City of Gold: Dubai and the Dream of Capitalism (9 page)

“They used to suffer in such a way, I can’t tell you,” says Sharif, who moved to Dubai in 1952. “But they wouldn’t go to the hospital.”

When Sharif grew pregnant, she told her neighbors that she would deliver at the hospital. She returned home with a healthy baby girl and showed her neighbors that her stomach was intact. “Now you all must go to the hospital. It’s more hygienic,” Sharif admonished them. After that, Arab mothers began visiting the hospital.

Dubai may have been the most advanced town east of Bahrain, but it offered no opportunities to get an education. Schools that opened during the pearl boom closed in the 1930s. In the 1950s Dubai had a couple of simple schools that taught the Quran, rudimentary math, and history. Most people couldn’t write. Some learned to read the Quran. Anyone wanting more had to study in Iran, India, or Pakistan.
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People were suspicious of education. In his autobiography, Dubai native Easa Saleh Al-Gurg wrote that his father denied him permission to study English, considering it un-Islamic. Al-Gurg’s mother intervened and the tutorials, by an Indian doctor, went ahead. English gave Al-Gurg a huge advantage. He traveled with Sheikh Rashid to handle his dealings in English and eventually became the UAE’s ambassador to Britain.

Dubaians’ disdain for school caused the city to develop one of the world’s widest education gaps, which, together with its complementary wealth gap, makes for some extreme juxtapositions. To this day, many older Emiratis cannot read or write. They still sign papers with a thumb-print and close business deals on their word of honor. Their immediate children, who grew up with schools, may have gone on to get PhDs.

Emirati political scientist Abdulkhaleq Abdulla, who earned a PhD at Georgetown University in the 1980s and now teaches at UAE University in Al Ain, is one of them. Abdulla was raised in a mud-and-thatch home by parents who made fun of his penchant for reading. “Where do you think that reading is going to take you?” Abdulla’s mother would tease him. To her, there was no reason to read anything but the Quran.

“They were always making fun of us,” says Abdulla, a relaxed talker with a salt-and-pepper beard and wire-frame glasses. “It would’ve been better to do something worthwhile than sit for hours, reading books that made no sense to them.”

Parents who grew up in stark poverty also raised children who’ve become billionaires. Mohammed Ali Alabbar, the chairman of real estate giant Emaar, is a billionaire tycoon and one of Dubai’s most powerful men. He, too, is the son of poor illiterates who raised him in a
barasti
. He went to college in Seattle and, when he returned, became one of Sheikh Mohammed’s favorite entrepreneurs. Alabbar’s father, a dhow captain, never learned to read and write. He didn’t need to. He navigated by the stars.
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Elsewhere in the Gulf, the modern world was barging in. The West wanted oil, and the realization set in that the Persian Gulf countries, with some of the most backward societies on earth, had most of it. The chasms between civilizations weren’t quite as deep as those between the Europeans arriving in, say, aboriginal Australia or lost civilizations of the Pacific, but they were close.

Saudi Arabia, a nation so poor that its king, Ibn Saud, could carry his entire national treasury in the saddlebags of his camel, was also so traditional that the trappings of modernity that found their way into the kingdom—the telephone, the radio, the automobile—were shunned as tools of the devil.
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Ibn Saud tried to temper the foreign influences of the modern world on his deeply religious subjects, but it proved impossible. Saudi Arabia got roads and buildings and hotels, along with electricity and telephones. The Westerners who flooded in brought air conditioners.

Dubaians moved to Saudi Arabia, Kuwait, and Bahrain to work. Oil exploration resumed in the Trucial States in the 1950s, but drillers found nothing. Abdulkhaleq Abdulla’s family joined the migration north, taking up residence in the eastern Saudi oil town of Dammam in 1959. Abdulla, just six years old, traded his thatched
barasti
with kerosene lamps for a concrete house with electric lights. For a time, the modern world still lay outside the Trucial States.

In August 1958, the first offshore drilling barge in the Trucial States, the
Enterprise
, parked in the shallow waters off Abu Dhabi’s Das Island. The sea floor held a promising formation. The crew lowered the barge’s legs, and a drill as big around as a tree trunk began grinding its way through the seabed. In a while, the crew noticed blobs of black scum bobbing to the surface.

“A nice, sweet crude,” is how the
Enterprise’s
engineer described the lucky first-hole strike, the equivalent of a hole-in-one in golf.
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The Umm Shaif strike was the first oil discovery in Abu Dhabi or any of the lands that, in thirteen years, would become the United Arab Emirates.

Two months later, Abu Dhabi’s cantankerous ruler, Sheikh Shakhbut bin Sultan al-Nahyan, sat in the backseat of a Cadillac fishtailing over
the sand at Murban, in the windswept flats of western Abu Dhabi. A parade of Land Rovers followed Sheikh Shakhbut’s car, carrying a band of royals and retainers to oversee the spudding of a new well.

The bearded sheikh, wearing a dagger and robes that billowed in the wind, took his seat in an armchair on the drilling rig, surrounded by Bedouin wearing bandoliers of rifle cartridges and falcons on their wrists. The oilmen and the sheikhs ate lunch together, then someone flipped a switch. The men watched the drill start to chew into the sand. It wasn’t much to see. Shakhbut soon gave the order and his entourage piled back into their cars and drove off in a cloud of dust.

The first Murban well turned out to be a bust, yielding only gas. A year later, though, probing hit pay dirt. There was yet more light, sweet crude: low-sulfur oil that is easy to refine and therefore valuable. Drillers hole-punched the landscape around the underground limestone feature known as the Bab Dome until they tapped what turned out to be an enormous reservoir of oil.
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The barren wastes of Abu Dhabi, it turned out, were not worthless after all. The drifts of dust and the poisonous plains of salt had preserved a sea of oil for a tiny segment of humanity, the few thousand souls who defied nature and made their homes in that forsaken landscape. For their hardships, and those of their ancestors, they would be rewarded with custody of 8 percent of the world’s proven oil reserves. When the extent of the deposits became known, it was clear that Abu Dhabians were immediately among the richest and most privileged people in history. At $50 a barrel, Abu Dhabi’s 92 billion barrels of proven reserves
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are worth $46 trillion. Divided among Abu Dhabi’s roughly 200,000 citizens, each person’s share is nearly $23 million.

By 1963, Abu Dhabi’s oil was flowing from twenty-five wells offshore and another dozen on land. In 1965, drillers forty miles from the Umm Shaif oil field connected again. This time they found the Zakhum field, the biggest of all, and the third largest in the Middle East. It held 66 billion proven barrels.
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Abu Dhabi exported 2.5 million tons of crude that year, an amount that rose nearly ten-fold by 1968, when the sheikhdom shipped out 24 million tons of petroleum, earning tens of millions of dollars—Incredible wealth for a sun-wizened people who knew nothing beyond gnawing poverty.
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Abu Dhabi’s good fortune led those in Dubai and the other five Trucial States to believe that they, too, bobbed on an ocean of oil.

Dubai’s well-spudding days started in 1950, when British geologists and drillers set up in Jebel Ali, a sandy rise on Dubai’s southern outskirts. They found nothing.
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The team shuttled between Dubai, Abu Dhabi, and Sharjah, moving tons of gear and men and perforating the desert at huge cost and effort. The British exploration company Petroleum Development, finally got tired of pouring its money down dry holes and gave up, abandoning its Dubai concession in 1963.

For thirteen years after Abu Dhabi began pumping oil, Dubai drilled hole after dry hole. One can only imagine how the Maktoum family must have cursed the ancestors who fled Abu Dhabi in 1833. But Sheikh Rashid was a relentless optimist. Dubai built a consortium of local and international firms and redoubled its drilling on land and at sea. Everyone felt it would only be a matter of time before Dubai spiked a gusher and people would toss money like confetti. In 1964, with no oil in sight, Dubai issued postage stamps emblazoned with derricks and bearing the message “Oil Exploration.”

Finally, in 1966, a crew drilling fifteen miles offshore proved everyone right. Planes buzzed Dubai, scattering leaflets with the news.
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One crewman turned up in Sheikh Rashid’s
majlis
with a gift: a jar of coffee-colored crude. Rashid named the offshore field Fateh, translating roughly to “conquest.” The first export of Dubai crude came in September 1969, forty-two long years after Sheikh Saeed signed the first exploration agreement in the Trucial States.

In 1970 and again in 1972 and 1973, drillers in Dubai’s territorial waters hit new oil fields. Dubai was in business. But when the finds were assessed, they looked more like a letdown. Dubai had just 4 percent of the UAE’s oil, or 4 billion barrels of reserves. Nearly all the rest was in Abu Dhabi. Sharjah and Ras Al-Khaimah found paltry deposits and the other sheikhdoms found nothing.

Oil is a curious substance. It’s one of the key drivers of economic life, but few people ever see it. The crude oil underground is pumped into
pipelines and holding tanks and then hauled across the globe in ships, offloaded into refineries, converted to products like gasoline and diesel fuel, and then trucked to filling stations or heating oil distributors, from where it is dispensed into gas tanks or boilers and burned. The entire lifecycle of a barrel of crude is hidden from view.

Sheikh Rashid wanted to make sure Dubaians got to see their oil. Not for novelty’s sake. Dubai, like most of the Middle East, is a rumor mill where conspiracy theories run wild. The leader might claim he’d struck oil, but until people saw it, there would be doubters sowing rumors. So Rashid ordered a barge to haul some of his crude down the creek. He called a gathering of news reporters, advisers, his sons, and sundry photographers to the creek bank. And there, the bearded sheikh directed the barge crew to start pumping. The hose’s six-inch nozzle coughed and spat and then burped forth a gush of black sludge onto the ground.

A photo taken by Dubai chronicler Noor Ali Rashid records the event. There is Sheikh Rashid squatting on his haunches next to the nozzle, closely examining the black flow. Behind him stands his dapper son Maktoum, fingering prayer beads, his
agal
—the black bands around his headscarf—jauntily askew. Two dozen others watch, including Europeans in bow ties and crewcuts, and a woman in a skirt.
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Word of the oil strike reached the Abdulla family in Dammam. The family, like many others, pulled up stakes and returned to Dubai, flying into the new airport. Abdulkhaleq, then twelve, drove with his family on a paved road to a new home, built of concrete. The old
barasti
homestead with its kerosene lamps was gone. So was the wandering water vendor and his donkey. The family still slept on the roof in summer, but most other trappings of modernity were in place.

By 1975, oil earnings dominated Dubai’s economy, bringing in nearly two-thirds of gross domestic product. That year stood as the peak of oil’s importance. By 1985 oil’s contribution slipped to 50 percent of GDP.
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A decade later it was down to 18 percent. By 2000, it slid to 10 percent. In 2006, oil sales brought a minuscule 3 percent of Dubai’s overall economy.

Dubai wasn’t exactly running out of oil. It hit peak production in 1991 at 410,000 barrels per day. But it had other prospects. Trade, construction, and services rose in relation to oil as a portion of the economy. By the time oil production dropped as reserves began running dry, oil was already losing its importance. In 2008, Dubai’s daily draw was 60,000 barrels. Abu Dhabi’s was 2.5 million.
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Dubai isn’t an oil town. Oil fever never caught like it did in Kuwait City, Houston, or Baku. Perhaps it was memories of the collapse of the pearl economy that made people shy away from banking on a primary export. Oil was nice while it lasted. Because it came so late, Dubai had other sources of income. When it started to run out, few noticed. Dubai moved from oil dependence to independence, becoming the first post-oil economy in the Middle East.

Oil did give Dubai a shot in the arm. Sheikh Rashid invested the proceeds in overbuilding roads, factories, and ports that he imagined would serve the city for the next fifty years. Oil income allowed Dubai to create the state-run business base that grew into the foundation of its economy. Oil has always been a mixed blessing for producer countries. Prices spike and plummet in cycles, pushing oil economies into inflationary booms and dragging them into recession at the whim of the marketplace. Dubai succumbs to those cycles, as in 2009, but not usually as acutely as its neighbors. As its economy diversified, Dubai kept busy amid most of the downturns.

Dubai’s commemoration of its oil discovery sums up its attitude. By way of gratitude, the city installed an eternal flame in a roundabout at the intersection of two roads in Deira. But that roundabout was torn up when the roads were widened. The eternal flame was moved to a small park near the airport. Few people know about it.

One morning in October 2008, I phoned Fatma Essa, a tour guide at Dubai Heritage Village. The village is a collection of
barasti
and coral huts in the old style, where retirees weave palm mats and bake flatbread for tourists. It sits in the Shindagha section, next to Sheikh Saeed’s house.