Category Archives: UAE

Eight reasons why Emirates is crushing it

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When we departed Dubai airport we were flying from the busiest international airport in the world. Sure there are busier airports with big domestic markets, but this year DXB has edged out London’s Heathrow as the airport serving the most international passengers.

Dubai airport’s meteoric rise has largely been on the back of Emirates. Emirates was only founded in 1994 and, in a world where most big movers in aviation have been low cost carriers, it has made a conventional hub-and-spoke strategy work. It’s now the operator of 777s, A380s one of the fastest growing carriers in the world.

Here are eight the many reasons why Emirates has been successful.

1. High wealth passenger; low cost labour

Rich countries have wealthy travelers, but labour in them tends to be expensive. Poor countries have cheap labour, but nobody flies. Dubai is a rare example where there is a wealthy flying population, but the basic labour needed to run an airline (think baggage handlers) is incredibly cheap because it’s all guest workers. This keeps operational costs down and lets Emirates offer competitive fares.

Because the labour force can’t unionise Emirates can also do things like decide to have its major banks of flights in the middle of the night when its colder and aircraft need to burn less fuel on takeoff. And none of them can really complain.

2. A natural crossroads

Most airlines that have success disproportionate to their home population are based in big port cities. Think Singapore Airlines, Cathay Pacific, or Copa Airlines. The cities they fly from (Singapore, Hong Kong, Panama City) represent natural geographic transit points.

Dubai does not have a port of the same scale, but it still represents a historic crossroads between cultures. This kinds of position and cosmopolitanism can be leveraged to make a hub airport, and the Dubai crossroads is all the more important given where the world’s population is growing. These days Dubai is within eight hours flight time of half of the world’s population.

Some great examples of connections that make sense via Dubai include:

  • The growing stream of Chinese setting up businesses all over “Africa province”
  • South Asian and Filipino guest workers heading to the Middle East
  • South Asians heading to Europe and the Americas
  • The Kangaroo route, as discussed below

Continue reading Eight reasons why Emirates is crushing it

Voting where no one else can

We didn’t get one of those excellent “I’ve voted” stickers, but we did get to vote in a city where no one else does.

We voted at the New Zealand Consulate-General in Dubai. We stepped out of the express lift in the central city tower to be greeted by a Wahi Poti sign in orange man orange. I greeted the Indian man staffing the front counter: “Hello, we’d like to vote, please”. His New Zealand colleague, who I suspect was employed as local staff, was quite excited by the novelty of it all. Our special voting forms said OVERSEAS in gratifyingly large letters. A can of L&P, like those offered to New Zealanders voting in Canberra, really would have topped off the experience.

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Look, I’m the first to admit I wasn’t overly excited about the options I had on the ballot this time round. But I will say that the pleasure of voting was enhanced by the exotic location, and it felt more meaningful because it’s a power that isn’t afforded to citizens here.

The UAE is an elected monarchy. Its head of state and head of government are elected… by the hereditary rulers of each of its seven Emirates. By convention the Sheik of Abu Dhabi is always elected as the President and the Sheik of Dubai the Prime Minister. From the highway to where we’re currently staying we can see the super yacht of the PM, moored by his private island. He seems a bit of a Kim Dotcom character. The kind that, ideally, would stay the hell out of politics.

If you’re feeling morose about the various governmental options that the New Zealand election might spit out, fear not, you do have the chance to participate in the only contest that counts on Saturday: my Great Election Sweepstakes. Enter here.

Fast food development – United Arab Emirates

The UAE is very easy to categorise in terms of our fast food development scale. Western fast food brands are everywhere. In a big mall today I noticed a McDonalds ‘East’ and ‘West’ listed on the noticeboard. That meant the mall had more McDonalds than bookstores. There’s also all the other big international brands and a surprising number of Burger Fuel Joints. New Zealand burgers taking over the world.

Fast food isn’t cheap compared to, say, Pakistan, but nothing is super cheap in the UAE. You’re probably looking at prices about the same as New Zealand. There are probably cheaper options to serve the large population of foreign labourers, although their employers provide most of those meals. But overall Western fast food brands are certainly among the cheapest on offer. So, that’s a stage four for the UAE.

Eight Dubai surprises

  • The city isn’t big. There are only two million people here and many of them are concentrated in quite a small area.
  • Nobody walks anywhere. That’s partly because it is super hot but also because the city is built for cars. If you don’t have your own car you take a lot of taxis.
  • It isn’t always hot, though. There’s a winter season where average highs are mid teens and at night it gets down below five degrees.
  • There isn’t a discernible Dubai cuisine. The choices are a lot like what you’d get in a big American city, with the offerings of kebabs and other Middle Eastern food slightly pumped up.
  • Coins don’t have numbers on them, and notes only on one side. Or they probably do have numbers on them, but they’re written in another script. Which is odd because I thought we used Arabic numbers.
  • Labour is so cheap that almost anything is available with free delivery. Want a bottle of milk? Call the convenience store. Need your shirts ironed? Someone nearby will come and pick them up.
  • The Emiratis wear traditional clothing almost exclusively. Long white robes for men. Long black robes and head scarf for women. But they still seem to have a lot of reason to browse and buy from expensive fashion brands in the massive malls.
  • There’s only one ski field and one ice skating rink. So poor.

Double enclave!

Double enclave: It’s the geopolitical equivalent of a double rainbow, a country within a country within a country – a concentric circle based territory. There are only a couple in the world. One is on the East coast of the UAE, so of course we went to visit.

One leg in each camp: Fiona does her best to stand in the UAE and Oman at the same time.
One leg in each camp: Fiona does her best to stand in the UAE and Oman at the same time.

First there’s Madha, a 75km2 territory of Oman that is completely surrounded by the UAE. Then, there’s Nahwa, an even smaller UAE territory inside an Omani territory inside the UAE.

There’s not much to see, though of course we made the most of the excitement when license plates miraculously changed from white to yellow and back again, and cheered when there was an observable split in bitumen on the road. But truth be told, aside from the one border that was marked, I had to keep close tabs on the GPS to determine what country we were actually in. There are no border posts and sadly, no petrol station pumping Omani petrol with massive state subsidies.

The double enclaves came about because when the British Protectorate ended in the Gulf, individual families where able to choose whether to join Oman or the UAE. Back then a few neighbours in Madha were like “Oman!” and now they’re probably like “Oh, man!” because the UAE vasts exceeds Oman’s per capita wealth.

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Asking individual families which country they want to live in is a novel and in some ways admirable way to draw borders. The alternative is simple borders that don’t really fit with national identities. But complicated borders bring their own problems too, and, as the map above shows, there are a range of quirks in the demarcation between the UAE and Oman.

One problem that has recently developed is the burgeoning tourism industry in Omani Dibba on the north east coast on the Gulf of Oman, right about Emirati Dibba. The UAE has become frustrated that this other country is challenging its dominance of tourist services, resorts, snorkeling, trekking and the like. To make life tougher for the Omanis they’ve introduced an official border. They now require visas and the payment of a fee to cross the border. It seems petulant. But I guess that’s what protecting your borders fundamentally is.

Policy wonk digest – Dubai and the United Arab Emirates

  • Dubai Emiratis receive extraordinary financial support from the hereditary monarchy that governs them including free land when they marry and cash bonuses when they produce children. Citizens of other emirates get some support too, but generally not as much. This is an important example of the United Arab Emirates functioning more like seven fiefdoms than one united country.
  • Only children with at least one Emirati present (until recently an Emirati father) can get citizenship in the UAE. As a result many South Asian families have been in the country for generations but have no official residence status.
  • Alcohol is illegal in some Emirates, always illegal for Emiratis, and also illegal for foreigners without a license, or outside the confines of hotels. It is also illegal for unmarried couples to live together (regardless of nationality) and public displays of affection are banned. I have some sympathy for this last law. In practice laws like these are rarely enforced against foreigners.
  • Outside of designated ‘free zones’ businesses must be majority Emirati owned. In practice this means paying an Emirati sponsor not to interfere in the day to day operations of your business.
  • There is no income tax.
  • Immigration is relatively free, supporting the import of many foreign workers. But the ability to bring your family (first a wife and then children) is means tested.
  • Low cost foreign workers from the Philippines and sub-continent have relatively few rights. The receive pay that is high compared to their home country but low compared to others in the Emirates. Their employers often confiscate their passports, limiting their ability to flee.
  • The Emirati Dirham is tied to the US dollar.
  • Emirates airline employees around 13,000 Dubai based flight crew. Interestingly, of its own accord it offers to adjust 50% of employee salaries to reflect fluctuations of currencies in their home countries. This is in recognition that most of its employees send much of their salary home.

Went through the desert on a ute with no name

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We spent the weekend getting out of Dubai, roaming around the desert in a hulking ute owned by our friends who live here. We snorkeled in the Gulf of Oman, lumbered up dry riverbeds, took obligatory photos atop dunes, oggled date palms thick with fruit and used a combination of Western faces and confidence to finagle a bathroom break at a five star resort.

After all that we climbed to 1,500 metres in the hope of a cooling breeze and a flat camp site. We found one with an expansive view over the plains below with street lights from the big cities bouncing off the haze in the desert sky. A roaring fire thundered through the bone dry wood we’d collected and stoked a camp over which, miraculously, housed a full lamb roast

Yea, it was all pretty amazing. The towers and opulence of Dubai felt a million miles away though an air mattress on the back of the ute was still more comfortable than most of the places we slept in Pakistan.

In your face, inequality. Dubai and cheap labour.

Dubai must surely be the only place in the world where the metro has a first class cabin. It’s a symbol of how engrained and how overt the inequality is here.

Emiratis make up about 15% of the population and live off their jackpot win in the birth lottery. The government gives Emirati couples land when they marry and cash payments when they have kids. It funds their healthcare and education and also provides them with highly paid jobs, in the unlikely even that they should need them, within its agencies. When Emiratis picnic in the dunes they toss their trash knowing the government will pay someone else from somewhere else to pick it up.

The rest of the population is expatriates stratified by race. Westerners, about 3% of the population, staff the financial services industries that keep Dubai rich. Filipinos, mostly women, work as maids and in retail, and wait tables. South Asians work as labourers in the never ending maze of construction sites, drive taxis and sweep streets. Dubai has been built on the back of their cheap labour.

Employment conditions are not great, though the government does make some effort to ensure they meet bare minimum standards. Labourers are often housed in camps. They get three square meals a day, but can’t bring their families with them. Employers are required by law to fly their labourers home for a month’s leave a year but they commonly (though illegally) take their passports so they can’t leave at will.

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There is something sickening about walking amongst this dramatic inequality, especially when it is so clearly structured along racial lines. There’s a temptation to throw about words like apartheid. But, as a good friend of ours here says: “this is the world”. The reality is that we’d probably feel similarly woozy lining up a Swiss property developed with a Nepali labourer but that problem is harder to see, stretched across continents. The fact that Dubai makes them more visible in a small space doesn’t necessarily make things here any more objectionable.

The low cost labour group we’ve had most contact with are taxi drivers, shuttling us from one consulate to another as we vote and apply for visas. In our sample of about a dozen all but one has been Pakistani. The other was Bangladeshi. They’d been working in Dubai for between two and thirty years. I started asking them whether they liked living here, expecting I’d get the kind of instinctive positive response New Zealanders give strangers when people ask “how are you?” But none of them did. “No, sir” said one. “That’s a complicated question” said another. They miss their families, and the hubbub at home. But the chance to earn five or six times what they’d get driving cabs in Lahore or Peshawar is too much to pass up.

As much as Dubai can be admonished for its feudal feel there is no doubt that it also provides economic opportunity to many who have no other. In a post called Defence of Dubai one blog points to a picture of a young Indian man lifting 40kg bricks in a quarry for four cents a pop. If he was doing similar work in Dubai, goes the argument, he’d earn much more and he’d work with adequate safety boots to boot.

I’m not prepared to offer an unqualified defence of Dubai, but that’s because I can’t defend the way that wealth and welfare falls around the world, rather than because I want to admonish the Emirate. And indeed there is an argument that by moving some of its wealth into the developing world through the remittances of the labourers that sweep its streets and staff its mega malls, Dubai is part of the solution rather than the problem.

Du buy

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Arriving in Dubai felt like we’d landed on the moon, such was the dramatic change from Pakistan. Actually, maybe we’d landed on tatooine, because Dubai came complete with Star Wars robe like costumes for the local Emiratis.

The most profound contrast with Pakistan was how constructed Dubai is. I guess that’s what you get for a city that has completed the transition from non-descript pearl fishing village to cosmopolitan metropolis in the span of a couple of decades. There is order in the way it works. The highways curve through gleaming skyscrapers and impossibly green grass marks their verges. Impossible I say because this town has been built from a desert base.

We’re lucky to be staying with dear friends from New Zealand while we’re here and we’re luxuriating in the sense of relative normalcy that makes the life so good here for ex-pats. We’re enjoying little things like fresh towels, reliable hot water and toilets capable of downing discarded paper. We’re also enjoying the air conditioning, without which this Dubai summer would be unbearable. Forty degrees is common and fifty degrees happens.

Compared with Hong Kong, say, or even Singapore, Dubai feels relaxing. It’s like people are just sitting around with their wealth, rather than scurrying about frantically trying to generate it. There isn’t oil in Dubai, which I found surprising, but oil fortunes have spilled across from other Emirates. And beyond that Dubai has built its wealth from money laundering, and as a centre for international trade.

The infrastructure is so well developed that luxury cars glide along eight lane highways to the suburbs rather than lurching between traffic jams. You might think the desert would constrain the city. But it’s easily conquered with money and cheap labour. Villas and apartments are sprawling out with leafy avenues fed by desalinated water. There’s also a big development stretching into the sea in the shape of a palm. We’re staying in an apartment on the stem as I write. Dubai being Dubai, there are two more palms under construction.

There’s plenty to buy. We sucked up the New Zealand comparable prices to get ourselves another replacement day pack from a mall that claims to be the world’s largest. It includes a massive aquarium, a stunning indoor waterfall and an ice rink. Because that goes naturally with the desert. It also has an Emirates A380 simulator which Fiona thinks is too expensive. Elsewhere there are perfect golf courses that only get used when the sun and the heat has gone down, an endless line of beachfront resorts and every international brand you can name.

Asked to describe Dubai in one word a friend of our says this: “unreal”. He’s nailed it because the city is hyper-impressive. But it is so impressive that it doesn’t quite feel real. It’s not fake either, but more surreal.