Will the Boom Continue?
“Dubai has truly let the cat out of the bag. There’s no doubt in my mind that in the next 10 years, other Dubai look-a-likes will spring up around the world, variations on a theme. For most countries, it’s either that, or plan on becoming a petting zoo for those who do.”
by Doug Casey
As a longtime anarchist, I’m of the opinion that the best government is no government at all. The fact that Hong Kong has been, until recently, just a “night watchman” state is responsible for its spectacular success; it (was) as close to a political ideal as exist(ed) in today’s world.
But, perhaps because of some atavistic genetic coding, humans generally seem to want somebody in charge, a father figure who can give them the illusion of security and somehow guarantee that they live in the best of all possible worlds. It’s often been said that a benevolent dictatorship is the best practical form of government, and that may be true, as long as the dictator stays benevolent; generally, however, only the most flawed type of person actually gets to be a dictator. There are exceptions, of course, like Lee Kwan Yu of Singapore who, despite his somewhat laughable and idiosyncratic attempts at social engineering, not only did an excellent job, but found an able and non-corrupt successor. I do know that “democracy”, a vastly over-rated, currently quite fashionable and widely misunderstood system, is not the answer.
Dubai’s Sheikh Rashid, who ruled from 1958-1990, said: “What’s good for business is good for Dubai.” He not only talked the talk, but walked the walk. His son, Sheikh Mohammed, is apparently at least as business-oriented. They intelligently directed revenues from their oil, when it still flowed, to prime the pump, and then let the market do its thing. Can things change? Of course. This is a hereditary monarchy, and the next Sheikh (like the next U.S. President, for that matter) could be a psycho. But I rather doubt it will happen in Dubai. This country is literally run like a corporation, with the Sheikh acting as the Chairman. The aristocracy is the other directors, and the 100,000 citizens the shareholders. Any serious deviation from a proven corporate culture simply wouldn’t be tolerated.
A benevolent dictatorship that’s run like a profitable business, not a dictatorship, actually can work.
People are, in most ways, very conservative. Sometimes I want to say stupid. One definition of stupidity is doing the same thing – like socialism – over and over again, and expecting different results. Another definition of stupidity is the ability to learn something – like “capitalism works” – only very, very slowly. You’d think that after enough people had been to the United States in its halcyon days, all the world would have wanted to model itself after America. But nooo… they stupidly kept buying into every cockamamie socialist scheme that came down the pike from Europe.
It was argued that, somehow, America was anomalous, or that its success was due to something other than its free market practices. So America acted as an example to individuals, but not to other states. Hong Kong – basically a barren rock, devoid of any resources other than poor opportunity seekers and the free market – wasn’t planned as a free market entrepot, but anyone could see how successful it was. Singapore, watching Hong Kong, was probably the first country in the modern world to consciously adopt capitalism (albeit in a rather paternalistic and adulterated form) to achieve success. Then, in the early ‘80s, China started copying Singapore: a socially and politically circumscribed free market. Far from ideal, but an outstanding success nonetheless.
Dubai will be, I predict – this is easy because it already is – the most successful city in world history because it is, in most ways, the freest. But what’s more important is that as leaders of other countries – especially small, poor ones – visit the place, they will increasingly see that they have no alternative but to emulate it. Dubai has truly let the cat out of the bag. There’s no doubt in my mind that in the next 10 years, other Dubai look-a-likes will spring up around the world, variations on a theme. For most countries, it’s either that, or plan on becoming a petting zoo for those who do.
What’s happening in the Emirates makes me think that even when things go bad in the United States – and if they go bad in China – the world economy will still continue apace. The reason is that any leader of a backwater country who sees what’s happening here will understand that if a boom can be created in an absolute desert in the world’s most notoriously unstable region, then it can be created anywhere. For all anyone knows, the leader of some fly-blown place in Africa, Asia, the South Pacific, the Caribbean, or Latin America is even now planning on replicating the success of Dubai.
But Dubai is important in another way. It’s an example to the Arab world that they can do something as spectacular as has ever been done – and do it without the deus-ex-machina device of oil. Arabs that see Dubai can view themselves and their culture on a level with the Europeans, Americans, and Orientals, not just as some “camel jockeys” that got lucky by sitting on a pool of oil somebody else discovered and developed.
The success of Dubai is due, partly as a result of this ongoing change in self-perception by Arabs, to the withdrawal of their money from America. Because of the absurd War on Terror, anyone from the Middle East who keeps substantial capital in the U.S. has to be an imbecile. But where, then, to put their money? Before Dubai, there was no place within the Arab culture that was safe. Now there is. It’s safer than America, and much more profitable.
And, lastly, Dubai shows the West in general, and America in particular, that Islam in general, and Arabs in particular, are not necessarily their enemies any more than any other culture. Of course the Bush regime will disregard the lesson.
I wish I’d gone through Dubai pre-9/11, before property prices doubled. I would have bought a few apartments off the plans of a new high rise on the beach, and urged you to do the same. I still think property is going a lot higher, despite the immense supply, simply because Dubai is still only for the people from the Mid-East and the sub-continent. It’s barely been discovered by Europeans, less by Orientals, and not at all by anyone in the Americas. But it will be. So property is going higher. If you don’t yet have a bolthole outside your home country, this is an excellent time, and Dubai is an excellent place to secure one. With purchase of property comes a permanent residence visa, a valuable document in today’s world. That’s first on the list.
If you’re in any business that has interests abroad, this place is in a class with any other for buying, selling, trading, outsourcing, or you-name-it.
If you’re looking for a good location for an offshore company, or a secure bank account, look in this part of the world or the Orient. These people aren’t going to be pushed around by the U.S. and other declining powers.
Most important, call your travel agent and take a look. I’ve always thought trying to deal in the financial markets without knowing more than your neighbor was no better than gambling. Your neighbor is most likely a rube whose idea of international travel is a jaunt to Mexico, or maybe England. It’s critical to know what’s happening in the rest of the world, first hand, or you’re in no better position than your neighbor. It’s a variation of the old rule in poker: if you can’t figure out who the mooch is after a half hour, then it’s you. And when it comes to this part of the world that describes most Americans.
Your homework assignment, should you choose to take this seriously, is to get on a plane. Soon.