History

Dubai used to be a small, sleepy fishing village and trading port, clustered around the mouth of the creek that divides the city today in two main parts: Deira and Bur Dubai. It was taken over in about 1830 by a branch of the Bani Yas tribe (from the Liwa oasis to the south) led by the Maktoum family, whose descendants still rule today. In 1971, the Federation of the United Arab Emirates was created and since then Dubai has been one of the most politically stable city states in the Arab world. Its history reads like a tale of rags to riches, transformed into a major commercial hub—one developing at the speed of light—in which 1.61 million people are predicted to be living in 2008.

Politics

Dubai is one of the seven emirates that make up the federation of the United Arab Emirates (UAE). It is the second most important after Abu Dhabi, the capital and the seat of the UAE’s oil wealth. As in other Gulf states, ruling clans dominate politics. In Dubai, the al-Maktoums hold all key positions in the city-state’s government; their power is absolute and their decisions are largely popular because they have overseen a period of prosperity. Sheikh Maktoum bin Rashid al-Maktoum is the official head of the large family, with his younger brother, Sheikh Muhammad bin Rashid al-Maktoum, appointed crown prince and known affectionately as ‘CEO of Dubai’. People pay no income tax and the government has been shrewd in sharing the country’s oil wealth through a generous welfare system. Although UAE nationals account for just one fifth of the country’s 4.1 million inhabitants, they are the only people who matter politically.

Expats have no representation. The local press is cautious, rarely offering more than tub-thumping for the rulers and their decisions.

Religion

Dubai’s official religion is Islam and the call to prayer is heard five times a day. But the Emirate’s commercial ethos and cosmopolitan inhabitants preclude strict enforcement of religion. Muslims make up about half the population. Most Indian expats are Hindu or Catholic. Dubai’s high standard of living tends to mitigate radicalism and the risk of terrorist alerts is deemed low.

Economy

Dubai is the second largest and wealthiest emirate in the UAE. The discovery of oil in 1996 led to rapid economic growth, but Sheikh Rashid bin Saeed al-Maktoum (Dubai’s ruler from 1958 to 1990) wisely diversified by ploughing the proceeds from oil into building infrastructure.

In 2004, 93% of Dubai’s GDP came from non-oil sources and this share is increasingly in real estate, banking and tourism. Reports suggest that Dubai’s oil and gas will run out in 10 years. Sheikh Muhammad has encouraged foreigners to buy property and enjoy a Western lifestyle, making Dubai an obvious choice for the Middle East headquarters of Microsoft and HSBC. Emirates, the national airline, has experienced phenomenal growth in routes and cargo.

Population

The current population is 1.4 million. Of these, 25% are Emirates citizens, 12% are other Arabs and 3% Western expats. Expatriates make up 80% of Dubai’s population, 60% of which are Indians, Pakistanis and Filipinos who take the low-wage jobs. Languages spoken include Arabic and English, although Hindi and Urdu are also widely spoken.