Economist.com Cities Guide: Dubai Briefing - November 2005

News this month

Shop till you drop

Dubai's investors continue their multi-billion dollar shopping spree, snapping up swish properties on either side of the Atlantic. On November 10th, the royal family’s investment firm bought a landmark building above New York’s Grand Central Terminal for $705m. On the same day, Dubai’s government bought a controlling stake in the London Eye, a tourist attraction in Britain. Dubai paid British Airways $166m for a 33% share, doubling its original share.

The deals were the latest in a string of acquisitions, financed largely by the recent surge in oil wealth. The emirate itself is home to very little oil, but investors from neighbouring OPEC producers—including Kuwait, Saudi Arabia and Abu Dhabi—have funnelled up to $100 billion into Dubai over the past two years, according to Rasmala Investments, a local firm. Much of this money has gone on foreign investments. In 2005 alone, Dubai has bought the Tussauds Group, a leisure company, for $1.5 billion, bought a $1 billion stake in DaimlerChrysler, a carmaker, and reportedly launched a $5 billion bid for P&O, a British port and ferries group. Meanwhile, state-backed real estate developers such as Emaar and Dubai Properties have unveiled multi-billion dollar projects in Morocco, Egypt and Istanbul.

Looking to score

Manchester United, an English football club, is opening a football school in Dubai in a bid to cash in on the game’s popularity in the Arab world. The club's manager, Sir Alex Ferguson, visited Dubai in early November to launch the training camp, saying he hoped it would discover young Arab players who could one day become stars. Organisers expect 500 aspiring footballers to participate in the academy’s first session, which will run from mid-December to mid-April.

In recent years, leading European clubs such as Manchester United and Spain’s Real Madrid have promoted their brands in Asia, hoping to boost sales of television rights and football paraphernalia. But clubs have largely neglected the Arab world, despite a growing population of young people with a passion for football and, thanks to high oil prices, money to spend. This now looks set to change.

A better connection

On November 14th, negotiators from the United Arab Emirates (UAE) and Pakistan agreed to revive a telecoms deal. Etisalat, a telecoms firm with a monopoly in the UAE, had agreed in June to pay $2.6 billion for a controlling stake in Pakistan Telecommunications Company, a state-owned firm. But the deal fell through in late October after Etisalat failed to pay a final instalment of $2.3 billion. Sources say that the payment schedule has been extended to 20 months, but negotiators in Abu Dhabi, where Etisalat is based, have been quiet about the details. Many observers said the deal was overpriced—Etisalat’s winning bid was about 40% higher than that of its nearest rival.

A princess goes public

Princess Haya Bint Al Hussein, the wife of Dubai’s Crown Prince Sheikh Mohammed, has joined the United Nations World Food Programme as a goodwill ambassador. The new role, though largely ceremonial, is a departure from the usual duties of a princess. Traditionally, royal women have rarely made public appearances, and then only wearing the full black abbaya gown. But the 31-year-old princess, a daughter of Jordanian royalty and a champion equestrian, is bucking the trend. She even wore western clothing when she announced her new job.

Women seem to be taking a slightly greater role in public life. In September, Dubai’s government promoted Salma Hareb to head the Jebel Ali Free Zone, a tax-free area in Dubai. And Sheikha Lubna Al Qassimi, minister of economy and planning, has made numerous international appearances since she became the UAE’s first female cabinet minister in November 2004. Before that, she held senior posts within government-owned companies. Still, there are limits to this trend. Princess Haya, for example, may be a goodwill ambassador, but royal succession remains a male preserve.

Too close for comfort

A Dubai-based British couple spent almost two weeks in an Iranian jail after sailing their yacht too close to Abu Musa, an island claimed by both Iran and the UAE. Stuart and Linda Wise were arrested by Iranian navy officers and taken to Iran, where they spent 13 days being interrogated. The couple was not allowed to contact British diplomats for several days.

Iran and the UAE have long squabbled over Abu Masa and two neighbouring islands, Greater and Lesser Tunbs. But neither party wants the issue to become a major diplomatic spat. There is a large Iranian expatriate community in the UAE, and Iran has strong trade links with Dubai, which is only a short boat ride away.

Catch if you can

November 2005

Dubai International Film Festival

December 11th-17th 2005

Dubai’s second film festival has much to live up to. The inaugural event last year won rave reviews from the city’s culture-starved residents and visitors. This year's festival will feature 85 films, with a greater emphasis on Arab cinema, including offerings from the UAE’s own film industry. The festival will also show mainstream films such as “Pride and Prejudice” (pictured), starring Keira Knightley, Britain’s dewy starlet of the moment. Whether actors from any of these films attend the festival is still unknown, but fans have reason to hope: last year included appearances from established stars such as Orlando Bloom and Morgan Freeman.

Locations across Dubai including Madinat Jumeirah and Dubai Media City on Dubai’s Beach Road. For more information, visit the festival's website.

More from the Dubai cultural calendar