Dubai’s ruler downsizes property projects ambitions amid crisis

[Naveed Yaseen]

DUBAI: There was a time when Dubai’s annual property fair was a gilded stage for the ruling sheik to unveil his latest, anything-goes dreams: the world’s tallest towers, canals in the desert and artificial islands in the sea.

As this year’s fair begins on Monday, the global recession has sharply downsized those visions and taken much of the boomtown bravado from the city-state’s CEO-style ruler.

The Cityscape expo is expected to be far more subdued than in years past. The shift reflects Sheik Mohammed bin Rashid Al Maktoum’s passage from big-ticket visionary to more cautious steward of the Gulf emirate’s sand-to-skyscraper transformation.

“Nobody is talking about grand projects or being No 1 anymore,” said Abdul-Khaleq Abdullah, a political science lecturer and Dubai native. “There’s a sense from top to bottom that we need to tone it down.”

Although Mohammed has been credited for Dubai’s stunning makeover, which was fueled by borrowed money and surplus cash from the Persian Gulf’s oil profits, he has yet to assume responsibility for the city-state’s property bust and admit to faults in his business plan.

A year after Dubai became the Gulf’s biggest credit crunch victim, dozens of gleaming new towers that mark the city’s skyline stand empty.Even camps for migrant workers have posted “to let” signs after the building boom ended and billions of dollars worth of projects were scrapped or put on hold, including a half-mile-tall (kilometer-tall) skyscraper that was announced at last year’s Cityscape.

Despite the grim economic reality, Mohammed is not apologizing. “I don’t think we made any mistakes,” he said recently at a rare gathering with reporters. He added that in the future “our strategy will be mainly the same, but things will change a little bit because of this crisis and we will be more careful now.”

Careful is not a word often used to describe Dubai’s 60-year-old-patriarch. Mohammed’s unshaken confidence and limitless ambition to place Dubai in the same league as London or New York has earned him labels like “arrogant” and “over-the-top,” but also “daring” and “courageous.”

That mix fits Mohammed’s personality and ruling style in a region where a well cultivated personality cult is part of good governance. The stark contrast also reflects Mohammed’s bipolar Dubai, a modern Arab metropolis, pious in faith and daring in all else.

Like his Muslim city-state with a Western outlook, Mohammed is stuck between deeply rooted Arabian traditions and raw ambitions for modernity. A passionate lover of horses and a breeder of camels, Mohammed rides long endurance races in the desert and drives a customized Mercedes four-wheel drive SUV along Dubai’s sprawling highways. He listens to residents’ complaints the old-fashioned way, in his diwan, but also regularly updates his Facebook profile and exchanges tweets with Dubai’s youth.

“We want Dubai to be the world’s number one city for commerce, tourism and services,” Mohammed wrote in his 2006 autobiography grandiosely titled “My Vision.” It included building the world’s tallest skyscraper and extending the emirate’s shoreline with artificial islands shaped like a palm tree or the map of the world.

Jean-Francois Seznec, a Gulf specialist at Georgetown University in Washington, DC, said there was “quite some arrogance” in Mohammed’s vision for Dubai but that “without it, it’s hard to imagine some things would have been undertaken.” And to make that vision reality, Mohammed had to incur massive debt “that is now owed by the emirate,” Seznec added.

With little cash available to borrow abroad to pay off his debt, Mohammed was forced to turn to Abu Dhabi’s rival Nahyan family for help. The business plan of the United Arab Emirates’ oil-rich capital has emerged as a confident alternative to the dwindling foreign investment in Dubai.

And while some of Dubai’s extravagantly shaped island developments are stuck on the drawing board, Abu Dhabi is zooming ahead with development on its islands. Abu Dhabi’s Yas Island will host its first ever Formula 1 race next month and Saadiyat Island will soon lay the foundations to the Mideast branches of the famed Guggenheim and Louvre Museums.

Mohammed has brushed aside pointed questions about Dubai’s debt, which is estimated to be at least $80 billion. When recently asked about it, he confidently replied: “I assure you we are all right. We are not worried.” It’s not just Abu Dhabi’s cushion he’s relaying on.

Dubai owns a profitable airline, Emirates, and its massive airport is an important hub between Europe and Asia. The emirate’s port and the adjacent free-trade zone both rank among the world’s largest and most efficient harbors and trade centers.

Just a few years ago, due to Mohammed’s marketing skills business fell behind the curve almost overnight if they didn’t have an office in Dubai. Some multinational companies even made the emirate their regional headquarters, and company executives rubbed shoulders with Hollywood stars like Charlize Theron and famous athletes like Tiger Woods.

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