A walk through Dubai's supercity of futuristic skyscrapers made me uneasy for any city that mimics its rapid development

Harrison Jacobs

Dec 11, 2018, 19:22 IST

A walk through Dubai's supercity of futuristic skyscrapers made me uneasy for any city that mimics its rapid development

Dubai Development Property Real Estate (18 of 40)

The city of Dubai in the United Arab Emirates is known for its extravagant, newly built landmarks like the Burj Khalifa, the Palm Jumeirah, and the Dubai Mall.
In just over two decades, the city has skyrocketed from a desert backwater port to a thriving metropolis with the third-most skyscrapers in the world.
While the rapid development has produced a futuristic city, it has come at the cost of hundreds of thousands of workers and produced a city that can feel soulless.
Dubai markets itself as a liberal Hong Kong-for-the-Middle-East, but it hides the fact that it is still ruled by an autocracy and that legal rights frequently don't hold up for foreigners.
During a visit to Dubai's downtown, it became apparent just how radically the city has developed and the consequences - both positive and negative - of that development.

Three decades ago, Dubai was little more than desert.

The city exploded in prosperity after the United Arab Emirates discovered oil in 1966, leading to a development boom that has resulted in the world's tallest building, the second-biggest mall, the most luxurious hotel, and more skyscrapers than any city besides New York and Hong Kong.

From the outside, Dubai looks like an unmitigated success story. Whereas many other Gulf nations - from Qatar to Saudi Arabi to Bahrain - still rely heavily on oil exports to drive their economy, Dubai is driven by tourism, real estate, tech, shipping, and financial services.

Oil and gas now accounts for less than 1% of Dubai's economy, down from 50% at one point, according to Bloomberg.

The development has been aimed at one thing: becoming the Middle East's Hong Kong or Singapore - an easy place to visit, spend money, and do business.

But for those looking at Dubai and wishing their country or city would use it as a model, Dubai may look more like a cautionary tale. The shiny, glass towers hide the trampling of the hundreds of thousands of migrant workers that built them, the city's often opaque and arbitrary legal system, and the fear over what happens to the economy when the cranes stop building and the flow of foreign investment dries up - as happened in 2009.

I recently spent a day in Dubai's downtown to see the fruits of the city's rapid development.

Prior to the discovery of oil in Dubai in 1966, the city was an unremarkable port in the Gulf region. While it had existed as a trading port along important Middle Eastern trade routes since the 1800s, its main industry was pearling, which had dried up as of the 1930s.

The discovery of oil in the United Arab Emirates in 1966 changed everything. While Dubai's reserves were nothing compared to that of neighboring Abu Dhabi, Dubai's ruler, Sheikh Rashid bin Saeed Al Maktoum, was determined to turn the city into a trading hub.

But even as recently as 1979, seen here, the city was trudging along. By most accounts, things changed in the 1990s and early 2000s. In 1985, the city opened the Middle East's first major "free zone" — a place where foreign companies can operate with almost no taxes or customs and streamlined bureaucracy — at Jebel Ali.

Meanwhile, wars in Iraq and Afghanistan pushed up the price of oil, resulting in tons of capital for Gulf states. And general instability increased the attractiveness of Dubai as a place for investment. In the years after 9/11, Dubai's economy kicked into full gear.

With the accelerated wealth, Dubai's ruler, Sheikh Maktoum bin Rashid Al Maktoum, put into effect a plan to turn the city into the world's top tourist destination. Building outlandish landmarks, like the Burj Khalifa, the world's tallest tower, was key to the plan.

The Burj Khalifa is impossible to miss as you drive through Dubai. I spotted it as I took a Careem — an extremely popular competitor to Uber headquartered in Dubai — up Sheikh Zayed Road, the main highway in the city.

Sheikh Zayed Road connects downtown Dubai with other major developments in the city like the Palm Jumeriah — the world's largest man-made island — and the Dubai Marina, a massive man-made marina that acts like a second downtown.

I got out of my car around the Emirates Towers stop of the metro. Dubai's 49-station, 46-mile metro is completely automated and driverless. The city's Red Line runs like an artery through the heart of Dubai.

As I looked around, it was hard not to be stunned initially by the number of skyscrapers in the area. The city has 190 skyscrapers, trailing only New York and Hong Kong.

I grew up in and around New York City so I was surprised to find myself staring up at the buildings. But there is something striking about the architecture in Dubai. Each building seems to have its own unique design.

Despite the bustling highway and the numerous buildings that crowd the landscape, there are few, if any, people walking around.

When compared to a city in the US or Europe or Asia, Dubai feels like a ghost town. There was a Zoom, a convenient store, on the street level, but little if anything else.

Part of that is due to Dubai's climate. During Dubai's long summer, stretching from mid-April through October, outside temperatures are unbearable. Temperatures are regularly around 105 degrees Fahrenheit (41 degrees Celsius) and have gone as high as 119 degrees Fahrenheit (48 degrees Celsius), with plenty of humidity.

That has influenced development to be extremely car-focused. Highways and parking are everywhere. But that makes it an almost impossible city to walk, even during Dubai's winter, when temperates are at a more comfortable mid-80s Fahrenheit (mid-20s Celsius).

While Dubai has worked to develop industries in trade, tech, and finance, there is little question that real estate development has driven the economy throughout the last two decades.

It seems buildings are going up everywhere. But that's nothing compared to the mid-2000s. In 2007, Morgan Stanley estimated the city had 20% of the world’s construction cranes. The vast majority of development was driven by the state-owned Dubai World company and Emaar Properties, a formerly government-owned enterprise that is now publicly traded.

The top-down development had its consequences when the bills came due. In 2009, Dubai suffered a severe economic crisis when property values crashed by more than 50% of their peak. By some estimates, the UAE owed as much as $123 billion to debtors.

Oil-rich Abu Dhabi bailed out Dubai to the tune of $20 billion and the economy has been mostly thriving since. But there is a sense that some of the lessons of the crisis were never learned. The Al Rostamani Tower, a skyscraper with a maze-shape, was completed in 2011. Like many of the skyscrapers along Sheikh Zayed Road, it combines luxury apartments with office space.

One of the first developments in the area was the Emirates Towers. Like many Dubai developments, it is directly connected to a retail complex so you never have to step outside.

As a result of the crisis, numerous massive development projects were stalled, never completed, or abandoned. The World, a collection of 300 artificial islands, is only just now being developed again. The Palm Jebel Ali and The Palm Deira, two palm-shaped artificial islands planned to be bigger than the Palm Jumeirah, have both been stalled indefinitely.

The development of extravagant landmarks began again after the crisis. The Museum of The Future, first announced in 2015, is due to be completed in 2020. The museum of one of a number of extravagant projects under construction to show off at the World Expo in 2020, which Dubai is set to host. Reuters reported in July that massive government spending for the Expo is propping up economic growth.

The museum will be a "platform to demonstrate and test" the latest technologies and is considered one of the most complex buildings in the world. It is run by the Dubai Future Foundation, a government organization working to make Dubai a tech hub for the Middle East. The DFF is housed out of a plant-covered building next door.

The Dubai Future Foundation building looks as futuristic as the museum-in-progress it will run. But the DFF, like just about every initiative in the city, is government-run to the point where it's impossible to tell where the public sector ends and the private sector begins. Dubai is betting that top scientists and innovators will see government involvement as a benefit — allowing them to implement ideas faster — rather than a detractor.

The Dubai economy was developed as a series of cut-out special "zones," each for a different industry. The laws in each of these "zones" is different depending on the industry. One of the first was the Dubai International Financial Centre, a free zone with the goal of making Dubai the Middle Eastern Hong Kong.

While the zone opened in 2002, the horseshoe-shaped centerpiece complex seen here opened in 2004. Unlike the rest of the UAE, the DIFC is governed by western-business regulations designed by consulting giant McKinsey, with the goal of attracting multinationals. For the most part, it worked. Within a few years, it filled up with global banking giants like Credit Suisse, Citibank, and HSBC.

The DIFC has its own court system and, unlike the rest of the UAE, you will not go to jail for being unable to pay your debts. But investors are now questioning whether the DIFC is as rules-based as once believed after the collapse of Abraaj Group, a Dubai-based private equity firm once worth $14 billion. "The finance world often resembles a small clubhouse of members who look the other way at wrongdoing," lawyers who work in Dubai told the Wall Street Journal in August.

The first (and only) real amount of street life that I saw at the DIFC was the Dubai Fitness Challenge. There were a couple of people playing a game that looked like a cross between tennis and ping pong.

There were a series of yoga and cross-training classes happening. It seemed to be mostly attended by expats.

But other than that, the area was completely dead. This was between 4 p.m. and 5 p.m. on a Wednesday. I'm talking almost no one in the area, aside from construction workers. It seems they may be trying to change that. Gate Avenue, a ground-level retail destination that stretches through the complex, is under construction.

The DIFC is expanding aggressively, as part of a plan to double the number of companies in the DIFC and create a neighborhood of 50,000 professionals by 2024. Gate Avenue is $272 million development that cuts through the center of DIFC and adds 660,000 square feet of dining, retail, and entertainment outlets. There are also other office and residential towers going up.

I found it almost impossible to navigate through DIFC outside. The only way to do it is to pass through a network of underground/indoor corridors that double as a mall. If you are wondering what life is going to look like after pollution and climate change makes the outdoors unlivable, Dubai can give you an idea.

After getting lost in the labyrinth a few times, I found my way outside. There are more than 30 free zones aside from the DIFC. Each is for a different industry and is governed by a different set of rules and laws. Media City and Internet City, for example, are exempted from internet censorship, though some say that freedom has started to be rolled back.

The construction never seems to end. But the buildings, like the Park Towers seen here, are mostly luxury properties. Avoiding another real estate collapse relies on all those towers filling up with wealthy tenants. That may be a problem. Residential property prices have dropped by 15% since 2014 and continue to drop.

Visas for foreign white collar workers are tied directly to jobs, meaning many do not set down roots and, instead, stay for a few years and then leave. And, according to Hasnain Malik, Dubai-based global head of equity research and strategy at Exotix Capital, it's not clear that Dubai's white-collar industries are growing fast enough support demand, anyway.

That's just the surface. Beneath the surface is how this vast futuristic city of gargantuan landmarks was built: on the back of migrant workers hailing from developing or impoverished countries like Nepal, India, Pakistan, Bangladesh, and the Philippines.

Nearly 90% of Dubai's 3.1 million residents are expats, the vast majority of whom are migrant workers brought in to work on construction projects or service jobs. Most come alone with the promise of much higher salaries than their home countries, so they can send money back to their families.

But Dubai, and the UAE as a whole, have long suffered complaints of mistreatment of workers. Migrant workers complain often of brutal work conditions, shifts of 12 hours or more, recruiters promising exaggerated salaries, companies withholding paychecks, and companies holding workers' passports so as not to let them quit, leave, or return home.

The "kafala," or visa sponsorship system, has been singled out as perpetuating some of the worst abuse. The system requires employers to sponsor employees' visas for a fee, which they frequently pass on to workers. Many workers are in debt to their employers for the cost of arranging their contracts, their visa, and the plane tickets to Dubai.

Under "kafala," if workers try to leave their jobs without permission, they can face fines, prison, or deportation. As a result, many have little legal recourse if they find themselves in a bad situation or one differing from what recruiters promised.

Foreign white-collar workers complain of having little legal recourse when things go wrong as well. The New York Times reported last year that architect Fernando Donis found he could do little when he said the government stole his designs for a building known as the Dubai Frame, a new landmark attraction in the city.

"There is a huge dependence on migrant workers who have employment terms that are no different than indentured servitude," Sarah Leah Whitson, director of the Middle East and North Africa division of Human Rights Watch, an advocacy group that has documented abuses of migrant workers, told The New York Times. "This is a system that's put in place to entrap workers."

In recent years, Dubai's government has, it appears, worked earnestly to fix the situation. Training sessions are now held regularly to educate workers on their rights, the UAE has adopted a system to ensure on-time salary payment, and it has passed laws that establish working hours, paid sick leave, and stiff penalties for employers or recruitment agencies that fail to guarantee legal rights, use violence against workers, or fail to accurately convey the expected job description or salary to workers before bringing them to the UAE.

Every day, buses take workers back and forth between massive labor camps with dormitories, where they typically sleep four or five to a room. The government now inspects labor camps to ensure that they are up to code.

While recent reports from Human Rights Watch and the United Nations acknowledged the improvements, both reported that labor abuses have still continued. HRW noted that the reform laws still allow employers to charge workers the recruitment fees that put them in debt.

The entire experience of being in Dubai can be disorienting. As I walked into the Dubai Mall, the second-biggest mall in the world and one of more than 65 malls in the city, it was clear that Dubai society has three tiers: the Emiratis and super-rich on top, the foreign white-collar workers below them, and, at the bottom, the migrant construction and service workers.

Most of the workers come of their own accord, out of a serious need to make money because their home countries are so impoverished. Which makes it all the more tragic that the system, as it exists, seems to set up to exploit them.

It's hard to argue that the Emiratis didn't do what was best for them. Dubai has become the third-most visited city in the world and has weaned itself off oil revenue almost entirely. No small feat. But, as I walked from one massive luxury shopping complex to the next, I had to wonder if Dubai is living on borrowed time.

Dubai and its wealthy developers seem not to think so. With the world's tallest tower already built, Dubai's big name developers' next move is to build an even bigger tower. The Dubai Creek Tower is set to out-scale the Burj Khalifa, and the mall below it will dwarf the Dubai Mall to become the biggest mall in the world. It all feels like a kid playing SimCity with unlimited money, which, as any millennial knows, is a game that gets old quick.

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