Billionaires
Arabian Knight
Dubai is a place where the act of moving around sand dunes always involves billions of dollars. You might recognize the sail-shaped $1 billion Burj Al Arab superluxury hotel jutting into the Persian Gulf. Perhaps you haven't heard of the $3 billion construction of two islands in the shape of palm trees. Or the 480,000-square-foot hole for a new $4.1 billion airport terminal. That's in front of the site for Dubailand, an improbable $5 billion Disneyesque project comprising indoor snow skiing, an animal safari and amusement rides--but not a single mosque.
The guy driving all this construction is a bit of an oddity himself. Sheikh Mohammed bin Rashid Al Maktoum, 54, who rules this tiny city-state (roughly the size of Rhode Island), is Dubai's de facto Muslim leader, but he has a distinctly capitalist tilt. Thanks to his restless enterprise, Dubai's nominal GDP has exploded from $8 billion to $20 billion in the last decade. That wealth does not derive from oil, which represents only 8.5% of output; nearly two-thirds comes from trade, tourism, real estate, construction and financial services.
Dubai is a place of intriguing contrasts. Fewer than 15% of its 1 million residents are nationals; most of its immigrants hail from Pakistan, India, Iran, Egypt and other Arab nations. Women in black burkas revealing only their eyes stroll on Sheikh Zayed Road past a line of sequined halter tops waiting to get into the smoky Zinc nightclub, where booze is served. While muezzins call the faithful to prayer, you can hear bells ringing at the Catholic church. Tourists with Israeli stamps in their passports breeze through customs. "We want to be the one place in the world which offers the best option for everything--business opportunities, world-class sporting and entertainment events," says Mohammed.
It's not quite the business mecca it pretends to be, not yet, anyway. Technically, foreigners can't own land in Dubai--or anywhere in the United Arab Emirates, a federation of seven sheikhdoms on the Arabian peninsula. But the tax-free advantages to trading companies are an irresistible draw for more than 1,500 companies from 80 nations. A fledgling stock exchange lists 16 companies (market cap: $15.4 billion, versus $14.7 trillion for the NYSE) that trade for two hours a day. The economy remains opaque because there's little distinction between government fisc and private treasure of the sheikh and his three brothers, estimated at $10 billion.
The sources of that wealth are a little fuzzy. Mohammed gets $2 billion a year in income from assets accumulated by his father, Sheikh Rashid. Then there's an estimated $2.5 billion a year, a subsidy from the UAE to the ambitious autocrat and his family. In addition, Mohammed controls luxury hotels, banks and at least six beachfront palaces, not to mention a stable of 1,200 Arabian racehorses. (Dubai's Nad al Sheba Racecourse hosts the Dubai World Cup series, the richest equine event in the world, with purses totaling $16 million.)
Think of Dubai as a corporation and Mohammed its chief executive--without a board of directors getting in his way. He can increase the value of land simply by building, say, a marble-clad hotel on a portion of it. The airline he launched delivers tourists who stay at his hotels and buy goods sent through his ports. To keep things humming, he funnels cash to his friends in the form of highway and hospital contracts. "Under Sheikh Mohammed," says Khalaf Al Habtoor, a billionaire construction magnate whose firm helped build hotels, hospitals and airport facilities, "anything is possible."
Anything except failure. In 2000 the sheikh's friends Abdullah and Majid Al Futtaim couldn't agree on who should run their $1 billion-plus auto-trading and real estate business, which includes exclusive selling rights for Toyota, Jeep, Volvo and Chrysler, as well as a 1-million-square-foot shopping mall. Squabbling might have driven both ventures into the ground. Mohammed ordered each sib to bid on the assets, highest number takes all. "His Highness never wants to see anyone go bankrupt in Dubai," says a banker who represents the superrich there.
Arabian Knight
Dubai's crown prince is building a very rich empire--on virtually everything but oil.
Dubai is a place where the act of moving around sand dunes always involves billions of dollars. You might recognize the sail-shaped $1 billion Burj Al Arab superluxury hotel jutting into the Persian Gulf. Perhaps you haven't heard of the $3 billion construction of two islands in the shape of palm trees. Or the 480,000-square-foot hole for a new $4.1 billion airport terminal. That's in front of the site for Dubailand, an improbable $5 billion Disneyesque project comprising indoor snow skiing, an animal safari and amusement rides--but not a single mosque.
The guy driving all this construction is a bit of an oddity himself. Sheikh Mohammed bin Rashid Al Maktoum, 54, who rules this tiny city-state (roughly the size of Rhode Island), is Dubai's de facto Muslim leader, but he has a distinctly capitalist tilt. Thanks to his restless enterprise, Dubai's nominal GDP has exploded from $8 billion to $20 billion in the last decade. That wealth does not derive from oil, which represents only 8.5% of output; nearly two-thirds comes from trade, tourism, real estate, construction and financial services.
Dubai is a place of intriguing contrasts. Fewer than 15% of its 1 million residents are nationals; most of its immigrants hail from Pakistan, India, Iran, Egypt and other Arab nations. Women in black burkas revealing only their eyes stroll on Sheikh Zayed Road past a line of sequined halter tops waiting to get into the smoky Zinc nightclub, where booze is served. While muezzins call the faithful to prayer, you can hear bells ringing at the Catholic church. Tourists with Israeli stamps in their passports breeze through customs. "We want to be the one place in the world which offers the best option for everything--business opportunities, world-class sporting and entertainment events," says Mohammed.
It's not quite the business mecca it pretends to be, not yet, anyway. Technically, foreigners can't own land in Dubai--or anywhere in the United Arab Emirates, a federation of seven sheikhdoms on the Arabian peninsula. But the tax-free advantages to trading companies are an irresistible draw for more than 1,500 companies from 80 nations. A fledgling stock exchange lists 16 companies (market cap: $15.4 billion, versus $14.7 trillion for the NYSE) that trade for two hours a day. The economy remains opaque because there's little distinction between government fisc and private treasure of the sheikh and his three brothers, estimated at $10 billion.
The sources of that wealth are a little fuzzy. Mohammed gets $2 billion a year in income from assets accumulated by his father, Sheikh Rashid. Then there's an estimated $2.5 billion a year, a subsidy from the UAE to the ambitious autocrat and his family. In addition, Mohammed controls luxury hotels, banks and at least six beachfront palaces, not to mention a stable of 1,200 Arabian racehorses. (Dubai's Nad al Sheba Racecourse hosts the Dubai World Cup series, the richest equine event in the world, with purses totaling $16 million.)
Think of Dubai as a corporation and Mohammed its chief executive--without a board of directors getting in his way. He can increase the value of land simply by building, say, a marble-clad hotel on a portion of it. The airline he launched delivers tourists who stay at his hotels and buy goods sent through his ports. To keep things humming, he funnels cash to his friends in the form of highway and hospital contracts. "Under Sheikh Mohammed," says Khalaf Al Habtoor, a billionaire construction magnate whose firm helped build hotels, hospitals and airport facilities, "anything is possible."
Anything except failure. In 2000 the sheikh's friends Abdullah and Majid Al Futtaim couldn't agree on who should run their $1 billion-plus auto-trading and real estate business, which includes exclusive selling rights for Toyota, Jeep, Volvo and Chrysler, as well as a 1-million-square-foot shopping mall. Squabbling might have driven both ventures into the ground. Mohammed ordered each sib to bid on the assets, highest number takes all. "His Highness never wants to see anyone go bankrupt in Dubai," says a banker who represents the superrich there.
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