Business Elites, Unofficial Citizenship, and Privatized Governance in Dubai

Several scholars of citizenship and migration in the oil-rich Gulf Arab states have noted the divisions between citizens and non-citizens in terms of mobility, access, geographic location, job prospects, and rights (or lack thereof) in these countries.^[1]These “rentier” states, such as the United Arab Emirates (UAE), which rely on oil for the majority of their income, highly police the boundaries of citizenship, which is based not in political participation but rather on heavy government subsidies and welfare benefits. Foreigners, who make up large proportions of the work force and population in these countries, are considered to be temporary guest workers, tied to renewable work visas, and are not integrated into the social and cultural fabric of the nation. Legally, they have little or no access to citizenship.

In Dubai, where foreigners are estimated to make up close to 90% of the population, the division between citizen and foreigner seems at first glance to be very rigid, defining the daily lives of the city’s residents. Indeed, many accounts of the city’s boom in the mid-2000s (and its subsequent “bust”) focus on the disparities between wealthy Arab citizens on the one hand, and underpaid, exploited unskilled labor (mostly from South Asia) on the other.^[2]However, over the course of 14 months of fieldwork in Dubai (conducted between 2004 and 2009), I found that the economic models deployed by Shaykh Muhammad of Dubai and his government, as well as the divisions between citizen and foreigner in the country, relied heavily upon foreign business owners to govern migrant populations and act in some ways as unofficial citizens of this city-state.

Migrant governance in the UAE, as in other Gulf states, is done through the kafala system whereby individual citizens sponsor employees and are responsible for their actions and well-being while in the country. Foreign business owners obtain their visas through partnership with citizens, in which the foreigner may own up to 49% of any business. In addition, there are free zones and freehold property options in Dubai that offer long-term visas for wealthy expatriates who open businesses or purchase property in certain areas of the city.

While its oil-rich neighbor Abu Dhabi holds the world’s largest sovereign wealth fund, oil constitutes only 3% of Dubai’s GDP. For many centuries, Dubai’s economy has been based primarily in mercantilism and trade in the Indian Ocean region.^[3]Over the past three decades, the Dubai government has invested in construction, tourism, service sectors, and commerce in order to diversify away from its small oil reserves. This has required adopting what Saskia Sassen and others refer to as neoliberal “global city” models, where foreign investment and labor is lured through lower taxes and customs, relaxed environmental standards, and the privatization of governance into the hands of individuals.^[4]

While the privatization of migrant governance through the kafala system has been prevalent throughout the Gulf states since their inception, in Dubai the economic openness to wealthy foreigners means that it is most often expatriate elite managers and business owners who govern the day-to-day lives of migrant workers, thereby assuming responsibility for the migrants’ well-being.

In my interviews with foreigners in Dubai, I found that business owners emphasized the “freedoms” that Dubai offers for expatriates, a sentiment that went against the majority of journalistic and scholarly accounts of migration in the Gulf, as well as contradicted my interview experiences with middle- and working-class salaried foreign workers in the city.^[5]Mr. Soni, for example, a wealthy Gujarati gold merchant who had been in Dubai for over 30 years, told me that “Dubai is actually a freer place than India” and that India, while in his heart, is no longer his true home. Mr. Adnani, a Sindhi electronics dealer, explained to me that Dubai is a “land of opportunity” where anyone can reach his full potential. And Mr. Muhammad, a Syrian CEO of a construction company, related Dubai’s openness and fairness to all business people through the example of Shaykh Rashid (Shaykh Muhammad’s father and previous ruler of Dubai) and “the ice cream company:”

One of his friends wanted to open an ice cream factory, you see, since there were none at that time. Shaykh Rashid gave his friend land upon which to open the factory, as well as a loan for start-up expenses. However, there was one request the friend made that Shaykh Rashid would not fulfill: exclusive rights over ice cream in Dubai. Sheikh Rashid said that he would be as open to anyone coming into the country for entrepreneurship as he was to his friend, but would not allow anyone to have a monopoly. The friend said, ‘but just taste my ice cream, and you will see how wonderful it is.’ Shaykh Rashid assured him that if his ice cream was indeed wonderful, he would benefit from healthy competition, and succeed. And the testament to this success is the fact that even though major ice cream companies have now entered the Dubai market, this small local business is still going strong after so many years!

Mr. Muhammad told me this story in order to illustrate how the rights of expatriates are protected in Dubai, and how anyone is welcome. His is therefore a claim about equality in neoliberal economic terms between foreigners and citizens. According to him, “it is not about where you are from, but what you can bring.” Of course, he told me, there is the need to protect citizenship, and there are too many expatriates. However, unlike other Gulf countries, where whole sectors of the economy are nationalized overnight, the UAE has proceeded gradually, aiming to balance the population without endangering foreign business. For example, in the UAE there is a three-tiered classification system for businesses based on who they hire. An “A” category company pays the lowest in visa fees because it has incorporated a certain percentage of citizens into its work force. A “B” company does not have enough citizens, but pays slightly reduced fees because it employs workers from diverse national backgrounds. A “C” company, which tends to hire almost exclusively from one nationality, pays the highest fees for visas. So companies can decide which category to which to belong based on their business preferences — in effect they pay more to maintain ethnic strongholds in particular industries. Additionally, Mr. Muhammad, like many other businessmen in Dubai, told me that 51% local business ownership exists only “on paper” and is not very restrictive since side agreements with citizens make the business effectively owned and operated almost exclusively by the foreign partner.

Even though many of my interlocutors in the business community had been in Dubai for decades and had grown children who were planning on continuing their businesses, they all insisted that they were “guests” in the country, that they respected the rights of Emiratis to have more benefits than foreigners, and that they were in no way interested in Emirati citizenship, even if it were available to them. In fact, may of them did not socialize at all with Emiratis and preferred to conduct business and define their social networks and cultural identities through their compatriots, who often also shared linguistic, regional, and religious backgrounds.

Based on this ethnographic evidence, I argue that foreign business elites — despite their assertions to the contrary — are, in effect, unofficial citizens in Dubai. These expatriates, through a disavowal of both political participation and socio-cultural belonging in Dubai, produce room for two seemingly contradictory goals — the preservation of narrowly-defined citizen interests and the production of an open “global city” — to dominate official state discourses and activities. Their neoliberal narratives of economic freedom mask the ways in which foreign elites are complicit with the state in producing social and economic hierarchies that benefit both citizens and wealthy expatriate clients. Foreign business elites participate in the production of the legitimacy of the state and the production of a particular version of “closed” citizenship and national identity. The state satisfies these expatriate clients by affording them particular rights, which include the ability to govern other populations and access to wealth accumulation.

Yasemin Soysal, in her work on Turkish migrants in Germany, argues that contemporary definitions of citizenship are moving outside of national identity. According to her, this post-national model of citizenship comes out of a tension between notions of a territorial nation-state and the drive for universal human rights.^[6]Thus, post-national citizenship is associated with official rights for non-citizens, and erodes the strength of nation-based citizenship claims. However, the example of Dubai challenges this claim. In fact, elite expatriates in Dubai do not threaten national identity and citizenship through their accumulation of particular rights, but rather they cement the idea of an Arab nation-state and help to purify the foreign presence out of Emirati national identity. Elites in this case get certain rights regardless of formal citizenship, but this does not amount to an erosion of the impact of nation-based citizenship and rights upon other less privileged bodies.

Thus immigrants, and especially elites, can be considered alternate or unofficial citizens to some extent within the UAE, and Dubai in particular. However, the convergence of neoliberal rhetoric about choice and free markets in Dubai in state discourses and in foreign business arenas contributes to the lack of needed intervention into the exploitative conditions within which a large percentage of Gulf migrants live. This is noticeable in the Emirati state and wealthy expatriate accounts of working-class laborers’ “choice” in coming to Dubai, the “benefits” for them of Dubai over India or Pakistan, the ability of unhappy workers to return if they choose, and the assumption that, due to pressures by human rights organizations, employees now have more rights than employers in the UAE. Within these narratives, both the state and wealthy elite businesspeople remove themselves from responsibility over the unsafe, unsanitary, and unsatisfactory conditions under which many people in the UAE live. By relegating governance over laborers to wealthy elites, the state abdicates its responsibility over their well-being; by narrating belonging in neoliberal economic terms instead of through politicization or nationalism, elite expatriates mask their own practices of citizenship and governance.