- The Dubai ruler’s image took a hit when one of his six wives, Princess Haya, fled to Britain
- But it was a reliance on credit and a dalliance with Iran that really hurt his legacy – and left him in the shade of big brother Abu Dhabi
Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, is in a league of his own. His approach to governing the emirate – he functioned more as a corporate chief executive with a knack for investing than as an oil monarch presiding over a tribal polity of loyalists turned citizens – made him an exception in the Gulf. His other interests – he was an acclaimed poet, equestrian, and regular at the Royal Ascot every year – made him a rock star to the West.
That image has taken a huge dent with news last week that one of his six wives, Jordanian royal Princess Haya bint Al Hussein, had fled the palace for Britain several months ago and was now asking for a divorce. She is the third of Sheikh Mohammed’s immediate family to flee Dubai, after his daughters, Sheikha Shamsa Al Maktoum, who left in 2003, and Sheikha Latifa bint Mohammed Al Maktoum, who defected early last year. Both were subsequently recaptured by Emirati forces.
The fallout from the latest episode is likely to hit Dubai’s commercial standing. Sheikh Mohammed, who is also the prime minister and vice-president of the United Arab Emirates (UAE), has seen his political influence recede over the last decade or so, mainly as a result of the global financial crisis of 2008-9, which hit Dubai badly, but his reputation for being a deft wheeler-dealer remains.
“Sheikh Mo”, as he is popularly known, rose to power in January 2006, when his older brother Sheikh Maktoum, who had ruled since their father’s death in 1990, died of a massive heart attack while vacationing in Queensland, Australia. Groomed by his father, the visionary Sheikh Rashid, and among the first generation of Gulf royals to have been trained at Britain’s Royal Military Academy at Sandhurst in Britain, he was the foreign minister of the UAE at its inception in 1971, a post he occupied until he became prime minister in 1990.
Sheikh Mohammed was instrumental in defining the course of Dubai’s economic progress. Acting on their father’s advice, he, along with his two older brothers, evolved and implemented a policy leveraging migration, tourism and foreign investment at a time when the rest of the Middle East was reorienting itself around its new-found oil wealth.
The unorthodox and freewheeling approach of the Maktoums brought rich economic dividends to the emirate as capital fleeing the taxman in India and government funds circumventing US sanctions on Iran sought safe haven in Dubai. Some of this money was pushed into business ventures, while some found its way into the international financial system through Dubai’s banks and hawala networks. In a region fraught with war, sectarian strife, internal political unrest and rival factions competing for power, everyone looked to Dubai as a safe haven for their money. This position gave the emirate some measure of immunity from the region’s volatile mix of politicking and warfare.
Sheikh Mohammed’s genius lay in taking advantage of this immunity and using it to develop Dubai’s ports, special economic zones, and banking and real estate sectors, as well as its home-grown airline industry, enabling it to slot seamlessly into a globalised economy. These “hard” investments were twinned with “soft” ones which generated much publicity, such as in horse racing and football clubs, beginning in Britain before extending to the rest of Europe and on to the United States. In one of his biggest accomplishments, Dubai Ports World acquired P&O Ports in 2006 – a move that saw the corporation join the top league of global port operators and supply chain giants, alongside Hong Kong’s Hutchison Port Holdings and Singapore’s PSA International.
Despite the transformative nature of Sheikh Mohammed’s policies, they had a flaw: They were not backed by massive oil revenues but by credit flows, since the emirate’s relatively smaller oil reserves – compared to neighbouring Abu Dhabi, Kuwait and Saudi Arabia – were dwindling and contributing little to its coffers by the late 1990s. That made Dubai vulnerable to global economic vagaries, and the reckoning arrived in spectacular fashion with the 2008-9 financial crisis, which stopped the city’s progress in its tracks. Abu Dhabi had to go to its rescue, and the price for the bailout was steep: Sheikh Mohammed’s wings were clipped, and his economic imperatives were subsumed under the foreign policy goals of the UAE, which were now decided by the powerful Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and de facto ruler of the emirates.
MBZ, as he is better known, is the architect of an expansionist foreign policy, and commercial goals are secondary to his regional ambitions. Dubai’s economic lifeline since the recession a decade ago has been its function as a hub for Qatar and Iran. The Crown Prince put an end to that when he teamed up with Saudi Arabia to isolate Qatar and challenge Iran’s ambitions in the region. The latest embarrassment for Dubai will only strengthen his ironclad grip on the country, leaving Dubai deeper in the shade.
For Sheikh Mohammed, that will mean his legacy will be diminished further. His approach to tackling a post-oil future for the region will also be discredited. Despite his contributions to Dubai’s economy and the moderating effects it may have had on the otherwise-chaotic violence gripping the Middle East, Sheikh Mohammed, once a leader seen as exceptional in the West, will be seen as just another oil monarch who failed to rein in his excesses, particularly in the light of the all-powerful women’s movement – one that received another fillip just this week with the arrest of the billionaire financier Jeffrey Epstein in New York.