Insomnia stalks kingdom of dreams

If Abu Dhabi and the West do not refuel Dubai, the big casualty would be millions of workers from South Asia who see this desert city state as a profitable getaway
PN Gupta Dubai

FOR many years now, the shortcut to a good and prosperous life in South Asia has usually been a ticket out of the country. Millions took small boats, ships and aircrafts to escape joblessness and extreme poverty to migrate wherever there was money and hope of a better life, even a marginally better life. And Dubai, furiously rising above the sand dunes to vie with other financial and trading centres like Hong Kong, Singapore and even London, promised long term hope of good money and good life till the contagion of the global economic recession bludgeoned its economic fundamentals.

And now Dubai, staring at loan defaults, is on its knees.

How did it happen?

There are easy answers available in the angry reporting flowing out from the Gulf despatched by nervous English expatriates for whom the collapse of this desert kingdom also means an end to a paradise which had year-long sun, sand, private beaches and unlimited easy money. They blame the profligacy of the Al Nahayan family that rules Dubai and the manner in which it went about building the tallest, biggest and most expensive structures in this Neverland that had no resources of its own, like its more affluent neighbour, Abu Dhabi.

Indeed, low or no tax rates for rich investors, special economic zones and other high profile devices resulted in global capital flowing into this kingdom. The city was over-leveraged. Hence, if there was any consequent interruption in the flow of capital, it was bound to get hurt.

Mega projects like Burj Dubai, one of the tallest buildings in the world, or the palm-shaped, swanky manmade islands that were sold to celebrities all over the world, not only underlined the bizarre forms hedonism and human greed could take, but also the recklessness that comes to those who are not challenged by human or natural laws. The Dubai ruler, as some writings in the media suggest, was an epitome of such a mindset. Is it really the only truth or is there more to it?

Dubai has more expatriates than local inhabitants. And, a majority of them were labourers who had left their abode to work in inhospitable conditions to send money back to their families. The riches of Dubai were an outcome of the sweat and tears of those who worked in extreme desert temperatures, often in terrible work conditions, ghettoised and with few fundamental rights. Their labour and the remittances that they sent back home impacted the economies of their countries. India was a major beneficiary of all the hard-earned money that came their way.

The economies of Kerala and Punjab, for instance, were sustained by these remittances. "If I had five sons, then I would have been the richest man in my village since all of them would have sent money from the Gulf. I have just one son, whose money orders cannot match my neighbour's prosperity who has four sons working in the Gulf." This is the typical refrain of a father in the backwaters of a Kerala village at Champakulam near Alleppey. And, his feelings are neither symbolic nor solitary. They denote a universal truth of expectation.

Until the time IT professionals began to travel to the West and send their sizeable earnings back home, it was the poor villagers who worked as casual labourers at the innumerable construction sites of Dubai and other Gulf settlements that brought majority of remittances back home. Till the late 1990s, the Gulf sent back the maximum money home. The rapid urbanisation, development and new-found wealth of Kerala can be clearly credited to the Gulf money. Besides, Kerala faces intense labour shortage - even in the empty and shrinking rice fields, where Tamil labourers are filling the void.

In the absence of any industrial growth wrecked by trade union politics, migration or 'brain and brawn drain' to the Gulf countries was nurtured by successive governments in Thiruvananthapuram. It was an enabler for migration of its people.

Maybe such a policy made sense as the gestation period for setting up its own projects was long. As the remittances kept flowing in, it did not cause any social disquiet that could have forced the local governments to industrialise. Needless to say, migration and substantial money from the Gulf marked Kerala as one of the least industrialised states, despite its phenomenal high rate of literacy and higher indices of quality of life and labour rights.

The boom in Dubai hid many deep-rooted and structural ills. Foremost among them was the kind of people that prospered in an environment of opaqueness and amorality. The initial wealth in Dubai came from gold smuggling to India, where a gold control act prevented the import of the yellow metal. Gold smuggling became the most lucrative business for a clutch of Mumbai-based Indian businessmen, who provided protection to smugglers like Haji Mastan, Sukur Narain Bakhia and Yusuf Patel. Their exploits found expression in many commercial Bollywood films.

Old-timers suggest that this powerful lobby worked aggressively to ensure that the gold control act was not removed to help the vested interests to earn windfall profits. Many big Dubai business families still find their names in Mumbai and Goa police stations.

Gold smuggling was a roaring business till Prime Minister Manmohan Singh did away with the gold control act. In one stroke he removed the criminality that defined the relationship with the Gulf Emirate.

Besides gold smuggling, the animosity and tension between India and Pakistan also sustained Dubai as a re-trading centre. As there was no direct trading link between the two countries, bulk of the trade took place through the third country route - Dubai. A rough estimate suggests that about $3-5 billion worth of trade takes place between the warring neighbours this way. In some ways, Dubai served the parasitic need for the two countries that could not do business together.

This re-trading allowed all kinds of dubious individuals to gravitate from gold smuggling to 'real business'. The Mumbai don, Dawood Ibrahim, who earned his spurs in the business of crime smuggling gold, invested heavily in Dubai and built a new image as a mafia don cum fast-expanding businessman. In money and entertainment obsessed Dubai, since no one had any interest in anyone's past, Dawood, with his phenomenal under/overworld links in India, Pakistan and the Gulf, was feted by the ruling elite.

There was a time when Bollywood stars would entertain Dawood, dance at his parties, and openly associate with him. Dawood was a regular at the celebrity Sharjah cricket matches, sharing television spotlight with film stars from Mumbai. The don would be seen lustily waving the Indian tricolour.

Any taxi driver in Dubai would point out the various hotels that Dawood owned and fill you in with 'folk tales' about his power and influence. The impotence of the Indian police and enforcement agencies in repatriating Dawood - a policeman's son - for various crimes committed in India, shows the complex relationship that he enjoyed with them in the past. And, perhaps, his alleged political linkages.

Dubai also prospered due to the covert money operations of the western powers when they used banks like the disgraced BCCI. Owned by a Pakistani, Agha Hasan Abedi, the bank was found to be laundering money for effective use in fighting the Soviets in Afghanistan. Dubai boomed every time there was chaos, turmoil and war in the region. The war against Iraq took Dubai's economy from one level to another.

From this standpoint, Dubai just would not go 'under' till the western powers and all their stratagems continue to play out in this region. Dubai is a western protectorate, where the British and Americans are 'A-citizens', who control large part of the financial operations. Clearly, all that they are not able to do in their own country, they end up doing in this Lego land.

With so much support stacked up in their favour, Dubai has been less than fair to many of the workers who came here from poor countries. It has allowed dubious contractors to exploit workers and increase their profit margins. Due to this reason, the majority of the people who stay in Dubai do not identify with the place. They have no stake in the buildings that they construct under the relentless Dubai sun. They live in abominable conditions that would not bring glory to a city state that prides in owning the highest, tallest, grandest architectural structures.

If Abu Dhabi and the West do not refuel Dubai to the extent the Dubai regime wants, the big casualty would be the millions of workers from South Asia who see the desert kingdom as a profitable getaway from their own countries, whose economies are fragile, stalked by mass unemployment, and no chance to cross the poverty or low middle class threshold.

In some ways, the golden city in the desert is an instinctive and institutional need for different countries, entities, corporations, sundry tycoons and celebrities, upwardly mobile professionals and ordinary people. Indeed, despite the Dubai debacle, by the look of it, the Kingdom of Dreams, both real and artificial, is really not going away anywhere. But how will it regain the magic? That's the question, with no clear answer.