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July 24th, 2007
The Sand Castle
Interview with Afshin Molavi

Afshin Molavi, former Dubai-based correspondent for Reuters and fellow at the New America Foundation discusses the United Arab Emirates’ global significance with anchor Daljit Dhaliwal.

DALJIT DHALIWAL: Afshin Molavi, welcome to Wide Angle.

AFSHIN MOLAVI: Thank you, Daljit.  It’s a pleasure to be with you.

DALJIT DHALIWAL: So, what did you make of the film?

AFSHIN MOLAVI: I thought the film was fascinating for many reasons.  On the one hand,
you know, when I’m in the United Arab Emirates, I hear a lot about Ras Al Khaimah.  Ras Al
Khaimah is one of seven Emirates.  They’re a very young country.  This is a country that was
formed in 1971 and Ras Al Khaimah is considered by many to be the next big growth
destination.  And so, it was very interesting to look on the inside of the decisions that are
being made.

And as I was watching the film, I thought to myself, wouldn’t it have been interesting if there
were such a film about Dubai.  Dubai, which is now the great economic juggernaut of the
United Arab Emirates.  It’s a place that has really become a major regional hub and A global
hub.  And so, I think this film will be just as interesting to watch ten years from now, once
the hotels have been built and the shopping malls have been built.  And we’ll see whether the
decisions that were made, that we saw in the film, were actually the right ones.

DALJIT DHALIWAL: Have you been to Ras Al Khaimah, the tiny Emirate that we feature in
our film?  What were you impressions?

AFSHIN MOLAVI: Sure.  You know, when I was living in Dubai in the late 1990s and
throughout my many visits to Dubai since then, Ras Al Khaimah, for many people who live in
Dubai, was a place to get away from the hustle and bustle of the city.  It was a place to see
natural beauty and scenery.

Ras Al Khaimah has one of the most beautiful coastlines along the Persian Gulf and wonderful
beaches, and it also has mountains and a desert.  So, for us, Ras Al Khaimah was this natural
oasis– to get away from the city.  And so, there were also moments when I stood back and I
looked at this film and I said, “Oh, no.  You know, what is happening to the pristine, you
know, beauty of Ras Al Khaimah?”

DALJIT DHALIWAL: You were disappointed then, at the development?

AFSHIN MOLAVI: Well, you know, it gets to the heart of the issue of development.  You
know, on the other hand, you look at that pristine natural beauty and you say to yourself,
you hope that that will be somehow preserved.  But on the other hand, the people of Ras Al
Khaimah, just like people anywhere in the world, deserve to develop their economy.

They deserve to develop the kind of growth that will benefit their citizens.  And, you know, if
the lesson of Dubai is learned by anyone in the United Arab Emirates, it is that hotels and
shopping malls and big tourist mega complex do attract people.  Dubai last year, Daljit,
attracted more tourists than India.  Think about that for a moment.

DALJIT DHALIWAL: And Egypt.

AFSHIN MOLAVI: And Egypt.  A city state of less than two million people attracting more
tourists than a country of a billion people, and a place like Egypt with the pyramids and all of
that civilization…

DALJIT DHALIWAL: So, but why did they want to go to Dubai?  I mean, what has Dubai
got?  I mean, Cairo has obviously got the Pyramids.  And India’s got the Taj Mahal.  What
has Dubai got?

AFSHIN MOLAVI: I think what Dubai has done is they’ve created, on the one hand, a
shopping Mecca.  And while that may not be to some people’s tastes, if you look in the
region—you’ve got a region of about two billion people.  And you look at the way Dubai is
positioned, geographically you’ve got the Indian subcontinent, we’ve got the Arab states of
the Persian Gulf, Iran, Western China, East Africa…it’s a region of two billion people with a
GDP of two trillion dollars.  So, what they did—Dubai simply looked around and said, “This
region needs a tourism hub.”  But they also need a trade hub and a services hub.  So, they
created these mega hotels.

They created these events, you know, super concerts of major superstars.  And it seemed to
have worked for Dubai as the tourists numbers don’t lie.  In terms of hotel occupancy rates,
Dubai is the third in the world after London and New York.  So, it seems to be working.

DALJIT DHALIWAL: We saw in the film how Ras Al Khaimah is trying to be like its much
wealthier sister state, Dubai.  You are a journalist.  You lived in Dubai for a few years and
you go back there quite often.  What was that transformation like?

AFSHIN MOLAVI: It was very fascinating to watch because, I remember– at one point, I
had been away from Dubai for about a year.  And I had come back to Dubai and someone I
had gotten to know there pointed to the skyline.  And he said to me, “You see the skyline?
That wasn’t here last year.”  But his English wasn’t very good. So, I thought he meant, “You
see that skyscraper that wasn’t here last year.”  But, no.  He meant an entire skyline.  So, it
was almost as if you were living in this place where you have that digital photography—that
you see things grow.  And it was almost like you were living in that environment and you’re
just watching things sprout up.

Dubai really benefited from, in many ways, 9/11, oddly enough.  Because after 9/11, you had
this spike in oil price and you had this enormous Persian Gulf oil boom.  But then you also
had this animosity develop between the United States and the Arab world which made it
more difficult for Arab investors to come to the United States.  It made it more difficult for
them to invest in the United States.

So, you had all of this money floating around in the region, looking for investments.  Well,
they weren’t investing so much in the United States.  They weren’t investing as much in
Europe and suddenly, you had Dubai, a place that had world class infrastructure, world class
businesses, and this was the ideal place for them to invest.  So, Ras Al Khaimah in many
ways is trying to follow aspects of the Dubai model. And this Dubai model is a very simple
one.  It’s, ‘build it and they will come.’  So, you build the world class infrastructure.  You
create a regulatory environment that is attractive to business.  This is something that Dubai
has been doing for centuries, but this is also something that Ras Al Khaimah has been doing
for centuries.  It’s important to remember that Ras Al Khaimah was always an important
trading port in the Persian Gulf region that linked India, and linked merchants from as far
away as China throughout the 18th and 19th and 20th century.  So, what they’re doing now
is scaling up what they’ve been doing for centuries anyway.

DALJIT DHALIWAL: And this notion of ,‘build and they will come,’ apparently it seems to be
working.

AFSHIN MOLAVI: It seems to be working and– and it seems to be working not only in
Dubai, but in the larger country.  So, as we know, Ras Al Khaimah is one part of the country
known as the United Arab Emirates.  This country was formed in 1971.

It’s a young country.  It was– before that, these were all sheikhdoms that were under British
protection.  Well, today, the United Arab Emirates attracts more foreign investment than any
other country in the Arab world.  Today the United Arab Emirates has a gross domestic
product that is approaching Iran’s gross domestic product.  Iran—this historically rich country
with a population of 70 million people.  Today, according to the World Economic Forum, the
United Arab Emirates is the most competitive economy in the Arab world.  So, they’re doing a
lot of things right.

DALJIT DHALIWAL: Well, where is all this money coming from?
AFSHIN MOLAVI: I think most of the money in the United Arab Emirates comes from Abu
Dhabi.  Dubai gets all the attention because Dubai has the fancy buildings and the islands
and the sea.  But Abu Dhabi is the capital of the United Arab Emirates and they have the oil.

And so, the oil flows into Abu Dhabi and Abu Dhabi distributes the oil money to the rest of
the Emirates.  But, they also keep a lot of it at home.  The Abu Dhabi Investment Authority is
an investment authority that has 500 billion dollars in assets.  So, this means that it’s the
second largest institutional investor after the Bank of Japan.

So, we’re talking about serious economic players here.  The Abu Dhabi Investment Authority
invests in major companies around the world.  The liquidity that is in the region is truly
extraordinary.  And it’s not just the United Arab Emirates, Daljit.

What we’re witnessing today, in my view, is one of the most historic transfers of wealth in
human history, from one part of the world to a small area of the world.  What we’ve
witnessed in the last five years—1.5 trillion dollars has come in to the countries known as the
Gulf Cooperation Counsel—Saudi Arabia, Oman, Kuwait, Bahrain and the United Arab
Emirates.

These countries, with 1.5 trillion dollars in the last five years—this is not the first time we’ve
witnessed a Gulf oil boom.  But this Gulf oil boom is different because they seem to be using
their money wisely.  They’re not spending it on white elephant projects.  They’re not
squandering it as much in the nightclubs of London or Paris.  Notice I say, as much.  But
what they are doing is investing in infrastructure, investing in industry and investing in
creating a financial and services and tourism hub.

So, a place like Dubai—oil only accounts for 6-7% of its GDP.  So, what Ras Al Khaimah’s
going to need to do, Ras Al Khaimah cannot follow the model of the oil rich Gulf states,
because Ras Al Khaimah does not have a lot of oil.  So, they have to follow that Dubai model.

DALJIT DHALIWAL: Well, the point that you make about oil is interesting because Dubai
was able to sort of see into the future almost, and to set up this other model.  And, is this
something that can be replicated all over the Emirates, especially in Ras Al Khaimah?

AFSHIN MOLAVI: I think that’s such a fundamentally important question because when we
look at the development of Dubai—you know, oil has played an important role in the early
development of Dubai, particularly in the development infrastructure.  But today, oil accounts
for about 6% of Dubai’s GDP.  So, they’re clearly creating the way for a post-oil future.

Well, Ras Al Khaimah actually doesn’t have much of a choice because they don’t have much
oil reserves.  And so, they are going to have to develop an economy that is not dependent on
oil—mostly because Abu Dhabi, the capital of United Arab Emirates, the oil-rich region of the
country, is not particularly interested in subsidizing these Emirates forever.  So, Ras Al
Khaimah is going to have to create its post-oil future.

And the sort of things they’re doing right now is part of that.  But if there’s one lesson of the
Dubai model, it is this: people talk about geography being their destiny– or demography
being their destiny.  But I would argue that governance is your destiny.  And when you have
good governance, when you have ambitious, far-sighted rulers—and in small populations with
access to some resources, there’s no telling what you can do.  You know, and I–

DALJIT DHALIWAL: So, what are the politics in the region?  And we can’t talk about in
terms of it being a liberal place.  I mean, can we talk about it in terms of it being a
progressive place?

AFSHIN MOLAVI: Yeah, you know, it’s such an important question.  I think the way we can
describe United Arab Emirates as a whole, is an economically liberal, an economically
progressive place, a socially and culturally liberal and progressive place, but not a politically
one.  In fact, the irony is that there’s probably less space for politics in the United Arab
Emirates than even in Saudi Arabia.  And, in fact–

DALJIT DHALIWAL: Really?

AFSHIN MOLAVI: Really.  Yeah.  And, in fact–

DALJIT DHALIWAL: What do you mean by that?

AFSHIN MOLAVI: Saudi Arabia has held municipal elections.  These municipal counsels
have some real power.  The United Arab Emirates has a federal national council in which they
recently held elections for–

DALJIT DHALIWAL: Last year, right?

AFSHIN MOLAVI: –last year.  But only 20 of the 40 seats were up for election and it was a
very limited number of people who are even allowed to vote in this election.  So–

DALJIT DHALIWAL: And they were hand picked.

AFSHIN MOLAVI: And they were hand picked, exactly.  So, you have hand picked voters for
half of a federal national council which has very little teeth.  So, in many ways, there is not
much space for the politics that you and I understand in the West.  However, they would
argue that they have somewhat of a direct political system, in which residents of the United
Arab Emirates, nationals of the United Arab Emirates– I must correct myself.  In which
national–

DALJIT DHALIWAL: Because 80 percent of the population is expatriates on the Indian–

AFSHIN MOLAVI: Absolutely.

DALJIT DHALIWAL: –subcontinental…

AFSHIN MOLAVI: Absolutely, absolutely.  This is very important.  I mean, you have the
population with 80% that are not UAE passport holders, many of which are expatriates from
the Indian Subcontinent.  More than half of all residents in the United Arab Emirates are from
India.  This is very important point.  But, in that– among that small population of UAE
nationals, they do have regular what they call, majlises.

DALJIT DHALIWAL: That’s, like, what, holding court?

AFSHIN MOLAVI: Holding court, exactly.  Where the ruling prince will sit and, if you are
UAE national, you can go.  You can present your complaint to the ruling prince.  You can
present their ideas.  But as the population grows, as life becomes faster, there’s going to be
a lot less people showing up at these majlises.  And there’s going to be a lot more, I think
calls for greater political participation.

DALJIT DHALIWAL: But do the sheikhs listen to what people have to say at these majlises?
I mean, can you think of an example, for instance, where they’ve actually acted on what the
population has said?

AFSHIN MOLAVI: Yeah.  You know, from everything I’ve heard from when I’ve attended
these majlises, I’ve found that there is a real give and take among the sheikhs.  But I’ll give
you one interesting example.  Sheikh Mohammad Bin Rashid has asked several members of
the majlis who attend his majlis regularly, he said he’s looking for a young man who could be
kind of a rising star and who could help in the economic development of Dubai.  And the
story is that there was this young man in one of these Dubai economic departments.  His
name was Mohammad Gergewi.  And what Sheikh Mohammad would do is he would send out
mystery shoppers, who would go to government departments and test and see who’s alert,
who’s serving the people well, who’s not serving the people well.

Well, he sent out one of these mystery shoppers to an economic development department
and he wasn’t treated particularly well.  But there was one young man who really went out of
his way to help.  And his name was Mohammad Gergewi.  Well, this mystery shopper went to
the majlis, told Sheikh Mohammad, this man named Mohammad Gergewi is someone you
should look at, is someone you should hire.

He said, “I want to meet him.”  And as a result, that lead to rise of Mohammad Gergewi who
is now a very important and powerful and influential man in Dubai.  So, that’s one example.
But in general, I think there are now, what we’re starting to witness is more and more
complaints from the UAE nationals, particularly in Dubai.

Because, here you are.  You’re– if you live in Dubai, you’ve literally gone from tents to
skyscrapers in one generation.  And this can be very disorienting.  If you live in Dubai, you
are less than 10%– you as an UAE national make up less than 10% of the population.

DALJIT DHALIWAL: Is that true of other parts of the Emirates as well as, for example, Ras
Al Khaimah?  Could that be true for Ras Al Khaimah. sort of ten or 15 years from now?

AFSHIN MOLAVI: Yeah.  It certainly will probably see the numbers shift towards
expatriate.  Right now in Ras Al Khaimah, United Arab Emirates nationals make up about
50% of the population.  I think with all of these projects that they are building and the way
they’re trying to attract business: that is going to shift in favor of the expatriate population.

DALJIT DHALIWAL: So, we’ve seen this astounding economic boom which is exemplified by
Dubai.  And, Ras Al Khaimah is hoping that it’s going to be able to replicate and get some of
the action here.  But doesn’t this lack of democracy deter a lot more foreign investment
coming into the Emirates–

AFSHIN MOLAVI: Right–

DALJIT DHALIWAL: –does it not make any difference because it’s–

AFSHIN MOLAVI: Yeah—

DALJIT DHALIWAL:–business?  It’s–

AFSHIN MOLAVI: Yeah.  Thus far, it doesn’t seem to have made a difference and
particularly because those foreign investors see that, what you have is good leadership, good
governance, in much the same way people flocked to Singapore because they trusted Lee
Quan Yu.  In much the same way that people flocked to Hong Kong because it was a hub and
it was a hub for very important markets.  I think people are flocking to Dubai in much the
same way.

The challenge for Dubai, the challenge for the United Arab Emirates and the challenge for Ras
Al Khaimah, is how do you institutionalize some of these regulatory environments, some of
these economic conditions, so it’s not only about do I trust its ruler.  Because Ras Al Khaimah
is blessed with a modernizing, ambitious prince in Sheikh Saud ibn Saqr al-Qasimi, we saw in
this film.  And Sheikh Saud in many ways is right out of the mold of Sheikh Mohammad bin
Rashid, the ruler of Dubai.

He’s ambitious.  He has a vision for his Emirate that is one that would like to see his Emirate
play a larger role than it’s currently played.  And he also is focused on education and focused
on developing his nationals as well.  But, what will happen if something were suddenly to
happen to him?  What would happen if something were suddenly to happen to Sheikh
Mohammad?  And so, foreign investors are going to want to know that there are regulatory
environments in place that will outlast these modernizing rulers.

DALJIT DHALIWAL: Right.  So–

AFSHIN MOLAVI: And that’s gonna be the real challenge going forward.

DALJIT DHALIWAL: Yeah.  So, in a way you’re describing this astounding economic boom.
I mean, that’s what’s happening now.  But it could be different and why aren’t we seeing this
model which is a fully fledged market economy?

AFSHIN MOLAVI: Right.  We certainly, what we’re seeing in many ways is a market
economy with the government playing a role in the market.  And let me give you an
example.  When we look at some of those companies—remember when Khater Massaad, the
Lebanese director, he listed all of those companies that he’s the director of?

Well, many of those companies are partially government-owned.  And when we think of
government-owned companies and government-owned industries, we think of inefficiency.
We think of tea sipping bureaucrats who are unable to capitalize on markets.  But in the
United Arab Emirates, we’ve also seen the rise of a new kind of government company.
Government companies that are ambitious, globalized, and efficient.  And–

DALJIT DHALIWAL: But it also sounds like protectionism to me.

AFSHIN MOLAVI: There is an element of that.  But when you look at companies like
Emirates Airlines, you know, Emirates Airlines is on track to be the largest airline operator in
the world within ten years.  Now, you don’t get to that level if you are not efficient, ambitious
and globalized.  Dubai Ports World, right now is the second largest ports operator in the
world.  Remember Dubai Ports were–

DALJIT DHALIWAL: In the news last year, yes.

AFSHIN MOLAVI:–in the news last year.  When the US congress opposed the fact that
when Dubai Ports World bought a British firm that handled six US ports, US congress
opposed it.  And ultimately, they divested from that portion of it.  But, guess what–

DALJIT DHALIWAL: Well, the fear was that that there could be an increased risk of terrorist
attack because two of the 9/11 hijackers were from the United Arab Emirates.

AFSHIN MOLAVI: This is true.  Yeah, absolutely.  And what has happened with Dubai Ports
World is that, right now, they’re operating ports all over the Americas.  But to your point
about the two 9/11 hijackers, you’re absolutely right.  And in many ways before 9/11, Dubai
turned a blind eye to a lot of the things that were going on in Dubai that were partly
symptomatic of boomtowns and partly reflective of the region.  So–

DALJIT DHALIWAL: What do you mean?  Are you talking about money laundering?
AFSHIN MOLAVI: Money laundering being one of them.  Human trafficking, being another
one of them.  Boomtowns attract businessmen, professionals and bankers.  But they also
attract criminals. And in the Middle East region, they attract terrorists.  And so, there was a
certain amount of terrorist finance going through Dubai. And the government has made an
effort to really crack down on that.  From what I understand, from the bankers that I talk to,
it’s not as easy to launder money in Dubai as it used to be.  There are stricter rules, and
particularly, there’s stricter rules in the ports.

The container terminals have been endorsed and sanctioned by United States Homeland
Security, in Dubai.  So, we’re seeing a lot less of that.  But sometimes the question is asked
is that Dubai, is this place where Saudis go to sin.  And, Iranians go have a drink.

DALJIT DHALIWAL: It is?

AFSHIN MOLAVI: Because there is this vast underbelly.  There is this place where you have
prostitutes.  You have bars.  You have nightclubs.  And people from all across the region are
attracted to that, just as much as they’re attracted to the business and the trade and the
tourist attractions.

So, why wouldn’t Al-Qaeda strike at this place that is known as, seemingly, this den of vice.
Some bankers and some people in financial circles have suggested that even though the
government has taken very significant steps to prevent money laundering, the terrorists need
hubs just as much as anybody else.  And so, by striking at Dubai, they’d be striking
potentially at a hub that they might be using right now.

DALJIT DHALIWAL: Because it is after all, in a very dangerous part of the world.  But, the
Emirates is a fairly stable region.

AFSHIN MOLAVI: That’s right.

DALJIT DHALIWAL: So, your suggestion is that it’s remained stable because there’s
terrorist money that’s blowing through here.  So, why would they want to bite the hand that
feeds them?

AFSHIN MOLAVI: There certainly could be an element to that. Now, from everything I’ve
heard, the government of the United Arab Emirates has made a decision.  And this was a
decision they made after 9/11, after there was some pressure from the international
community and the United States, that they could no longer turn a blind eye to some of the
nefarious activities that were going in the United Arab Emirates.

So, they have taken steps to tighten banking laws, to tighten laws against money laundering.
They’ve begun prosecuting human traffickers for the first time.  But, having said that, this is
a boomtown.  This is a place where it’s very difficult to track, there are ships and there are
small ports that come in from Somalia, from Iran, from east Africa, from other parts of the
region.  And it’s very difficult to track all of that economic activity.  So, there certainly could
be an element of what you just described as biting that hand that feeds you.

DALJIT DHALIWAL: So, I mean, we should be clear that these are just suggestions and
stories that–

AFSHIN MOLAVI: Absolutely.

DALJIT DHALIWAL:–you’ve heard, I mean, in your trips back and forth to Dubai.  As a
journalist, I mean, we don’t have any evidence–

AFSHIN MOLAVI: Sure, sure.

DALJIT DHALIWAL:–to prove any of this–

AFSHIN MOLAVI: Certainly, certainly.

DALJIT DHALIWAL: So, let’s talk about some of the incentives of the Emirates as a whole
are trying to provide in terms of luring more foreign investment and is the United States
taking advantage of that investment?

AFSHIN MOLAVI: Yeah.  I think that basically what the United Arab Emirates has perfected
is the creation of these free trade zones.  So, what they do is they’ll create a zone, often
attached to a court.  And they’ll tell companies from around the world to set up.

They’ll offer them no taxes.  They’ll offer them world class infrastructure.  If you set up in
one of the free trade zones outside of Dubai, you have access to 160 destinations by plane
through Dubai International Airport.  You have tax-free operation within the zone.

You have excellent banking facilities.  So, they basically create an environment that is
amenable to business.  Now, what are we seeing in terms of United States and the United
Arab Emirates?  Well, just last year, the United States exported 12 billion dollars worth of
goods to the United Arab Emirates as a whole.  Now, this accounted for 1/4 of US exports to
the entire Middle East region.

So, clearly US exporters, US manufacturers are benefiting from the boom that is taking place
in the United Arab Emirates.  And, right now there is still talk of a US/UAE free trade
agreement, but that’s been held up in Congress.  And it’s been held up in Congress partly for
some of the same reasons that the Dubai Ports World deal was pushed back.

DALJIT DHALIWAL: But, the Emirates is an ally on the War on Terror.

AFSHIN MOLAVI: I agree with you on that’s why I don’t think this deal should be held up.

DALJIT DHALIWAL: So, what is it based on what?  In the reality or just–

AFSHIN MOLAVI: I think it’s–

DALJIT DHALIWAL:–perception?

AFSHIN MOLAVI: I think it’s perception.  I think it’s partly perception, partly campaign
season politics.  But it’s also partly because the United Arab Emirates, itself, has only recently
started reaching out to the American public, American Congress, the American media.  It was
very much focused on the British world and the Asian world.

And I think people just didn’t understand this place.  And I think as they get to understand it
more, they will see that this is precisely the kind of place that the United States would want
to encourage.  That the United States would want a free trade agreement with.  Now, if the
United States were to demand certain things of the United Arab Emirates, for example, I
think there are serious concerns about labor issues in the United Arab Emirates as a whole.
There have been serious labor strikes.  There are far too many cases where construction
companies are exploiting laborers—not paying them on time, for example.

DALJIT DHALIWAL: That’s something that we do see in our film—some of the complaints
that migrant workers make.

AFSHIN MOLAVI: Absolutely.

DALJIT DHALIWAL: And why aren’t these companies paying these people on time?

AFSHIN MOLAVI: I think that these are easy targets to some extent.  Their embassies don’t
go to bat for them.  They can exploit them.  They can defer paying them on time because
they know, well, there’s more workers where they came from.  And if they’re going to cause
trouble, we can just force them to leave.  It’s–

DALJIT DHALIWAL: Do migrants have any rights in the Emirates?

AFSHIN MOLAVI: They have very little rights, in terms of labor rights.  Now, only recently
they’re developing laws that will allow them to unionize, but that’s only in Dubai in particular.
And Dubai is a good example of globalization forcing almost, a city state to reform positively.

Because Dubai needs investment.  They need a good reputation internationally.  And so,
therefore when, these stories break of labor exploitation or human trafficking—it’s not
exactly—neither is it morally right, but it’s not good for business.  So, they’ve taken the most
steps out of all the other Emirates to stem those problems.

But in general, I mean, I think this is something that United States should push on.  But it
should not prevent the US from moving forward with a free trade agreement.  Because we
have free trade agreements with Bahrain which also has some of these same problems, with
Oman, and with several other countries in the region, and Jordan included.  And so, the
United Arab Emirates is the most dynamic economy in the region.  It’s a hub.   See, I think
this is an important point to remember.  The United Arab Emirates is not just an Arab
regional economic hub.  It’s an Asian hub. And what we’re witnessing today is almost this
new Silk Road of trade and commerce between the Middle East and Asia.

DALJIT DHALIWAL: Between the Middle East and Asia, yeah.  Until–

AFSHIN MOLAVI: Yeah.  And the United Arab Emirates is smack in the middle of this new
Silk Road.  So, it’s important for America to be a part of this new Silk Road of trade and
investment.  It’s estimated that in the year 2007, we’re going to see 20 billion dollars of
Middle East investment in Asia.  This is only going to grow.

Because when you– when we think of Dubai, you would think The Arab world.  But the
reason that they’re successful is they haven’t confined themselves to the Arab world.  And
they are really feeding off the growth of India.  They’re feeding off of some of the wealth of
Iran.  They’re feeding off of the– even the growth of China to some extent.  And–

DALJIT DHALIWAL: Well, some of the world’s richest people have put their money into the
Emirates.  Where is this money coming from?

AFSHIN MOLAVI: Well, a lot of money is coming from the United Arab Emirates’ neighbors.
Qatar, Saudi Arabia, Kuwait, Oman.  All of these countries have benefited the high oil price.
At last count, 65 dollars.  And they looked around, and they’re particularly interested in
investing in their own region.  So–

DALJIT DHALIWAL: Why?

AFSHIN MOLAVI: I think partly, because they see new opportunities in their own region,
partly because it’s become more difficult for them to invest in the United States.  The laws,
that there have been some very high profile seizures of assets of prominent Arab investors.
It’s difficult for them to get visas– to come to the United States.

DALJIT DHALIWAL: And this is all as a result of 9/11?

AFSHIN MOLAVI: This is all as a result of 9/11.  So, when they looked around, they saw–
Dubai in particular, but the United Arab Emirates as a whole, as an amenable environment
for investment.  But they’re also investing at home.  In this small area of country, the Gulf
Cooperation Council countries, Saudi Arabia, Oman, Kuwait, Bahrain, United Arab Emirates
and Qatar, you have 1.5 trillion dollars that has come in to this region in the last five years.
And one trillion has stayed in the region in the form of investments in infrastructure or in the
form of imports of goods and services.  And–

DALJIT DHALIWAL: And give us a who’s who of the people that are putting this money into
Emirates.

AFSHIN MOLAVI: Absolutely.  In addition to very prominent regional and Gulf investors,
you also have major global players like Goldman Sachs, Morgan Stanley.  They both have
recently opened offices in Dubai, in this new Dubai international financial center.  It aims to
be the major financial center between Hong Kong and London.  You also see companies like
Microsoft with offices in Dubai.

You have companies, all over the technology industry that have set up in Dubai’s Internet
City.  But more importantly, even than many of those countries and many of the big names
like Morgan Stanley and Goldman Sachs, in so many ways, the United Arab Emirates is
geographically located at this hub and this nexus of a growing economy of two billion people.
Because if you look at the Indian subcontinent, the Iranian plateau, central Asia, the
Caucuses, the Arab states of the Persian Gulf and into Western China, you have about two
billion people there.

And, the rulers of Dubai were very smart early on.  They said this region of two billion
people, needs a tourist hub, they need a trade hub and a services hub.  And we’re going to
be that hub.

And so, come the late 1950s they started building the infrastructure to what we see today.
And now Dubai and the United Arab Emirates is not solely an Arab city.  It’s very much an
Asian city and it has very much become a major geo-economic hub in this part of the world.
And the last thing that I think–

DALJIT DHALIWAL: Something like a Silk Road, perhaps?

AFSHIN MOLAVI: Absolutely.  When we think of the old Silk Road, the famed 9th through
13th century highway of goods, trade from China all the way to Venice– in places like Dubai
and Abu Dhabi, they were not part of that old Silk Road.  But now, there’s a new Silk Road
that’s forming, of trade between the Middle East and Asia, trade between these two regions
has quadrupled in the past year.

It’s expected to quadruple again in the next few years.  The Middle East is expected to put in
20 billion dollars of investments in Asia in the year 2007.  So, we’re going to see this
continue to grow and it’s not only the United Arab Emirates, it’s Saudi Arabia and the other
Gulf states as well.  And so, this is I think something important for US foreign policy to
watch.  I mean, when we think of–

DALJIT DHALIWAL: Are we not watching it?

AFSHIN MOLAVI: I get the sense that when we look at the Middle East region, we tend to
look at the conflicts.  We tend to look at the West Bank and Gaza and look at Lebanon, Iraq,
Syria, potential looming conflict with Iran.  Obviously–

DALJIT DHALIWAL: So it’s about putting out the fires.

AFSHIN MOLAVI: Absolutely.  And we’re putting out a lot of fires.  And obviously, those are
very important fires for us to be trying to put out.  But I also think that while we’re putting
out these fires, we may be missing out on some opportunities and particularly, positioning
ourselves well in this new Silk Road of trade and traffic between the Middle East and Asia.  To
actually push it along because this is good for America.

DALJIT DHALIWAL: So, what kind of foreign policy should we be crafting then?

AFSHIN MOLAVI: Yeah, I think what we need and, in fact, is far more of a economic vision
for this region.  Because I think the growth of the Gulf region, the growth of this new Silk
Road is good for America and here’s why.  For so many years after World War II, the mission
of America was the spreading of prosperity around the world.

And we did it with things like the Marshall Plan, where we invested a lot of our own treasure.
And we spent a lot of our own resources in trying to develop a economies in eastern Europe.
Well after 9/11, President Bush, in addition to his agenda of democracy promotion, he’s also
pursued an agenda of economic development in the region.  And he’s called for Middle East
free trade zones.

Well, we haven’t done as much on that agenda as we’ve tried to do on the democracy
agenda.  But the good news is that that agenda is kind of being taken care of itself.  And,
we’re seeing this development without US involvement.  We’re seeing this new Silk Road
develop without US involvement.  And I think the US can certainly help fuel it– but the good
news is we don’t have to drive it and that’s important.

DALJIT DHALIWAL: So, you’re saying that the United States is missing the boat, both
economically, but also in terms of securing its future security in that part of the world?

AFSHIN MOLAVI: Yeah.  Well, there’s going to be a point when China is going to step in and
say to the United States, “Hey, listen.  We import far more oil from the Persian Gulf region
than you do.”  And they may want to play a role in Persian Gulf oil security.

In the year 2020, China is going to import three times as much oil from the Persian Gulf
region as the United States does.  Well, right now the United States is effectively providing a
security umbrella not only for the Gulf state, but for China.  China may find that no longer
sustainable.  But this is an opportunity for China and United States to work together.  So,
what I’m saying is that this growth in the Gulf region offers a lot of opportunities for US
policy to work together with the Chinas of the world, with the Indias of the world and with
these Gulf states.

DALJIT DHALIWAL: Talk about how the Emirates fits into the global economy.  After all,
Dubai is growing at nearly twice the rate that China is.

AFSHIN MOLAVI: Right.  That’s right, that’s right.  When you look at the United Arab
Emirates as part of the global economy, what you have is– I have to repeat myself.  But
what you have is the United Arab Emirates is a geo-economic hub of emerging Asia.  An
emerging area with a population of about two billion people, with a GDP of about two trillion
dollars, that is growing at about 5% per year.

But when you look at the global economy and you look at what’s happening in the Middle
East region as a whole, the Middle East region is diverse and it’s not monolithic.  But it does
have one thing in common.  It’s young.  And you have a lot of young people about to enter
the job market.

The World Bank estimates that the Middle East/North Africa region is going to need to create
a hundred million jobs a year by the year 2020 just to keep up with the young population.
The average Arab is 21 years old.  Well, you’re going to need growth areas like the United
Arab Emirates, (a.) to attract people for jobs, but (b.) to use some of that excess capital to
invest in the most populous Arab states like Morocco and Egypt and Jordan that are not doing
as well as the Gulf states.

DALJIT DHALIWAL: But the boom in the Emirates, I mean, it’s a rare success story in an
area of the Middle East which is characterized by corruption, by stagnation.  Can what’s
happening in the Emirates be seen as a blueprint for the rest of Middle East?

AFSHIN MOLAVI: I think that’s a very important question, Daljit.  And I think in many
ways, you are seeing the Dubai model being talked about across the region.  You are seeing
aspects of the United Arab Emirates model being emulated in the region.

You’re seeing Saudi Arabia start to develop the kind of free trade zones and industrial
clusters that the United Arab Emirates has been developing for the past several years.  You’re
starting to see Egypt, Jordan and others develop some of the kind of regulatory environments
that Dubai had developed.  But I think what Dubai has done and what the United Arab
Emirates has done as a whole is, it has made the region think bigger.

It has set ambitious targets.  It has raised the bar in so many ways.  So, if you’re a member
of the business elite of Egypt or of Jordan, or of Saudi Arabia, you visit the United Arab
Emirates, when you go home and you say, “Why can’t we do some of the things that they’re
doing?”

DALJIT DHALIWAL: But do they like that vision?  I mean, do they like the vision of, for
example, in Dubai, it has the world’s first seven star hotel.  It has an underwater restaurant
that’s reachable by submarine.  Is that the vision that they would like to see translated
across the Emirates?

AFSHIN MOLAVI: Yeah.  I think that it’s an important question because Dubai is both the
source of envy and admiration for its regulatory environment, it’s environment for business.
But it’s also a source of scorn for some of the crass materialism, some of the underbelly or
some of the leniency towards things like prostitution that takes place in Dubai.

So, someone from Saudi Arabia will not say I want to emulate the Dubai model in that
respect.  But they do say that they would like to see a world class business environment in
Saudi Arabia just like there is in Dubai.  So, people can cherry pick aspects of the Dubai
model and aspects of what’s going on in United Arab Emirates.  And what I like about what
I’m seeing today in the United Arab Emirates, I like to see that ambition.

When Dubai said they’re going to build the largest airport in the world– and it’s going to be
twice the size of Heathrow—we may scoff.  We may say, “Ha.  What are these people
thinking?”  You know, but people have been scoffing at Dubai and at the United Arab
Emirates for about 50 years now.

In the late 1950s when Sheikh Rashid Bin Saeed, the father of modern Dubai, decided to
dredge the Dubai creek to open it more to ships, people scoffed and said, “No, people are not
going to come to Dubai.  Why is he doing that?”  But he did it.

He leveraged his economy on it and it worked.  And they kept doing that with ports and
airports.  And Ras Al Khaimah is starting to do it now.  Ras Al Khaimah, the film we just saw,
I don’t think we would see Ras Al Khaimah doing the things that they’re doing were it not for
what Dubai has done.

Dubai in so many ways set the standard, it paved the way.  But places like Ras Al Khaimah
can pick and choose from aspects of what they saw in Dubai.  They don’t have to choose
everything that Dubai has done.  And they can do it their own way.

And, what I would hope to see is– I’d like to see Ras Al Khaimah have this ambition.  It’s
good to see them want to develop their economy in this way.  But I would hope they would
also preserve some of the architectural heritage of Ras Al Khaimah.  I would hope they would
also preserve some of the oasis and some of the natural beauty of Ras Al Khaimah.  Because
not only do I think that’s good for the United Arab Emirates as a whole, but it’s actually a
good tourist strategy.  Because tourists would like to see those as well as the shopping malls
as well.

DALJIT DHALIWAL: And possibly an environmental disaster could be looming as well.

AFSHIN MOLAVI: You know, this is an important question because a lot of the development
that has taken place in the United Arab Emirates, but particularly in Dubai, particularly
offshore in the Persian Gulf, has destroyed coral reef.  Has been very damaging to the fish
environment and this is a question that boomtowns always face.  You’re always going to
destroy certain parts of the environment when you build at such a rapid pace.

And in this case of Ras Al Khaimah, it seems that they are building in a desert.  So, there’s
going to be less life-forms that are going to die.  And, when you’re building in the desert, one
people that in the United Arab Emirates will tell you is that they have plenty of sand.  So,
sometimes we in the West, we get nostalgic for a pristine, oasis and serenity.  Whereas
people over there, they actually want this kind of development and they want the shopping
malls and the hotels.  Because it creates jobs, but it also creates a certain amount of
economic development.  But I think they would like to see it done in a sustainable fashion,
and one that is not, perhaps, as high speed as what has been going in neighboring Dubai.

DALJIT DHALIWAL: According to Thomas Friedman, Dubai is where we should want the
Arab world to go.  And he says that it’s a place that embodies the narrative of globalization
as progress.  What do you think?

AFSHIN MOLAVI: I think Thomas Friedman is right.  I think that the key to Dubai and the
key to the United Arab Emirates is good governments.  We talk a lot about the lack of
democracy in the Arab world, which is true.  But what the Arab has also lacked is good
governments, simply good leaders who manage economies well, who develop their nations.

I mean, take a look across the region.  You have countries like Egypt.  You have countries
like Libya.  Countries that have enormous potential and yet, are dramatically underperforming their potential. And then you see the UAE.  This small state on the shores of the Persian Gulf dramatically punching way above their weight.

DALJIT DHALIWAL: But in some ways, they are also autocratic.  I mean, they don’t have–
elections– free elections at least– in the same way that we do in the United States.

AFSHIN MOLAVI: That’s right.  The United Arab Emirates, the great irony is that they are
socially modern.  They are in many ways, economically modern, but by no means do they
have openings for political spaces.  In fact, United Arab Emirates, there’s probably less
political space than in Saudi Arabia, for example.

Saudi Arabia recently held municipal elections.  United Arab Emirates held very limited
elections for 20 seats in a 40 seat national body that had very little or no power.  So, what
the United Arab Emirates is doing to some extent is the Singapore model, where you have a
benevolent autocrat that goes in there, develops the economy.  Exploits globalization for the
good of the economy, for growth and all of these things.

But, you don’t have the kind of openings that you would have in other parts of the region.
For example, in Iran, civil society is probably more vibrant than in United Arab Emirates.  But
you don’t have a democracy there either.

And the same goes for Egypt.  And so, it cuts through the heart of what people really want
out of life.  And I think it’s very clear.  You don’t have a great deal of viable political
opposition to the rulers and people tend to be generally content with their rulers.  There’s
grumbling about the fast pace of growth.  There’s–

DALJIT DHALIWAL: So, they’re not restless for the more political participation–

AFSHIN MOLAVI: No, no.

DALJIT DHALIWAL:–because the fruits of the boom of keeping them happy–

AFSHIN MOLAVI: The United Arab Emirates, like many of the Gulf states, is to some extent
a welfare state, where they provide a great deal to their people in the form of health services
and social services, and public sector jobs.  And this is kind of the old Gulf bargain– and and
this old Gulf bargain is going to fray at some point as the populations grow and as public
sectors grow smaller.  So, right now it’s working.  But how long it’s going to work remains an
open question.

DALJIT DHALIWAL: Do you think that the Emirates, exemplified by a successful Dubai that
we heard about in our film and this ambitious Ras Al Khaimah, to some extent, are tossing
aside their traditions and their Arab/Muslim culture?

AFSHIN MOLAVI: This is an important question.  And when you talk to many people in the
United Arab Emirates, particularly in Dubai, there is a certain amount of frustration at the
high speed of development.  There is a frustration that some of the aspects of their culture
and heritage are being put aside.

However, having said that, in one respect, Dubai is embracing its culture, because Dubai,
after all and the United Arab Emirates in general was never Baghdad or Damascus or Cairo or
Tehran, old Middle East civilization centers with old and deep cultures.  Dubai was always a
port city.  And in many ways, Dubai has embraced its port city identity in a 21st century
ambitious hyper-globalized way.

DALJIT DHALIWAL: So, it’s always been a bit of a crossroads, a little bit like, I don’t know,
Istanbul?

AFSHIN MOLAVI: Absolutely, yeah.  It has always been a crossroads, but it never really had
the kind of civilizational heft that Istanbul had.  And so, in many ways, there are often
complaints about Dubai being somewhat artificial or lacking in identity.  But Dubai has
embraced its identity because its identity is a crossroads, a port city– a place where
merchants gather to trade.  This is something that Dubai has been doing for centuries.  And
they simply are doing it now in a 21st century, ambitious, hyper-globalized way in which, if
all goes according to plan, they’re going to have the largest airport in the world and the largest airline in the world.

DALJIT DHALIWAL: So, they’re not really losing their culture, but they’re recreating their
identity, given the fact that 80% of the population are expats.

AFSHIN MOLAVI: That’s right.

DALJIT DHALIWAL: And overseas workers from the subcontinent.

AFSHIN MOLAVI: No.  I think that’s right.  I mean, my own view is that Dubai has
recreated an identity for themselves that is very much in tune with their old identity which
was a port city, a city of merchants, a city of traders.  Now, some of the other Emirates,
because Dubai is one of seven Emirates in the country known as the United Arab Emirates,
some of those other Emirates do not have that mercantile tradition of Dubai.  And so, when
you go to other parts of the UAE like Fujaira, for example, you do see aspects of old Emirati
traditions retained.  Whereas in Dubai, you don’t have a lot of concern about having lost
something.  Because in so many ways, they’re simply doing what they’ve been doing for
centuries.

DALJIT DHALIWAL: We talked a little bit about how our foreign policy, in the Middle East
has essentially been about putting out fires.  I mean, are we at our peril ignoring the
opportunities that the Emirates has to offer?  Not just in terms of the economic fruits, but
also how it could help secure our security into the future?

AFSHIN MOLAVI: I think so.  I think fundamentally when we think about US foreign policy
in the Middle East, I think we need to change our paradigm of thinking about the Middle East.

And I think there’s almost two Middle Easts forming right now.  When you look at a map
geographically, roughly from Egypt on to Syria, and Israel, Lebanon, Jordan, onto Iraq and
Iran, you almost have this arc of crisis or potential crisis or relative instability.

And then almost, when you go to the southern part of the Middle East, particularly this
Persian Gulf region, you have an entirely different Middle East.  It’s a different vibe.  When
there’s crisis in the West Bank and Gaza, you just don’t feel it in Dubai and Abu Dhabi.
You’re not even feeling any spillover from the real, raging sectarian civil war in Iraq in places
like the United Arab Emirates.

And so, here you have a region that is growing.  You have a region that is not engaged, that
is almost not even affected by some of the real problems that are taking place in other parts
of the Middle East.  And I think it’s a real opportunity for us to engage more proactively with
these governments and to build their economies.  But to do one thing.  The question is, how
do you get the Middle East that is growing and prosperous and relatively stable to influence
the Middle East that is more unstable, that is gripped by war and gripped by violence?  And I
think that’s a fundamental paradigmatic shift that US policy ought to be looking at in the long
term.

DALJIT DHALIWAL: Well, you and the Bush Administration agree that a new Middle East is
being born out there.

So, is the region a safe haven for the United States when it comes to investment?

AFSHIN MOLAVI: I think so.  I mean, we’re already seeing that happen in the sense that
we’re seeing companies like Goldman Sachs and Morgan Stanley and others flocking to the
United Arab Emirates to set up offices.  And after all, Halliburton moved its Houston
headquarters to Dubai.  And they did that not–

DALJIT DHALIWAL: I think it’s their corporate headquarters, right?

AFSHIN MOLAVI: Yes, they moved their corporate headquarters to Dubai and their CEO
operates out of Dubai now.  Now, Halliburton has done this, not necessarily only because of
the Dubai market or the United Arab Emirates market, they’ve done it because they see
Dubai as a hub for all of Asia.

They see it as a hub for their business in India, business in East Africa.  It’s a shorter flight
from Dubai to Bombay than it is from Dubai to Cairo.  So, in many ways the United Arab
Emirates is an Asian geo-economic hub, not only a Middle East economic hub.

DALJIT DHALIWAL: And how does it play into other countries then, like India, like Iran, for
example?

AFSHIN MOLAVI: Dubai and the United Arab Emirates as a whole has become in so many
ways, a very integral part of Iran’s economy.  There are nine thousand Iranian businesses
operating in Dubai.  There are four hundred thousand Iranians living in Dubai.

And, Iran’s economy is poorly managed.  As a result, many Iranian businesses are leaving
and moving to Dubai.  And in many ways, the United Arab Emirates as a whole has benefited
from the lack of competencies of its neighbors.  And so, there’s a lot of capital in Iran.

There’s a lot of capital in Egypt.  A lot of capital in places like Saudi Arabia.  Well, they’ve
been frustrated by the fact that they don’t have many good investment opportunities at
home.  So, they come into places like the United Arab Emirates.

DALJIT DHALIWAL: You and the administration agree that a new Middle East is being born,
but you disagree on what it is.  Talk about that a little bit.

AFSHIN MOLAVI: Sure, absolutely.  Last summer what was very interesting, during the
height of the Israel/Hezbollah/Lebanon war, Secretary of State Condoleezza Rice described
that war as the birth pangs of a new Middle East.  But to me, that looked like the old Middle
East. You had an Israel war with Arabs.  You had a lot of tension.  You had this potential for
violence exploding beyond the Israel/Lebanon region.  That looked a lot to me like the old
Middle East.

But around that same time, there was a prominent Saudi Arabian company that offered an
initial public offering.  And ten million Saudis went out to buy shares in that initial public
offering, half of the adult population.  Saudi Arabia was witnessing that kind of boom that we
witnessed in the late 1990s with the technology boom.  And what I had been seeing in my
travels, particularly in Dubai, Saudi Arabia and the Gulf region, is a new business dynamism
forming. A new economic dynamism forming, where you had governments getting macro
regulatory policies right.  You had a more innovative and sophisticated private sector.
Because in my view, the key crisis facing the Middle East has not been necessarily a political
crisis, it’s been an economic crisis.

If you look at the trajectory of the Middle East, from the period 1970-September 11th, 2001,
the Middle East region as a whole grew at less than 1% per year.  This was less than even
Sub-Saharan Africa grew.  So, you have this economic underdevelopment.  Combine that
with large, young populations and you combine that together and you have an explosive mix.
So, it’s after 2001, as a result of the oil price rise and as a result of governments coming in
that are more reform-minded, particularly economically, we’re starting to see the first
flowerings of a business renaissance in the Arab world.  And ultimately, I think that’s the new
Middle East that could potentially shape the region– not a Lebanon/Israel war.

DALJIT DHALIWAL: But is your version of a new Middle East more than the Emirates?  Is it
Syria?  Is it Saudi?

AFSHIN MOLAVI: Yeah.  That’s the fundamental question.  What we are seeing is in places
like Egypt, we are seeing very significant economic reforms that are taking place.  Egypt has
grown at 6% a year the last couple of years.  And your question is absolutely right.  Because
for the Middle East to grow out of this economic crisis, it’s not going to grow out of it by the
small city states like the United Arab Emirates and Qatar and Bahrain.  You need the Egypts
and the Syrias and the Irans, the big populous countries in the region to grow at that level.
And we’re starting to see it now.  We still have a long way to go.

A country like Egypt, deeply damaged by 50 years of bad economic management, command
and control economies, corruption.  So the economic reforms that are taking place now, we
may not see it trickle down to the larger population of Egyptians for another ten or 15 years.
But they have started.

DALJIT DHALIWAL: So, all this money, where it’s coming from?

AFSHIN MOLAVI: Well, a lot of the money in the region that has come into the United Arab
Emirates has come from its neighbors.  The oil price rise has lead to Saudi Arabia having a lot
of money at its disposal.  Qatar, Kuwait, Bahrain, and they’re investing a lot of that in the
United Arab Emirates because there’s so many investment opportunities.

And then you have the major western players.  You have Goldman Sachs, Morgan Stanley,
Deutsche Bank, HSBC Bank.  They’re all investing in United Arab Emirates or using it as a
hub.  And then you also have some of the more glitzy investments, the investments in the
islands that they’re building in the sea.  For example, the international soccer star, David
Beckham, has bought a villa.  Julio Iglesias and Rod Stewart have reportedly bought villas–

DALJIT DHALIWAL: That’s quite a who’s who of–

AFSHIN MOLAVI: Absolutely.

DALJIT DHALIWAL:–people in the Emirates.

AFSHIN MOLAVI: Absolutely. It really is.  And, I suppose you’ve arrived on the international
glamour map when the supermodel, Naomi Campbell, hosts her birthday party in Dubai, at
one of the glitzy hotels known as the Burj al-Arab.  So, they’ve certainly managed to place
themselves in the world of glitzy, glamour capitals.

DALJIT DHALIWAL: Was the Dubai model intended to wean the Emirates off oil?

AFSHIN MOLAVI: Very much so.  Dubai rulers saw very early on that their oil reserves were
not nearly the amount of oil reserves in places like Kuwait or Saudi Arabia or even in their
neighboring Emirate of Abu Dhabi.  And so, from the very beginning they decided that what
they needed to do is create an environment that’s good for business.

Now, Sheikh Rashid Bin Saeed Al Maktoum, who’s the father of modern Dubai, who ruled
from the 1950s till 1990, he had a great line once.  He said, “What’s good for the merchants
is good for Dubai.”  And that has become almost the unofficial motto of Dubai and in many
respects, the unofficial motto of the United Arab Emirates.

From the early 19th century, when the Al Maktoum family took over Dubai to 1971 when the
United Arab Emirates was formed as a country, remember, this is a very young country that
had gathered together seven disparate sheikhdoms.  Put them together in one country
because the British, who protected them decided to leave in 1968.

DALJIT DHALIWAL: So, they’re all run like a monarchy.

AFSHIN MOLAVI: Abso– well–

DALJIT DHALIWAL: All of the Emirates?

AFSHIN MOLAVI: I would argue that they are more– I call them sheikhocracies, in a sense-
DALJIT DHALIWAL: What’s the difference?

AFSHIN MOLAVI: The difference is that, in monarchy, you think of a king as having this
absolute, almost capricious arbitrary power– to decide the fate of a nation.  In
sheikhocracies, you have regular gatherings of the ruling sheikhs and the elite of the city
states.  They gather—the discuss–

DALJIT DHALIWAL: That’s what– they listen, but they don’t implement what the people–

AFSHIN MOLAVI: Well–

DALJIT DHALIWAL:–raise in these majlises, do they?

AFSHIN MOLAVI: Perhaps.  But I would argue that in a place like, take for example, Dubai.
If tomorrow the ruler of Dubai, Sheikh Mohammad Bin Rashid, decided he was going to
reverse course, 180 degrees and he was going to say, “You know what?  I’m not going to
open up the economy anymore.  I don’t want to trade with the outside world.”

I think he would, in a matter of a few years, be gently pushed aside by other members of the
sheikhocracy.  Make no mistake about it.  The ruler has enormous power and what we saw in
the film, the ruler, the prince of Ras Al Khaimah, Sheikh Saud ibn Saqr al-Qasimi, who is in
effect, the de facto ruler, he has enormous power.  Don’t you, remember in that one scene
when they came to him, he ultimately had final say on whether the project went forward or
did not go forward.

DALJIT DHALIWAL: So, it’s final say, but you’re saying it’s not– he doesn’t run it like he’s
an absolutist monarch.

AFSHIN MOLAVI: It’s just not the culture of rule in these sheikhdoms.  The culture of rule
in the sheikhdom is one in which the ruler has the final say, but he does gather the leading
elites in these gatherings called majlises.  And they discuss the future of their Emirate.  And–

DALJIT DHALIWAL: Why is it only the elites that get a say?

AFSHIN MOLAVI: Well, I think that’s the key question, and what we’re going to see going
forward is, as you grow middle classes and as people have–their basic needs are covered,
well, they’re going to want to have more of a say in THE future of the country.  And right now
the way that elections have been held in United Arab Emirates– it’s with a very small pool of
people who are allowed to vote, for a very small number of candidates in an insignificant
body.

Will the people of the United Arab Emirates push for greater openness, greater democracy–
thus far, they haven’t.  It’s not like a place–like Egypt or Syria or Iran, where you’re there
and you feel the restiveness of the people.  You feel the frustration of the people at their
rulers.

In the United Arab Emirates, you just don’t feel that same sense of frustration and
restiveness and clamoring for greater openness, partly because it’s a young country.  Partly
because we have to remember, if you lived in the United Arab Emirates in the 1960s,
chances are you lived in a tent.  And now, suddenly you’ve gone from, in one generation,
from tents to skyscrapers.

Now, this can be very disorienting, and this can be something that the people of the Emirates
might get frustrated at.  They might feel that they’re losing out on some of their culture.  But
to many people, they see enormous opportunities here that they didn’t have in the past.

They don’t die from preventable diseases anymore.  They don’t die from malaria anymore.
They have excellent healthcare– excellent roads.  There’s no nostalgia for the fact that it
took people from Dubai ten hours across blistering deserts to get to Ras Al Khaimah.  Now,
they can get to Ras Al Khaimah on this new road that’s going to take 45 minutes.  So, I think
they’ve embraced these developments in many ways.

DALJIT DHALIWAL: What do you think is the most dangerous problem for the Emirates?

AFSHIN MOLAVI: I think the most dangerous problem for the Emirates is going to be, now,
how are they going to manage this large expatriate population that, in some respects, is
going to begin clamoring for rights in their own respect.  We’ve seen the laborers begin to
clamor for rights.  We’ve seen labor strikes in United Arab Emirates.

We have seen professionals from the Indian subcontinent, who are facing high inflation and
those sort of things.  If they decide to leave suddenly, I mean, these are the people who
running the boats, the plumbing–the inner stuffings of the United Arab Emirates.  And I think
at some point they’re going to have to bring them into the larger national project.  They’re
going to have to, frankly, make them feel more welcome in the United Arab Emirates.  And I
think that’s a real challenge going forward.

DALJIT DHALIWAL: What do they do to look after what is essentially 80% of the
population?

AFSHIN MOLAVI: It is extraordinary.  I mean, you have a country where 80% of the
population are not citizens of that country.  And in a place like Dubai, it’s something like 90%
are not citizens.  And so, to some extent, many of those expatriates have come to the United
Arab Emirates because it provides them opportunities that they don’t get back home.

And so, they’ve come from places like India and Iran and Egypt and Jordan and other places.
And they don’t have those same kind of opportunities.  So, they’re happy to be there.  But,
as–
DALJIT DHALIWAL: They want to get paid as well for the–

AFSHIN MOLAVI: Of course, they want to get paid.  And so, one of the things that we often
focused on, the laborers and I think that’s important.  And Dubai will never be a great city
until it’s a good city.  And by that I mean, until they take care of the less fortunate, and
particularly, these laborers.

But Dubai, the United Arab Emirates as a whole, has also been a beacon of opportunity for
many, particularly from the Indian middle class and the Pakistani middle class and the
Iranian middle class.  The joke among many of the affluent professional Indians in Dubai is
that Dubai is the best city in India. Because there’s so many of them–

DALJIT DHALIWAL: Not to be confused with Mumbai.

AFSHIN MOLAVI: That’s right, exactly.  And, Bollywood holds its annual Oscars event– its
Oscar equivalent event in Dubai.  It doesn’t even hold it in Mumbai anymore.  So, you see in
the United Arab Emirates as a whole, you have more than 150 nationalities living side by side
in one place, and with relatively little in the way of ethnic conflict.  So, it’s a very interesting
sociological experiment.

DALJIT DHALIWAL: But does it also in a way, take the political pressure off the ruling
family to make reforms because 80 percent of the population around agitating for political
reforms?

AFSHIN MOLAVI: Yeah.  It– it does. It does take pressure off the ruling family and in
addition to the 80 percent, the 20 percent that are United Arab Emirates nationals are also
not particularly agitating very strongly for political reforms as well.  So, you have a situation
where the ruling elites in all of these Emirates do not feel under much pressure.

And, to be fair to them, they’ve governed their realm fairly well.  They’ve provided for their
people fairly well.  I mean, these are not, rulers who have underperformed, who have raped
their countries, who pillaged their countries.  These are not Muammar Ghaddafis of Libya or
even Hosni Mubaraks of Egypt who have really dramatically underperformed the potential of
their people and their countries.

DALJIT DHALIWAL: What does the Emirates want to be, the capital of living large?

AFSHIN MOLAVI: Yes. I think Dubai in some respects has become somewhat of the capital
of living large.  But there is some tension with some of the other Emirates.  For example, Abu
Dhabi, the capital of the United Arab Emirates, the oil-rich capital, they’re trying to position
themselves as more of the, for upscale tourists.

They are building museums.  They are building a large Guggenheim center.  They have
recently signed an agreement with the Louvre in Paris to create the Louvre Abu Dhabi–
which would be their own version of the Louvre.  And they would borrow art from that
museum.  Now, some people have chuckled and said, this is buying culture.  But they’re
doing this to some extent, consciously, as a counterpoint to the boomtown nature of doubt,
they want–

DALJIT DHALIWAL: You mean the underwater restaurant that you reach by submarine.

AFSHIN MOLAVI: Absolutely, yeah.

DALJIT DHALIWAL: The mega-mall that boasts the only ski slope in the Middle East, for
example.

AFSHIN MOLAVI: Absolutely.  Absolutely, yeah.  I mean, there not many places in the
world where you can go on sand buggies in the morning and go skiing in the afternoon.  And
you can do that in Dubai.

DALJIT DHALIWAL: Right.  Should Vegas be worried?

AFSHIN MOLAVI: I think that other vacation areas in that region should be worried because
Dubai, after all, has attracted more tourists than India—a city state of 1.5 million people
attracting more tourists than India.

Now, Vegas need not be worried and here’s why.  There has been some talk about putting
casinos in Dubai.  But that was seen as going too far in terms of, after all, this is still an
Islamic country.  Despite the fact that there are bars, there is an underworld of prostitutes–
casinos was seen as going too far.

Because the government could potentially say, “Well, we have nothing to do with the bars.
We have nothing to do with the underworld.”  But if casinos were built, everyone would
understand that the government was sanctioning this.  And this is something that they were
unable to do.

DALJIT DHALIWAL: How would you characterize the type of Islam that is practiced in the
Emirates?  Is it lenient of other cultures and other faiths?

AFSHIN MOLAVI: It is very much a tolerant religion and I think a tolerant form of Islam.
And I think has to do with the fact that, in so many of the key cities of the United Arab
Emirates have been port cities for so long.  And as a result, they have interacted with people
from all over the world.

And port cities are, by their very nature, cosmopolitan, a little bit more socially and culturally
open.  And so, take for example today in United Arab Emirates.  You can go to a church.  You
can go to a Hindu temple.
DALJIT DHALIWAL: A synagogue?

AFSHIN MOLAVI: There are no synagogues that I know of, but there are also no restrictions
on Israelis actually traveling to the United Arab Emirates, which is very significant given the
fact that there are restrictions on Israelis traveling just about anywhere else in the Middle
East.  You are in an environment in which, even the ruler of Dubai, Sheikh Mohammad Bin
Rashid, when I interviewed him, a few months ago, he said to me, “You know, I don’t why
people are talking so much about Shia and Sunni.”

So, he was talking about the divisions that are seemingly growing in the Muslim world,
between the Shia and the Sunni aspect.  And he said, “You know, for me, I don’t care if
you’re a Shia.  I don’t care if you’re a Sunni.  If you work hard, you don’t bother your
neighbor, than you have a place in Dubai.”  And in many ways, you know, it was a very
simple statement, but it encapsulated so much of the Dubai attitude to religion and the
United Arab Emirates’ attitude to religion which seems to be a live and let live one.  I–

DALJIT DHALIWAL: And that applies to women as well?

AFSHIN MOLAVI: And now, the interesting thing about women is that women in the United
Arab Emirates tend to cover and they tend to cover and veil.  And this is something that is
part of their culture, more so than something than the government forces them to do.  In
fact, there are no government mandates  of veiling.

But what United Arab Emirates has done a very good job of is educating women, and in
particular, putting them in significant positions of power within the government.  The Minister
of Economy and National Planning, which is not an insignificant post in the United Arab
Emirates, is a woman, Sheikha Lubna Al Qasimi.  And she’s part of the ruling elite of, in fact,
of Ras Al Khaimah.

And she’s the Minister of Economy and National Planning.  And you find women in all sorts of
important positions in the government.  Now, as with any society in the Gulf, there are
notions of patriarchy that keep women down.  There are cultural norms that prevent women
from progressing.  But you don’t find the government trying to keep women down.  It’s more
society and culture.

DALJIT DHALIWAL: So, they have property rights?

AFSHIN MOLAVI: They have property rights.  There are some very prominent business
women.  You have women winning all sorts of government awards.  When you go to
government offices, you see women, in the same room as men.

You don’t have any sort of separation between men and women.  Women are driving.
Women are doing the sort of things that you would expect women to be doing in Egypt or
Jordan or some of the older civilization states.

So, in many ways, for women in United Arab Emirates, the government has done a significant
amount to push them forward, to offer them opportunities in education, offer them
opportunities in professional lives.  If they are being held back, it’s because of patriarchal
norms of the society or of the culture.

DALJIT DHALIWAL: Afshin Molavi, thank you very much for joining us on Wide Angle.

AFSHIN MOLAVI: Thank you.  It was a pleasure.

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