A Little Perspective on Dubai

It has taken me a while to comment on Dubai's current economic crisis because I really wasn't surprised. The model and speed they were using with which build their city were unsustainable in so many ways. Dubai has been up to now a city built in part by incredible PR and marketing. After Sheikh Mohammed bin Rashid al Maktoum made the momentous decision in 2002 to allow foreigners to buy property in Dubai, a lack of proper regulation created a wild wild west environment, where anything goes. Small, unscrupulous operators were able to sell apartments before the ground was even broken; oftentimes before even owning the land the apartment building was supposed to be built on. Dubai's government utilized the same strategy to build the Palm Jumeirah when they could not get bank financing. A lack of building codes and laws encouraged shoddy work and cost cutting. In spite of that real estate values skyrocketed. Speculators flooded the city. Poor destitute laborers worked around the clock in 40 C temperatures, under slave like conditions to ensure that these buildings were constructed fast enough. Obviously, this method of developing a city needed to be re-examined and revamped.

Buildings under construction in Dubai's Marina (Picture from Reuters)

But the media in its usual hyperbolic form, exalted Dubai when construction and financial deals were moving ahead at the speed of sound and then when Dubai inevitably hit a bump (ok a pretty large $26 billion to $80 billion debt bump), the media immediately reported the demise of the Gulf city. To make such bold and extreme statements however, is to not know Dubai's history or the full extent of its entrepreneurial spirit.

While most people in world started to take note of Dubai this past decade, Dubai has been building itself as an entrepreneurial hot spot since the late 1800s. In 1894 Sheikh Maktoum bin Hasher took over as ruler of Dubai and launched the plan to make Dubai the most business friendly port of the lower Gulf. He lured disgruntled merchants from Iran by abolishing the 5% customs duty and slashed fees turning Dubai essentially into a free port. Sheikh Maktoum also sent out his agents to recruit the biggest merchants in surrounding countries to Dubai with promises of free land, the ability to bend the leader's ear and a hands off government policy. This strategy is not so different from what Sheikh Mohammed bin Rashid al Maktoum, the current ruler of Dubai has done with Internet City, Media City and in Dubai's International Financial Center, earlier this decade - where he attracted huge global tech, media and financial companies like Microsoft, Oracle CNN, Reuters, and every giant investment bank to open up operations in Dubai with promises of free rent, no import duties, no tax and an eradication of companies law which forbade majority foreign ownership.

When Sheikh Rashid bin Saeed al Maktoum, the grandfather of modern Dubai, proposed the idea of building the world's largest man-made port in the 1970's in Jebel Ali 35 km southwest of Dubai people thought he was crazy and wasteful but today it is one of Dubai's greatest financial assets. Now I'm not equating the building of the port with the construction of giant palm island after island (although it did put Dubai on the world stage), but Dubai is no flash in the pan.

I agree with BusinessWeek's recent article "Why Dubai Matters" by Stanley Reed, when he writes that Dubai is an important economic experiment in a strategically vital region. "The humiliating debt implosion aside, the emirate remains the most dynamic business hub in the Gulf" and remains a model for surrounding countries. According to Reed, Dubai stands out for creating an open economy that is diversified well beyond oil. It is also the Middle East's most nimble competitor and a "tolerant and comfortable base for anyone seeking a foothold in the Arab world...." And beneath all the flashy over-the-top construction projects, Dubai is also a place "where serious business gets done."

Emirates Airlines, Dubai's national airline which began in 1985 got its start with the assistance of Pakistan International Airlines (PIA) which leased them two airplanes. Twenty years later, Emirates Airlines, now one of the world's fastest growing and leading airlines, is winning award after award, leaving their original mentor PIA in the dust. Many of Dubai's home grown companies, despite the current economic problems remain significant players in world markets. Dubai is also the major location for the emerging market of Islamic financial services, which according to BusinessWeek is a $1 trillion business globally.

And despite many competitors in the region, who would love to take over Dubai's role as the Middle East business hub, like Doha in Qatar, Abu Dhabi, or even Riyadh in Saudi Arabia (all of which are closely studying and following Dubai's model for finance and building infrastructure) that doesn't seem to be happening anytime soon. For the most part these cities still have relatively closed societies, steeped in very traditional values. Expatriates will not be rushing to settle in those cities any time soon.

So inevitably, this crisis has forced the leaders of Dubai to re-examine their way of doing things. Instead of building up their brand through outlandish developments, the leaders of Dubai are now going to London and Washington to reassure the U.S. and British governments and businesses that the second $10 billion bailout they received from Abu Dhabi earlier this week will not be a recurrent pattern. Today, the ruler of Dubai, Sheikh Mohammed also issued several laws to promote government transparency and rein in public spending. Dubai also implemented earlier this week, an insolvency law modeled on U.S. and British practices and created a tribunal headed by three international judges to mediate any disputes between Dubai World and its creditors. There is tremendous pressure on the leaders of Dubai to change their past operating model which they are doing by creating greater transparency and a sounder, less ambiguous regulatory framework. All of which are imperative and a good start. The leaders of Dubai also need to control and rein in some of its excesses. Curtailing the endless supply of 'world's tallest buildings' and 'world's largest development' can only help the urban and economic environment of Dubai. According to financial analysts, while Dubai's current economic problems are undoubtedly severe, the viability of their economic model remains sound. The entire global economy is depressed right now - but demand for business services will rebound in Dubai as it will globally with the easing of the credit crunch.

On a separate more personal note, as a long time researcher on Dubai, I find this current financial predicament an incredibly fascinating comment on the rise of Dubai as a premier global city. Twelve years ago when I first started studying the city-state, I struggled to find even a handful of articles published on Dubai. It was barely a blip on any one's radar. However, in a mere twelve years, this present financial crisis in Dubai has put the entire world on alert and dramatically affected the global economy. Anyone who discounts this desert city-state does not know it at all.

The Question of Healing**

The decision to try Khalid Shaikh Mohammed, the self-described mastermind of the September 11 attacks, in New York City – just blocks away from the site of the World Trade Center – has sparked a tremendous debate in the city and nationally. This debate has focused upon issues of rule of law and security, in particular whether civilian courts can prosecute complex terrorism cases and handle confidential information without compromising security. Those in support of civilian trials in New York City argue that the city has handled high-profile terrorism cases in the past and that the justice system is capable of fulfilling the task. Those opposed to civilian trials believe that military commissions are still the best medium to try terrorist suspects. An absent, yet equally important aspect of the debate is: what is the more appropriate medium to help American society grapple with the mass atrocity that was 9/11?

David Filipov looks for a picture of his father, Al Filipov, at the Tribute WTC Visitor Center in New York City. (Image by Scott Lewis)

Such questions have been explored in many other countries in their attempt to deal with mass violence and human rights violations, referred to often as transitional justice. Trials are a prominent component of transitional justice, and decisions on where to hold trials are usually based on two key considerations: where the capacities lie and where the trials are likely to have the most impact. International tribunals for the Former Yugoslavia and Rwanda, for example, were set up in the Netherlands and Tanzania to prosecute crimes committed during the violent conflicts in the Former-Yugoslavia and Rwanda in the 1990s. These tribunals were situated in a different place from where the crimes were committed in large part because domestic judicial systems at the time were weak. In addition, it was feared that the domestic climate at the time would not allow for safe and fair trials. The international tribunals, while rich in judicial capacity, have however been criticised for failing to resonate with local populations. Their distance rendered the trials physically and financially inaccessible to the vast majority who suffered from the violence. Rather then participating in these acts of justice and in so doing, possibly experiencing some form of healing, international trials were often seen as a foreign abstraction. In both the Former-Yugoslavia and Rwanda, some trials have subsequently taken place through domestic justice systems. In Rwanda, accused have also been held accountable through traditional justice systems. Many would argue that localising justice has been an important factor in the process of survivors coming to terms with atrocities.

In discussions about 9/11 trials, this important issue of impact and resonance has been missing. The question of whether justice conducted locally may play a role in healing survivors has not been asked. The prime focus has been on rule of law and capacities – whether a military commission or a civilian commission is most capable of handling the cases. Guantanamo Bay, where Khalid Shaikh Mohammed (and four accused co-conspirators also designated for trial in New York City) have been held is critiqued primarily for digressions from due process and rule of law. Concerns over the applicability of Guantanamo have rarely centred upon whether the system there resonates with Americans or is perceived as distant and abstract. Although family members of those who died on 9/11 could apply to win a lottery to attend proceedings at Guantanamo, these were rare to come by and disempowering for the many who were not selected. By and large, the processes and occurrences there have been shrouded in secrecy. Civilian trials in New York City would open the process. New Yorkers and all Americans affected by 9/11 would have greater ability to sit in the courtroom and witness proceedings. Trials could also be broadcast, at least in part, by local and mass media – reaching countless more people than the military proceedings in Guantanamo.

Most commentators that touch on the potential impact of local trials on New Yorkers stress, however, only the potential negative effects of Americans reliving the trauma and the risk of a media circus. These experiences will undoubtedly be difficult and painful, as they have been in other countries overcoming mass violence. Some New Yorkers may feel that it is too soon to have the trials so close to home, while others may think that it is time to confront this past. Whichever the view, it is indeed time to ask these questions and to extend the debate on civilian versus military trials, New York City versus Guantanamo beyond the lens of rule of law and security to issues of healing.

**This article was written by Huma Haider, a New York State attorney who worked in the Prosecution Support Section of the War Crimes Chamber, State Court of Bosnia and Herzegovina in 2007.