Dubai, the contingency of economic development, and the Great Man theory of history
The unlikelihood of Dubai
Recently there have been various attempts by people in my intellectual sphere to rehabilitate the Great Man theory of history. The reasons behind this rehabilitation are twofold: intellectually to lay bare the poverty of the thinking of those who lazily ascribe all events to the inevitability of historical processes, and practically to shake people on the right out of their fatalistic doomer convictions and force them to reckon with the fact that perhaps they could change history if they only chose to try.
This discourse has made me want to lay out the theory that the development of Dubai since the 1970s into the middle east’s leading entrepôt and latterly, destination, is the best example of Great Man theory since Lee Kuan Yew did something similar for Singapore.
The default pathway for somewhere like Dubai was for its rulers to luxuriate in oil wealth without making any notable efforts at development, and this is what the other gulf states largely did until they belatedly followed the trail it blazed. Dubai though, under Sheikh Rashid (ruled 1958-1990) and his third son Sheikh Mohammed (ruler de facto since the 1980s and de jure since 2006) chose a more difficult but ultimately far more rewarding path and established a model for the whole region.
From today’s vantage point it can seem like it was inevitable that the gulf states would produce one or more great global cities given their location at the shipping and aviation crossroads of Eurasia and Africa, combined with their development-enabling oil and gas wealth. Today there are many in the region that look like Dubai (though some still more in aspiration than reality): Doha, Sharjah, Manama, Abu Dhabi and Kuwait City, and even Riyadh, Jeddah and Mecca.
Emirates is just one of multiple world class airlines; Qatar Airways and Etihad most notably. Dubai is not region’s sole international destination: Qatar has hosted the World Cup and both it and Bahrain host an annual Grand Prix. In infrastructure the current world’s tallest building the Burj Khalifa is to be outstripped by the Jeddah Tower, while Saudi Arabia’s Neom and The Line exceed the infrastructural ambition of the Palm Islands and the World Islands. In all of these things though, these countries are merely following the model pioneered by Dubai, and while following a model, of course, is something that many people and societies can do, successfully pioneering one is far rarer.
If you went back to the middle of the 20th century when the gulf states were still British protectorates, you would not have bet on something like the Dubai model emerging there. Singapore and Hong Kong’s rise could have perhaps been predicted due to their existing history as trade centres and the fact that they were majority Chinese, but the Trucial States were forever backwaters, never properly colonised by any power due to lack of interest rather than lack of ability, and only made British protectorates in order to suppress piracy.
Even if you did predict a global entrepôt emerging in the gulf, you would not necessarily have bet that it would be Dubai. The emirate was known for trade prior to its great development boom, it had been declared a free port in 1901 and had become a centre for Persian merchants who were alienated by their own government’s regulations. By mid century it was known as a trading centre compared to its neighbour Abu Dhabi. However it was far less important than many of its peers.
Bahrain had been a highly prominent trading centre in the gulf since the mid 19th century and managed to boost its status further during the Lebanese civil war in the 70s by capturing much of the financial activity fleeing Beirut. It had also enjoyed oil wealth decades before Dubai, and had the first airline in the region (Gulf Aviation, later Gulf Air) from 1950. Kuwait too had been known as a wealthy trading centre since the early 20th century and was the most developed country in the region in the 60s and 70s.
Bahrain and Kuwait did have political problems Dubai did not have to deal with: a sectarian Sunni-Shia divide and being claimed by Iraq respectively. But even Dubai’s immediate neighbour Sharjah had an airport long before Dubai and by some accounts had a larger port too, while its other neighbour Abu Dhabi was always larger and more politically dominant.
Dubai then is one of the best examples of how economic development is a choice, not merely a necessary result of the right economic, political, and social factors, and it is a rare choice at that. Elites by definition sit in a privileged position in any society, they already possess high status and the good stuff already flows their way. They can still live lives of luxury in a poor and stagnant economy, as the many historical examples of societies dominated by conservative landowning aristocrats, or more recently the record of nearly all postcolonial African states, shows.
And of course, even the bounty of natural resource wealth is also frequently squandered by these rentier states. Gabon is a good example of this, another small coastal country with oil wealth, where the leader Omar Bongo who ruled from 1966-2009 did almost nothing to develop it. Gabon was said to have built only 5 km of motorway per year despite vast oil revenues.
The other gulf states were also (less extreme) examples until they started to copy Dubai. Without Dubai, their rulers would still have the summers in London, the horse racing, the palaces, the yachts and sports cars, and the lives of excess, but the gulf would not house the world’s tallest building, largest man-made harbour, or many of its top airlines.
Building Dubai
For the relevant history of Dubai’s development the best account I have read is Jim Krane’s 2009 book City of Gold: Dubai and the Dream of Capitalism. Sheikh Mohammed’s own books My Story and Flashes of Thought are also interesting, they are of course hardly going to be objective but they provide a good insight into how the current Sheikh sees himself and the development of Dubai. You can read these for a full history, so I will just describe here the most relevant parts.
In short, the two relevant Sheikhs had highly specific and ambitious visions for their emirate and pushed hard to bring these to fruition in an unlikely environment and against much scepticism. Sheikh Rashid’s vision was a ‘regional entrepôt model’ (Dubai as leading shipping port and trade centre), and his de facto and later de jure successor Sheikh Mohammed’s was to expand on this model and combine it with a ‘global destination model’ (Dubai as airline hub and international business and tourism centre).
The reason why I lean towards the ‘great man’ explanation in Dubai’s case is that most of the projects for achieving these visions were driven by one of these two rulers and pursued prior to commercial demand for them actually existing, rather than being natural market driven responses by the emirate’s commercial classes. While Dubai’s elite was indeed historically more merchant friendly than many neighbouring places, there has been no sign, as far as I am aware, of any particular commercial genius among them as a whole either prior to or after Dubai’s boom.
Of course there is always the risk that I (and Jim Krane) are being misled by megalomanical Al Maktoum propaganda and that Dubai’s development was really pushed forward by less well known but visionary officials and business leaders. If anyone reading this has evidence this is the case please let me know, but I have not seen much to indicate this, the most I have seen is from Krane who mentions various competent members of the ruling class in the Executive Office and Executive Council, though they were, of course, selected personally by Sheikh Mohammed (Krane, City of Gold: Dubai Inc.).
So to give the relevant history: in 1958 Dubai had only 20,000 people and was known only for pearling and small scale trade. Sheikh Rashid took power this year, and his first grand project was the dredging of Dubai Creek which had become unnavigable due to the build-up of sand. While unlike later projects this was not so much a grand vision as a solution to an obvious problem, Dubai at this point had no oil wealth, making it an expensive and risky investment. This was the point at which Dubai began to diverge from its neighbour Sharjah, as Sharjah’s port was also closed in the same period by sand build up, but the rulers were far slower moving and it was not opened again for a decade (Krane, City of Gold: Outpacing the Neighbours).
Dubai then started to come into its oil wealth (though far less than its neighbours), which was invested in more infrastructure. The next project was a new port, Port Rashid, completed in 1972 and at Sheikh Rashid’s urging, far larger than there was demand for at that time (Krane, City of Gold: The Gambler). The Dubai Dry Docks came later in the decade, against much advice that it was folly, as among other reasons, Bahrain was also building dry docks for which it had much more backing. Then came a gigantic aluminium smelter and desalination plant, and then the Sheikh Rashid tower. Nowadays this looks pretty unimpressive (it resembles London’s Centre Point) but at the time it was the tallest building in the Middle East, and was built standing alone in a desolate desertscape.
The new port of Jebel Ali was completed in 1979, even more absurdly large for the demand at the time: Port Rashid was not yet over capacity, and there was much opposition to the project in the emirate. It did indeed seem like a white elephant until the opening of the Jebel Ali free trade zone in 1981, which again went against the conventional wisdom that the source of Dubai’s wealth was customs duties. Now Jebel Ali port is the busiest one between Rotterdam and Singapore, easily eclipses any other in the region, and is the world’s largest man made harbour. By the early 80s then Dubai had moved far beyond simply living on oil revenues and had become the key regional entrepôt.
At this point the story moves to Rashid’s third son Sheikh Mohammed, who was not yet ruler but had had key roles in the state since being appointed head of Dubai Police aged 20. His autobiography cites a childhood visit to London with his father in 1959 as inspiring his vision for Dubai to match it (and New York, which he also visited). He was especially impressed with Heathrow airport, and in fact the purpose of the visit was to beg Harold Macmillan to be allowed to build one in Dubai, which was granted. He was put in charge of the development of this airport in the 80s, introducing an open skies policy. Most significantly, he drove the founding of Emirates in 1985 after disputes with the Bahrain-based dominant regional incumbent Gulf Air over this aforementioned policy.
Emirates almost immediately outcompeted Gulf Air, despite the latter airline being backed by, in addition to Bahrain, Qatar, Abu Dhabi, and Oman. As with many other projects, the other gulf countries eventually followed once the model had been proved a success, successively pulling out of Gulf Air, with Qatar Airways being founded in 1993, and Abu Dhabi’s Etihad in 2003. Gulf Air is now an afterthought, and Dubai International Airport overtook Heathrow years ago to become the second busiest in the world.
Sheikh Rashid died in 1990 and official rule passed to his eldest son Maktoum, however Mohammed had been progressively assuming the role of de facto ruler since Rashid’s stroke in 1980 (he became de jure ruler in 2006 when Maktoum died). From this point Dubai started moving beyond the entrepôt model towards the destination model, positioning itself as a luxury tourist destination, commercial hub, and an (attempted) centre of innovation too, with a frenetic building of malls, hotels and commercial buildings.
As in many other cases, these developments were frequently seen as absurd at the time, with Mohammed’s idea of Dubai as a tourist destination being ridiculed at a meeting of Gulf Arab officials in the 1980s, due to it possessing no landmarks but merely burning sun and barren desert (Krane, City of Gold: Turning Hell into Paradise). These officials were perhaps overestimating the average tourist’s desire for culture and landmarks over sun, sea, shopping and beer (which Dubai, unusually for the region, permitted them): by 2006 tourism was bringing in £8 billion a year (Krane, City of Gold: Building a Landmark).
The residential property market also boomed, boosted in particular by Mohammed's 2002 decree that foreigners would be allowed to purchase property. He also understood the power of marketing, the artificial islands in the sea, the world’s tallest building, and the Burj Al Arab hotel (with integrated helipad) define brand Dubai visually: it all came from this since 1990.
Mohammed’s self professed dream for Dubai was to rank with the top global cities, so at the height of the dot-com bubble in 1999 the somewhat cargo-cultish sounding tax-free zone of Dubai Internet City was founded in order to be the region’s tech hub and attract international tech companies. This is where we see the Dubai model reaching its limits, as while Dubai Internet City did become a success, it was not quite in the way Mohammed had envisaged it.
While many tech companies do have offices there for sales, marketing, and tax reasons, Dubai is not where they do the actual technical work; in the region it is much more likely to be done in India or Israel. This is because while Dubai is a stunning commercial success, it has not really managed to become a centre for education or research. Nevertheless, many other tax-free zones followed with varying levels of success: Dubai Media City, Sports City, DuBiotech, Motor City, Golf City, Maritime City, Logistics City, Academic City, Humanitarian City etc. (Krane, City of Gold: Designer Industries). And even a space centre which led to Emirati astronauts visiting the ISS by 2019.
By the early 21st century Dubai had pretty much fulfilled Sheikh Mohammed’s dream. Not quite up there with New York and London, but certainly tier two, and undoubtedly the most important one between Europe and East Asia. A remarkable achievement, but one that is still somewhat underappreciated in the West because the British and wider Western commentator class have always disliked Dubai.
People often predict the imminent collapse of things that their worldview cannot accept, and so much as The Telegraph has been predicting the collapse of the EU for decades, liberal commentators (used to) predict the same for Dubai, especially after the 2008 financial crisis. I remember the first time I spent time in Dubai a few years ago on my way back from India: there were lots of British people there of course, but they were the exact opposite type of British person from those who travel to India. They were estate agents, personal trainers, money-focused professionals, and trashy glamour seekers. In other words, people who have or aspire to have money, but who don’t write newspaper articles or work in the culture shaping industries.
I like the My Dubai Rent series for illuminating the Dubai dream: people from all over the world united by a desire to show off their new fitted kitchens (perhaps I share more in common with the Western commentator class than I admit). Dubai has won over the world’s commercial classes and those who aspire to join them, but not its clerisy. As I touched on before, in this dichotomy you can see where Sheikh Mohammed’s vision has succeeded (trade, property, tourism, luxury) and where it has not or only partially (education and R&D).
So far Dubai’s rulers have managed to achieve the right balance between boldness and madness in their projects. Not everything has worked as planned, though nothing has been a total disaster. Most of the World Islands do remain undeveloped but they still serve as a fantastic advertisement for the city, while Dubai Internet City did not make Dubai a genuine tech hub but it has still been a commercial success.
It is now Saudi Arabia that is the gulf country leading the charge in bold projects with Vision 2030, but if we look at specific examples like The Line, I will go on record and say that while it is a cool idea, it is also a stupid one on the wrong side of the boldness/madness divide (though the less insane parts of Neom like Sindalah are more likely to succeed).
Boldness alone was not sufficient to make Dubai a success, and with similarly bold but less judicious rulers than it had in reality Dubai could have produced some terrible white elephants. In his My Story Mohammed recounts a meeting with Muammar Gaddafi where the latter said he wanted to build a new Dubai for Africa (not a completely implausible idea as a stopover between West Africa and Europe). But as Mohammed implies in his description of the meeting, and reality shows, if anyone was ill suited to be able to distinguish between ambition and insanity, it was Gaddafi, and the idea came to nothing.
Earlier I said Dubai’s achievement is the greatest one since Singapore’s. Singapore however had the advantage over its regional competitors in that it was the only one with a Chinese majority (and thus a secure Chinese ruling class). Thus it started with a massive human capital advantage over these competitors without the political instability that wealthy Chinese minorities experienced in Malaysia or Indonesia.
Dubai did not have this sort of advantage except in comparison with its immediate neighbours, and its development is really a collaboration between its rulers and the foreigners they brought in, who I have not yet mentioned in this article but who were and are of course indispensable to building Dubai. From John Harris who planned the city’s infrastructure in the 60s and 70s and Maurice Flanagan who was the founding CEO of Emirates, all the way down to the millions of foreign workers who built the city’s infrastructure. I like this video in particular, we only hear about the exploitation of men like these, but there is a grandeur and pride there too.
The context that enabled Dubai’s success
Great men can of course only achieve what is possible in their environment. A key advantage Dubai had when it came to development (though one shared with the other gulf states) was and is its premodern and illiberal political system, existing due to its historical backwater status and having never been properly colonised by European powers. Most other postcolonial countries took at least the form of a democratic nation-state, but the gulf countries emerged from European hegemony as tribal monarchies.
One advantage this brought was a lack of a sophisticated legal system that could impede development. "Business concerning millions was done with a wink and a nod," according to Edward Henderson, a British oil company representative. This of course is only an advantage if you have effective rulers, but in Dubai’s case so far, it has. Another advantage of this nature that has helped Dubai (but that could also have been disastrous with the wrong ruler) is that effective power was placed in the hands of rulers when they were still very young, and thus could bring the full force of their drive to bear on development (as mentioned, Sheikh Mohammed had key roles in the state since he was 20).
Dubai’s political structure is also highly compatible with being able to take full advantage of globalisation and mass immigration without a risk of the immigrants making claims on the welfare state or upsetting the political system. Dubai is the world’s most extreme example of a successful ‘guest worker’ model, with nearly 90% of residents being non-citizens, with pretty much no way for them to gain citizenship in most cases.
You can still have this model with a democracy, e.g. Israel, South Korea and especially Singapore have large guest worker programmes that do not lead to citizenship, though it is hard to imagine their populations accepting being made such an extreme minority as in Dubai, even with the ‘no citizenship’ caveat.
In the West however, whenever guest worker programmes were tried in the postwar period, they always eventually led to citizenship against their original intentions, e.g. with Pakistanis in Northern England or Turks in Germany. This has happened due to the West’s postwar liberal political and legal systems, see Christian Joppke’s Why Liberal States Accept Unwanted Immigration for a good summary of this, as he puts it “the capacity of states to control immigration has not diminished but increased, as every person landing at Schiphol or Sydney airports without a valid entry visa would painfully notice. But for domestic reasons, liberal states are kept from putting this capacity to use.“ Prior to WW2 though, the West was more like the rest of the world is now, employing guest worker programmes that did not lead to citizenship, e.g. see the US’s Mexican Repatriation of the 1930s.
More broadly, the US-driven globalisation that drove the world in the latter half of the 20th century and early 21st century was of course crucial to Dubai’s success, though you can also credit the Sheikhs with the wisdom to bet on this trend. Absent US power, it could easily have been swallowed up by Iran or Saudi Arabia, and absent the long economic boom that American hegemony oversaw, there may have been no global growth trend for it to bet on.
Much of course remains hidden about Dubai and its rulers, and doubtless many dark secrets exist even beyond those that are reported: ‘great man’ certainly does not mean ‘good man’. It is hard to judge how suspicious to be of Mohammed’s elder brother’s death by heart attack at 62 (which allowed Mohammed to become official ruler), but the death of his eldest son Rashid (an embarrassing failson and passed-over heir), also supposedly of a heart attack aged 33, seems unlikely to be the whole story (rumours range from drug overdose to being killed by Houthis in Yemen).
Mohammed has also crushed the independence of and imprisoned two of his daughters for years, who poignantly seem to have inherited their drive for control over their own lives from him (one tried to escape from Dubai to India by yacht).
Dubai’s future
So what is the future of Dubai? As of 2024 Dubai no longer seems quite as special as it once did. Saudi Arabia is the place now pushing the envelope, though less judiciously than Dubai did, and the gulf as a whole is generally coming to resemble Dubai more and more.
In the late medieval period the northern Italian city states like Venice and Florence pioneered modern trade and capitalism in Europe, and undoubtedly formed the continent’s economic and cultural centre. However they were eventually eclipsed by larger states like England and France which were able to copy what they did but also marshall more resources to do so. In the same way Dubai is perhaps at risk of being overtaken by its larger neighbours copying the commercial model it pioneered, Qatar and Saudi Arabia most notably.
Then there’s the perennial risk inherent to all authoritarian states of the ‘bad emperor problem’, though Mohammed’s replacement of his now dead eldest son with his second son as heir (long before the former’s suspicious death) shows that he is alive to this risk.
There’s also Dubai’s immigration model, a source of its strength but also one which always has the potential for instability. The majority of the workforce and of residential property ownership is by foreigners who do not have citizenship. What if due to some future crisis there is a rush to the exits greater than that in 2008: could we see an Emirati Edict of Caracalla to save the property market? Sheikh Mohammed has tried for many years to make Dubai a ‘real economy’ and has long been focused on ‘Emiratisation’ (while occasionally castigating his countrymen for their insufficient desire to work), without a huge amount of success, so the risk inherent in its reliance on foreign labour remains.
A less dramatic possibility is simply a slow bleed as neighbouring countries eliminate what makes Dubai special through imitation, which would leave it as just one skyscraper city among many situated in a tiny state without a hinterland. For now Dubai remains the preeminent gulf destination, with no signs of decline. But its days of clear distinctiveness in the region are gone for good.
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