Good-bye to Dubai | Hacker News Reader

Good-bye to Dubai

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90 pointscwan92 comments

While Dubai is held out by many as an example of capitalism at work, I actually see it as another case of socialism gone wrong. While you might scoff at the suggestion of linking socialism and Dubai together, what you effectively had with Dubai world was a government entity making investment decisions seemingly with no regard to price signals as more land sat unsold, and more buildings sat unrented, as more hotels sat unoccupied, but still the construction went forwards. It's this central government command of the economy that has arguably caused the problems with overinvestment and overbuilding, and a tightly controlled workforce (no freedom to associate, no rights) that supplied the labour to do it.

If there had been proper price signalling (insistence, for example, that the existing hotels turned a profit before new ones were built) and a properly free labour force, which would have seen rising wages during contruction booms, then the growth would have slowed somewhat. Instead, because of these artificial market conditions, overinvestment continued and tripped off a speculative frenzy, which has caused the grief.

I'm not pretending this is the only cause, but when you have a central authority blazing away wasting money, it's only a matter of time before the economy as a whole suffers from overinvestment in unproductive assets.

Correct me if I'm wrong, but my impression was that there were a lot of foreign investments in Dubai real estate, not just (maybe not even primarily) the government. Certainly there were many people buying at the wildly inflated rates, ignoring the "proper price signalling" that you suggest might have solved the problem. Or are you suggesting that Dubai should have blocked the private investors from building the new hotels and condos until more of the unsold pieces were occupied? That might have been a good idea, but it is also not the unfettered market you're advocating in the rest of your post, so I'm not sure what you mean.

"The market" is not a magic wand, its invisible hand not nearly so reliable as many, apparently including you, seem to think; and "socialism" is also ill-defined as "everything short of rampant unregulated capitalism". Dubai's market was pretty darn free, and its safety nets were effectively nonexistent and certainly nothing even remotely worth of the name "socialism".

Yes, there is (was) a lot of foreign investment in Dubai, but the government was effectively underwriting much of it by starting off and feeding the Ponzi scheme. The big headline projects (the world, Burj Dubai, etc) were all underwritten by the Dubai government.

Perhaps I didn't make it clear enough in my post that I wasn't suggesting Dubai was remotely socialist. My point was that centralised planning in an economy leads to problems. Where I failed in my haste to post and move on, was that I omitted the next part is that most socialist economies rely, and expect, a greater amount of government control over the economy, right up to the point where you get 100% control of the official economy in the case of communism.

The point I'm making is that excessive government interference in the marketplace leads to undesired outcomes. Everyone who is entrepreneurial should have this as a startup message on their computer or phone. It's so easy to mistake government money flows for real prosperity.

What I'm suggesting is that Dubai World shouldn't have borrowed and spent so much money on non-productive investments. The [tenuous] link to socialism I'm trying to make is that the hallmark of any truly socialist government is that it spends too much money on unproductive investments (aka bridges to nowhere), not because they are stupid, but because they evaluate investment on things other than the ability to return their outlay and make a return in the future.

My post was designed to look absurd, because I'm truly concerned about the reckless amount of government borrowing and spending taking place across the world. It's unprecedented in scale and will affect us all in the fallout. We all look at Dubai and think 'can't happen here' (wherever we might be) but so many places can end up like this.

>the hallmark of any truly socialist government is that it spends too much money on unproductive investments

Care to name one of these hallmark "truly socialist governments"? I think this is a figment of your imagination. Socialism is one point on a slider and laissez-faire capitalism on the other side. If you slide the bar too far in either direction it breaks. Which is why no one does. Sweden has 52% taxes, free health care, free schooling, etc., etc. Are they one of your "hallmarks"? Because they are also very capitalistic.

What you should really be worried, what is really causing world-wide problems is corporatism/fascism.

> the hallmark of any truly socialist government is that it spends too much money on unproductive investments -- because they evaluate investment on things other

So your means of identification of socialist government is that you don't agree with its valuations?

Perhaps you mean to say that without stringent focus on a numerical performance measurement, like size of budget deficit or kLOC, optimization theory breaks down. I don't see how that would be particular to any form of government. That said, communal ownership does suffer more here, because it's an attempt at moving past local maxima in the poorly-defined utility space. Perhaps Jesse Schell's point system for people would be a sufficient compromise.

The problem with borrowing in particular is that it leverages the assumption that your use for the money is valued by society. However, you can't nail down a worth and societies are fickle.

Centralized economic control by the state is not socialism. It's just centralized economics. Indeed, nearly everything you described—especially the tightly controlled, wholly un-free workforce—is antithetical to any socialist plan. The elements you've highlighted have more in common with corporatism than anything else.

The way price signalling works is through failure and bankruptcy. Capitalism doesn't assume that all participants are rational; rather, it assumes that some fraction of them are irrational (possibly all of them, as long as there are some people who happen to be right despite being irrational), and that those firms will go bust, and their assets will be picked up by the people who happened to be on the right track in the first place. As long as you let those failures occur, you have a functioning market.

You're exactly correct, it's a good point. We should be watching what happens now - if the failures are allowed to happen, and the pre-built assets can be had at the market clearing rate - then growth in the future should be assured.

Muscat could have been Dubai if they had developed their port. I don't think Dubai is in a worse place than Muscat in the long term.

The reason people see Dubai going down is the same reason people saw it go up - ambitious/optimistic development by the 'socialistic' ruler.

Muscat could have been Dubai if they had developed their port.

It took me several reads to figure out that that sentence had nothing to do with wine.

http://en.wikipedia.org/wiki/Socialism

Whatever the problems or merits of socialism, it advocates common ownership. Dubai has always been openly a personally owned state advancing financial speculation. You may indeed call it something other than standard capitalism but calling it socialism is clearly an abuse of the term.

People have been confusing government intervention of any kind with socialism for a long time. The argument against this generalization, by and large, keeps falling on deaf ears.

I think you mean fascism.

From the Wikipedia:

  Fascism, pronounced /ˈfæʃɪzəm/, is a radical and
  authoritarian nationalist political ideology.
  Fascists seek to organize a nation according to corporatist
  perspectives, values, and systems, including the political
  system and the economy.

(Edit: format)

what it actually shows is that capitalism where much of the wealth is heavily concentrated in the hands of those who accrued it more through property rights than business acumen ignores market signals at least as much as socialist style central planning.

Dubai's culture is so openly shallow and materialistic, and its social structure is so patently corrupt—its once-vaunted development and luxury are so directly built on the backs of slaves and oppressed people—that I must confess, I think it's the only place in the world that I think less of people for living in. China, Israel—of all the places whose governments I disapprove of, I would never morally judge someone simply for moving to that state or living in that city. But when I meet people, personally or in my business, who live in Dubai, I really do immediately think less of them as people. I am worse inclined to them; I find myself thinking it a moral failure to participate in the waste and vanity that that city produces. It's probably not fully defensible, but there you have it.

Well, I'm a Canadian expat in Dubai and I find it interesting that you're ill-disposed toward me though we've never met.

I also wear Nike sneakers that were sewn by children working in some god-awful Pacific Asian export zone sweat shop. Don't you?

Do you not realize that you live in a country where slavery exists? Do you not find the expat culture in Dubai to be vapid and vile? If not, I'd be interested to hear why; everything I've read about Dubai indicates that is very much that way. If you do, then I don't know why you're surprised that someone might think less of you for choosing to live there.

It's not really all that different in North America is it? If you want to stretch the word slavery like that. We exploit people all over the world. I don't think it's fair to be that judgemental towards someone unless you cease to participate in any activities that facilitate someone somewhere being exploited.

It's completely different from North America; your hand-wavy equivocation is completely unwarranted. There aren't vast legions of workers brought into the US under false pretenses, who then have their passports confiscated and are forced to work for several years in excruciating conditions just to "earn" their freedom, simply to build a fake city designed to attract morally blind foreigners.

Is economic slavery OK if you aren't making people do it? Every first world country relies on people basically working as slaves in some sense or another to function. People feel entitled to a decent well paying job, and don't want do "lower caste" jobs like cleaning.

I did a short stint in Abu Dhabi and it is presented to expats as a wonderful place and is so if you want it to be. Having known someone who worked for Al Jazeera and heard the stories that get supressed involving workers conditions it wiped the sheen right off.

There are vast legions of workers working in conditions which are neither free nor pleasant to produce consumer goods for North American (and European) markets. They just happen to be conveniently overseas, conveniently one remove away from the multinational brands who contribute to the problem in their quest for ever-cheaper suppliers.

That's true; the vast legions of workers brought into the US under false pretenses, who then have their passports confiscated and are forced to work for several years in excruciating conditions just to "earn" their freedom, are there for other reasons entirely. I recommend reading this article series, "Diary of a Sex Slave":

http://articles.sfgate.com/2006-10-10/news/17314668_1_massag...

Also, slavery is an economic institution, and so the benefits flow not only to the slaveholder but also his customers, and they can be exported internationally to customers like you; the costs are borne by the slaves.

I've read of many cases of maids being imprisoned in the households they serve, not paid, and sexually assaulted by the owner of the household. This is slavery without ambiguity.

I know that people are judgmental, so I'm not surprised at all.

I live here with my wife and two young boys, my job and my stack of O'Reilly books. Where are these vapid expats you speak of?

The difference for me is that it's very easy to make a difference in this case: just don't go there. Don't spend money there, don't fuel the corruption and slavery and artificial prosperity of a crumbling city.

I don't argue against free trade with 3rd/2nd world nations -- in fact I think that our economic presence in China is a net beneficial thing over the years. However, that also means that I get to make a moral choice of where I spend my money. I don't believe that spending money in Dubai enriches anyone but the exploiters.

Whoa! That's pretty extreme! Can you share your experiences of people you met who live there?

It's in fashion to bash Dubai, but the article isn't exactly well written. The author just grabs at everything potentially unappealing he can and throws it in a pot:

> (The UAE was one of only three nations—the others were Saudi Arabia and Pakistan—to recognize the Islamic fundamentalist government in Afghanistan.)

There's no analysis of why there - notice how Dubai is one of the most progressive countries in the Middle East about dress, culture, and women working, and yet gets no trouble/bombings from fundamentalists? They kind of have to appease knuckleheads geopolitically. Saudi Arabia do the same thing because they control Mecca and Medina and want to recognize all even nominally Muslim countries. Pakistan shares a really large, poorly guarded border with Afghanistan and a lot of citizens live along that border with no particular loyalty to either country's government - again, not rocking the boat for geopolitical reasons.

A lot of world nations recognize backwards places, which just means they'll negotiate with them - most of the world countries recognize North Korea, for instance, where the rampant abuses are 1000x worse than anything you could imagine in Dubai. That's not to say nothing is wrong in Dubai, but its demise has been greatly exaggerated, and this particular article isn't particularly well written.

Dubai is the Pets.Com of the real estate bubble.

There are things like it in China that have yet to crash. Look folks... cities must grow organically. You cannot create an instant New York or London with loads of debt. Buildings do not make a city. Culture makes a city. The buildings are built after the city is built, to contain it.

I also look at Dubai as the peak of something else: the idea that you can literally create reality if you have enough hype. The same idea was beneath a lot of hand-wavey dot.com business plans and bad accounting practices of recent years.

  Dubai is the Pets.Com of the real estate bubble without the awesome puppet.

FTFY

My favorite picture of the Dubai skyline.

Skyscrapers in the clouds back when property values were reaching towards the sky...

http://www.flickr.com/photos/playing-with-light/2399114248/s...

Also: http://secretdubai.blogspot.com/

If you really want to understand Dubai look at:

http://maps.google.com/maps?hl=en&q=google+maps+dubai...

It's a tiny strip of a few really tall buildings between the dessert and water.

A real city looks like: http://maps.google.com/maps?hl=en&q=new+york&um=1... http://maps.google.com/maps?hl=en&q=new+york&um=1... http://maps.google.com/maps?hl=en&q=beijing%20china&... or http://maps.google.com/maps?hl=en&q=New+Delhi&um=1&#...

Since when does the shape of a city define it as being "real" or not? Maybe I'm missing something.

Any modern city that had all that prime beach land waiting to be developed would probably grow in a similar manner. Now that Dubai is rather "long" it's growing out into the desert too. e.g. newer areas such as Barsha and whatever that area is called where the dragon market is (edit: Mirdif).

If you don't like Manhattan then it might just look like a strip of tall buildings sandwiched between two straights, but you can't say that it's not a real city.

Dubai is certainly a giant bubble, but it's as real a city as any other city.

A classic example of what you're talking about is Los Angeles. Almost the entire stretch of land between Santa Barbara and San Diego is developed, and so now you see ever-growing hordes of people in the more inland, desert communities.

There is no reason to build buildings that tall when land is so cheap around it. And not just closer to the desert but also to the north and south. Just looking at the place you can see poor economic choices being made.

For comparison the strip in las vegas is basicly a tourist trap in the middle of the desert http://maps.google.com/maps?hl=en&q=las+vegas&ie=UTF... but it still has plenty of support around it. http://maps.google.com/maps?hl=en&q=las+vegas&um=1&#...

There’s a very simple reason: air conditioning. One skyscraper with a thousand residents is going to be more energy-efficient than a thousand single-family homes or even a hundred smaller apartment buildings. It also allows the developer to offer tenants some other amenities, such as restaurants or shopping, just an elevator ride away, and others within a few blocks or a short drive.

Most Americans aspire to live in a detached single-family house with a yard, if they don’t live that way already, but I don’t think this is a worldwide preference.

Buildings rappidly increase in cost as the height increases. A 30 story building has vary close to the same amount of surface area as a 60 story building, but a 60 story building needs to support the full weight of the 30 storys on top of it, and at the same time have spare elivator capacity to reach the top 30 floors.

http://www.burjkhalifa.ae/language/en-us/the-tower.aspx

Yes, the cost is nonlinear with height, but my point is that the benefit to density can also be very high.

(I can believe that in the specific case of the Burj the cost outweighs the benefit, given that the skyscraper was built primarily to give Dubai bragging rights. But even if the infrastructure of a 124-story skyscraper is too expensive, that doesn’t refute the value of 60-to-80-story buildings.)

If you want to optimize for energy-efficiency and short travel distances, you end up with something spherical or octahedral, and probably mostly buried, like a subterranean Epcot Center, or maybe Arcosanti. The form of Burj Khalifa is following a very different function.

How about:

http://maps.google.com/maps?f=q&source=s_q&hl=en&...

Also bear in mind the relative populations of New York, Beijing and Dubai. No surprise Dubai looks "tiny".

Not that I'm standing up for Dubai - I didn't like it at all when I went there and it has some very serious problems. I think the demographics don't match the form of the city very well - the city is too large and the buildings are too grand to match the people who are actually there (who are mostly construction workers it seems).

miami is freaking huge. I'm not really sure what point you're trying to make about it.

also, it's more than just Miami -- http://en.wikipedia.org/wiki/South_Florida_metropolitan_area

I interpreted the comment that I replied to to mean that Dubai being a strip along the coastline meant that it didn't look like a real city. I would say that it's probably more of an indicator that it's got nice beaches than anything else.

Miami was the first strip like city that sprung to mind as a counterexample, but as you say, it is huge, so it probably wasn't the best comparison.

The have a beautiful coast line, however, it still needs work. The lack of jetties, detached/floating breakwaters, groynes and seawalls is going to cost them in the long run. The city is still in its infancy so they may be planned- at least one hopes so.

For comparison:

http://maps.google.com/maps?client=ubuntu&channel=fs&...

http://maps.google.com/maps?f=q&source=s_q&hl=en&... (scroll along the coast)

http://maps.google.com/maps?client=ubuntu&channel=fs&... (nice example of erosion)

http://maps.google.com/maps?f=q&source=s_q&hl=en&... (prime example of good coast protection.)

Here is a good example for what is in store(area of Dubai): http://maps.google.com/maps?hl=en&q=google+maps+dubai...

Here we can see erosion(/) and building(\) taking place. Those "palm" islands are not going to stay that way forever.

After looking more into it, here are some articles about the risk their beaches face.

http://gulfnews.com/news/gulf/uae/environment/saving-dubai-s...

http://www.dubaipropertycrash.com/wp/2009/02/tsunami-dubai-p...

http://www.gsd.harvard.edu/research/publications/hdm/back/27...

http://humanitieslab.stanford.edu/UrbanSustainability/111

http://www.cnsm.csulb.edu/departments/geology/people/bperry/...

I have difficulty understanding the rather sudden and drastic change in regard of "the West" for Dubai. None of what is brought up in these articles was unknown or much hidden. I can only suppose that the marketing of Dubai's brand was simply that successful, as suggested by Syed Ali, an author cited in the article

"Ali [...] accuses Western journalists of buying too easily into the Dubai myth".

Could the poster or any upvoters comment on why they find this to be compelling?

I think people were willing to ignore the exploitation of workers and human rights abuses when Dubai was still a money train. Now that it has crashed outrage can be expressed without financial impact.

That's not exactly true. BBC's 'Dubai Dreams' is sth like 2005/2006 and one episode includes slave labour.

Its maybe not entirely true, but still generally the case IMO. You really didnt start seeing the mass of articles critical of Dubai until mid-2008 or so.

Dubai strikes me as the ultimate endorsement for agile development. Even seemingly unlimited investment, near dictatorial power, and a war room stocked with the smartest development minds in the world could not turn a small patch of desert into a world class tourism and financial center. None of the pieces made sense, yet they charged onwards to some higher, more perfect vision only Dubai could see. Could've been a lot easier if they'd just failed early, and failed fast.

Any HN people in Dubai?

I've been there a few times, most recently in the summer of 2006 or 2007. I do not like it. If you do not like gaudy things and rampant superficiality, you probably would not like it either. I intended to visit once Burj Dubai reached full height, and also after the metro was launched, but in both cases decided seeing those things was not worth the trip.

I've been there off and on in the early-to-mid 90s, and kalmar's point above would've held even then - it was (and evidently still is) a tad too opulent for my taste.

I've been in 2008 as a tourist and totally loved it. I got interested in the subject and had a long-term plan to settle there down some day. The crisis changed a lot, yet I laugh how pre-crisis it was en vogue to write about the mindblowing progress, now you only get attention if you write like everything is going down the drain there.

Peaks and troughs, this is the only thing people seem to write about these days. They love building people/companies/countries up (Dubai, China, Apple), and then tearing them down a little while later.

I think hearing about people getting arrested for possession of melatonin or flogged for kissing their wives has a larger negative impact on Dubai as a tourism/business destination than anything any financial columnists are saying. I know I wouldn't come within 2,000 miles of the place.

You've heared it long before, and it hasn't impacted tourism, it was still THE destination back in the day. Law is strict, but should one respect it when chooses to come there. The Gulf as a whole is not for everybody, for sure.

Notice how most of the stories you read about people arrested for moral code offence, concern Britons. I'm not so surprised, as some of them forget it's not a UK colony. Once I've seen a British woman making fun of arabic incenses in a mall, made stupid facial expressions, laughed off, etc. A local approached, calmly showed her how to use it and then angrily said "it's our land, our culture. not yours". Hard to argue with that.

Dubai has dozens of dark sides, but if you agree to live by the code, I still believe it can be lots of fun.

I've been here for over 6 years. These articles were amusing two years ago mostly due to the novelty of reading negative editorials about the city; you'd never get that from local papers here.

That being said, there's nothing in the article that isn't common knowledge in this region.

I have a good friend that lives in Dubai and echoes the article in saying that racism is incredibly apparent- "British stick with British, Americans with Americans, Indians with Indians etc."

I will be very interested to see what the place will be like in 50 years time.

"British stick with British, Americans with Americans, Indians with Indians etc."

That's not so much racism as pretty much the way it is with expat communities all over the world. Dubai, though, has far worse racial problems than that.

Sorry, I was just paraphrasing a line from the article.

He has talked a lot about the slave labour and the way groups are treated unfairly.

Gosh when did risk-taking and failure become so objectionable? Dubai made some bad mistakes just like the rest of the world during the credit-fueled binge.

It's just that it happened on a metropolis sized scale. A skyline had never before risen so quickly. It's now falling down at nearly the same pace. Interesting to watch and at least in my opinion, unique.

I think China is coming close, of course they have a lot more backing than Dubai. I read somewhere that China has 70% of all the worlds cranes, busy putting up buildings. (yes, could be completely wrong, how does one go about finding that statistic out anyway).

China also vastly larger than Dubai.

But exactly what are people doing in Dubai? What holds up the economy? Is there manufacturing? R&D? A healthy financial district?

It seems like it was all built for "something" to show up, and it never did. So everyone is just busy hustling each other. A city full of nightclub owners.

Las Vegas, on the other hand, does quite nicely as a city full of nightclub owners.

There's definitely a future for Dubai as the Las Vegas of the middle east, if that's where they choose to go.

Las Vegas is Las Vegas because it has the perception that "anything goes". So far Dubai has no casinos, a no-skin dress code, no alcohol in public, and they're cracking down on kissing. I'd say Vegas is safe for now.

I wonder how long it'll be before the decision to go that direction is made?

Vegas isn't in any danger of being replaced by Dubai of all places. Vegas is vegas in part because it is shielded by the laws of the USA. Unlike Vegas, Dubai is controlled by the laws of Sharia as interpreted by the ruler of the day.

Well, it doesn't have to be the Las Vegas of the world, just the Las Vegas of the Middle East. But yes, obviously religion is the factor that holds it back. If the emirs (correct title?) can get it into their heads to let money beat religion, though, they have a huge opportunity.

Dubai was trying to buy and monopolize the luxury market. Yachts, planes, real estate, jewelry, fashion, etc. They were simply trying to divert all of the world's luxury consumers to one place (Dubai) instead of other places (Paris, Monaco, New York, etc.).

I think that's an oversimplification.

People object to Dubai because the rise of the city was never based on any real economic activity. There was no real tourism, no manufacturing, little resource industry, nor a knowledge economy. It was all hype - in the same way that we frown and look down upon the unrealistic, borderline scammy dotcoms of yesteryear, we look on Dubai with some disdain for what we perceive as dishonest business.

I may disagree with the politics of, say, China, but one cannot deny that their economic rise to power was based on real growth, in real industries, providing tangible benefit to people.

Secondly, the objection to Dubai (and the schadenfreude you often see at its downfall) is fueled by the notion that much of Dubai's construction and service industry was built on indentured labor, if not borderline slavery; the labor abuses in Dubai during its hey-day would make a 19th century robber baron blush. Hell, if the reports are anywhere near accurate, labor conditions in Dubai makes a Chinese sweatshop a veritable paradise.

So, in short, the perception (whether or not reality jives with this will be answered by history) is that: Dubai was built on hype, no real substance, fueled by shallow people, upon gross human rights abuses.

It is far from as simple as making bad business decisions.

As I understand it (though I could be wrong), the port in Dubai is one of the freight hubs of the world, which is where the Emirate gets a lot of its wealth (it has little/no oil - Abu Dhabi has most of the UAE's oil). So there was some economic activity there at least.

Dubai economy may seem shallow but it is based on logical strategies. It placed its bets on real estate, tourism, finance and trade.

The global real estate meltdown is not unique to Dubai and Dubai is paying for it just like Miami or Vegas. Its bet on tourism is based on the theory of providing an alternative vacation destination to the larger middle east and northern Africa population. The tourism bet is also linked to the growth in global travel. Dubai conveniently sits in between West and East airline routes. Emirates airline has prospered precisely by taking advantage of this opportunity. So if Dubai just happens to be a transit stop, its quite logical to try to entice those travelers to vacation in Dubai. Dubai does not have any natural tourist attractions so they tried to build some. Some of it has been garish and comedic (indoor sking, etc) but some of it is quite fascinating from an engineering persective.

Dubai's tradition of trade goes back hundreds of years. Its been the primary trading port between the middle east and the Indian subcontinent. It has invested in its trade hub status by encouraging other industries to use Dubai as the trading hub. This has lead to the creation of Media City, IT City, etc.

Dubai's bet on finance is closely related to its admiration for NYC's financial status and history. Also, after 9-11, it was felt that some of the middle eastern oil wealth should be reinvested back in the region. Dubai tried to seize this opportunity by creating the Dubai stock exchange, and other related financial reforms. Dubai is not alone in these efforts. Bahrain (where I used to live), Kuwait, Qatar and Saudi Arabia are all trying similar things. As far as the migrant labor situation, the entire Middle East region should do a better job of treating migrant workers.

There are shallow people who abuse human rights in Dubai. But there are also visionaries, entrepreneurs and hard working folks who are trying to build real businesses (see http://www.startuparabia.com/). The best thing about all these strategies and efforts is that it provides a space for hackers, creative folks, entrepreneurs, investors and the young of the middle east to try at other human endeavors.

I get the feeling from your post (and username) that you may be Emirati, and I certainly understand your wish to defend your home, but I think there's a certain amount of whitewashing going on here.

> "There are shallow people who abuse human rights in Dubai"

Based on what I understand, this is an extreme and gross understatement. The entirety of the construction industry was based on borderline, if not outright slavery of foreign nationals. This is not the case of "yeah, there were a few bad apples in the bunch", this was widespread and almost universal. (Again, if you'd like to contest this perception, please feel free). The Dubai skyline as we see it today was impossible to create at that cost, in that timeline, without labor abuses that would make most developing nations look like Eden.

I find it hard to believe that a hacker-friendly and creative-friendly space can exist amidst so much moral corruption and especially in such a closed society.

I am unsure if you've had the opportunity to visit some of the more tech-centric and creative-centric cities of the world - but you will notice that creative types (hackers included) tend to be a weird bunch. Around me right now are people with strange haircuts, strange sexual preferences, strange (and to some, offensive) clothes, strange habits... etc. Hell, even in a socially liberal place like the US many of these people are decidedly non-mainstream and are merely tolerated, not celebrated. Nonetheless, here they are protected and free. They also thrive on liberal, bohemian substance - not the glitzy, luxurious sophistique that Dubai is shooting for.

Dubai does not sound at all like a place where hackers and artists would want to call home. In fact, half the creative types I know would be at risk of imprisonment in that country. IMHO it is impossible to nurture a creative space in a closed, socially hyper-conservative country. Social conservatism is historically the antithesis of artistry - and this includes the middle east. The most scientifically and artistically prolific eras of the middle east all came during reigns of particularly secular (or at least, non-fundamentalist) governments.

I am following Dubai closely. If rents fall more, it might be a good place to settle down and work on my projects.

I'd be careful it may affect the output of your work

You will seriously find a much more supportive environment in a random town in rural America for $250 a month rent than in a shallow racist metropolis openly employing slave labor.

Why Dubai rather than somewhere else cheap? Unless you are going just to see some place foreign (which is a valid reason to move elsewhere) I think that as another poster said, the midwestern states of the US might be the cheapest place to live, if you count the costs involved with adapting to a foreign place (I'm assuming you are an American)

I think it might be a bit early to write Dubai off. Maybe the overbuilding will drive the rent down and attract businesses. The middle-east seem to be a very good emerging new market.

I'm pretty sure that innovation and real solid businesses don't come from hype, but away from the media spotlights and pundits.

> The middle-east seem to be a very good emerging new market.

Not bloody likely. In which way, exactly, is the Middle East a "good emerging new market"? Beyond their natural resources and strategic positioning there is nothing at all to speak of in any industry.

I think Dubai is doing http://en.wikipedia.org/wiki/Embrace_and_extend

you have to wonder if Dubai is Islam's deliberate way of showing their followers that the western world is messed up?

My comment is not an attempt at being racist or judgmental, but even the "highest class" Americans probably shake their heads at what is going on there.

I'm sorry but I don't understand what you're getting at. Could you please elaborate on your point?

I think he is suggesting that a nebulously defined "Islam" orchestrated the rise and fall of an entire emirate as plot to convince people that "the West" is wrong?

It could also be a lesson that "if you build, they will come" is misguided - even in the Muslim world.

This comment is important because it is so offbase and yet is sourced in what a lot of westerners think/know about 'islam'. Frankly, it kind of depresses and scares me a bit how little people understand about the thing that supposedly is causing them so much disruption in their lives. BTW, debt at interest is totally forbidden in Islam so building an entire state and economy on it - as happens in the west also, of course - is totally 'unislamic'.

You know, I was thinking about this. I don't know much about sharia-compliant finance, but I have the impression that a lot of it works by giving the "lender" something like preferred shares in the venture they're financing — no voting rights, but a defined dividend, and liquidation preference. (I don't know; do you know anything about this stuff?) Dubai might be in much better shape if they had been financed this way instead of through debt at interest.

It's hard to tell because the comment you're replying to is so absurd, but perhaps the commenter meant to say that Dubai is a sort of cartoon version of a European state, as imagined by some "Islamic" people who deplore the structure of such states — and thus was doomed to fail. It's hard to read it as other than a gross stereotype, though.

Me, it depresses and scares me a bit how little I understand about the human world: not only the "Islamic world", to whatever extent it makes sense to lump together Indonesia, Turkey, and Egypt under a single rubric, but also Africa, India, and China.

"Frank Gaffney addresses the Defense Forum Foundation (DFF) in the House of Representatives on the topic of Shariah and, broadly defined, it's threat within the United States. Some topics include Shariah-Compliant finance and AIG, homeland security and the Muslim Brotherhood."

http://youtu.be/5wLEvYcmj_Q (goto 12:00)

-- the ultimate issue is that there are Muslim supervisors who decide whether money should be lent or not on a case by case basis. It's subjective and it's biased. If the recipient promotes Shariah it's cool, if it's against Shariah, it's not. Shariah compliant finance is stealth jihad.

Your mistake here is thinking that if something is not against the shariah then it must be 'promoting' shariah. That's incorrect. In Islam, everything is allowed (halal) unless it is clearly disallowed (haram), so someone administering a shariah compliant loan only needs to establish that it is not for the purposes of e.g. gambling, prostitution, the alcohol industry etc. If your business is to sell pet food then there would be no problem with that. You don't have to 'promote' shariah to get a loan. Frankly, it's bordering on the absurd to say that shariah-compliant banking (if you find any that really is genuinely compliant, let me know by the way, I can't find one to buy a house) is 'stealth jihad' but again that reinforces my point that the lack of knowledge the west (particularly Americans) has about Islam is scary and makes it so easy for those with a vested interest in war to keep the ball rolling.

The comment you're replying to is pretty inflammatory. Bravo to you for responding in a rational fashion.

About home mortgages — it seems like it would be hard to apply the preferred-share-like structure I described to home mortgage financing. Your house doesn't produce profits that you could share with someone, does it?

Maybe you could sign over a fraction of your total family income in exchange for help buying the house: say, one third of your income for twenty years. But that would still be pretty risky for the investor, even more risky than investing in a hotel, where they have a plausible reason to believe that their investment will produce results. (And I have no idea whether it would be legal, either under the shariah or under civil or common law systems.)

I'm not sure whether to give the quick explanation to that or the proper one - an in-between one is that the income idea won't work because there is no guarantee that e.g. my health will continue OK for twenty years or that my job will remain steady. There would not be the equivalent of an income protection scheme available either. There are simple methods available in principle based on the real rental value of the home and treating the buyer as a form of renter but in reality all the so called 'islamic' schemes do not actually involve risk sharing and consequently it's hard to be sure that they are indeed 'halal'. BTW on your first point it's Ramadan so if I do lose my patience I've blown it....:-)

What precisely is so inflammatory about it?

You and me both are ignorant about so much of world, but when we see how what we do know about it is so mistakenly represented in the media, it's a big concern. After the world trade center bombings the BBC news on the TV ran a piece in a classroom in the US and the teacher told the kids that the bombings happened because "they don't like our way of life". Frighteningly I think a lot of Americans still believe that.

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