DUBAI, United Arab Emirates - Snow skiing in the desert? Sure. The world’s largest shopping mall and the earth’s tallest building? Build them. An under- sea luxury hotel? Why not?
Nothing seems impossible these days in this desert kingdom on the north coast of Arabia.
The biggest oil-price boom of a generation is under way, proving wildly wrong predictions by the U.S. Department of Energy last year that oil prices would decline to $23.57 a barrel.
Prices hit all-time highs of $57.70 per barrel in New York on Friday, and some analysts said prices could rise as high as $105 per barrel. The price closed Friday at $57.27, also an all-time high.
Analysts predicted that regular self-serve gasoline would cost more than $2.25 per gallon within weeks and reach $2.40 by Memorial Day.
Every time motorists fill up at more than $2 a gallon in the United States, the swishing sound you hear in this desert kingdom is billions of fresh petrodollars pouring in. Oil profits are being spent with such relish that Dubai’s economy grew last year at a rate of 16.7 percent, compared with U.S. growth of 4.4 percent and China’s 9 percent.
It’s not just Dubai that is being transformed by the world’s — especially China and India’s — thirst for oil.
Petrodollars are helping repair Russia’s tattered economy and giving President Vladimir Putin an excuse to avoid needed reforms, plus a way to revive Moscow’s influence on the global stage.
In Venezuela, President Hugo Chavez is using the oil bonanza to beef up his military, thumb his nose at Washington and polish his populist credentials with giveaways to a restive population.
But it’s Dubai’s freewheeling economic vision — and lack of any democratic opposition — that has proved a magnet for investments by the newly wealthy oil rich.
“We don’t bother ourselves with politics, and you don’t hear people talking about politics here. In the coffee shops and restaurants and shopping malls, all they’re talking about is making money,” said Ali Ibrahim Mohamed, a top official in Dubai’s department of economic development.
There was a time when oil barons of the Middle East invested much of their newfound wealth in the United States. But that was before September 11, 2001, and their fears of an American backlash toward the Arab Middle East. Since then, they have kept their money closer to home.
Now flush with cash from the latest oil bonanza, they are sinking huge sums into a round-the-clock construction frenzy that has transformed Dubai, a once-quaint port of pearl divers and gold traders, into a high-tech capitalist dynamo that combines Singapore, Disney World and Oz.
In its drive to create an international business center and deluxe tourist destination, Dubai already boasts the five-year-old Burj Al Arab — the world’s tallest hotel, at 1,053 feet — taller than the Eiffel Tower and only about 200 feet shorter than the Empire State Building.
Not to be outdone, the neighboring sheikdom of Abu Dhabi just opened the 1.18 million-square-foot Emirates Palace Hotel at an estimated cost of $2.8 billion. It took 20,000 workers laboring day and night three years to complete it.
While the interior of the Burj is covered with 86,114 feet of 22-carat gold leaf, the marble walls of the Emirates Palace, which originally was intended as a guesthouse for Persian Gulf heads of state, are said to have used up a year’s supply of gold from South Africa.
The Burj offers a “pillow menu” and specializes in camel milk rice pudding. “We make sure we surpass expectations with all these little things,” said Nicki Allitt, a spokeswoman for the Burj.
The Emirates Palace features “bath caviar,” $15,000 cognacs and 50-inch plasma screens in each room, with a touch-screen pad that controls everything from air conditioning to wake-up calls.
Rooms are priced accordingly — from $1,361 to $10,073 a night at the Burj and from $5,989 to $12,251 a night at the Palace.
The “edifice complex” sweeping Dubai and to a lesser extent, Abu Dhabi, does not end there.
Companies closely linked to Dubai’s royal family, whose approval is necessary for any project in the emirate, are constructing the world’s first underwater luxury hotel, called the Hydropolis. Built three miles offshore, guests will be whisked to the complex by train through a Plexiglas tunnel.
Then there are the three massive man-made archipelagos under construction in the Gulf to make way for hotels, shopping centers and private residences.
The Mall of the Emirates, the largest mall outside North America, is scheduled to open in September and includes the Middle East’s first indoor ski slope.
It will be surpassed in 2008, when Sunny Mountain Ski Dome opens at the massive Dubailand entertainment complex. It will be the world’s biggest indoor ski resort, covering 15 million square feet, and will have 6,000 tons of artificial snow.
Dubai’s build-it-and-they-will-come vision is best illustrated by what transpired at a meeting two years ago between the ruler of Dubai, Sheik Maktoum bin Rashid Al Maktoum, and his consultants.
Ali Ibrahim Mohamed said that when the consultants proposed building the world’s largest mall, the sheik replied: “As long as you’re doing that, why don’t you just build the tallest building in the world?”
So ground has been broken for the half-mile-high Burj Dubai, to be finished in 2008. It will include a hotel, offices, residences and one of the largest shopping malls in the world, with about 1,200 stores. Two miles from the Burj Al Arab hotel, this glass-and-aluminum tower is being designed so extra floors can be added, just in case someone else tries to surpass it.
Mohammed al-Fahim, a BMW dealer in Dubai, is confident the towers will not become a target for hijacked airplanes or bombs intended to disrupt pro-Western playgrounds.
The economic success of the emirates has banished once and for all their loose financial laws that allowed the terrorist network al Qaeda to launder its funds easily through those channels.
“We want the opportunity to show the world we can tolerate and welcome other investors in our region,” Mr. al-Fahim said. “We want recognition for our achievement, and what we have achieved in our generation no other has ever done.”