DUBAI - The Non-OPEC Countries - Part 5 - The Emirate Of Dubai.

The UAE's federal super-structure has no authority over the petroleum sector and related industries in Dubai or in the other member emirates. Each of the emirates has its own government and petroleum department or national oil company. There is no co-ordination among the seven emirates concerning their petroleum resources.

The current UAE Minister of Petroleum and Mineral Resources, Obeid Bin Saif Al Nasseri, is an Abu Dhabian who belongs to the powerful Abu Dhabi Investment Authority (ADIA). When he attends meetings of OPEC, OAPEC, the GCC or other multilateral institutions, he is formally to be recognised as representing the UAE, which by implication should include Dubai and the others. But in reality this is not the case. Before he makes a commitment in the name of the UAE, he must get instructions from no authority other than Abu Dhabi's Supreme Petroleum Council (SPC). And none of the other emirates would be bound by such a commitment.

The decision making system in Dubai is fairly simple, with those in charge of the petroleum sector being a handful of men controlled by the emirate's strongman, Shaikh Mohammed Bin Rashid Al Maktoum, who holds several positions apart from his being the local crown prince and the UAE's defence minister.

Shaikh Mohammed Bin Rashid Al Maktoum: Dubai under the Maktoums is more of a family "corporation" than a state. In describing the "corporation", one British expatriate has said the Maktoum brothers function as follows: Shaikh Mohammed, the third and most favoured son of the late Shaikh Rashid, is "the CEO". Shaikh Maktoum, the eldest and the current ruler of Dubai, is the "chairman". Shaikh Hamdan is "the chief of the landed gentry" as well as the treasurer. Shaikh Ahmad, the youngest of the four and in charge of security, is "the playboy" who is often abroad.

The crown prince of Dubai since late 1990 and UAE defence minister since the early 1970s, Mohammed is the day-to-day ruler of the emirate. Chairing the most vital departments, he controls all the sectors in Dubai, and directs the family's lucrative horse-breeding business. His post as federal defence minister is a counter-weight to that of Abu Dhabi Crown Prince Shaikh Khalifa Bin Zayed, who is the deputy supreme commander of the UAE armed forces. Mohammed holds the rank of general.

Born in 1949, Mohammed received a military education from the Mons Officer Cadet Training College and Sandhurst in the UK. He also studied at Cambridge. He began his career as director of the police and public security in Dubai before the UAE was created. He founded a 6,000-strong army for Dubai. He became UAE minister of defence in 1972.

Mohammed has been worried since 1997 that, despite the glitz and glitter that characterises Dubai, financially the emirate has been barely breaking even. It is doomed to spend and expand in luxury. To cut costs, in late he got Dubai's army to be integrated into the federal system of Abu Dhabi. This involved a trade off under which Shaikh Mohammed asked for and got an agreement for Abu Dhabi to supply natural gas by pipeline to Dubai as from June 2001, among other things.

Mohammed has been the effective head of the Dubai Petroleum Department since 1982 and as such he controls the hydrocarbon sector and the related downstream industries. He has acquired wide technical and marketing knowledge of the petroleum business, and now has a grasp over the complex subject which few citizens in Dubai could emulate. His key aide in petroleum marketing is a British expatriate, Rtd. Brig. Barclay, who works from his UK home most of the time.

"The Boss", as Shaikh Mohammed is known by aides, has keen interest in the financial and business affairs of Dubai, which are the main portfolios of his elder brother Hamdan. He has nominated the CEOs of businesses which the Dubai government owns or controls. It was at his initiative that Emirates Petroleum Products Co. (EPPCO) was established in Dubai in 1980 as a products marketing unit.

Likewise, Emirates National Oil Co. (ENOC) was set up in 1993 to invest in upstream and downstream ventures. While the upstream ventures are to be abroad, such as its 69.4% stake in Dragon Oil of Ireland which has two oil producing fields in Turkmenistan, ENOC's downstream activities are located mainly in Dubai and Fujairah; and has a 120,000 condensate splitter in Jebel Ali on stream since 1999.

Mohammed was behind the Jebel Ali free zone, Emirates Airline and various other projects. He was behind the plan, launched at the beginning of 1997, to raise the non-oil sectors' contribution to Dubai's GDP from 81.2% in 1996 to 100% by 2015. He is the chairman of the Dubai Economic Development Department, with its CEO being economist Mohammed Ali Alabbar. Shaikh Mohammed is also behind many annual events held in Dubai and attracting a huge number of people, such as the international air shows, conferences and exhibitions, the famous Dubai Shopping Festival, etc. Extensive facilities for such events and a plethora of five-star hotels - the amazing Burj Al Arab which is the world's most luxurious hotel with the world's most expensive suites, is one example - have attracted high profile meetings to Dubai. The annual IMF/World Bank meetings will be held in Dubai in 2003. He has consolidated Dubai's position as a leading sports centre as well.

On Jan. 27, 2000, Mohammed issued an order granting all GCC nationals "the same rights and responsibilities to practice trade in the emirate as those enjoyed by UAE citizens". Previously no non-UAE national could hold a general trade licence; and GCC nationals were limited to owning one commercial and one residential property. The edict implied regulations covering company ownership could be changed. Until then non-UAE nationals could not own more than 49% in limited liability companies. Property ownership/lease regulations for foreigners are in the process of being relaxed, something that is likely to lead to considerable investment in Dubai real estate.

Mohammed can be tough, too, and can reach anyone in Dubai. On Feb. 20, 2000 he dismissed the entire management of Dubai courts as, after a surprise visit, he found offices empty and managers absent. The director of the criminal laboratory at Dubai police HQ was also sacked. After his tour, he issued a warning to staff at all government departments, ordering them to abide by official working hours and improve performance. He issued a final warning to the assistant undersecretary at the defence ministry for being absent from his office before 9.30 am.

Having made the world's free trade Internet City a reality a year later, Mohammed said on Oct. 29, 1999: "My vision is very simple. In the future, all commercial action will be in cyberspace. But the cyber world will need a ground base on this physical world...and I want Dubai to be the best physical location in the world for any and every virtual company". Among incentives there are 100% foreign ownership and 50-year renewable land leases at low prices, together with blanket exemption on taxes. This zone will house an Internet university and a research and development centre.

He would not stop there, as Shaikh Mohammed now rules Dubai through the world's first e-government. This is optimising the day-to-day operations of government departments and giving the residents easy access to public services. Since late 2001, all departments have implemented the initiative which hinges on synergy between government and the private sector. Residents can apply for driving licences, IDs, work permits and trade licences through the internet. Likewise they can file complaints, use credit card numbers to pay their dues, and so forth.

Shaikh Mohammed has a unique passion for horse racing. He and his brothers have some of the fastest thoroughbreds in the world. They have dominated British horse racing for more than 16 years. Their lucrative racing interests extend to Australia and the brothers are described as the world's most dominant thoroughbred owners. The Al Quoz racing stables are located near Jebel Ali in a cluster of inconspicuous buildings with whitewash walls and mud-red tiled roofs. The stables not only house some of the finest thoroughbreds in the world, but they are also the headquarters of Godolphin - the Mohammed-inspired racing operation.

The Mohammed Bin Rashid Techonology Park, one of his projects announced on May 21, 2002 by Dubai's Ports, Customs and Free Zone Corp, is to be built on a 3-sq-km site adjacent to Jebel Ali Free Zone (JAFZ). The park is to provide international companies with R&D presence in the region - starting with technologies in water desalination, treatment, energy, oil and gas exploration and insulation. The park's soft opening is schedule for late 2003.

In March 2002 he made one of this sons, Shaikh Maktoum Bin Mohammed, head of the board of directors of another free zone called Dubai Technology, e-Commerce and Media City. Two other sons of Shaikh Mohammed, Rashid and Hamdan, had in mid-2002 attended the UK royal military academy at Sandhurst for one year.