Reporter's Notebook: Dubai

UNITED ARAB EMIRATES, Feb. 8, 2005 — -- For many Americans, the only time they run into the words United Arab Emirates is during an online transaction when it appears just above United States in the drop-down country menu. But once you visit Dubai -- the shiniest and newest sliver of this tiny Middle Eastern country -- you'll realize rather quickly that it will be a city and a country we will all soon become familiar with in one way or another.

You can see it as you begin nearing Dubai in the air -- either from the downward-pointing cameras that Air Emirates allows its passengers to sneak peeks from or the old-fashioned windows. From the minute you set foot on the tarmac, it becomes clear that the skeletal objects you saw dotting the landscape are massive cranes for construction. The entire city is growing -- in every direction, from condominium and apartment high-rises to hotels to beach villas to planned communities on manmade islands so big they are visible with the naked eye from space.

Dubai's airport features raffle tickets for Ferraris, Porsches, Harley-Davidson motorcycles and bars of gold, along with an enormous mall of duty-free shops that employs more than 1,100 people and generates more than $300 million in revenue a year. It's the first indication you have that you are walking into some sort of combination of Disneyland (disclaimer: Disney is the parent company of ABC News) and Las Vegas (without the casinos) -- to an exponential degree.

Dubai is a tiny coastal city along the Gulf. I hesitate to say Persian Gulf because there is some dispute in these parts whether it should be called the Persian Gulf or the Arabian Gulf.

Before you think that the bread and butter for this town is oil, think again. The United Arab Emirates' capital city, Abu Dhabi, has the oil. Dubai knows that its fields will dry up in less than 20 years, so it has launched perhaps the most ambitious plan ever to try and make its sand worth something. As of now, less than 6 percent of Dubai's economic success comes from oil. Dubai is planning -- in the space of five years -- to triple the number of people visiting it to 15 million, and increase the number of people living in it to 3 million.

One of the ways that this trading town along a creek has reformulated itself into a megalopolis is by throwing everything and the kitchen sink as incentives for companies to invest in and relocate to Dubai. There are free-trade zones where 100 percent foreign ownership is allowed, with no individual or corporate taxes or import/export duties whatsoever. The zones come in the shape of large office parks with unimaginative names like Internet City, Healthcare City, Media City and Knowledge Village, but inside the clusters of companies it's anything but dull.