City of Gold: Dubai and the Dream of Capitalism (7 page)

Sheikh Rashid’s use of violence to maintain power is nowadays seen in Dubai as an embarrassing bit of family history. Discriminating folks don’t mention it in public. Local books gloss over the event. But in the context of 1930s Arabia—or, for that matter, Europe—the killing of political opponents was hardly unusual.

More remarkable was the success of the operation. Sheikh Rashid’s wedding fusillade rescued his dynasty. It was as if the Maktoum penchant for risk taking had ebbed under Sheikh Saeed and needed a flash of violence to get it back.

The rebel
majlis
might have been destroyed, but Rashid realized the ideas it spawned had merit. He enacted every single one of them—except the royal pay cut—once he took power. But Rashid didn’t just co-opt the merchants’ ideas. He eventually co-opted the merchants themselves. As Dubai grew, Rashid secured their loyalty in exchange for business contracts and exclusive trade licenses. Onetime opponents built monopolies in branded goods like Mercedes cars or Frigidaire freezers. Some descendents of rebel merchants are now billionaires.

The British, too, were winners in the massacre. After the showdown, the British political resident issued a deceptive statement saying the democratic movement had grown “unpopular” and collapsed.
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The British preferred the friendly Maktoums to the merchant radicals, who exhibited a distinct anti-imperialist air. The massacre was a nasty business, but it took away the need for the British to tackle the rebellion themselves.
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The Maktoums’ dogged staying power owes itself less to gun battles than to British buttressing through the treaties, or truces, they signed with them and the other ruling families of the Trucial States. Rulers like
Sheikh Saeed earned legitimacy through ties to the British. And the British, in turn, depended on their allied sheikhs to fend off advances by foreign powers like France and Germany.

The truces of 1820 and the following decades quashed piracy and hostilities at sea. In later treaties, the ruling sheikhs traded Britain much of their sovereignty in exchange for protection. In 1892, the rulers gave Britain command of their foreign affairs. In 1922, the sheikhs relinquished the right to sign oil exploration contracts with the United States and other countries, and agreed to deal only with Britain.
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The treaties turned out to be incredible stabilizers. They replaced strife-prone “tribal democracy” with monarchies that evolved into some of the most stable regimes in the developing world. The hereditary authoritarian rule that Britain backed in the Trucial States continues today. Rulers of Dubai and the other UAE sheikhdoms still choose their successors from sons and brothers, preserving a system that is one of the least democratic in the world.

The British didn’t bother colonizing the impoverished sheikhdoms, which, until the late 1950s, showed no signs of mineral wealth. The British Empire, overstretched around the globe, did the minimum to keep the Gulf Arabs under its thumb. That amounted to six warships patrolling the Gulf part-time. Until the early 1900s, just one white Briton watched over the lower Gulf—from Iran—buttressed by three residency agents who were local Arabs or Indians. That makes just four full-time representatives.

The British kept order by maintaining the illusion of power, by making threats, and by occasional shelling of rulers’ forts. They kept up their bombardment diplomacy far beyond the period that it was politically acceptable.

One such barrage came in 1925. The ruler of Fujairah, Sheikh Hamad, obsessed over a Baluchi slave girl he met in Muscat, in Oman. Hamad convinced the girl’s mother, also a slave, to sell him the girl. The sheikh smuggled his mistress home in violation of the British ban on importing slaves. When the English found out, they demanded that Hamad release the girl. Hamad refused, but offered to pay a fine that would allow him to keep her. The British decided to punish the insubordinate sheikh. The gunboat
Lawrence
blasted his fort and knocked down two of its towers, but Hamad kept his slave girl.
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The British also bullied rulers by holding their boats for ransom. In 1930, the British seized the entire pearling fleet in Ras Al-Khaimah, relinquishing it only when the sheikh agreed to allow the Royal Air Force to open a refueling base.
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Overweening British agents treated Arab leaders like children. Lt. Col. T. C. Fowle, who oversaw the Trucial States from his base in Iran for most of the 1930s, liked to say he was civilizing a people stuck in the seventh century.
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In reality, the opposite was true. Fowle and his contemporaries did nothing to advance Gulf Arab society, giving no encouragement to reforms of health, education, or politics. By the time the British left in 1971, illiteracy was above 70 percent, life expectancy wasn’t much more than fifty years, and there wasn’t a single university.
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Life improved dramatically after their departure.

The stability that Britain brought to the Trucial Coast was, for the first hundred years, stagnation. The sheikhdoms remained Third World outposts because the British enforced their isolation and blocked foreign ideas. Dubai’s links to the world came despite—not because of—the British presence.

But Britain’s truce-enabled stability was crucial. It allowed the ruling sheikhs to develop seven robust monarchies that eventually banded together as the UAE. The British also prevented the expansionist Saudi Wahhabis from swallowing up the tiny sheikhdoms. By the time oil arrived, the monarchies were strong enough to drive their country through one of the fastest and most thorough modernizations in history. Political stability has held up through thirty-eight years of independence with no serious hitches. It is a key reason Dubai and the UAE have generally outperformed the rest of the Middle East.

On a scorching day in July 1937, a deep-throated rumble intruded on Dubai’s afternoon siesta. Stumbling out of their thatched
barasti
shacks and looking up, Dubaians saw a lumbering aircraft, its silver aluminum skin shimmering in the sun. Dubai had seen aircraft passing overhead before, but nothing like this. The plane was as fat as a blimp, with an arched bottom that made one think of a pelican. Alarmingly, the plane wasn’t passing by. It swung behind the town and began a low approach
as if to land. But Dubai had no airport. Worse, the four-engine behemoth wasn’t even heading for land. It looked like it was going to crash into the creek.

Aboard the Imperial Airways flying boat, the distress was equally grave. The craft was the pinnacle of luxury travel, with two decks, like those of a Boeing 747, only civilized. It was an airborne gentlemen’s club with a smoking room, promenade saloon, and, for those who’d had a tipple too many, berths where one could sleep it off. Few of the two hundred or so passengers knew anything about Dubai. From the air, it looked like the end of the world. Certainly not a place that warranted a break in a game of gin rummy, let alone a stop on their journey to India. But not only were they making a fuel stop, they would spend the night.

The passengers, who’d left Southampton four days earlier, gazed down at the empty desert and sparkling sea and wondered what sort of depredations awaited. The creek’s S-bend marked the site of the town, but where were the buildings? The land was white in the afternoon sun. Slowly, walled compounds that looked like animal pens revealed themselves. The buildings were barely discernible from the surrounding sands. There was no greenery, not a single concrete building, nor a bridge or a paved road. The town had no electricity, no telephone service, not a pane of glass or a cube of ice. Drifting lower, the passengers saw humans in long, loose cloaks moving among camels. Goats scampered like tossed dice.

After a dramatic splashdown in the creek, with gaping onlookers lining the banks and bobbing in sailing dhows, the passengers were whisked to Imperial Airways’s guest house in neighboring Sharjah, where the airline had landing rights at a British airbase built in 1932.
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Dubai’s aviation history started with these flying boats that made the four thousand-mile trip from England to India in short hops, across Europe, Turkey, Iraq, and the Gulf.
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But the 1930s flying boats also represent a less salubrious side of Dubai’s economy: the start of what economists call “the rentier state.” In Dubai and elsewhere in the Gulf, the British made payments for landing rights directly to the ruling sheikhs, handing them wealth that they could use to make allies among their subjects. Imperial Airways paid Sheikh Saeed 440 Indian rupees a month (about $150, or £30), plus a landing fee of 5 or 10 rupees—a small sum in British terms but a lifesaver in depression-racked Dubai.
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The rentier state was a product of “economic rent,” a financial reward for a gift of nature such as mineral deposits or, in Dubai’s case, location. The first rents came as payments for landing rights, which didn’t require any labor or expertise on Dubai’s part.
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In one way of looking at it, economic rent is money for nothing.

Sheikh Saeed and the other rulers on the Trucial Coast considered the payments personal income that could also be used for public benefit. Initially, the money staved off some of the ravages of the depression, while angering merchants who argued the money belonged to the state. In coming decades, Sheikh Saeed’s successors would distribute those economic rents with skill, using them to neutralize political opponents. The ruling sheikhs fortified themselves by trading money—subsidies—for the support of their opponents, and later for the backing of the population at large.
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A second concession Sheikh Saeed signed in 1937 was far more lucrative. This was an oil exploration contract that ignited hopes that Dubai would be rescued from the poverty of its pearl bust by another gift from God—sludgy crude oil. The contract granted seventy-five years’ exploration rights to London-based Petroleum Development (Trucial Coast) Ltd. in return for an annual royalty of just over 30,000 Indian rupees (about $10,000, or £2,000).
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Dubai might’ve done better if Sheikh Saeed had dealt with one of the American oil companies working across the border in Saudi Arabia. But treaties bound him to Britain. The oil contract cemented the pattern of granting concession income to the ruling sheikhs. The sheikhs’ grasp on power strengthened.

In those days, gusher oil strikes came year after year. Each one brought undreamed-of prosperity to some of the world’s most hard-bitten lands. The first Arab jackpot erupted in northern Iraq in 1927 and the big strikes crept ever closer to Dubai. Bahrain, a Gulf island just west of Dubai, struck oil in 1932. Wildcatters tapped huge flows in Kuwait and Saudi Arabia in 1938. Each find raised hopes in Dubai that the economic depredations were over. If a drilling rig struck oil, the British concession promised to pay Sheikh Saeed 200,000 rupees (about $75,000, or £15,000) on the spot, and a further payment for each barrel exported. Dubai was waiting to bathe in a shower of oil wealth.

But exploration got off to a fitful start in the lands that now form the
UAE. Geologists pored over the desert in Dubai, Abu Dhabi, and Ras Al-Khaimah. They noted interesting geological formations, but drillers never arrived to punch holes. When World War II broke out in 1939, the teams left.
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The company eventually relinquished its Dubai concession. It would be twenty-seven years before anyone struck oil in Dubai.

OIL, SLAVES, AND REBELLION

IN THE DEVELOPED
world, the 1950s brought prosperity and progress. America’s postwar baby boom roared into full swing. City dwellers fled to the suburban good life. They tuned in to
Leave It to Beaver
, slicked their hair with Brylcreem, and careened down the highways in tail-finned Chevys. Air conditioners triggered a population shift from slushy Detroit to sunny Florida.