Economist.com Cities Guide: Dubai Briefing - June 2005

News this month

Human resources

An American report has attacked the United Arab Emirates for its record on human trafficking and its failure to tackle the trade in prostitutes, labourers and child camel-jockeys. The State Department singled out four Gulf states—the UAE, Saudi Arabia, Qatar and Kuwait—and threatened sanctions if they failed to improve. Sheikh Saif bin Zayed Al Nahyan, the UAE's minister of the interior, said the country would use the report as a platform for reform.

Most labourers powering the UAE’s construction boom are from Asia and work for as little as $250 a month while living in cramped camps. Prostitutes from Eastern Europe and China are the mainstays of the country’s sex trade, and a number of hotels are well-known pick-up joints. In May the country pledged, yet again, to crack down on the illegal use of camel jockeys aged under 15, a practice that continues despite a series of attempts to end it.

Financial watchdogs bite

Financial watchdogs in the UAE have shut down a rogue investment house, SMI Private Equity, as part of their continuing drive to clean up the country’s financial image. Police, the central bank and regulators from the new Dubai Financial Services Authority (DFSA) all joined forces on the case. Officials said the company, already blacklisted in Britain, was selling dubious investment funds from an address in Sharjah emirate.

Strictly speaking, the company fell outside the remit of the DFSA. But Dubai is paranoid about suggestions of financial impropriety, especially after some funding for the September 11th attacks was traced to the banking system here. So DFSA staff, many of whom were regulators in London and Sydney, used contacts in Britain to glean information about SMI, which they then passed to the police.

The emperor’s new clothes

Naser Nabulsi, one of the leading figures in Dubai banking, has swapped his suit for the dish-dasha robe as he seeks to build a local financial empire. A Palestinian by birth, Mr Nabulsi wants to make the most of the current oil boom by launching Al Mal Capital, an investment bank and private equity house that aims to raise $325m in a stockmarket listing in July.

Stockmarkets are in overdrive across the Arab world, and the Dubai Financial Market index has more than doubled this year. Mr Nabulsi is well-placed to take advantage of this. He is close to the Dubai government, having left Merrill Lynch to run Crown Prince Sheikh Mohammed’s investment portfolio in 2000. And two years later he was appointed chief executive of Dubai International Financial Centre, the government’s new financial free zone. Last year Mr Nabulsi was granted UAE citizenship, and with it the social obligation to wear the dish-dasha on home turf. His challenge is now to disprove sceptics who warn that Al Mal's launch comes just as the current boom turns to bust.

Hot stuff

Dubai suffered a city-wide power failure on June 9th, losing air-conditioning for several hours during the sweltering day-time heat. Officials at the state-run Dubai Electricity and Water Authority blamed a technical flaw. The weekend had already started for half of Dubai’s workforce, who work Saturday to Wednesday, but the Thursday failure still caused widespread disruption.

Power was restored after about five hours, and key facilities such as Dubai International Airport switched to independent generators, so economists said the short-term impact was limited. But some Western managers said the incident could cast doubt over Dubai’s role as a regional trade hub. As one senior manager remarked: “They don’t tell you they’ve got dodgy wiring when they’re giving you the sales patter to move your regional head office and 300 staff here.”

Scary movie

Those who tire of Hollywood plot-lines may enjoy an exciting diversion in Dubai's cinema houses. A four-foot python attacked a film-goer at a recent screening of “Mr & Mrs Smith”. She escaped unharmed owing to the quick wit and compassion of a fellow theatre-goer named Sherana Alansudhir. According to reports in 7 Days, a newspaper, Ms Alansudhir was watching the film when she heard a lady nearby scream. With the light in her mobile phone, she noticed that the snake was wrapping itself around the woman’s leg. Ms Alansudhir calmly unwrapped the offending reptile, took it out of the theatre—which by this time had stopped the film—and called the police, who took the python away. “I don't know why I did what I did but I believe that nothing is more important than helping people”, she explained.

Catch if you can

July 2005

Dubai Summer Surprises

June 22nd-September 2nd 2005

This two-month carnival is geared for children and, unsurprisingly for Dubai, centred on the city’s shopping malls. The aim, when the government launched it seven years ago, was to prevent the traditional summer exodus of locals and expatriates, and to lure tourists from neighbouring Gulf states. It has worked: organisers say it pulled in 1.5m visitors last year, an almost three-fold increase on its debut in 1998. Expect plenty of face-painting and Disney-style live concerts for children, endless car raffles and gold giveaways for parents, and malls teeming with Saudis and Kuwaitis.

Held at locations across Dubai. Tel: +971 60 054 5555. Visit the event's website.

More from the Dubai cultural calendar