oil wealth

This article exaggerates a bit but it does capture the essence of what it feels like to live here.

Extravagance part of life in the really rich, oil-soaked emirate
THE STAR
July 21, 2008
Oakland Ross
Middle East Bureau

Source: http://www.thestar.com/News/World/article/464057

ABU DHABI–In the imponderable world of unthinkable wealth, it is easy to dream big.

But it doesn’t hurt, now and then, to think small.

Saeed Abdel Ghaffar Khouri was doing a bit of both a few weeks back, when he shelled out 52.2 million dirhams, or $14.3 million – for a licence plate.

Granted, it’s no ordinary plate.

It bears only the single digit “1″ where normal plates carry five numerals, so Khouri’s proud acquisition – purchased at a charity auction – undoubtedly helps its owner stand out from the crowd.

But still – $14.3 million?

It might seem like a lot of cash but this is Abu Dhabi, where 420,000 indigenous inhabitants share in the revenue from 2.5 million barrels of oil a day. They mostly take such transactions in stride.

“They’re astoundingly rich,” said a Western diplomat. “They have to be among the richest people in the world, without a doubt.”

He was referring to the elite, but even the less affluent of this city’s native-born residents are not exactly what you would call strapped.

“A poor Emirati?” said a local journalist, using the term for a citizen of the United Arab Emirates, of which Abu Dhabi is the capital. “I have yet to see one.”

Money talks in every corner of the globe, but nowhere does it speak more volubly than here. With roughly $1 trillion invested abroad – and this was before the price of petroleum began gushing skyward nearly a year ago – this emirate was already the richest place on earth.

People in other countries have probably heard of Dubai, another emirate located a short drive to the northeast, and they rightly associate it with immense wealth.

But Dubai is no Abu Dhabi.

Dubai never had much oil, and what it did have is mostly gone.

Meanwhile, the desert around Abu Dhabi oozes petroleum – enough to last more than 100 years at the current rate of extraction – and this city is poised to eclipse Dubai as possibly the most sumptuous city in the world.

“The oil boom has opened the doors to things that would not have happened otherwise,” said Hassan Fattah, deputy editor of The National, an English-language newspaper here. “Do you realize how far this place has moved forward?”

A recent census found that about 79,000 Emiratis qualify as millionaires, or roughly one person in 10.

Most of these well-heeled folk dwell in Abu Dhabi, and the most prosperous among them are colossally rich.

They are apt to make their homes in the Al Bateen district, a giant checkerboard of massive properties, each occupying several square kilometres of almost priceless urban real estate, each surrounded by ornate walls and elaborate gates.

Among the grandest is the estate belonging to His Highness Sheikh Khalifa bin Zayed al Nahyan, president of the United Arab Emirates and emir of Abu Dhabi.

Glimpsed from outside, the president’s manse could be described as a palace but in fact more closely resembles a large airport terminal.
Five decades ago, Abu Dhabi was still a remote desert outpost populated by a few thousand Bedouin.

The only way to get from Abu Dhabi to Dubai was by camel train across the sand. There was no road.

Oil has changed everything.

“The Bedouin who 50 years ago was walking in the desert?” said a local journalist. “Today, he’s driving a Lexus and wearing a Rolex.”

At a minimum.

Lamborghinis and Rolls-Royces are a common sight along the palm-bordered streets of Abu Dhabi.

Wealthy residents also like to buy thoroughbred horses, polo ponies, racing camels, and falcons for hunting – an Emirati passion. Air carrier Etihad Airways lets passengers carry falcons as cabin luggage.

“The only rule for wealth management here is, if you’ve got money, spend it,” said the local journalist. “The money doesn’t just stay in the United Arab Emirates. It goes overseas to chalets in Switzerland, homes in the United States.”

Even Abu Dhabians who aren’t downright rich do fine, thanks to a government that provides free education right through university, awards houses gratis to Abu Dhabi citizens when they marry, and dispenses long-term, interest-free loans to its people. It also pays very high salaries for civil service jobs, about 90 per cent of which are filled by native-born Abu Dhabians.

“This is the ultimate welfare state,” said the local journalist.

Meanwhile, the territory’s labour supply is mostly imported – from construction workers to hotel staff to office workers – and outnumbers natives by more than two to one. Many imported workers dwell in crowded labour camps but many foreigners live very well thanks, in part, to an absence of taxes.

“The lifestyle is very good,” said Pam Simmons, one of about 12,000 Canadians who now call the Emirates home. “You think you’ll save money five times over, but no. Your lifestyle changes.”

Housing, however, can be extremely costly and is getting dearer by the day, as soaring oil revenues fuel inflation.

“Prices have gone up tremendously,” said Tamara Trinka, an Abu Dhabi real estate agent originally from the United States. “In some places, they have doubled in the last year. But it’s still a great place to raise a family.”

Or a fortune.

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