An editorial headline in USA Today asks that cogent question, then adds: "If there is any place in the Arab world that the United States should not have a beef with, it is Dubai. One of seven Persian Gulf states loosely linked into the United Arab Emirates, Dubai is a booming monument to capitalism. Yet this oil rich emirate, known for its opulent hotels and shopping malls, has quickly become a political piñata for Democrats (and some Republicans)".
American politicians have become Dubai bashers, taking cheap shots at a mischaracterized Dubai to suit their ends and stir popular prejudice. Last year an experienced Dubai-based corporation planned to buy a company that managed several of America's major seaports. You would have thought Arab terrorists were about to invade America again. As USA Today notes: "Dubai has become a convenient symbol to stoke fears about global security and globalization. It can be depicted as a terrorist haven, as it was during the ports debate, or a tax haven, as it is now. The image one is left with is rather incongruous, kind of like a Bermuda run by the Taliban".
Truth be told, Dubai, is one of the United Arab Emirates (UAE), a union of seven sovereign sheikdoms, formed when the British withdrew from the Arabian Gulf in 1971. It boasts mountains, beaches, deserts, oases, camel racing, markets and the renowned duty-free shopping of dazzling Dubai, all packed into a relatively small area, home to 2.7 million people, a significant number of which are foreigners, especially south Asians. The British are leaders in the offshore financial sector, many of whom moved here from banks and investment firms in the City of London.
And yes, Dubai is a tax haven and proud of that fact.
Jebel Ali, the first free trade zone in Dubai, in 2003 led the way as a planned offshore financial center. That was followed by another free trade zone in the UAE at Ras Al Khaimah (RAK), another sheikdom, which also launched an offshore financial facility. RAK created an International Companies Registry which allows foreign investors to register offshore companies without the need to establish a physical presence. Jebel Ali offshore center has positioned itself as a tax haven comparable to the Cayman Islands, The Bahamas and Liechtenstein. Some observers have predicted the UAE will become the world center for Islamic finance. With a GDP per capita in 2006 of $45,200, it ranks with the U.S. and Liechtenstein in personal income.
But American politicians on the left have had a field day with the news that Dave Lesar, Halliburton's chief executive, is to set up an office there. They have falsely accused this of being a tax dodge, which it isn't, since Halliburton is Delaware corporation with offices in Texas and elsewhere, thus liable for U.S. corporate and state taxes. The Gulf News welcomes the fact that "...Dubai has scored one of its biggest marketing coups yet in attracting Lesar and Halliburton. The small emirate has worked relentlessly to build a reputation as a regional business center. Halliburton's name carries some sensitive connotations because of its political links in the US and its role in Iraq..." The Dubai government says that as many as a quarter of Fortune 500 global firms now service the Middle East and North Africa from a Dubai base.
So why bash Dubai, indeed? It is one Arab country that is friendly to America and the West, and one that offers real possibilities for offshore investment, banking and commerce of all kinds.
For more about Dubai, see LINKS: http://www.difc.ae/ and http://www.dubaitourism.ae/
Comments