After bling is banished from Dubai

Dubai is fast becoming the tombstone for capitalist hubris and exuberance, its hollow skyscrapers a poetic shrine to decadence and impunity. While this is a convenient image, like that of the humbled redundant banker with a whopping unsustainable mortgage, it is important to remember that Dubai is not a country, it is an emirate which, albeit independent in governance, is still part of the fabric of the «United» Arab Emirates.

Among the seven emirates in the federation, the classier and more sedate Abu Dhabi is better known to the tourist cognoscenti. Sharjah and Ajman, ruled by more conservative emirs, have been trying to fashion themselves as modern Muslim states. Athens-like in their appreciation for art and culture but with an Islamic bent, they view Dubai as a cesspit of iniquity and vice and even Abu Dhabi as a nouveau riche beneficiary of oil wealth.

While the ruler of Dubai was mingling with Hello! magazine celebrities at Ascot, his equivalents were presiding over art competitions and museum openings. Instead of fake ski resorts and artificial islands, Abu Dhabi will eventually host branches of the Guggenheim and Louvre museums.

Other Gulf states turned their noses up at Dubai’s vulgarity, with countries such as Bahrain and Qatar choosing to go down the Abu Dhabi route of development. «My sons don’t holiday in Dubai,» a Saudi friend of mine declared. «They go to Abu Dhabi – they don’t have to fight off hookers there.»

The gloating over Dubai’s troubles is shared by its fellow emirates. It is perceived that the state, lacking oil wealth of its own, only managed to build up a reputation and property portfolio so quickly by prostituting itself to the tastes of the west and exploiting cheap labour.

But among the other emirates these feelings are tempered by a fraternal tribalism, one that is loth to allow the rest of the world to rejoice at the expense of an errant but still privately loved prodigal son. The fact that the sole shareholder of Dubai World Group is the state of Dubai, in effect the ruling family, smears egg on the faces of the royal institution.

The colossal loss of face affects Abu Dhabi as well and this has fuelled speculation that Abu Dhabi will inevitably come to Dubai’s aid. But this may happen only after Dubai has been left to sweat, and become chastened. «Upstart Dubai», «Bling City», the «flashy spendthrift», is seeking help from its «prim conservative neighbour», and may have to give up more than its dignity in exchange for economic stability.

Dubai still has a lot to offer; it is not all shallow roots and freakishly large and precarious growths above the soil. Prestigious institutions such as the Emirates airline and a property portfolio whose core would still be valuable after a correction mean that sister emirates and other Middle Eastern countries also have a financial incentive for offering support, after toxic debts have been ring-fenced and discarded.

Dubai’s failure has economic implications for Abu Dhabi too, so any help will not be entirely free of this consideration. The Emirates’ «sovereign wealth» places it in a unique position economically and blurs the lines between private and state ownership. Pots of money not extracted from tax and subject to no accountability to citizens make up «sovereign wealth funds», those that fund western institutions in dire straits and purchase football clubs.

Abu Dhabi Investment Authority and Abu Dhabi Investment Company are prolific in alternative investments, planning for a future without oil by investing yield surplus today. If any money has to be diverted to prevent collapse, then the cost to Dubai will be more than just domestic vindication for a more prescient brother. Dubai overreached, but it has still managed to rise from the sands with few resources apart from its climate and private wealth. Abu Dhabi and any consortium of Arab state investors will be to the emirate what tax-rich governments are to western banks and will no doubt impose conditions that are economically robust but also morally punitive.

This is perhaps the downside of the calamity that has hit Dubai, for it was always the more liberal and outward-looking of the emirates. While it can be argued that its modernity was skin-deep, lusting after licence and not freedom, some might choose to see the rise in stature of more conservative states as proof that opening up to western values will ultimately be a society’s undoing. And so Dubai might not only become more conservative in economy, but also more demure in demeanour, like a broken woman who dared to dream.

Nesrine Malik, a Sudanese-born writer.