Derek Sivers
City of Gold: Dubai - by Jim Krane

City of Gold: Dubai - by Jim Krane

ISBN: 0312535740
Date read: 2023-06-17
How strongly I recommend it: 9/10
(See my list of 360+ books, for more.)

Go to the Amazon page for details and reviews.

So well-written! Absolutely fascinating history of Dubai. An exciting page-turner. It gave me so much admiration for the city and its visionaries.

my notes

Dubai is ruled by three principles:
1. what is good for the merchant is good for the village
2. embrace visitors, no matter what their religion
3. you cannot win if you do not take risks

UAE population hovered around 80,000 for more than a millennium, from the arrival of Islam in AD 630 until the 1930s.

The golden age of the Arabs: between the eighth and thirteenth centuries, ruling an empire that stretched from China to Spain.

As Muslims, divided Arab tribes found unity. The faith’s equanimity brought leaders closer to their people.

UAE’s rulers now maintain power and legitimacy by giving generous subsidies to their citizens, essentially buying their support.
Public backing in return for improvements in living standards, including jobs, homes, health care, and education.
Tribal autocracy is one of the oldest ways of organizing society and the only form of governance the UAE has ever known.

When Granada fell in 1492, the last Arab-governed city in Europe had been captured and the Reconquest was complete.
Now the Iberians were in a mood to conquer and colonize.
They viewed Arabs and Muslim civilization as heathen enemies. They killed thousands.
Albuquerque’s actions in 1506 would be remembered for centuries as the behavior of Europeans and Christians.
Albuquerque destroyed every Arab vessel he saw. When Omanis refused him permission to land, he sacked their towns.
The unnecessarily cruel Portuguese occupation soured Arabs on Westerners in general and Christianity in particular.
When the British arrived in earnest two hundred years later, they were unwelcome.

When demarcating the border between the UAE and Oman, surveyors asked tribes to declare whom they preferred as overlord, the sheikh in Abu Dhabi or the sultan in Muscat.

The downfall of Ras Al-Khaimah also left a commercial vacuum in the lower Gulf.
The Qawasim port of Sharjah would take over some of the slack for a while, but the opening left room for Dubai to emerge and later, to dominate.
Dubai’s leaders learned a lesson from the 1819 raids: The English were a force better befriended than fought.

In 1833, the Al Bu Falasah people in Liwa - eight hundred of them fled north, heading for a frontier province that they could take control and govern themselves.
When they descended on Dubai, they nearly doubled the village’s population.
They declared Dubai a new sheikhdom, independent of Abu Dhabi and its al-Nahyan rulers.
The British soon recognized the new regime, cementing the Maktoum family in power.
The Al Bu Falasah risked their future on a little-known fishing village on the coast.
the clan’s decision to gamble on Dubai was the first recorded evidence of the Maktoum family’s knack for bold decisions.
The family’s skill in backing these decisions with quick action would pay off incredibly well.

The Maktoum family’s long and profitable friendship with Britain, ruled Dubai with remarkable stability for 175 years.
Stable rule and predictable succession is one of the fundamentals of Dubai’s commercial success.

In 1894, Sheikh Maktoum launched a plan to make Dubai the most business-friendly port in the lower Gulf, at the expense of Iran, turning Dubai into a free port.
The heads of a few of the biggest Iranian businesses agreed to relocate, and their business partners and customers followed.

By the 1920s, most Iranians accepted Dubai’s invitation to settle permanently. They brought their families across and adopted the customs and dress of the local Arabs. Dubai was happy to have them. The Iranians brought their entrepreneurial savvy and trading links with Africa and Asia, and removed those assets from Iran, a competitor. Iranians brought prosperity and worldliness.
Iran’s cascading missteps have showered Dubai with wave upon wave of Iranian entrepreneurs and their savings.
In the 1970s Iran raised import tariffs to nearly 40 percent on some goods, triggering another exodus.
In the 1980s and since, the Islamic revolution pushed liberal-minded Iranians and much of its academia across the Gulf.
Nearly half a million Iranians have fled to the good life in the UAE.
In Dubai, Iranians outnumber local Emiratis by around three to one.

By the early 1900s, pearls commanded 95 percent of the Gulf economy
Pearl merchants grew wealthier than some ruling sheikhs, causing instability.
But the Arab natives of Dubai felt it was beneath them to diversify into real estate or shopkeeping.
They left a fat wedge of the economy open for migrant Indians, who soon controlled Dubai’s retail sector.

Japanese researchers figured out how to “culture” pearls, killing pearling in the Gulf and everywhere else - permanently - in 1929.
The pearl crash triggered a famine, with malnourishment widespread in Dubai in the 1930s and 1940s.
Deaths from starvation were even more common.

British agents treated Arab leaders like children.
By the time the British left in 1971, illiteracy was above 70 percent, life expectancy wasn’t much more than fifty years, and there wasn’t a single university.
Life improved dramatically after their departure.
The stability that Britain brought to the Trucial Coast was, for the first hundred years, stagnation.
The sheikhdoms remained Third World outposts because the British enforced their isolation and blocked foreign ideas.
But Britain’s truce-enabled stability allowed the ruling sheikhs to develop seven robust monarchies that eventually banded together as the UAE.

Political stability has held up through thirty-eight years of independence with no serious hitches.
It is a key reason Dubai and the UAE have generally outperformed the rest of the Middle East.

Dubai in the 1950s was little different from how it was in 1850s.
Nearby, Egypt was in the midst of its cinematic golden age.
Beirut was a swank destination for the jet set.
Iran was delving into nuclear power1 while its upper classes washed down caviar with iced vodka.
Dubai, by contrast, sat in darkness.
Dubai held only fifteen thousand people in those days, and 60 percent of them were Iranians. Farsi was the language spoken most.
Not even the home of Dubai ruler Sheikh Saeed, his son Sheikh Rashid, and baby grandson Sheikh Mohammed had flush toilets.
Most Dubaians simply squatted over the creek - or above a pit in their yards.
Electricity arrived in the 1960s.

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.

Saudi Arabia was a nation so poor that its king, Ibn Saud, could carry his entire national treasury in the saddlebags of his camel.
Saudi Arabia shunned modernity as tools of the devil.

The barren wastes of Abu Dhabi, it turned out, were not worthless after all 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.
Divided among Abu Dhabi’s roughly 200,000 citizens, each person’s share is nearly $23 million.

For thirteen years after Abu Dhabi began pumping oil, Dubai drilled hole after dry hole.
Finally, in 1966. The first export of Dubai crude came in September 1969,
But when the finds were assessed, they looked more like a letdown. Dubai had just 4 percent of the UAE’s oil. Nearly all the rest was in Abu Dhabi.

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.
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.
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.

Dubai became the first post-oil economy in the Middle East.
Sheikh Rashid invested the proceeds in overbuilding roads, factories, and ports that he imagined would serve the city for the next fifty years.

Slavery was only banned in 1963. Hundreds or thousands of former slaves are still alive.
Freed slaves often took their owners’ family names, as in America. Black Emiratis now bear some of the most prestigious names in the country.
But, unlike in America, integration was quick and nearly total. Black Emiratis face little discrimination.

Rulers in Dubai and the UAE have stanched dissent the nice way, by paying off their opponents.
In practice, a wealthy populace is a happy populace and not one to clamor for political rights.

Subsidizing away the political opposition isn’t so easy in other Gulf states.
Bahrain discovered oil in 1932, when prices were low. It has since pumped out most of its reserves and has little left to pamper its people. The tiny country is now embroiled in a slow-burn rebellion led by its underprivileged Shiite majority.
Neighboring Saudi Arabia may sit atop the world’s largest oil reserves, but it must share the proceeds among 25 million citizens. Saudi per capita income is $23,000 per year, a third less than the UAE average of $37,000, and far lower than Abu Dhabi’s towering $74,000.
Not surprisingly, there is far more political opposition in Saudi Arabia.

Dubai didn’t even have a police force until 1956. The only people in arms were desert Bedouin, who, by their nature, wanted to remain free and nomadic.

The sheikhs confounded those predicting their downfall. People are happy with them.
UAE enjoys broad social freedoms which substitute for its lack of political ones.

The 1958 death of Sheikh Saeed and the end of his forty-six-year rule marked the final stage of Dubai’s long slumber in old Arabia. Very little changed on his watch. His death came like a catalyst, a dam burst that allowed fifty years of pent-up modernity to flood Dubai.
Within a year, Dubai would have a modern port. Within four years, electricity, running water, and telephones.

In 1954, newly wealthy Kuwait, played the role of Gulf big brother in those days.

Dredging barges: project finished in 1961, Dubai was the most accessible and important port on the Trucial Coast.
The dredging cleared away the obstructions to Dubai’s modernization.
Shippers knew their vessels could visit and stay on schedule. Dubai became a profitable destination. Merchants could order hundreds of tons of concrete.
Locals who shared the risk became some of the richest in the world, repaid with exclusive import licenses and business contracts.

Its first paved road, first bridge, and municipal water system came as dowry presents from Sheikh Ahmad bin Ali al-Thani, the emir of the nearby sheikhdom of Qatar.

In the 1950s, Dubai was overshadowed by next-door Sharjah, a larger city with a bigger port and a long maritime history.
But Sharjah drifted in indecisiveness.
One night in 1960, a hot shamal, a summer wind, blew down from Iran, kicking up booming surf that filled the mouth of the Sharjah creek with sand.
Sharjah’s port was sealed shut. Overnight the tidal creek became a saltwater lake.
The closure of Sharjah port lasted a decade.
To this day, Sharjah is a poor city.

Dubai has always been a freewheeling place where bureaucrats and inspectors get little traction because they slow commerce.
“Dubai, city of merchants. Anything goes.”
Its whole economic function was aimed at evading the rules and regulations of other countries in the region.
Sheikh Rashid’s motto is famous in Dubai: “What’s good for the merchants is good for Dubai.”

Dubai jumped at every opportunity, cornering industries and economic sectors.

In 1967, design a deepwater port.
In 1971, when Port Rashid’s first berth opened, it brought immediate relief. The first of 120 ships anchored off Dubai began to discharge cargo.
The state-run operator that ran the port would eventually grow into the world’s fourth largest.
Dubai’s area grew sixteen-fold and its population nearly quintupled.
Dubai’s first big hotel worked out a deal with the Philippine government and in 1978 imported six hundred workers in three planeloads. Bosch was the first major recruiter of Filipinos, a group that soon came to dominate jobs in hospitality, retail, and nursing. Filipina women also took jobs once held by slaves: as housemaids and nannies.

Sheikh Rashid in 1971 commissioned a feasibility study on building a dry dock.
Advisers said the project was ridiculous. Global shipbuilding was in recession. Dubai was too small to absorb such a huge industrial investment.
Ambition that bordered on folly.
But in 1979 he commissioned the mammoth Dubai Aluminum smelter - which recycled the plant’s heat to distill fresh water from the sea.
He launched the Dubai World Trade Centre.

Young Mohammed bluntly asked his father to stop the job before the city went bankrupt.
The old sheikh puffed on his pipe and told his son: “I’m building this port now because there will come a time when you won’t be able to afford it.”
He was very wise. He built things when they were cheap. That’s the way Sheikh Mohammed thinks. ‘Let’s get it while the money’s around.’

The Jebel Ali port is the world’s largest man-made harbor, Dubai’s greatest financial asset, and the U.S. Navy’s number one overseas seaport.

Sheikh Rashid’s steel-gut gambles on infrastructure were the pivotal decisions that make Dubai what it is today.
Dubai’s massive investments set the tiny emirate apart from its oil-rich neighbors.

Abu Dhabi, Saudi Arabia, and Kuwait used mineral wealth to subsidize cushy lifestyles and overpaid bureaucracies, or they parked it in overseas stocks and bonds.
Their investments earned maybe 10 cents on the dollar, while Dubai made $5 for each dollar invested in infrastructure.

Zayed treated the entire UAE to his formula of tribal generosity. It worked. The uncertainty that shrouded the UAE at its birth faded away.
Sheikh Rashid’s sons made sure their father’s priorities were given maintenance and attention, not left to rot.

The Zayed Grand Mosque is the third largest in the world, but also one of its most beautiful.

Dubai’s physical shape is one of Sheikh Rashid’s legacies.
He bequeathed us a linear city with multiple centers, rather than a traditional metropolis that radiates outward from a central core.
The building of Jebel Ali port on a faraway beach created a new development anchor.
Jebel Ali ensured Dubai would stretch along a narrow coastal strip.
Sheikh Rashid’s sons set about filling the space

Sheikh Rashid kept lawyers away from the decisions.
The biggest sickness in the Arab world is legal advisers saying, ‘This is forbidden, this is forbidden, this is forbidden.’
If a certain contract violated the law, he didn’t care.

Instead of waiting to choose among bidders for a project, he just chose a qualified company. He didn’t care if he paid a higher price. Time was more important.

By 1985, Dubai had come a long way. Just about everyone lived in an air-conditioned home.

Dubai is successful because it is a government that is an entrepreneur at the same time.
It can spot opportunities and immediately take advantage, unlike the rigid five-year planning and specific road maps that many developing economies follow.

In terms of physical impact, the greatest twentieth-century artist is Warren Pickering, a chunky fifty-nine-year-old from Christchurch, New Zealand. Pickering’s masterpiece is a 1997 untitled work with colored pens and airbrush on a piece of art board. The picture, never seen in public, depicts a stylized island in the shape of a date palm. Pickering’s painting is the basis for a man-made island that is three and a half miles wide and three and a half miles long. It’s a city neighborhood built at sea for more than 100,000 residents and workers. From space, it’s clearly recognizable as a Pickering original.
Another Pickering masterpiece a few miles away: an array of hundreds of islands shaped like a map of the world.

“If a consultant says, ‘Don’t do it,’ that’s great. It’s an opportunity for us.”
“That tells us there are going to be barriers to entry for that market. If we can crack into it, we’re going to have a leadership position. That goes to the core of Dubai. We’re always encouraged to do what’s seemingly not possible.”
In speed of construction, the place it resembles most is Shenzhen.

“I’m fully convinced that I’m leading my people not only on the right path but on the only one available.”
In a region where people speak in elliptical platitudes, Sheikh Mohammed is a rare straight shooter.
He’s an incredibly energetic man who disdains the laziness that envelops many of his countrymen.
Sheikh Mohammed said he would measure them against the world’s best governments: Singapore, New Zealand, Australia, and Canada.
Sheikh Mohammed runs Dubai by motivating people to excel. He prefers to use his celebrity status and personal attention to get things moving, rather than ordering people around.
A man in a hurry, not only does he know what he wants to do, he wants to do it faster than other people. He’s using language to get people going. ‘If I don’t do it now, who will?’ It’s a great burden of responsibility that he feels.

Indians in Dubai outnumber Emiratis by around seven to one.
India supplies much of Dubai’s brainpower.

Laborers are some of the most impressive people anywhere. They toil in difficult and dangerous conditions, but not for personal benefit. They live like ascetics in a city that claims ostentation as its brand. The scraps of cash they squeeze from their employers are immediately dispatched home. To their families, at least, they are heroes.
They come from Pakistan, Nepal, Bangladesh, China, Sri Lanka, North Korea.
Love becomes money for their families. They say, ‘My life is gone. Let them live in comfort.’

The city has six thousand building sites and just sixteen inspectors.
That leaves safety precautions up to individual companies.

Sheikh Mohammed made a dramatic announcement: Starting January 1, 2008, every new building launched in Dubai would have to comply with environmental standards. Until Dubai developed its own, the basic LEED standard would be the minimum. Less than three months before it would take effect. It required architects and engineers to scramble to rework designs to comply. A rule change like that would take years to push through in the European Union or the United States.

Women make up less than a quarter of the population and just 14 percent of the workforce.

If UAE recognized second-class residents as citizens, foreigners could take control of Dubai, perhaps declaring it an independent city-state. It’s not far-fetched.
Dubai is not a genuine city. Yet. It’s still an unfinished collection of buildings.
95% of its inhabitants are temporary.
Dubai’s expatriates are like nannies raising a rich kid. They’re responsible for his well-being and accomplishments, but they’ll never get ownership.

“They haven’t yet produced anything useful for the human condition,” Khouri says. “But it’s too early to judge them. It’d be like judging New York in 1782. They’re still physically building the place.”