From the Wall Street Journal 20th February 2009
There's No Reason to Gloat Over Dubai's Fall by Zvika Krieger (a former correspondent for Newsweek in the Middle East, is an editor at the New Republic.)
Of all the victims of the global financial crisis, Dubai and its neighboring states are receiving little sympathy. The oil-rich Persian Gulf emirate, which until recently had been a glitzy boomtown attracting fortune-seekers from across the globe, is reported to be canceling 1,500 work visas every day. Its real-estate market has dropped 30% or more over the past few months.
Their indoor ski slopes have earned these sheikhdoms few friends. Los Angeles Times columnist Rosa Brooks shed no tears that "Dubai may be going down," finding it "hard not to be revolted" by a state that "doesn't really produce anything of value" but is a playground for "cold-eyed Russian oligarchs, coked-out London pop stars and the spoiled princelings of global finance." News reports have been dripping with schadenfreude. Newsweek recently bid "Goodbye, Dubai" on its cover, while Time wondered if the Gulf collapse means "no more Palm Islands?" In response to Dubai's decision to deny a visa to Israeli tennis player Shahar Pe'er, New York Times columnist Harvey Araton gloated, "Just like that, the glitter and promise of Dubai as an emerging international sports center evaporated into the cool desert night."
But it would be a mistake to dismiss Dubai, Abu Dhabi, Qatar and the other Gulf emirates as nouveau riche Bedouins on a petrodollar-fueled shopping spree. In a region mired in poverty and extremism, the Gulf emirates are shattering taboos and challenging traditional power structures. Their financial demise would be a great loss to the Middle East.
The Gulf emirates have become financial lifelines in the region, sustaining their less wealthy Arab neighbors through billions of dollars of direct investment, and providing tens of thousands of Arabs with jobs. Their free-zone model of development has been adopted in countries like Jordan and Saudi Arabia, and their tourism boom has overflowed into countries like Egypt and Syria. The Western businesses attracted to the Gulf are opening new markets across the region.
But the significance of the emirates goes beyond money. They have applied their pragmatic business strategies to diplomacy, using their financial independence and domestic stability to mediate disputes from Morocco to Libya to Yemen. Besting traditional regional powerhouses like Egypt and Saudi Arabia, Qatar was the only country that helped effectively mediate an end to Lebanon's violent conflict last year -- largely because it was the only country considered close enough to both Syria-backed Hezbollah and the Western-backed government to be trusted by both sides.
The recent controversy over Israeli tennis star Shahar Pe'er obscures the fact that Dubai and its neighbors are the only countries in the region (other than Egypt and Jordan) that have been willing to consistently violate the Arab League boycott of the Jewish state. Qatar opened an Israeli trade mission in 1995 and recently hosted Israeli Foreign Minister Tzipi Livni. Dubai has also allowed Israeli nationals to enter the emirate for conferences, and it is currently in high-level discussions to open an Israeli mission as well. In its discussions with New York University about its new satellite campus, Abu Dhabi has indicated a willingness to overrule visa restrictions relating to Israelis and signaled that it is re-evaluating the policy for all of the emirates. The negative attention garnered by the Pe'er decision will likely expedite this process.
The Gulf emirates are also revolutionizing education in the Middle East. Dubai is forming partnerships with institutions including NYU, Harvard, MIT and Cornell. While critics are right to be skeptical that these programs will measure up to their counterparts in America, they will certainly outperform the underfunded, overcrowded and censored universities that currently populate the region. These new institutions will bring Western ideas and high standards of education to Arabs across a region where traditional families are reluctant to send their children overseas for university, but are increasingly seeing the Gulf as a viable alternative.
Though there are still some restrictions on expression in the Gulf emirates, these states house some of the freest media in the region. Qatar's Al-Jazeera, the Arab world's most popular television channel, has broken the monopoly of state-controlled propaganda channels by featuring probing coverage on some of the region's most controversial topics. Abu Dhabi has pumped millions of dollars into a new English-language newspaper. The relative freedom of expression in Dubai's "media city" has made Dubai the headquarters for hundreds of international and regional magazines, newspapers, satellite television channels and Web sites looking to escape censorship in other Arab countries.
There are many legitimate reasons to criticize the Gulf emirates. Their banks house money for terrorist groups, and their free zones help Iran bypass sanctions. They are run by undemocratic regimes, and they have little respect for labor laws or gay rights. But the collapse of the Gulf economies does not just mean pulling the plug on the world's tallest building or largest shopping mall. It means losing some of the strongest forces for reform and stability in the region.