Dubai has emerged as a global finance powerhouse, also serving as a tourist center and travel hub between Europe and Asia. The growth is real—presently, 25% of the world’s construction cranes (30,000) are operating in Dubai. Dubai is multicultural, with 85% of its population of 2 million being foreign, and regularly hosting international sports events and Hollywood and Bollywood stars.

But while Western expats flock to the city and skyscrapers reach upwards, locals are becoming increasingly alienated by the foreigners flocking to their homeland and are enjoying precious few benefit from the experience.

First on the economic front, locals are being priced out of all markets. As expats and celebrities purchase the best homes, locals often aren’t even permitted to view the most luxurious homes. Property prices continue to rise (no sign of the credit crunch in the UAE) and natives are shunted into ghettos on the fringes of the city. Arabs are first in line for government jobs, but perk-laden, tax-free jobs in big foreign corporations go to candidates flown in from London.

Then on the cultural front, locals are confronted by a very foreign culture at every turn. Expats flaunt short skirts and skimpy tops and get drunk on the beach, yet local female students require a pass-card to leave the university campus in fully covered black garb. Fashionable restaurants only permit Western clothing and turn away men in Arab costume. Friday is the holy day in Islam, but it’s the day of drunk partying and sexual debauchery for Westerners. And there is almost no cultural integration between the locals and the foreigners.

Compounded by all this is the fact that Dubai is a hereditary monarchy with no parliament. Ordinary people have no way for their voice to be heard except in the streets and mosques were fury is reportedly growing. A terrorist attack could be carried our by a disgruntled local—but not necessarily. Dubai’s high regional profile makes it a likely target for Al Qaeda, which now seems incapable of launching an attack in the West, and who could see Dubai as an easy chance to kill some infidels.

What would happen if just one act of terrorist violence targeted expat tourists or resident professionals?

International investment would dry up; the million tourists who flock here to shop and sun themselves each year would melt away; the footballers and pop stars who have bought exclusive villas on the new Palm Islands development, such as Michael Owen and Rod Stewart, would doubtless move to safer shores.

Moreover, since Dubai is the Middle East’s cosmopolitan melting pot, and its experiment with Islamic capitalism could become the blueprint for surrounding Arab states, its failure would have dire consequences for the entire region.

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