Global Biz
Dubai ruler's ambition helped brew crisis
(Agencies)
Updated: 2009-12-04 17:00
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 An Emarati man tries to control a balloon with the image of Dubai's ruler and UAE prime minister Sheik Mohammed bin Rashid Al Maktoum during the UAE national day parade in Dubai, United Arab Emirates, Tuesday, December 1, 2009. [Agencies] |
DUBAI, United Arab Emirates: Dubai's ruler writes poetry, rides horses across the desert in long-distance endurance races and hobnobs with royals like the Queen of England.
Mixing extravagance with boundless ambition, he commanded the desert city-state's meteoric rise, and helped sow the seeds, some observers say, of its debt crisis.
Sheik 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 throughout the Arab world.
"In the past, the ruler was trusted on finances because everyone thought they were backed by oil," said Simon Henderson, a Gulf and energy specialist at the Washington Institute for Near East Policy. "It will be different from now on."
Dubai is one of seven highly autonomous statelets that make up the United Arab Emirates. Though UAE capital Abu Dhabi has huge oil riches, neighboring Dubai has very little.
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.
Forging ahead with eye-popping development, he vigorously wooed investors, leading to excesses that created a speculative bubble. One of the biggest borrowers was the government's own development vehicle, the conglomerate Dubai World, which shook markets with its announcement last week that it needed to delay payments on part of its $60 billion debt.
Mohammed and his government, however, have refused to stand by the company's debts, and when the signs mounted that Dubai was falling victim to the world economic turmoil, he denied it and never came up with a recovery plan.
Dubai's ruler supervised the Gulf city's stunning makeover in the past decade, turning it into a model for development in an Arab world plagued with poverty, corruption and nepotism.
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.
Like his Muslim city-state with a Western outlook, 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 customized 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.
That mix has suited his personality and ruling style in a region where personality cults around leaders are considered part of good governance.
Taken in by Mohammed's marketing skills, deposed politicians, oil tycoons and powerful executives willingly participated in Dubai's real estate bonanza, no questions asked, as did professionals from Europe and Asia who flocked to the emirate, paying for condos and villas before building even started.
Some multinational companies even made the emirate their regional headquarters, and company executives rubbed shoulders with Hollywood stars like Charlize Theron and athletes like Tiger Woods.
Charmed by Mohammed's personality and his assurances, investors poured in billions.
