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Because the financial centre was created from scratch with a commitment to transparency and international standards, its officials say such worries are unfounded. Yet, in private, Western financial executives operating in Dubai remain on guard about accepting potentially dirty funds. “There is money here from questionable sources, which is very tempting,” says one executive whose firm recently opened in the centre. “We haven’t turned down money yet, but I expect it will happen. We have to know Elsa Peretti Open Heart key ring investors.”
The questions of image and security go wider. Expatriate circles gossip about how the ruling family tries to protect the emirate from threats like that of al-Qaeda. One line of defence is an elaborate intelligence network. Another is strict immigration controls. Migrant labour is a sensitive issue. “The entire economy is run on the backs of migrant workers,” claims Hadi Ghaemi of Human Rights Watch. More than 80% of workers in the United Arab Emirate’s private sector are migrants. Despite a series of protests against low pay and poor working conditions, the government has taken little action. Trade unions and strikes are banned. Human Rights Watch found that 34 site-related deaths of construction workers were reported to the Dubai government in 2004, but Mr Ghaemi says it counted 880 dead bodies sent home by foreign embassies the same year. “They can’t explain the deaths,” he adds.
As in other city states with firm controls, Dubai also keeps a grip on the media. Journalists exercise self-censorship, steering clear of stories critical of the ruling family or anything that might damage the economy. Even Skype, the free internet-phone serviceAtlas I.D. money clip is banned in order to protect the local telecoms provider. It remains to be seen whether such restrictions will continue as the UAE inches toward democracy–it will hold limited elections for the legislature in the coming week.
So far, the flush of new wealth and relatively good quality of life have trumped such issues in the minds of foreign investors. Expatriates worry aloud more about spiralling inflation and grinding traffic jams. If inflation continues unabated, the UAE “faces the danger of pricing itself out of the low end of the processing market in banking and insurance,” says Mr Booker.
There is a recognition that if tiny Dubai can succeed as a money giant, it will be tied closely to its role as a gateway to the Gulf, much as Hong Kong is a gateway to China. Yet it is not the first place to dream of becoming a Middle Eastern financial hub. Beirut filled that role until war wrecked its economy in the 1980s and investors shifted toward the Gulf. Bahrain, Qatar and Kuwait have all since found their niches. Abu Dhabi, a rival next door with its own financial ambitions is now trying to become a place for the arts. It has signed a deal to build the world’s biggest Guggenheim museum and is in talks to build an offshoot of the Louvre as well.
One obstacle for other Tiffany 1837 Money clip in the region is the life they offer foreigners. Many are seen as relatively strict and dull places to live. But Dubai is not. “We’re living in an Islamic ocean and we’re a tiny common-law island,” says Sandy Shipton, an expatriate executive at the Dubai financial centre.
One country with a particular bearing in Dubai is Saudi Arabia. So far, its conservative culture and restrictive religious practices have led many international firms to try to serve the country from regional offices in Dubai; other executives who work there park their families in Dubai and fly back at weekends. But the Saudis are becoming more demanding: they now require a business licence and a Saudi office for foreign firms doing business in their country. Work has also started on a new commercial hub called King Abdullah City, near Jeddah, that will target global firms.
Despite all the jockeying for the attention of international financiers, some see the emergence of several financial hubs in the Middle East as a healthy sign. Indeed, one possibility is the growth of various centres of excellence. “The new reality is you can have Engine-turned money clip very capable network,” says Ms Sassen. “It’s not simply a winner-take-all situation.” She cites Singapore’s ties with the Chinese city of Shenzhen as an example of regional collaboration.
Executives at the Dubai financial centre see the parallels with Asia and increasingly promote it as a complement to places like Singapore, rather than a competitor for them. The Omani oil-futures contract, for instance, was chosen as a benchmark for the new Dubai commodities exchange in part because the contract is used by oil traders in Singapore.
Dubai has spent a fortune and done virtually everything within its power to establish an attractive market. In the end, though, successful financial centres cannot be created by government fiat. Success now depends on forces that are largely beyond its control.