Economist.com Cities Guide: Dubai Briefing - April 2006

News this month

Riotous behaviour

Low-paid construction workers staged a riot at one of Dubai’s flagship developments, the Burj Dubai site, on March 22nd. The workers, mainly expatriates from Asia, were protesting against poor pay and working conditions. They smashed cars, wrecked offices and refused to work for a day. Reports vary about the number of workers involved, from a few hundred to several thousand. Similarly, some media reports put the damage at $1m, although sources close to the companies involved claim that figure is exaggerated.

Yet the problem was less in the physical destruction than in the damage done to Dubai's reputation. The story had plenty of international attention, with many organisations pointing out that Asian labourers in Dubai earn as little as $4 a day. The Burj Dubai, slated to be the world’s tallest tower, is under construction in the city’s new business district. Workers building a new terminal at Dubai International Airport also went on strike in sympathy.

Ports and storms

Sheikha Lubna al Qassimi, the economy minister of the United Arab Emirates (UAE), flew to Washington in late March to resurrect the Free Trade Agreement between America and the UAE. The trip was intended to help mend the relationship between the countries following the cancellation of trade talks, originally planned for mid-March, after a damaging spat over a ports operation deal. State-owned Dubai Ports World (DPW) was due to take control of six American ports as part of a $6.8 billion deal to buy P&O, a British company. The deal turned sour after some American congressmen protested against the supposed security risk posed by an Arab firm running American ports. DPW eventually backed down and agreed to sell the ports to an American operator.

Diplomats in the Emirates said Sheikha Lubna's visit was a success. The DPW deal always had the backing of George Bush, America’s president, who regards the UAE as a key ally in the war on terror. The trade talks were rescheduled for the end of April.

Cruise controls

A tragic boat trip in nearby Bahrain killed 58 passengers on March 30th, pushing Dubai to place a temporary ban on leisure cruises. The ban was lifted on April 3rd after just one day—but only after Dubai Ports Authority had conducted a safety inspection of cruise boats and imposed tougher rules. These included a ban on passengers standing on upper decks, and a promise to enforce safety with regular spot checks.

Pleasure cruising on Dubai's Creek waterway is a small but growing part of the emirate’s tourism industry, particularly on traditional wooden boats known as dhows. Holidaymakers and corporate hospitality trips are the mainstays of the business, but the incident in Bahrain raised fears about the regulation of the industry. Most tour operators welcomed the tougher standards, however, and said they had not seen a significant fall in business since the tragedy.

This land is your land

In light of the property boom that has gripped the city, Dubai has passed a new real-estate law to clarify ownership rights for foreigners. Hundreds of thousands of villas and apartments are under construction, with many being snapped up by investors from Europe and Asia. But before March buyers simply placed their faith in statements made in 2002 by Dubai’s ruler (then Crown Prince) Sheikh Mohammed bin Rashid al Maktoum, that foreigners would be given freehold rights. The new law, which spells out these rights, allows foreigners to buy property in designated parts of town and register ownership with the government Land Department. This is significant for banks, which can finally secure home loans for foreigners against a legally binding document—and evict homeowners if they default.

Going a bit du-lally

The initial public offering for du, the UAE’s second telecoms operator, was oversubscribed 167 times to the tune of $109 billion—a new world record, according to figures published by Bloomberg News. The firm wanted to raise $650m by selling 20% of its shares to the public, but the appetite for new shares is ravenous in the Gulf, and massive bank lending increased the level of subscriptions. The frenzied rush to buy shares came despite a stockmarket crash that has seen the main Dubai Financial Market index fall by more than half between November and March. Indeed, some analysts blamed the du IPO for the fall, claiming that investors sold big chunks of their existing portfolios to raise cash for du stock.

Catch if you can

April 2006

“Chicago”

May 4th-12th 2006

As part of an effort to mend its reputation as a cultural vacuum, Dubai is to stage “Chicago”, a hugely popular musical about adultery, murder and brassy female entertainers in the 1920s. (It was adapted into a hit film starring Renée Zellweger and Catherine Zeta-Jones in 2002.)

The show does not come cheap: Done Events, a state-owned production company, is allegedly investing several million dollars. While the government expects to earn this money back selling tickets, it hopes, more importantly, to position the emirate as a regional entertainment hub. But there may still be some way to go. As one insider said: “If you go to Las Vegas, you walk down from your five-star hotel room and watch Celine Dion or Barry Manilow. In Dubai, you pay more for your room, but you go downstairs and get some dreadful couple with an organ playing cover versions of Celine Dion and Barry Manilow. We had to do something.”

Madinat Arena, Madinat Jumeirah, Dubai. Tel: +971 (0)4 366 8888. Tickets: from Dh200. See the production's website. For tickets, see the box office website.

More from the Dubai cultural calendar