A picture shows the towers of the Jebal Ali Free zone and Jumayrah luxurious area next to Dubai's Media City.
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By most metrics, the plan has worked brilliantly. Dubai's economy is the healthiest in the Middle East, growing at a 16% annual clip and diversifying well beyond oil (which accounts for just about 6% of GDP). Dubai's ports and free-trade zones bustle. The government has built high-tech centers, including Dubai Media City and Dubai Internet City, attracting companies from Microsoft to IBM. A research park called DuBiotech is luring drug companies. The Dubai International Financial Center, a "financial free zone," aims to lead the region's securities exchanges, although there will be plenty of competition for that honor.
Sheik Mo, known for his love of thoroughbred horses, has been on a shopping spree. In recent months his investment vehicles have acquired the Tussauds Group wax museums and a 2% stake in DaimlerChrysler. U.S. purchases include the landmark Essex House hotel and Helmsley Building in New York, and 69 apartment-rental properties in southern U.S. states. And he's clearly not done. Says Alabbar: "For any businessman, you need to operate in the American economy and understand it. That's where a lot of the stuff in the world starts. That's why I am in California." (And to visit his son, who attends college in San Diego.) Perhaps most impressively, the sheik has eschewed the opaque, connection-fueled style of business typical of the Middle East and insisted on Western standards of accounting and transparency.
Dubai's embrace of Western business principles was no match for Western politicians with security fears, either real or politically opportunistic. The Bush Administration, stung by a rebellion in its own party, announced last week that it would review a deal by another Dubai firm to buy a British company, Doncasters, which makes precision parts for U.S. military aircraft and tanks at plants in Georgia and Connecticut.
Senators who want to block the ports deal, such as New York Democrat Charles Schumer, point out that the 9/11 attackers laundered money through Dubai and that the sheikdom participates in a boycott of Israel by the United Arab Emirates, of which it is one sheikdom among several. (Despite the boycott, DP World does business with Israeli firms.) Congressman King, for one, told TIME he wants assurances that al-Qaeda supporters "will not be able to work their way into the company." That task might fall to the chief operating officer of DP World--a guy from New Jersey named Edward (Ted) Bilkey.
Dubai certainly isn't short on big names coming to its aid. Power brokers Bill Clinton and Bob Dole (whose spouse is a North Carolina Senator), along with Madeleine Albright's lobbying shop, have advised DP World. Clinton has described the U.A.E. as a model Middle East government and in 2002 gave two speeches in Dubai, pulling in $450,000. Nor is the Bush Administration unfamiliar with DP World. Critics grouse that Treasury Secretary John Snow's former company, transportation giant CSX, sold its international port operations to DP World in 2004, for $1.15 billion. Dubai also works with the Carlyle Group, the Washington-based investment firm stocked with former government insiders.