New Money, New Ideas :: New York Times

Are there many more intriguing places to be living these days than the UAE? Probably not.

Quote:

DUBAI, United Arab Emirates — In a city of superlatives, Burj Dubai is supposed to top them all.

The "burj," or tower in Arabic, is set to become the world's tallest skyscraper in 2008, looming more than 2,600 feet above a new neighborhood of offices and residential buildings. But more important, the rival to Burj Dubai's 167 floors will not be the current title-holder, Taiwan's Taipei 101, at 1,667 feet, or even New York's proposed Freedom Tower, which is to rise to a symbolic height of 1,776 feet.

Drive past the Mall of the Emirates with the only indoor ski slope in the Middle East; pass by three man-made islands shaped like palm trees and then a set of islands arrayed like the map of a world; continue past Burj Al Arab, the world's only seven-star hotel, which looks like a giant sail and offers rooms for as much as $13,900 a night.

There, farther down Dubai's coastal highway, another developer is planning to erect a tower that will stand about 2,300 feet tall. Simply known as Al Burj, or The Tower, it is to be the hub of a residential village for half a million people.

Once again, oil producers, particularly in the Arabian peninsula, are experiencing a boom. And just as they did in the 1970's and early 1980's, their coffers are spilling over with cash. Last time around, there was an abundance of outrageous projects, and judging from the extravagance on display in Dubai, lavish projects are finding financing once again.

But this time around, the region's main oil producers, like Saudi Arabia, Kuwait, Qatar and the United Arab Emirates, have gotten wiser. Since the boom started three years ago, they have paid down their debt, saved more money than ever before and created more jobs in the private sector. And they are trying to diversify their economies away from oil and its increasingly volatile cycles.

"People are asking where are all the petrodollars and why we have not seen anything like the spending of the 70's and 80's," said Bader al-Saad, who runs the Kuwait Investment Authority.

"What has changed is the economic and political reforms in the region, the fall of the barriers for investors, and the improvement of the banking and financial system," he said.

"If we hadn't learned from our previous mistake, this would have been a big stupidity."

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