Day 7: The Rich Feeding the Rich: Land Ownership and Economics

Since its inception as a country Dubai has been a very top-heavy society, and was designed to be so. An overwhelming percentage of the nation's wealth resides with a very small number of Sheiks and Emirati. Not only does it reside there, it quite effectively stays there. First of all: the ruler of Dubai, Sheik Mohammad bin Rashid al-Maktoum owns all the land. He then chooses to give parcels of it out to his friends, family and other influential and/or wealthy Arabs. From there, they can do as they please with it. They generally do what will be most profitable at the current time and change the land use if it stops becoming profitable. The second way the Sheiks stay in control of the money and resources is the system in which all businesses are run. When one wants to start a business in Dubai one first needs a Sheik's sponsorship. This entitles you to open a business with the blessing of the powers that be and more importantly entitles the sponsor to a controlling interest in your company. Provided that company operates in a way they are happy with and does not impede any other plans it is in everyone's best interest for the company to remain open. The Sheik can effectively shutter any business they sponsor by withdrawing their support. Not entirely surprisingly this does happen, generally when the Sheik thinks more money can be made with a different enterprise.

Elaborating on the above, it is effectively impossible for anyone who is not either related to, or extremely good friends with Sheik Mohammad to own land outright. Land ownership does not extend below the two upper classes in Dubai, the Sheiks and the Emirati. The closest are the expatriates, the next step down the social ladder, can come to owning land is an extremely long term lease on a property. Sometimes this works out well for businesses such as schools; however it can prove a risky investment for apartments and the like since the land can be effectively recalled at any moment. The slight advantage to this system is that there is effectively no "red-tape" when the Sheik wants to build something, he can simply appropriate it and start construction. This is evident in some of the massive construction projects currently underway in Dubai.

Without any way of investing in the country, the vast majority of the populace becomes guest workers. This economic structure is only really sound as long as labor remains cheap and plentiful to import from abroad, since none of the few natives to the area will ever do any of the jobs necessary to keep the city running. Since Dubai, rather prudently, shifted most of its income away from oil this type of structure will easily remain in place for the foreseeable future.

As the Turkish proprietor of a local confectionary told me in frustration as she glanced up the obligatory framed photo of Sheik Mohammed: "Dubai is very much a one man show"