The view as the sun rises over Dubai from the 42nd floor of the Jumeirah Hotel makes it hard to believe that, less than four decades ago, only a poor fishing village sat beside the small salt water inlet known as Dubai "Creek."
Tower after futuristic tower rises from the desert sand. Workers atop the world's tallest structure seem no larger than ants as they push upward to the Burj Dubai's 800-metre goal. Beyond, rising out of the Arabian Sea stands the Burj Al Arab, the world's most costly hotel, and nearby lies an enormous, man-made palm-tree-shaped island with hundreds of multimillion-dollar villas and luxury hotels lining its fronds.
We travel to the meeting on streets teeming with the latest and most luxurious autos. Sheik Mohammed bin Rashid al-Maktoum, tribal leader of the House of al-Falasi and ruler of Dubai enters the ornate room. He is credited with transforming this city-state into the Middle East's key entrée-port, business hub and tourist destination. While quietly gracious in his greeting, his reputation for over-the-top projects, such as the world's only indoor ski hill, creates a larger-than-life presence. This is the man whose vision of a tax-free, hedonistic oasis in a region where secular religious and cultural freedoms are rare attracted billions of development dollars.
Continuous construction lines the two-hour drive from Dubai to Abu Dhabi, the capital of the seven member United Arab Emirates (UAE). It is also the wealthiest. The head of the Tourism Development Authority briefs us on a $100-billion sea-front tourism and foreign residential development. It will include a branch of France's Louvre museum and a Ferrari World theme park built around a 1,000-yacht marina, complete with a lock system to raise the water level so those on the yachts can get a good view of Grand Prix races. Several new golf courses are to be built, along with costly new natural gas powered desalination plants to water them.
Next, we meet the highly professional managers of the world's biggest Sovereign Wealth Fund, the $875-billion (U.S.) Abu Dhabi Investment Authority. ADIA recently made headlines by injecting $7.3-billion to help rescue Citigroup. Amazingly, at current oil prices, Abu Dhabi's production of 2.7 million barrels a day will see these funds replaced in just three weeks. While Abu Dhabi's population is 1.6 million, 80 per cent are foreign workers, leaving just over 300,000 citizens. This means ADIA's assets alone amount to $3-million a citizen - and that doesn't include the much larger value of 10 per cent of the world's proven oil reserves.
Crown Prince Sheik Mohammed bin Zayed al-Nahyan, deputy chairman of the Abu Dhabi Executive Council and Head of the Council for Economic Development, arrives for our meeting with few aides and little fanfare for the man who will inherit the position as ruler of the world's richest state.
A graduate of England's Sandhurst Royal Military Academy, he soon reveals a deep intellect and clear vision. As general of the Emirates armed forces, he emphasizes the importance of military support from the West for the UAE and the other Gulf Co-operation Council Countries: Oman, Saudi Arabia, Kuwait, Bahrain and Qatar. Together, these countries produce around 20 per cent of the world's oil, generating more than $2-billion a day at current prices. That works out to $730-billion a year. Meanwhile, the U.S. oil trade deficit is set to grow to around $600-billion.
The sovereign wealth funds of Abu Dhabi, Kuwait and Qatar already total $1.1-trillion, much of which is invested in ownership of American and European assets as part of the most massive and rapid transfer of wealth in the history of our world.
As the plane taxis to the runway, I open a book describing the history of the Emirates region, suitably titled From Rags to Riches. The author grew up at a time when his Bedouin tribe survived by subsistence fishing and dangerous pearl diving during the cooler winter months, followed by a perilous annual camel trek to a desert oasis for water and respite from the searing summer sun. Zayed, his boyhood best friend eventually became ruler of Abu Dhabi and founder of the UAE. Sheik Zayed mounted a tireless campaign to unite the seven Emirates after Britain announced its pending withdrawal from all territories east of Suez in January, 1968. When the UAE was proclaimed in December, 1971, this collection of Arab tribes was the poorest and the most backward country in the region.
As the plane lifts off, I look up from the book to the amazing metropolis below. Noting the author of the book, my seatmate says: "that's my cousin." His insights add even more to my understanding of how petro-dollars are dramatically transforming wealth and power in the world.