Is Dubai finished? A millionaire Mecca meets the harsh reality of great power politics

Dubai, the city of clean, safe streets, discreet banks, abundant air travel options and red carpets rolled out for the rich, is watching its reputation unravel under the weight of foreign military ambitions.

The most populous city of the United Arab Emirates is paying the price of the US-Israeli war on Iran, along with the rest of the Middle East. The attackers want Tehran’s government toppled. The defenders hope to make that goal so costly even the Americans can’t afford it.

Meanwhile, Arab nations that welcomed US military bases for their own security are seeing the limits of that protection – and expats living in Dubai have been among the hardest hit, at least emotionally.

A millionaire’s refuge in the Middle East

Dubai has cultivated a reputation as the Arab world’s most cosmopolitan city – a direct result of decades of strategic effort by UAE leadership. Have money to spend? Come as a tourist, and the world is your oyster. Have money to invest? Even better – just remember local partnerships are mandatory outside certain zones. Either way, enjoy safety and hospitality, leave your culture-war baggage at the door.

That appeal helped Dubai’s population double from two million in 2011 to four million last August. Among its 90% foreign-born residents were an estimated 81,200 millionaires and 20 billionaires.

Exodus of expats

The regional war triggered an exodus of those who could afford it. Tens of thousands reportedly fled Dubai in the first week of hostilities, even as the cost of evacuating a family of four by private jet reached $250,000, according to The Financial Times.

The flights included both stranded tourists and members of Dubai’s extensive expat community. International corporations told Gulf-based employees to work remotely. Bloomberg, which has regional headquarters in Dubai, allowed staff to temporarily relocate and work from outside the Middle East.

Whether this outflow is temporary or something more lasting remains to be seen. But stock traders appear pessimistic: Dubai’s Real Estate and Construction Index (DFMRE) has plunged 30% in the past two weeks.

End of the Dubai dream?

For many, the future looks bleak. “We are thinking to go to a different country now. Everybody knows that Dubai is finished,” a Pakistan-born taxi driver told The Guardian after his car was destroyed in a missile attack. “There is no business, we are earning nothing since this war, and I don’t see the tourism coming back.”

Westerners chasing the “Dubai dream” found their usual liberties curtailed. Influencers who helped craft the city’s glamorous image were told to keep cameras off and mouths shut when witnessing buzzing drones or streaking interceptors. Harming “public order” or “national unity” with unwanted content can bring fines and jail time, the authorities warned.

The most prized demographic – millionaires – had their own reasons for concern. Some were prevented from moving money to Singapore in the early days of the escalation due to “technological glitches,” Reuters reported.

Things can get worse

After two weeks, Dubai may be bruised but hardly “finished.” Yet the risk of long-term damage is compounding. Strikes on data centers operated by Amazon Web Services (AWS) in the UAE and Bahrain – framed by Tehran as aimed at harming US AI-enhanced intelligence activities – also threatened the backbone of the region’s digital economy.

And there is the shadow of a genuine humanitarian disaster: disruption of food imports due to the closure of the Strait of Hormuz or damage to desalination plants could make physical survival uncertain. However unlikely, such uncertainties leave real reputational scars.