In the nineteenth and early twentieth centuries, the Egyptian port city of Alexandria was the Middle East’s most cosmopolitan city. Expulsion of its Jews, the Egyptian Revolution, and President Gamal Abdel Nasser’s militant Arab nationalism slowly suffocated Alexandria’s vibrant culture, allowing Beirut to rise. “The Paris of the Middle East” thrived in the 1950s, 1960s, and early 1970s until civil war erupted in Lebanon. Istanbul rose in the 1980s, but faded amidst earthquakes, terrorism, and more recently, Recep Tayyip Erdoğan’s antisemitic, anti-Christian, and anti-Western polemics. Beginning in the early 2000s, Dubai took off, becoming the undisputed new cosmopolitan commercial capital of the region.
The Emirates’ leaders understood that greater wealth could come from spreading opportunity rather than constraining it in a network of corruption and kickbacks.
Many visitors misunderstand the reason for Dubai’s success. It is not oil. The United Arab Emirates is a confederation of seven emirates. While Abu Dhabi is oil rich, Dubai is not. When tourists visit the city, what they witness is not simply the re-invested proceeds of oil sales, but a broader embrace of the free market and a recognition that tolerance, rather than political polemics, could bring prosperity. As important, the Emirates’ leaders understood that greater wealth could come from spreading opportunity rather than constraining it in a network of corruption and kickbacks. This is why an old, derelict fishing, pearling, and smuggling port grew into one of the world’s trendiest cities attracting trillions of dollars in investment.
Dubai’s success also drew petty jealousy. Despite bribes and international sporting events, Doha lives in Dubai’s shadow. Qatar funded academics, human rights activists, and journalists to disparage Dubai, even as Doha’s own behavior was worse. None of this is to suggest Dubai, or the United Arab Emirates for its part, is progressive in a Western liberal sense. It is not. There is an unspoken contract, however, where the rules are clear: Tolerance is key, and mercantilism is a model.
The Iranian drone and missile attacks on Dubai caught the United States by surprise. Just as the Central Intelligence Agency’s overestimation of Saddam Hussein’s weapons of mass destruction was the intelligence failure that defined the 2003 war, the failure of the U.S. intelligence community to predict Iranian attacks on Dubai, Qatar, and Oman also represents a catastrophic mis-assessment. Dubai saw itself as a neutral ground, a sort of Switzerland, and believed its receipt of so much Iranian investment would make it an unlikely target.
Now, as Iranian drones and missiles slam into Dubai hotels and the airport, many in the West suggest the city’s demise. “Is the Dubai dream over?” Britain’s Daily Mail headlined, telling readers, “Expats say they will leave and never come back.” “The fighting may end, but the inflationary and investment effects across the region will not,” the Eurasia Group’s Cliff Kupchan wrote in the Washington Post. “Dubai’s safe haven brand may never recover as visitors watch missiles light up city’s skyline,” The Associated Press reported.
Nonsense. For years, flights approaching Dubai from North America and Europe would carefully avoid Iraqi airspace as they began their descent. Panic and misperception, rather than fact, color Western attitudes. Dubai was at peace and Iraq at war, but even though family members and some investors could not tell the difference, enough did that the city thrived. The same held true when the Islamic State erupted in the region. Dubai was not immune, as Qatar sponsored a Muslim Brotherhood affiliate to sow violence in the United Arab Emirates, if not overthrow the government. Emirati security triumphed, notwithstanding the handwringing of Western human rights groups whose subjective politics trump objective analysis.
If real estate prices dip, that only makes Dubai more attractive to investors who will scramble to get in cheap.
Dubai faced other trials. Nearly twenty years ago, the global recession and credit crunch also hit Dubai, with some expats leaving luxury cars abandoned in the airport as they fled to avoid their obligations. And yet, Dubai bounced back. Ditto during COVID-19.
Some Westerners might return home; then again, most do, as investors and workers flock to the city to make money before, inevitably, returning home. And the headlines about missiles and drones will leave their mark. But what those writing sensationalist headlines misunderstand is the way the market works. If real estate prices dip, that only makes Dubai more attractive to investors who will scramble to get in cheap. After all, what is the alternative? London, where Muslim Brotherhood and Jamaat-e-Islami activists run wild? Germany, where Turkish and Islamic State cells exist just below the surface? New York, where a generation of woke judges and now Mayor Zohran Mamdani risk a return to the criminality and decay of the David Dinkins years? Or Doha and Istanbul, where Islamist mores and a tolerance for radicals mean that expatriates will never feel as free or comfortable as in Dubai?
Dubai is a victim of Iranian terror, but the brand it represents is unique and resilient. For some expatriates or pundits not to recognize that suggests they misread the opportunities that drive millions, from Bangkok to Boston to Buenos Aires to Berlin, to call Dubai their temporary home.
