's now-famous landmarks had been built, nothing that whispered to me I was about to land in one of the most exciting cities on the planet. Instead, the message that came through loud and clear was 'this is the end of the earth'.

Between then and now, Dubai has been transformed. Once a hardship post for wanderlust-bitten expatriates who were clearly lost, drunk or confused, it is now a modern-day Babylon for those who want to work hard and party harder.

Perhaps Dubai's biggest achievement - aside from filling the empty desert with breathtaking structures - has been to capture the world's attention. Whereas everyone looked at me blankly all those years ago when I told them I was going to Dubai ('Is that in Saudi Arabia?'), now not only has everyone heard of it, they have probably worked or been on holiday in the city, too.

Dubai's economy may be tagged 'emerging', but its PR has been nothing less than first-world. That's why people who don't live there were so surprised by the recent news of violent protests by some of Dubai's workers. Surely, if the dream is real, everyone there is far too busy making millions - tax free - to strike?

Of course, the reality is different. Dubai's residents are acutely aware it is a city of contrasts, where some people make real fortunes while others are barely paid a salary at all. For those with a liberal conscience, on a generous tax-free salary, watching labourers toil six days a week in the sun for six quid a day represents a real test of principles. Nor does the Dubai tourist bus make a point of visiting the 'company accommodation' of the labourers - ramshackle corrugated-iron huts in the desert.

The emirate was not blessed with the oil or gas reserves of its neighbours. It was blessed instead with three generations of leaders from the Al Maktoum family who have built the impressive high-rise sandcastles that wow the world, home to some two million residents - 80% expat - serving the local, regional and international businesses that operate there.

Getting businesses to choose Dubai, and people like me to leave their home countries to staff them, has - until now - not been difficult. After all, in which of these would you prefer to live?

(a) Dubai: a tax-free, sunshine-heavy, petrodollar-fuelled land of opportunity where people work hard but play a lot harder in its world-class bars and clubs.

(b) UK: a land reeling from the dollar collapse, sub-prime insecurity and a 'whoops-I-just-swallowed-your-salary' tax regime.

On the face of it, those of you with skills to offer the new-world economy of Dubai should be doing a Norman Tebbit and getting on your bike right now. Dubai is a land where expatriates with real experience are very much in demand, where job and commercial opportunities abound, and where there is, on the surface at least, a real quality of life. However, before you rush to pack your bags, remember: nothing in life is that easy.

Dubai has maintained its rapid growth - estimated at 9% per annum - but the cracks are beginning to show. The October clashes between workers and police are a sign the Dubai government is finding it increasingly difficult to paper over those cracks.

Only last month, seven workers were killed and 16 injured when an overpass under construction near the new marina collapsed. This incident, attributed to a crane-driver's error in shifting steel beams, follows a fire in a tower block under construction in January that killed two - and another on an artificial island in May.

Life is getting expensive. The Dubai dirham is tied to the US dollar. That is making goods from around the world more expensive. Some even disappear. I lost my favourite banana this week, because Indian exporters would not agree to UAE price demands.

Rising costs are making racism an increasing issue, too. It has always been here, but tougher conditions are making people angrier. Unlike the laws in Europe, it is not illegal to be highly specific in job adverts: demanding specific country experience is the norm. There is a clear difference in salaries offered, with Europeans at the top of the tree, followed by South Africans and Australians, with those from India and Pakistan at the bottom.

At a more macro level, businesses are also being hit hard by rent increases. Year by year, property consultant Mercer publishes league tables of country commercial rents, and each year Dubai nudges towards the upper echelons occupied by London and New York. Where I work, desks have edged closer and closer together as the company has grown without renting more office space.

Employees face an equally tough time at home. As more and more residents have squeezed into the city, so apartment costs have soared. Lessees are being squeezed and are downgrading - or sharing - their accommodation. At the lowest end of the scale, stories abound of cars being the latest, compact pieds-a-terre.

A stretched transport system is also hurting Dubai. The emirate's residents love their cars and, for expatriates, one of the biggest benefits of moving to Dubai is being able to afford the car of their dreams. Porsches are 10 a penny - the city's Ford Focus.

Recently, however, sitting in Dubai's endless traffic, I gave up on the idea of swapping my Hertz rental for a Porsche 911. Even on my modest salary (by expat standards), I could afford one. Fast shiny cars are simply pointless when there's a dearth of open road to drive them on. So short of ideas is Dubai's Road Transport Authority that last month it launched a cash prize for the best congestion solutions offered by the public.

Finally, and for the first time in ages, the labour market is getting tight - employers across the Gulf are finding it difficult to recruit. The once-fertile hunting grounds of the UK and South Africa are drying up. With the dollar conversion rate running against sterling and the rand, it's just not worthwhile to move.

Perhaps more worrying for Dubai, though, is the advance of India. The subcontinent is booming and the rupee appreciating. As a consequence, the opportunity to work for £6 a day doesn't sound like such an opportunity to Indian workers.

In short, many of the things that have made Dubai successful in the past are now beginning to clog its gold-plated arteries. From a financial point of view, the quality of life is better than that in Europe. But there is more to life than money - in London, I used to love walking to the South Bank; and in New York, I loved my visits to Moma. In a cultural sense, Dubai is still a desert, although with its film and festivals and small galleries there are signs of life.

Dubai culture is largely confined to shopping and eating. The Dubai stone or kilo (everyone gets fatter when they arrive) is inevitable - certainly during the summer. And finding interesting things to do that don't involve a mall visit is a challenge.

Dubai's hook is the promise it offers. Those who have bet against Dubai in the past have lost. It's a city that has kept on rising, and its population has complete faith it will continue to do so. It's clear, however, that the times are changing. The emirate is at that critical juncture where it needs to find new ways to strike forward. For those of us living here, that need to change is so strong you can feel it in the city's heartbeat.

Jonathan West works in Dubai as a journalist.

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