Sheikh's high life sowed the seeds of crisis

Mohammed bin Rashid Al Maktoum's business-over-politics approach turned Dubai into a city-state with the surface trappings of Western liberalism - a thin veneer over the conservatism and strict political boundaries familiar across the Arab world. Drink at the bars, wear bikinis at the beach, hit the discos and make money was the overt message. But there was a red line in the sand: don't question his grandiose plans or the foundations they were built on. Those foundations, it turns out, were not oil, but other people's money. Lots of it. The 60-year-old Mohammed's confidence and ambition gave way to aspirations to place Dubai in the same league as London or New York. Dubai's ruler supervised the Gulf city's stunning makeover. Along with extravagant projects like artificial islands and glitzy skyscrapers, international schools, multinational companies and luxury hotels mushroomed around the city. They offered young Arab professionals jobs and a lifestyle they couldn't find or afford in Cairo or Beirut. Interestingly, Mohammed, whose net worth is listed at $12 billion by Forbes, has held onto deeply rooted Arabian traditions while pursuing his ambitions for modernity. He breeds camels and is a passionate lover of horses. He rides endurance races in the desert and drives a customised Mercedes four-wheel drive SUV along Dubai's sprawling highways. He listens to residents' complaints the old-fashioned way, in his diwan, or reception room, but also regularly updates his Facebook profile and exchanges tweets with Dubai's youth. His dream was short lived. Now, as the emirate's largest government-owned conglomerate, Dubai World, reels under the weight of its $60 billion in debts, Mohammed has retreated from the limelight. He is perhaps pinning his hopes on the neighbouring emirate of Abu Dhabi to step in with some sort of bailout or that creditors will see they have little choice but to agree to restructuring debt. There's no way to know for sure as Mohammed has shown little inclination over the past week to address Dubai World's debt problems directly. At a rare meeting with reporters two months ago, Mohammed's answer to a question about Dubai's debt-load was: "I assure you we are all right. We are not worried." By November, he had grown more testy. In a meeting with international investors in November, he switched from Arabic to English to tell naysayers in the media.

PRAVESH YADAV
PGDM 1st sem
(2009-11)