153. Dubai GDP

The question on everyone’s mind right now is: is Dubai back? What a lovely question. The question is a simple one, and if you were to replace the noun with, say, David, then it would be far easier to answer. David is either here or not. Dubai, on the other hand, never really went away. Its Star Trek skyline has been there all the while, peppered with cranes and heras fencing. Of course, when the Lehman Brothers jumped out of their 100th floor office window, they left Dubai with a nasty scar, a wound that will never really heal.

But that was in 2008 and in my experience if you just go ahead and pretend that the problem has gone away then, really, nothing can go wrong. It seems that I am not the only one with this idea. Dubai has left the troubles behind them and is now powering into the next decade with its big guns out.

But I have noticed something a little bit worrying. It would seem that over the course of time, Dubai’s prosperity has mirrored that of regional events. Whenever there has been an episode, all of a sudden the coffers start to fill up. Take the first Gulf War, the one when Saddam Hussein invaded Kuwait. Bang, straight away the Dubai spin-doctors were advertising it as a logistics hub for the assisting parties.

Then there was the second Gulf War. Dubai instantly became recognised as the base for Iraq-focussed companies. The same is true of the war in Afghanistan and the daily conflicts that plague Pakistan and Lebanon. And what of the Iranian lot over the water? Dubai, more so than Abu Dhabi, likes to be thought of as the regional go-to-guy, the big kid in the playground who will look after you in exchange for protection money.

After Dubai’s economy went south at the end of 2008, the treasury was all but closed down and the money stayed firmly under lock and key. Growth was slow and at times it looked as if Dubai was dead in the water. Then, in early 2011, a Tunisian market trader set himself on fire and the Arab Spring began.

Civil unrest swept across the Middle East, felling dictators like Hosni Mubarak and Colonel “definitely not mental” Gaddaffi. Forgive me if it sounds crass – as the movement is still in action and tens of thousands have lost their lives – but the instability of the region has allowed Dubai’s growth to accelerate. Business that once was headed for Egypt, for example, is now here.

Egypt has long been the preferred tourist destination in the Arab World, with its tolerance of all things western in the tourism hotspots and such mind-blowing attractions like the pyramids. But the uprisings have all but obliterated one of the world’s most desirable destinations. Airport traffic has increased 16% year on year. Dubai, really, has been one lucky son of a gun.

Trading off the maxim of being the “safe haven of the Middle East”, however, does leave Dubai in a bit of a pickle. How long can it rely on the conflicts elsewhere in the region to effectively bail it out? Had it not made millions from selling use of its ports in the Gulf Wars or lucked into diverted tourism and international commerce from the recent uprisings, where would it be?

Dubai doesn’t have oil; that was all finished years ago. Abu Dhabi takes care of selling the black gold. How will Dubai stand on its own two feet when world peace happens? It is no secret that the Emirate has been looking to diversify from natural resources for some time. Primarily it has looked to develop tourism and international finance. But without a sizable export portfolio that will only get them so far. Beyond petroleum and natural gas, Dubai’s primary exports are fish and dates. Err…we may need to think of a few more.

Thankfully, Dubai has a new ally in the shape of UAE Uncut and today I have come up with an idea. In order to boost export revenue, why not start selling sand? No, really. Sand has many uses and is in more or less infinite supply. Bricks, aquariums, mortar, concrete, paint, kitchen counters, low quality glass; the list is endless. Ultimately the desert is a barren waste land, so scooping up a few bucket loads and selling them to Autoglass is a winner; surely? The infrastructure already exists; the old oil tankers can be used to transport sand to Europe, and there are plenty of diggers and dumpers knocking around.

Now, Mr. Willy Wonka, I want exclusive rights to your sand...

Now, Mr. Willy Wonka, I want exclusive rights to your sand…

Nature will be on Dubai’s side, too. When the shamal (wind) picks up and half of Saudi Arabia is blown across the UAE then the sand coffers will be replenished and they can continue to sell it on to men in Ford Transits. Think of the fortune they could make. This “deal in the desert” will be far better than the one Blair did…

Well, I’m no trade envoy, but surely my half-cock idea of selling sand to manufacturing industries all over the world is better than relying on international finance, investment and regional unrest. Conversely, if you can put it in a box and sell it, you can trust it; its existence cannot be denied. If you can only see it as a long number on an accountant’s computer then trust it in the same way that you would trust your genitals in the hands of a lunatic with a pair of scissors.

So, is Dubai back? Yes. And watch out.

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