I picked up a copy of The Wall Street Journal-Europe on the concourse while boarding my Emirates Air flight from Paris to Dubai. The lead story provided an unexpected relevance to the trip – my first to Dubai. Dubai World, owned by the Dubai government, had announced a 6-month moratorium on payments of some of its $60 billion in debt. Since the announcement, stock markets have been dropping and recovering, company officials have attempted to calm borrowers and government officials have provided considerably less assurance than Dubai’s investors would have preferred.
Here’s a brief guide to Dubai and some thoughts about its future.
The United Arab Emirates: Dubai is one of the seven emirates of the United Arab Emirates (UAE), which like the United States and Canada is a federation. Broadly speaking, the emirates represent states or provinces. By far the richest is Abu Dhabi, with something like 10% of the world’s oil reserves. Just 100 miles up the eight-lane freeway is Dubai, with little in oil reserves, but which has used its previous income and massive borrowings to create one of the most spectacular urban environments in the world.
An Architectural Feast: Dubai is a feast of modern high-rise architecture on shore, off shore and in man-made islands shaped like palms and a map of the world. A tour of the world’s most spectacular modern high-rise architecture could take many trips to China, including Shanghai’s Pudong, the developing western downtown of Beijing, the transforming core of Nanjing, around north station in Shenyang and the world’s largest boom-town, Shenzhen. But Dubai provides nearly as impressive a list of attractions within a comparatively few square miles.
The Burj: Soon, the new world’s tallest building will open in Dubai. The Burj is virtually complete, with 160 floors and rising nearly 2,700 feet or more than 800 meters. The Burj is more than twice the height of the Empire State Building and a full 60% higher than the previous world record holder, Taipei 101. Adjacent to the Burj is Dubai Mall, which when completed will be the largest in the world. Another Mall, Emirates Mall, has an indoor ski area, a rather unique feature for the desert.
The Main Street Freeway: The main thoroughfare in Dubai is Sheikh Zayad Road, a 12-14 lane freeway, with additional service lanes on both sides. On either side, there is a row of some of the world’s tallest buildings, often not more than a few feet apart. Except in the Burj area, the tall buildings tend to be in single rows, with low rise development beginning virtually at the rear lot lines.
Dubai’s Upper North and South Sides: Manhattan has its upper east and west sides, while Dubai has its upper north and south sides. It is an open question which is more impressive, but if all of the planned construction is completed, Dubai’s skyline will overshadow that of New York. On the north side of Sheikh Zayed Road, there is the Dubai Marina, which played prominently in press reports expressing concern about the debt moratorium. Much of the Dubai Marina is still under construction. On the north side of Sheikh Zayed Road there is another development that appears to be at least as large as Dubai Marina, Jumeirah Towers, with many buildings still under construction. These two developments line the freeway for two miles and stretch at least 0.5 miles in each direction from the freeway. There are twin towers that appear to be generally modeled on New York’s classic Chrysler Building just to the east of the Marina on Sheikh Zayed Road. However, uncharacteristically for Dubai, they are not as tall.
The Palms and the World: Some of the most spectacular architecture is just to the west of the Marina, in and around the Palm Jumeirah Island (actually four islands). The Palm Jumeirah is home to the Atlantis Hotel, which would be the talk of any town in the world, except Dubai, that is. The Jumerirah Palm island includes single family housing on its “fronds” and high rise condominiums at the entrance. A monorail operates, largely empty, to the Atlantis Hotel from the mainland, though does not connect to the Dubai Metro.
The developer of the Palms and a group of islands called “The World” (in a shape somewhat like the world) is Nakheel, a subsidiary of Dubai World. This subsidiary was the unit that first indicated it would not be able to meet its financial obligations on time
Burj Al Arab Hotel: Just to the east of Jumeirah Palm is one of Dubai’s oldest and best known architectural masterpieces, the Burj Al Arab Hotel, which sits offshore, though not at the distance many of the publicity photos suggest. This is a prehistoric structure by Dubai standards, having opened in 1999.
Ring Roads and the Silicon Oasis: Dubai has two incomplete ring roads. The inner ring (Route 311 or “Emirates Road”), 12 lanes, runs through partially developed desert. The outer ring (Route 611), which is up to 10 lanes, runs through even less developed desert. There are, nonetheless, interesting projects along both roads. Dubai’s Silicon Oasis contains massive commercial buildings, still under construction, high rise condominium buildings and single family housing, which is behind security. This impressive development would be illegal in virtually all Australian urban areas, all of the UK and some US urban areas, because it would lie outside the urban growth boundaries that have been imposed by planners in those places.
Academic City: On the edge of Silicon Oasis lies the Academic City, which contains branches of universities such as Murdoch (Perth, Australia) and Michigan State. Perhaps someday there will be an annual gridiron or soccer match played between the two in the nearby new Cricket Stadium nearby the Academic City.
The Urban Area: The Emriate of Sharjah is to the immediate east of Dubai and continues the urbanization for many miles. The urban area (containing both Dubai and Sharjah) has approximately 2 million people. This is a very small population (less than that of Sacramento or Portland) for an urban area of such world significance and monumental architecture.
The Dominant Ethnic Minority: The native or citizen population of “Emiratis” is much smaller, estimated at under 20%. The balance of the population is primarily expatriate workers who are in Dubai on temporary visas. So long as the hundreds of thousands of Indians, Pakistanis and others have employment, they can stay.
Future Plans: Dubai has every intention of continuing its building binge. Already, a huge new international airport is under construction, which will have an annual capacity as much as 50% greater than the world’s largest airport (Atlanta). Unbelievably, the present airport, which has had significant recent expansion, would remain open. The two airports together would provide Dubai with more passenger capacity than the five airports of Los Angeles (with its 18 million consolidated metropolitan area population). There are many more hotels, large condominium and residential projects on the drawing boards. There are plans for a luxury hotel under water.
Projects on Hold: However, Dubai may not be the master of its own fate. The UAE and the Emirate of Abu Dhabi, both with much more in financial resources, are expected to provide Dubai some relief. However, any assistance will come at a price. Control of crown jewel “Emirates Airlines” could be lost. The new international airport could be put off, particularly with nearby Abu Dhabi also expanding its airport
The question is whether Dubai can rebound. There are plenty of uncompleted projects like the “City of Arabia” development along the Emirates Ring Road, far from the core. The project’s website says it will be completed in 2008. It is nearly 2010, and to put it mildly, from Emirates Road, the project appears to be a bit behind schedule.
The undersea hotel project also appears to be on hold. The proposed Nakheel Tower could rise to over 4,000 feet and would be located just to the east of Jumeirah Towers. It was, however, put on hold in early 2009. Nakheel, of course, is at the heart of the Dubai financial crisis. Construction has apparently stopped on Nakheel’s Deira Palm (the largest of the palms) and the World.
Of course, Dubai is not the only place where financial difficulties have put buildings on hold. Chicago’s “Spire” is little more than a circular hole next to Lake Shore Drive, rather than a rapidly rising edifice that would have been the world’s second tallest tower, after Dubai’s Burj.
Whither Dubai? It seems fair to ask what Dubai was seeking to accomplish. On one hand, there was an interest in developing a strong tourism base, and tourism has increased over the past decade. Yet, Dubai attracts only 1/10th of tourism of Las Vegas, while having more than one-half the hotel rooms. One challenge is that what has been built may already be too large to be supported by the permanent population, Emirati or expatriate.
But the real question is where Dubai goes from here. Late reports indicate that Dubai World intends to restructure nearly one-half of its debt. Creditors had hoped that the richer Emirate of Abu Dhabi would bail out Dubai, not much different from Texas bailing out a virtually bankrupt California. The more likely possibility could be that the UAE federal government itself might guarantee some debts but neither seem in any hurry to provide blanket relief. This could be reflective of the growing revulsion to the massive government bailouts from the Great Recession.
At this point, the international repercussions appear unlikely to be large enough to start phase II of the Great Recession. Yet the notion of providing a safe “haven” in a tough neighborhood could still pay off in the long run as it has for cities like Singapore. It may not be conventional wisdom to say this, but the Emiratis could end up with the last laugh.
Top photograph: Dubai Silicon Oasis
Second Photograph: The Burj (November 27, 2009)
Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”