Dubai's Big Boom

Built on sand, oil, and gold-plated everything, a new Xanadu is rising in the Middle East. SOPHY ROBERTS reports from the land of caviar facials and indoor ski slopes.

I am standing on the "H" of the helipad at the top of the Burj al Arab, the Dubai hotel that billows like a sail plump with wind on a manmade island in the Persian Gulf. For many observers of this desert boomtown—and it does seem as if all eyes are on Dubai—the Burj is the emblem of the city's freewheeling spirit, a kind of go-go giddiness that is not altogether shared by the United Arab Emirates' less liberal states. Dubai, unlike Abu Dhabi and the five other emirates, "has always been a wide-open place, ever since it was a smuggling center for gold," says Christopher Dickey, a Newsweek correspondent who lived here in 1987 and returns frequently. But it wasn't until Dubai struck oil in 1966 that this former trading post clustered around the mouth of a creek started to develop. In the last 20 years, change has been intensive. Since the new millennium, the Dubai ruler Sheikh Mohammad bin Rashid al-Maktoum, armed with cash and a progressive disposition, has been building nonstop, creating substitute economies to petroleum: construction, shipping, tourism. "It is an error to think the state is run on oil income alone," says Prem Chandran, editor of the Dubai-based Khaleej Times, the Gulf's oldest English-language newspaper. Dickey asserts that "everything built in recent years has been done to attract attention, to underline the free business environment of this free Middle Eastern port."

Dubai wants desperately to be noticed. From 1,000 feet above the desert, I can see the beginnings of a bizarre archipelago in the sea. It's called The World, each island representing a country, the total land area nearly 20 square miles, positioned two and a half miles from shore. Farther along in the cobalt waters, a spread of sandy spits is being fashioned like palm fronds on a vast trunk surrounded by a seven-mile crescent. All are real-estate projects built on dumped sand and flanked by a coastline that stretches out like a strand of yellow gold. Elsewhere, the sheikhdom is also planning an Internet City, a Media City, and an International Finance Center larger than London's Canary Wharf. Already in place is Ski Dubai, which opened in December with 242,000 square feet of real snow. This is Dubai's great push—an otherwise lifeless land putting its money into the creation of the ultimate global hub, an original city species.

Dubai's audacity can be both compelling and appalling. There is unhappiness deep within its bones, born by the collision of extreme wealth and low-paid import labor, from construction crews to waiters. It is estimated that only 20 percent of the UAE population is indigenous; it's certainly rare to see them serve you. Bangladeshis, Filipinos, and Indians make up the bulk of the work force—a sci-fi version of the pharaohs' Egypt—and luxury has to consume you completely for you simply not to notice the round-the-clock building, the bused-in men picking out pebbles from the beach and shining up the marble.

The completed Dubai won't be to everyone's taste—aesthetically, it's more Vegas than Vegas—but this may just emerge as the most modern city on the planet. Dubai has not followed the route of typical highbrow lures—no amassing of world-class art or commissioning headline architects (unlike Qatar, which is erecting structures by I. M. Pei and Santiago Calatrava). Instead, Dubai has engineered some eminently marketable tourism projects. Here you can drink camel's milk for breakfast, eat Kobe beef for dinner, sleep in golden beds with mirrored ceilings, and have a facial with caviar-enriched cream. It suits the spending habits of deep-pocketed travelers—Russia's nouveaux riches flock to the shops and the Burj, its buffets piled with lobsters and cellars packed with Château Petrus—and local emirs alike. They binge on Dolce & Gabbana and Gucci, brought here by the sheikh of chic, Majed al-Sabah, who owns the haute fashion mecca Villa Moda. (He will also publish a new glossy magazine, Aleph, this fall.)

When finished next year, the first leaf of the palm-shaped islands, Palm Jumeirah, will have 32 hotels. The second, the Palm Jebel Ali, will include 50 hotels and 4,000 villas. A final palm, due for completion in 2015, will be the largest, covering some 43 square miles. And of the 300 islands that will compose The World, about 240 have already emerged from the sea.

"We are creating a new Maldives," says James Wilson, the CEO of Nakheel, the government-owned development company behind all these reclamation projects. "Every five-star hotel brand of substance and quality has come on board."

Indeed, the luxury resort trade all over town is thriving. Last August, Park Hyatt Dubai joined the fray; Banyan Tree opens next year, to be followed by Versace and Armani resorts. By the end of 2007, two new Greg Norman golf courses will join the eight 18-hole links already in existence. Everybody wants a piece of the action. Harvey Nichols opened in March. The Core Club, New York's high-priced, high-profile members' club, is reportedly scouting for an outpost. And Quintessentially, the international concierge company, is already here.

Plans keep cropping up. The Dubai waterfront project, bigger than the island of Manhattan, will reach toward the Abu Dhabi border. In an attempt to recenter the city, the builders have conceived a new downtown. Called Madinat al Arab, it will be anchored by Al Burj, the building likely to become the world's tallest (not to be confused with Burj Dubai, another new tower also reaching for the highest plaudit). Add to this Dubailand, a three-billion-square-meter entertainment complex currently under construction, which will house the largest shopping mall on earth. There will be sports stadiums for football, cricket, and horse racing, a Space World, a Dinosaur World, an Aviation World. The only thing hard to find in this searing desert is culture of a conventional kind.

Wilfred Thesiger, in his seminal 1959 book on the region, Arabian Sands, described the souks as "crowded with many races—pallid Arab townsmen; armed Bedu, quick-eyed and imperious; Negro slaves; Baluchis, Persians, and Indians." Now that authenticity has been replaced by the hyperreal. The new hotel complex Madinat Jumeirah, for example, stands over canals plied by Arabian dhows powered by electric motors, carrying affluent tourists from restaurant to spa to luxury villa. "One boatman I've spoken with used to be a fisherman on the Swahili coast," says Dickey, who compares Dubai with the bar in Star Wars, where creatures from every planet congregate. Thesiger's souks still have some of that eclecticism, but the shops—like jewel boxes packed with 24-karat gold—are now all air-conditioned. And if you visit The Creek, the original safe harbor that was once the center of Dubai, you can still see teak-hulled dhows being loaded up with wares (in 2006 the cargo is refrigerators and Toyotas). But there's no mistaking the old district's diminishing status. Dubai's heart has been transplanted to Sheikh Zayed Road, the eight-lane highway bordered by skyscrapers. In Dubai, however, nostalgia is an alien emotion, according to Prem Chandran. "You simply don't hear comments on the loss of old charm," he says. "People are excited about change, about positive change. They view Dubai as a marvel."

But are things moving too fast? Chandran notes that bubble talk has been around for 15 years, "but it's still not bursting." Paul Drummond, who runs Quintessentially in Dubai, believes "the city has gone beyond the point where it can fail."

From where I am standing, 1,000 feet above it all, that seems as clear as the cloudless desert sky. In the distance I can see a chain of oil tankers slinking across the Gulf in the direction of Iran. Along the broad avenue below, the sun glints off a row of mirrored façades and 2006 SUVs. Dubai's rush hour has begun.