Dark Side of Dubai's Boomtown

November 17, 2006— -- In the world of thoroughbred racing, the ruler of Dubai, Sheikh Mohamed, has spared no expense in making himself a big man.

Jason Levine: It is the sport of kings. He's one of the few people in the game that treats it that way.

The Sheik's personal 747 is a familiar sight in Kentucky, especially around the time of the country's premier Keeneland horse sale.

That's Sheikh Mohamed, without his robes, in the midst of a royal spending spree. He and his brother spent more than $70 million on horses in just two days.

And once back in Dubai, the horses will live in royal splendor in his majesty's stables.

Jason Levine: Money talks, and in his case, he's happy to throw it around.

The sheikh's taking the same no expense spared approach to promoting Dubai around the world.

Prominent figures, including former President Bill Clinton, have been paid hundreds of thousands of dollars to speak, or act as consultants.

President Bush's brother Neil was a guest of the royal family last year.

The sheikh and his ministers say Dubai is a shining example of what can go right in the Middle East.

Dr. Anwar Gargash: Dubai is slowly becoming a cosmopolitan global city here in the Middle East in the Arab world.

And as Dubai grows from desert town to boomtown, again, no expense is being spared.

Just putting up the world's tallest building isn't enough.

Mohammed Ali Alabbar: I think we'd like to be not only the tallest in the world, but the best quality building every built by man.

The building will be twice this height when completed next year.

One hundred sixty floors of the most luxurious apartments and offices the world has ever seen.

All being built, it turns out, by workers who on average make less than a dollar an hour.

Sarah Leah: It's clear that workers are being abused. They're working for virtual slave wages.

Behind the glitzy world of Dubai are some 500,000 foreign workers who human rights groups say live in virtual enslavement.

Sarah Leah: That is how these new, fancy buildings are being built.

A report out just this week from the group Human Rights Watch concludes workers putting up Dubai's soaring towers are being systematically cheated and abused, with the sheikh's government looking the other way.

Hadi Ghaemi and Sarah Leah Whitson prepared the report.

Sarah Leah: You are working in a system where you are not really free to leave your job. You actually need employers' consent to change jobs. You're working in a system where your passport is withheld. And really, if you displease your employer, you are going to find yourself on a plane right back to Sri Lanka or Bangladesh or India.

Most of the workers live in labor camps an hour outside the city in the desert, in a place called Sonapaur, which means city of gold.

There's little gold to be found here.

The men putting up the world's finest buildings live six to eight, sometimes 12, to a room, rooms smaller that the horse stalls in the Sheikh's royal stables.

When we arrived, the men said it was one of the few times outsiders with cameras had been in the camps.

And we wanted to know if his royal highness Sheikh Mohamed had ever been here.

Dr. Anwar Gargash: I cannot confirm that he has or has not.

Brian Ross: I think he would find that his horses have better living conditions than those men.

Dr. Anwar Gargash: I think that's not a fair comment.

Dr. Anwar Gargash, the one and only government official provided to speak with 20/20, says Dubai and the sheikh are doing the best they can.

Dr. Anwar Gargash: I have been to more than one labor camp in Sonapur.

Brian Ross: Would you want to live that way?

Dr. Anwar Gargash: I think that some that are bad and some that are not so bad.

Brian Ross: We were at camps this week that are described as pretty good, and they're quite squalid.

Dr. Anwar Gargash: Okay.

Brian Ross: 8, 12 men in a room, working 12 hour days.

Dr. Anwar Gargash: Okay.

Brian Ross: Is Dubai proud of that?

Dr. Anwar Gargash: No, of course not.

Brian Ross: Then why do you allow it to continue?

Dr. Anwar Gargash: Because, the pace of growth has outstripped our ability. I think like any other city, any other country, we, of course, have growing pains.

Pains being felt by these men, trapped in indentured servitude.

They told us they were deeply in debt because they were forced to pay recruiters in their home countries large fees to get their jobs in Dubai, something that is supposed to be illegal.

And once here, they said, they found they would be making only half the wages they had been promised.

Workers: 600, 600 dirhams, about $163 dollars, a month. On average, less than a dollar an hour.

And even that, Human Rights Watch found, is routinely withheld months at a time.

Sarah Leah: It's considered a way to make sure your worker doesn't run away so you kind of owe him money to keep him on a short leash.

The work in Dubai goes on day and night, usually two, twelve hour shifts, six days a week. A pace Human Rights Watch says has led to a huge death toll.

Hadi Ghaemi: Hundreds are dying, especially falling from these high rises every year.

Brian Ross: You are saying hundreds are dying?

Hadi Ghaemi: Hundreds are dying.

And under the law in Dubai and the entire United Arab Emirates, there are no unions allowed, strikes are illegal, strikers can be fired and sent home.

Sarah Leah: So you basically, you better shut up and do your work and not complain.

But earlier this year, at the site of what will be the world's tallest building, workers went on strike anyway, for two days.

It was a rare, bold protest in front of the building Sheikh Mohamed wants to be the best building ever built by man.

The man in charge says he warned the contractors to improve conditions at the site, but that still, some of the strike ringleaders may have been fired for misbehaving.

Mohammed Ali Alabbar: There's one or two or three got fired because of that, I'm not aware, I'm not really aware of that.

Brian Ross: Is that fair?

Mohammed Ali Alabbar: Well, you know, what Brian, I could lose my job tomorrow, as well.

Brian Ross: You're not making four dollars a day.

Mohammed Ali Alabbar: Well, basically anyone, any level of job who can also get fired if they don't behave.

While Sheikh Mohamed has been busy with his horses and his skyscrapers and his fantasy islands, Human Rights Watch says he and the government of the United Arab Emirates have done little or nothing to protect workers rights.

Brian Ross: You talk about setting high standards. Where are the high standards for the workers?

Dr. Anwar Gargash: We realize very well that we are actually in a state of transition. So to come and say we have a problem, of course we do.

Brian Ross: As it stands today, are they receiving fair treatment?

Dr. Anwar Gargash: I think we have problem. I think we have a problem

Brian Ross: You admit it.

Dr. Anwar Gargash: I think we have a problem, but it's not like we're not doing anything about it.

In fact, just days after we left Dubai, the royal public relations machine was in high-gear, announcing new efforts to enforce labor laws and improve conditions at labor camps.

At long last Dubai's impoverished workers may finally be getting the same attention as the Sheikh's skyscrapers and famed racehorses.