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Last Updated: Monday, 7 November 2005, 12:48 GMT
How Dubai became a headline grabber
The Magazine answers...

Asian workers
Hard work: Workers prepare the foundations for a new beach hotel
What links the proposed takeover of P&O, Arsenal's lavish new London stadium and Brad and Angelina's last luxury holiday? Dubai. How did the modestly-sized sheikdom become a headline grabber?

If P&O is bought by the Dubai-based company planning its takeover it will signal the end of 160 years of British corporate history for the iconic seafaring name.

But the ferry operator would by no means be the first such brand to fall under the influence of this dynamic and emerging Arab state.

Over the summer the International Cricket Council took flight from its "home of cricket" headquarters at Lord's, to start a new chapter in Dubai.

A city of walled-off communities, with 180 different nationalities and 180 little villages
Clark Stevenson
British expat

Emirates, the Dubai airline, has paid about £80m to have Arsenal's swish new stadium in north London, named after it.

The same airline is ferrying ever more tourists and business folk to the sheikdom, including A-list celebrities such as recent visitors Brad Pitt and Angelina Jolie.

Oil rich Arab states have been flexing their financial muscle overseas since the early 70s, but Dubai's more measured ascent is partly down to its lack of black gold.

Dubai, which is one of seven states that make up the federation of United Arab Emirates, has never had much oil, or gas. Its reserves account for just about 7% of its economy, a mere splash compared to the oceanic reserves of neighbouring emirate Abu Dhabi.

Question Mark - from original architect's doodle design for BBC TV Centre
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But this has forced the native population to be more adventurous about its development.

And what it lacks in natural resources, Dubai makes up for in sharp-minded trading acumen, says Jeremy Williams, a former British defence attaché to the UAE and frequent business traveller there.

"They're traders. It's in their blood," says Mr Williams.

Its mercantile history is born of Dubai's strategically important location - midway between Asia and Europe - and historic port.

Singapore II

So when the Middle East sprung oil big time in the early 70s, Dubai was well placed to become a trading capital, acting as an intermediary for its neighbours and the wider world.

The World
A characteristically ambitious new development under construction
Comparisons with Singapore and Hong Kong - both small but feverish trading magnets in their respective parts of the world - are irresistible.

"Dubai's lack of natural resources prompted the government to model itself on Singapore," says John Lomax, an emerging markets analyst with HSBC. The Dubai government aims to surpass Singapore in terms of quantity and quality of services offered, he says.

The Dubai World Trade Centre, which opened in 1981, was a significant step. Suddenly Dubai became a focus for international trade shows, spawning new hotels and leisure facilities to draw in business travellers.

Free-trade zones, which allow foreign companies to operate under beneficial terms, have built on the success. Golf courses meanwhile, help keep the expatriate workers happy, along with a host of other leisure facilities.

All this is further smoothed by a relatively liberal social environment, encouraged by Dubai's influential former ruler Sheikh Rashid bin Saeed Al Maktoum, who died in 1990.

About 80% of Dubai population are non-nationals
Yet migrants are not allowed any form of naturalisation or permanent residence
And children born in the country to foreign workers are not granted citizenship
But while non-Muslims are free to practise, public proselytising is forbidden. And although nationals hold much of the wealth, Dubai's economy relies greatly on its army of unskilled foreign national workers, from places such as India. They have few rights and, three years ago, Human Rights Watch said many in the UAE suffered discrimination, exploitation and abuse.

Lately, Dubai appears to have stepped up another gear.

In 2002 it opened its property market to foreigners for the first time and when the England World Cup squad stopped off there on the way to Japan that year, key players were presented with beach-side homes in return for allowing their names to help market Dubai as a sport destination.

"The Dubai way is to get the best of everything and let nothing limit ambition - the 'let's get on with it' spirit," says Mr Williams. "If someone told me the Emir had asked to move the Moon out of orbit a bit, it would be done."

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