Home
Special Reports
 
Back
 
A Visit To Dubai Inc.


By Steve Kroft
CBS News
August 3, 2008


A Success Story In The Middle East

Oil-rich, a magnet for business and tourism and a stable island in the
turbulent Middle East, the Kingdom of Dubai is the success story of the region.

(Mimi Chakarova)Photograph of a sex worker by Mimi Chakarova. She has
chronicled the plight of sex workers in the Middle East and Europe for
several years. She has made a film about prostitution in Dubai for PBS'
Frontline/World. Click here for more information.

Dubai is a tiny sheikdom nestled along the Persian Gulf on the eastern
edge of the Arabian peninsula and part of a tiny, oil-rich country called
the United Arab Emirates. Over the course of just a few decades, it has
transformed itself from a spit of sand about the size of Rhode Island into
the Singapore of the Middle East.

It's a political, economic and financial success story, in a region torn
by conflict, and as 60 Minutes first reported last October, it's all the
vision of one man, Sheikh Mohammed bin Rashid al Maktoum. He rarely gives
interviews and but he gave one to correspondent Steve Kroft, along with a
tour of his sheikhdom.

No matter how many articles you read or how many pictures you see, they
don't quite capture the enormity and the energy of Dubai. It is a physical
manifestation of Arab oil wealth set in concrete, glass and steel, a place
so rich and ambitious that is changing the geography of the world as a
business center, transportation hub, and tourist destination.

It's a 21st century city at the crossroads of a new world. Skyscrapers
rise in clusters, man-made islands rise from the sea, and entire
neighborhoods with hundreds of office buildings and apartments that rise
from the sand. And it is all Sheikh Mohammed's vision.

One project, called by some the "largest construction site on earth," was
just desert several years ago. The site employs half a million laborers,
working 12-hour shifts on a reported $300 billion worth of projects,
building Sheikh Mohammed's dream of a modern, efficient and tolerant Arab
city with fine restaurants, a vibrant nightlife, that is both the
playground and business capital of a new Middle East.

"What are you trying to do here? What do you want this place to be?" Kroft
asks.

"I want it to be number one. Not in the region, but in the world," Sheikh
Mohammed says.

Asked what he means by "number one in the world," Sheikh Mohammed says,
"In everything. High education, health, housing. Just making my people the
highest way of living."

At 59 years old, he is one of the richest people in the world, a member of
the Maktoum family which has ruled here for nearly two centuries. He is a
former air force pilot and an avid horseman who competes in cross country
endurance races and is one of the largest breeders of thoroughbred race
horses in the world.

By Western standards his marital situation is a little complicated. Heís
married to Princess Haya, the daughter of the late King Hussein of Jordan,
but he also has another wife who is rarely seen in public.

He is frequently described as a workaholic and, as 60 Minutes found one
morning, always in motion. The sheikh, who likes to stay on his feet,
walks around without a security detail.

He is famous for dropping in unannounced at construction sites and
government offices to see how things are going.

He uses his cars as mobile offices, traveling most of the time by himself.

There is a little bit of Donald Trump in him, at least when it comes to
showmanship and getting people to come to Dubai. "You know this building
up here? This is where we have snow skiing," Sheikh Mohammed points out.

The strange looking building the sheikh had pointed out is the world's
tallest indoor ski slope. Outside it may be 120 degrees but inside it
feels like the Alps.

There is the Dubai World Cup, showcasing the fastest horses in the world
running for the world's richest purse. Not to mention the most luxurious
hotel in the world, the Burj al Arab, where the cheapest room is $2,000 a
night.

"Why do you want everything to be the biggest, the tallest?" Kroft asks.

"Steve, why not? Why not? If you can have it in New York, why canít we
have it here?" Sheikh Mohammed asks.

"Why are you in such a hurry? Most people would try and do this in a
lifetime, not five years," Kroft asks.

"I want my people to live better now. To go to high school now. To go to
good health care now. Not after 20 years," the sheikh explains.

This segment was originally broadcast on Oct. 14, 2007. It was
updated on July 30, 2008.

Dubai is a tiny sheikdom nestled along the Persian Gulf on the eastern
edge of the Arabian peninsula and part of a tiny, oil-rich country called
the United Arab Emirates. Over the course of just a few decades, it has
transformed itself from a spit of sand about the size of Rhode Island into
the Singapore of the Middle East.

It's a political, economic and financial success story, in a region torn
by conflict, and as 60 Minutes first reported last October, it's all the
vision of one man, Sheikh Mohammed bin Rashid al Maktoum. He rarely gives
interviews and but he gave one to correspondent Steve Kroft, along with a
tour of his sheikhdom.

No matter how many articles you read or how many pictures you see, they
don't quite capture the enormity and the energy of Dubai. It is a physical
manifestation of Arab oil wealth set in concrete, glass and steel, a place
so rich and ambitious that is changing the geography of the world as a
business center, transportation hub, and tourist destination.

It's a 21st century city at the crossroads of a new world. Skyscrapers
rise in clusters, man-made islands rise from the sea, and entire
neighborhoods with hundreds of office buildings and apartments that rise
from the sand. And it is all Sheikh Mohammed's vision.

One project, called by some the "largest construction site on earth," was
just desert several years ago. The site employs half a million laborers,
working 12-hour shifts on a reported $300 billion worth of projects,
building Sheikh Mohammed's dream of a modern, efficient and tolerant Arab
city with fine restaurants, a vibrant nightlife, that is both the
playground and business capital of a new Middle East.

"What are you trying to do here? What do you want this place to be?" Kroft
asks.

"I want it to be number one. Not in the region, but in the world," Sheikh
Mohammed says.

Asked what he means by "number one in the world," Sheikh Mohammed says,
"In everything. High education, health, housing. Just making my people the
highest way of living."

At 59 years old, he is one of the richest people in the world, a member of
the Maktoum family which has ruled here for nearly two centuries. He is a
former air force pilot and an avid horseman who competes in cross country
endurance races and is one of the largest breeders of thoroughbred race
horses in the world.

By Western standards his marital situation is a little complicated. Heís
married to Princess Haya, the daughter of the late King Hussein of Jordan,
but he also has another wife who is rarely seen in public.

He is frequently described as a workaholic and, as 60 Minutes found one
morning, always in motion. The sheikh, who likes to stay on his feet,
walks around without a security detail.

He is famous for dropping in unannounced at construction sites and
government offices to see how things are going.

He uses his cars as mobile offices, traveling most of the time by himself.

There is a little bit of Donald Trump in him, at least when it comes to
showmanship and getting people to come to Dubai. "You know this building
up here? This is where we have snow skiing," Sheikh Mohammed points out.

The strange looking building the sheikh had pointed out is the world's
tallest indoor ski slope. Outside it may be 120 degrees but inside it
feels like the Alps.

There is the Dubai World Cup, showcasing the fastest horses in the world
running for the world's richest purse. Not to mention the most luxurious
hotel in the world, the Burj al Arab, where the cheapest room is $2,000 a
night.

"Why do you want everything to be the biggest, the tallest?" Kroft asks.

"Steve, why not? Why not? If you can have it in New York, why canít we
have it here?" Sheikh Mohammed asks.

"Why are you in such a hurry? Most people would try and do this in a
lifetime, not five years," Kroft asks.

"I want my people to live better now. To go to high school now. To go to
good health care now. Not after 20 years," the sheikh explains.

"Could what's happened here have happened in any other Arab
country?" Kroft asks Abdul Rahman al Rashed, the general manager of Al
Arabiya, one of the most influential news organizations in the Middle
East.

"No way. No," Al Rashid says.

"What is it about the rest of the Arab world that that would've made it
incredibly difficult, if not impossible, to do what's been done here?"
Kroft says.

"I think lack of vision, heavy bureaucracy, lousy governments and
corruption," Al Rashed says.

Asked what Dubai's reputation is in the rest of the Arab world, Al Rashed
tells Kroft, "Remember, we have 300 million people live in this region.
Eighty-six percent of the youth being questioned, they say they want to
come to Dubai. Their destination number one is not London, is not New
York, as it used to be in old days, or France. It is Dubai."

But the sheikh is also trying to construct a new society based on
religious tolerance and gender equality, at least in the work place. He
has made recruiting and promoting women a priority.

"I think we, the government, we are doing all that we can to really make
of you a leader and we are concentrating on the woman," the sheikh
remarked at a meeting.

That's a significant change for women from a conservative Muslim culture.

"The resistance that people already have in our society because of the
religious background and cultural background should reduce," a female
attendee at a meeting said to the sheikh.

"That's right. I agree with you, but ah I only worried that you take over
all," he replied, to laughter.

It isn't the only cultural change taking place in Dubai. For starters,
being outnumbered by foreigners nine to one has had a huge impact on the
local population. Bikinis are mixing with burkas, and churches with
mosques, as traditional customs are challenged by modern sensibilities.

Take the ancient sport of camel racing, an extremely popular local sport.
Traditionally, the camel jockeys were always small boys, but an
international uproar over the way they were being treated led to a novel
solution. The boys have been replaced with radio-controlled robots. The
riding crops are controlled by owners, who follow their camels around the
track in SUVs.

It was a high-tech solution that preserved an old tradition but the
solution to Dubai's other problems, like prostitution, aren't so simple.
The U.S. State Department estimates that 10,000 women from Africa, Asia
and Eastern Europe may be victims of sex trafficking, lured to Dubai under
false pretenses and pressed into service as prostitutes.

"You allow alcohol. A lot of the women wear Western dress. You have some
prostitution. Are those concerns?" Kroft asks Itbisam Al-Kitby, a local
college professor.

"Yeah. This is main concern of people here. Of course!" Al-Kitby says.

Asked what he thinks the effect has been, Al-Kitby tells Kroft. "People,
you know, they've been put in a situation they didn't choose. Nobody asked
them, 'What do you want? Is it really, this is what you want?'"

"What do you think of Sheikh Mohammed?" Kroft asks.

"He is great. He is original. But his ambition without any limits," the
professor says.

Professor Al-Kitby warns that the sheikh's ambition could have some
consequences. "And those people are coming from democratic countries. They
cannot be ruled with undemocratic way. It will be a political risk for you
in the future. Did you think in that? Did you think about this?" Al-Kitby
wonders.

"We are not talking about a democracy here," says Dr. Rochdi Younsi, the
lead analyst for the Eurasia Group, a firm that does political and
economic risk analysis for companies interested in Dubai and the other
Gulf states.

"You get a sense of freedom when you are in Dubai. You do not really feel
that you live under an oppressive regime. At the same time, freedom of
expression is not guaranteed," Dr. Younsi says.

"Dubai, in many ways, is a Western country. A Western-style country. Why
hasn't it become a target, you think, for al Qaeda terrorism?" Kroft asks.

Says Younsi, "If you're concerned about the risk that al Qaeda may pose to
Dubai in the future, I would look at the labor issue in Dubai. Many of
these people have been disgruntled for years now because of the horrible
working and living conditions. And it is pretty easy for an organization
like al Qaeda to exploit that kind of anger."

Eight years ago, Sheikh Mohammed decided what Dubai needed was more
waterfront property and beaches for all the tourists who are going to
come. Dubai only had 60 miles of coastline, so ordered Sultan Bin Sulayem
to create more.

"After two months, I came to him and I showed him this picture, of a
perspective of a picture of an island. He said 'How much beach is this
going to give us?' I said seven kilometer. He said 'Why not 70?' You know
he always ask you the impossible. Not what you are able, but what you
cannot do," Sultan Bin Sulayem remembers.

"So, Sheikh Mohammed gave you the land and told you to start building?"
Kroft asks.

"He gave us the water," Sultan Bin Sulayem says. "We have to make the
land."

Business consultants told him the project was unfeasible, but with no
environmental regulations to stop him, Sultan began dredging a hundred
million cubic yards of sand from the Persian Gulf, along with seven
million tons of rock to form a man-made Island in the shape of a palm. It
more the doubled the coastline of Dubai, and created waterfront condos and
homes for 150,000 people, not including 35 hotels.

"Most people, if they brought in a business consultant, and they told
them, 'This is a terrible idea. It's not gonna work.' They wouldn't do
it," Kroft remarks.

"Most people, yes, but not us," Sheikh Mohammed says.

"I must tell you, your Highness, that there are some members on your team
who, from time to time had doubts. I won't name them, but they looked and
they said, after you told them what you wanted they said, 'This is
impossible,'" Kroft remarks. "They thought that you were crazy."

"Yeah, if you donít want to name them, I can name them," the sheikh said,
laughing.

It's easy to laugh about it now. The palm island project sold out in less
than a week, and houses that initially went for $1 million are being
resold by original investors and real estate speculators for five times
that. But the day 60 Minutes went ashore, a month after the official
opening, the island was a ghost town.

"People just started moving in," Sultan Bin Sulayem explains.

It's not clear when or if people will actually start moving in. Most of
the properties were bought as second or third homes by wealthy Arabs,
Russians, and Europeans to be used a few months a year, or as real estate
investments, or a way to move money offshore to a safe haven. But it has
not stopped the building.

Three more off-shore developments are underway, including a chain of 300
man-made islands, some of which will be private. They are shaped and
situated to resemble a map of the world, which is what the project is
called. Demand is said to be strong, but to many, Dubai has the feel of a
speculative bubble, that could burst.

Man-made islands with multi-million dollar homes on them are only one
component of Sheikh Mohammed's vision to make his kingdom a safe haven for
capital and a model for social and political change in the region.

From financiers and entrepreneurs, to construction workers and maids,
Dubai has become a kind of El Dorado, the setting for a modern day gold
rush. Everything is in overdrive. And not surprisingly, the speed of it
all has had unintended social and political consequences.

"A number of people have described you as the chief executive officer of a
huge business enterprise. Is that an accurate way of describing what you
do?" Kroft asks the sheikh.

"Actually, yes. I change the way of government to make it like a big
company," Sheikh Mohammed says.

Some people call it Dubai Inc. and, besides investments at home, includes
extensive holdings throughout the Middle East and around the world. In the
U.S. its list of properties is way too long to go into but includes
resorts, hotels and real estate holdings from Las Vegas to New York. The
company is also negotiating to buy a significant interest in the NASDAQ
stock exchange.

Amidst the smell of opportunity and prosperity, there is also a
whiff of exploitation. Sheikh Mohammed's dream is being built by armies of
contract workers from South Asia, who work 12-hour shifts, six days a
week, for an average of $4 or $5 a day. It is more than they can make at
home, but human rights groups say they are little more than indentured
servants, forced to live in substandard conditions.

At the end of a shift, they board buses for the trip out of the city to
remote desert compounds, where they live far from the gleaming towers
they're building.

"There have been allegations, and reports, that a lot of contractors, a
lot of labor contractors have brought people into the country, and taken
advantage of them, abused them," Kroft says to the Sheikh Mohammed.

"We had some problem. But we're dealing with it. And now the law is
against it. And we're dealing a lot about it," the sheikh says.

Sheikh Mohammed says he is dealing with it by building new modern
dormitories and compounds for thousands of workers. The government has
also created a court where workers can voice their grievances. And Sheikh
Mohammed told 60 Minutes that tough new laws have been passed to protect
workers and crack down on labor contractors who violate them.

"People will go to prison, if they keep doing this," Sheikh Mohammed vows.

But according to letter by Human Rights Watch, no one has. The group wrote
that it was "not aware of a single instance" in which an employer had been
prosecuted for labor violations.

"There have been efforts to improve their situation. But, clearly not
enough," Younsi says.

"Sheikh Muhammad and the government of Dubai say, 'Look, this is a problem
that has been created by labor contractors.' Mostly foreign nationals.
That they're the ones that are exploiting these workers. Not the people in
Dubai. What's your reaction to that?" Kroft asks Younsi.

"I'm not sure it's a credible answer," Younsi says. "They want the cheap
labor. And it's been working to their advantage."

The worker situation has damaged Dubai's reputation but it's not the first
time Sheikh Mohammed's had a public relations problem. Two years ago,
President Bush approved a deal for one of the sheikh's companies, Dubai
Ports World, to take over the operation six U.S. ports.

"This deal wouldn't go forward if we were concerned about the security for
the United States of America," President Bush said at the time.

But not everyone saw it that way and a nasty debate erupted in Congress
over whether a company owned by a Middle East sheikhdom should be managing
U.S. ports vulnerable to terrorist attacks.

The 9/11 Commission report had already pointed out that at least nine of
the hijackers "came through Dubai" on their way to the U.S. and that
"funds wired from Dubai" were used to finance the attacks.

It was the first time most Americans had even heard of Dubai, and the
controversy didn't end until Sheikh Mohammed decided to cut his losses and
sell.

"If thatís what the American people want, sell to somebody else," the
sheikh says.

"Do you think you got a fair shake out of the ports deal?" Kroft asks.

"I leave that to you," Sheikh Mohammed says with a chuckle.

Asked if he's disappointed, the sheikh tells Kroft, "As I say, I donít
want to disturb our relationship."

"You didnít wanna make a big deal out of it," Kroft remarks.

"Exactly," Sheikh Mohammed agrees.

Dubai is still one of the U.S.'s staunchest allies in the Middle East, and
the U.S. relies on its ports to service Navy warships in Persian Gulf.

Sheikh Mohammed says he considers himself a friend of the United
States and the he loves the country and its people.

Asked what he likes about the U.S., Sheikh Mohammed says, "I like
everything about them, except their foreign policy little bit. I don't
like their foreign policy."

"Can you be more specific about the foreign policy? What don't you like
about the foreign policy?" Kroft asks.

"No I'll leave it vague. Just, I'll leave it like that," the sheikh says.
"I think the American people will know what I mean."

"You had conversations, and consultations with the United States before
the Iraq war," Kroft says.

"Yes. Yes. We gave the best advice we can to our friends. But, as you
know, they don't always listen," the sheikh says.

Sheikh Mohammed acknowledges he was against the war. "It was wrong war,"
he says.

There are also differences with the U.S. over Iran, which is one of
Dubai's closest neighbor, largest trading partners, and one of its biggest
investors. Any hostilities in the Persian Gulf could present the sheikh
with some difficult choices. But for the time being, business is still
booming.

"What do you do when you're not the ruler of Dubai? What gives you
happiness and pleasure?" Kroft asks.

"I'll be riding my horses," Sheikh Mohammed says. "I love horses."

Sheikh Mohammed owns one of the world's top breeding and thoroughbred
racing operations. The morning 60 Minutes visited, the sheikh was
selecting horses for races all over the world. Some of the world's most
expensive thoroughbreds were on display.

His passion is evident. "These are the best horses in the world," he tells
Kroft.

Asked what it is that he loves so much about horse racing, Sheikh Mohammed
says, "Itís my hobby. The horse in my blood."

"Of the horses we've seen today racing, what are they worth?" Kroft asks.

"I mean, each one if he win what we think he will win, heíll be worth 50
to 60 million dollar!" Sheikh Mohammed says.

There was one horse in particular that interested the sheikh. "I expect
this to pass this before its done. Otherwise Iíll be disappointed," he
said, watching the race.

On this particular day the sheikh was not disappointed. Nobody likes to
disappoint the sheikh -- not even the horses.

"Thatís what I want to see!" the sheikh says. "Thatís what I want to see!"
 

Promoting Green Building Design, Construction and Operation, Sustainable Living,
Clean Technology, Renewable Energy Resources and Energy Independence