A Haven for Money in the Middle East, Dubai Is Losing Its Shine - Bloomberg
There’s a deeper problem. Dubai prospered as a kind of Switzerland in the Gulf, a place to do business walled off from the often violent rivalries of the Middle East, says Jim Krane, author of the 2009 book “City of Gold: Dubai and the Dream of Capitalism.’’
Now the state that Dubai is part of, the United Arab Emirates, has become an active player in those conflicts, fighting in civil wars from Libya to Yemen and joining the Saudi-led boycott of Qatar.
“It’s a situation that Dubai finds itself in mostly through no fault of its own,’’ says Krane. “You can go to war with your neighbors, or you can trade with them. It’s really hard to do both.’’
Stories of Qatari citizens being ordered to leave the U.A.E. shocked businesses that serviced the region from headquarters in Dubai. American executives were especially concerned about the prospect of being forced to pick sides, says Barbara Leaf, who was U.S. ambassador in the U.A.E. until March.
“It has cast a shadow,’’ she says. “It was a very unpleasant surprise when U.A.E.-based companies found out they could no longer fly or ship goods directly to Doha.’’ The dispute rumbles on, even though the U.S. is applying renewed pressure for a settlement.