Speaker 1: Welcome to odd Lots. I'm Tracy Alloway, Executive editor of
Speaker 1: Bloomberg Markets, and I'm Joe Wisenthal, Managing editor of Bloomberg Markets. So, Joe,
Speaker 1: I have a special treat for you today. We are
Speaker 1: going to be doing an entire episode essentially on my
Speaker 1: commute to work. Oh uh, And you are not based
Speaker 1: here in New York and you're in Abu Dhabi, So
Speaker 1: this is like a very Tracy centric episode, right, well,
Speaker 1: hopefully not um, but I am an Abu Dhabi and
Speaker 1: at least once a week I drive over to Dubai.
Speaker 1: It's about an hour, hour and a half, sometimes two hours,
Speaker 1: depending on how bad the traffic is. And it goes
Speaker 1: along this one road called the E eleven Highway, and
Speaker 1: it's kind of a famous road over here. Why is
Speaker 1: it famous? Is it just because it because it connects
Speaker 1: the two cities? I'm guessing it connects the two biggest
Speaker 1: cities in the U A E. It's also the U.
Speaker 1: A e S longest road and it kind of stretches
Speaker 1: and weaves through a bunch of other Gulf states. And
Speaker 1: what we're going to be talking about today is the
Speaker 1: history of how that road came to be and I
Speaker 1: promise you there is actually a markets angle in this
Speaker 1: awesome well I'm looking forward to it. Who are who
Speaker 1: are we talking to? All right? So, Joe, we have
Speaker 1: joining us today, Matthew McLean. He has a PhD candidate
Speaker 1: at New York University and a specialist in Middle Eastern studies.
Speaker 1: So the perfect person really to walk us through the
Speaker 1: history of this road. Great, let's get to it. Thanks
Speaker 1: for joining us, Matthew. Why don't you set the scene
Speaker 1: for us, you know, the road starts to get built.
Speaker 1: I think it was sometime in the nineties sixties. What
Speaker 1: did this area, the United Arab Emirates actually look like
Speaker 1: at the time? All right? Well, at the time, first
Speaker 1: of all, it wasn't the yet the United Arab Emirates.
Speaker 1: It was still known as the Trucial States, from the
Speaker 1: truces that the various Shaptims had signed with the British
Speaker 1: Empire and the eighteen hundreds. First a truce on c
Speaker 1: too to prevent piracy or what was called piracy and
Speaker 1: what some might call legitimate commercial competition for the British.
Speaker 1: And then there was a second truce that was signed
Speaker 1: later that century to avoid fighting on land, which wasn't
Speaker 1: always observed. But the point is that this is where
Speaker 1: the the area of the Trucial States got its name from.
Speaker 1: It was peripheral to the world economy. It was even
Speaker 1: it was the periphery of the periphery in some ways.
Speaker 1: It was governed from British India. The only reason the
Speaker 1: British were really there was to protect the maritime and
Speaker 1: land approaches to India. So it was pretty much ignored
Speaker 1: by by the British. But nevertheless it had an important role,
Speaker 1: which was to produce pearls and pearling in the Gulf.
Speaker 1: Area was the mainstay of the economy at least through
Speaker 1: the nineteen twenties, and then the pearling economy collapsed and
Speaker 1: in the thirties and forties because of the Great Depression
Speaker 1: and World War Two. The area was fairly isolated in
Speaker 1: some regards, at least it's perceived that way, compared to
Speaker 1: what it is today. Of course, there were many still
Speaker 1: maritime connections to India to East Africa. There was overland
Speaker 1: trade as well. Of course, people made the Hajj to Mecca,
Speaker 1: but it was very much a part of the Indian
Speaker 1: Ocean world. There were no paved roads until Dubai City
Speaker 1: started building some in in the in the late fifties,
Speaker 1: and one of the oil companies built a road for
Speaker 1: its own equipment in the western region of Abu Dhabi
Speaker 1: around the same time. So most transportation was by camel,
Speaker 1: by donkey, by foot, and of course by sea. So
Speaker 1: you mentioned oil just then. So something did happen in
Speaker 1: the area in the sort of nineteen fifties early nineteen
Speaker 1: sixties that eventually ended up changing the landscape, and uh
Speaker 1: was the catalyst for the construction of this road that
Speaker 1: I now shuttle back and forth on every day. Right. Yes, oil,
Speaker 1: of course had already been discovered in the region in
Speaker 1: Iran and I think Night and then later in Bahrain
Speaker 1: and Kuwait and Saudi Arabia and so on, but the
Speaker 1: Trucial States were we're latecomers to the game. It was
Speaker 1: the the oil in the in the Emirates is pretty
Speaker 1: deep underground relative to other areas in the Gulf, so
Speaker 1: it was harder to get to um. But oil requires
Speaker 1: a number of things that were at the time new
Speaker 1: in the Trucial States. Oil concessions which were signed with
Speaker 1: individual shakedoms required, for example, knowing where the borders of
Speaker 1: a shakedom were and no one had ever drawn formal
Speaker 1: land boundaries on a map before because it simply wasn't necessary.
Speaker 1: It was it was often known where the boundary was.
Speaker 1: Roughly speaking, there were some areas, of course that we're
Speaker 1: in dispute, but those areas you know, had ablem solving
Speaker 1: mechanisms and other mechanisms of governance that you know had
Speaker 1: developed over time organically to resolve disputes on a local level.
Speaker 1: But borders were a really new thing, and this was
Speaker 1: one of the things that oil brought in because you
Speaker 1: have to know where you're allowed to drill. So what
Speaker 1: it this means? So talk about the road specifically, oil
Speaker 1: required the creation of borders. Why specifically this road, well,
Speaker 1: the road in some ways is is only secondarily related
Speaker 1: to oil. The road was built for political reasons, not
Speaker 1: for economic reasons. And then when I'm talking about the road,
Speaker 1: I mean from Dubai to Ross Alchema, so in the
Speaker 1: northern part of the U A E what today is
Speaker 1: the U A E. But when oil was discovered in
Speaker 1: Abu Dhabi, of course people from the Trucial states had
Speaker 1: gone to Bahrain and Kuwait and Saudi Arabia to work
Speaker 1: in those countries were already producing oil, so there was
Speaker 1: a sense of what oil could bring and when oil
Speaker 1: was exported from Abu Dhabi, but the ruler at the time,
Speaker 1: Shake Shock Boot, didn't spend the money that it brought in.
Speaker 1: Of course, there were these great expectations which went unfulfilled
Speaker 1: and this created a huge gap in expectations versus reality,
Speaker 1: which create created the possibility for political descent. Now, the
Speaker 1: second thing that was happening at the time was that
Speaker 1: as people in the Trucial States moved to the oil
Speaker 1: rich countries of the Northern Gulf, Kwait, in Bahrain, but
Speaker 1: especially Kuwait, they encountered teachers from Egypt, from Palestine, from
Speaker 1: Iraq and so on, and workers from those countries as well,
Speaker 1: and they brought with them ideas like Nasarest, pan Arabism, socialism, communism,
Speaker 1: and all of this was seen as a threat to
Speaker 1: the existing political order. So the British what they decided
Speaker 1: to do was to spend more money on development of
Speaker 1: infrastructure in the region, which they had never really done
Speaker 1: before and over a hundred years of their time there.
Speaker 1: But also the Arab League, led by Nazaars Egypt, also
Speaker 1: wanted to spend money on development because this, of course,
Speaker 1: development is a way to win hearts and minds, as
Speaker 1: people say today. So when the Arab League sent a
Speaker 1: mission to assess development needs in the Trucial States, the
Speaker 1: British got very worried. The Arab League decided that a
Speaker 1: road would be the most visible project with the most
Speaker 1: immediate impact for the public to see, because obviously defect it,
Speaker 1: you know, it would it's there, people experience it in
Speaker 1: daily life and so on. So the British in response
Speaker 1: decided that they would build the road. What happened, to
Speaker 1: make a long story short, is that the British actually
Speaker 1: when the rulers accepted two of the rulers accepted the
Speaker 1: opening of Arab League offices in their states, in Charga
Speaker 1: and Russell Cama. The British decided that this was completely unacceptable,
Speaker 1: that Arab League development offices would be used for political
Speaker 1: subversion and propaganda. And you know, eventually there would be
Speaker 1: an armed rebellion to kick the British out of the
Speaker 1: Trucial States, just as was already happening in in Aiden,
Speaker 1: in Yemen and so on uh and in southern Oman.
Speaker 1: And if the British lost the Gulf of course, this
Speaker 1: would potentially bring the Gulf into the orbit of the
Speaker 1: Soviet Union during the Cold War, which would be disastrous
Speaker 1: for the West. So even something as small as a
Speaker 1: development office in the small towns of Sharjah and russel
Speaker 1: Cama in nineteen six five was seen as potentially a
Speaker 1: major threat to the Western world. Of course, part of
Speaker 1: this in the British diplomatic correspondence is diplomats on the
Speaker 1: ground in the Gulf who were worried, you know, on
Speaker 1: about their local position. But they're trying to get the
Speaker 1: attention of their superiors in London, and so they have
Speaker 1: to paint this apocalyptic picture that people in London will understand,
Speaker 1: and they, of course everyone in London understands, well, this
Speaker 1: is the Cold War, so yes, it has implications for
Speaker 1: that and we should do something. So the British arranged
Speaker 1: the overthrow of the ruler of Sharja because he was
Speaker 1: the most pan Arabist, the most nocerist, the most anti
Speaker 1: British of all of the rulers. He was exiled to Cairo.
Speaker 1: He was replaced with someone more amenable to British interests.
Speaker 1: The problem, though, was that the Arab League immediately announced
Speaker 1: a boycott of the Trucial States Development Council that was
Speaker 1: going to fund the road, and the British themselves didn't
Speaker 1: have enough money to build the road. So this then
Speaker 1: created a problem because again they they need to fulfill
Speaker 1: people's expectations of development and people by now we're expecting
Speaker 1: the road. So for political reasons, the road had to
Speaker 1: be built by someone. The British of course wanted it
Speaker 1: to be themselves. And one of the reasons for this
Speaker 1: is that, of course, if you control development policy, you
Speaker 1: control who gets the contracts, and the British government could
Speaker 1: spend money giving a contract to a British company, ensuring
Speaker 1: that the money would then circulate right back to Britain,
Speaker 1: and this is true of development policy everywhere and at
Speaker 1: all times. Basically, what happened was that King Faisal of
Speaker 1: Saudi Arabia stepped in to say that he would build
Speaker 1: the road, but in respect of the Arab League boycott,
Speaker 1: he would not funded through the British run Trucial States
Speaker 1: Development Council. He would finance it independently, hiring his own
Speaker 1: contractors and construction firms, which he did. I mean, there's
Speaker 1: the bin Laden Company, the largest construction company in Saudi
Speaker 1: Arabia that that wound up building the road. But the
Speaker 1: key thing is that while the road was built in
Speaker 1: order to satisfy political expectations and social expectations of development,
Speaker 1: and these expectations were created by the oil boom in
Speaker 1: other countries and then in the region, and then lack
Speaker 1: of a similar boom in the Trucial States, the road
Speaker 1: was not built for economic reasons, and as British diplomats
Speaker 1: continually pointed out at the time, there was no justification
Speaker 1: for the road. I mean, so it was built, Matthew,
Speaker 1: they were actually against it, right, because at the time
Speaker 1: I think the Trucial States had something like fewer than
Speaker 1: a hundred cars, Is that right? Yeah, there were a
Speaker 1: few fewer than a hundred. In russ Al Camo, which
Speaker 1: is the northernmost emirate, I think there were ninety one
Speaker 1: if I remember correctly, private of at cars and registered taxis. Um.
Speaker 1: Of course there were more in Dubai and Charge and
Speaker 1: so on. In the diplomatic correspondence you can see a
Speaker 1: divide between the British diplomats and the political offices who
Speaker 1: wanted the road to be built, and then the Middle
Speaker 1: East Development Division, which was all these economists and in
Speaker 1: development experts who thought that, you know, the road would
Speaker 1: cost over a million pounds. But like any other investment,
Speaker 1: you have to have an adequate return on investment, and
Speaker 1: there's and the invest the return on investment for a
Speaker 1: road is the additional economic activity generated by improved transportation.
Speaker 1: And they thought that given the level of economic production
Speaker 1: in the region at the time, there's no way that
Speaker 1: a one million pound expenditure on a road would ever
Speaker 1: justify itself. So take it forward a bid and the beginning,
Speaker 1: you know, from the beginning this looked like purely wasteful.
Speaker 1: How did that develop? I mean, at what point did
Speaker 1: that turn around and become a significant thing? Well on
Speaker 1: the point did they realize that it could be a
Speaker 1: much bigger deal than they would have otherwise thought, right, well,
Speaker 1: right before the actual construction on the road began. On
Speaker 1: the main section from charge of the Russell came the
Speaker 1: longest section. Right before it began, Shakes had been sultan
Speaker 1: and Hagian came to power in Abu Dhabi, and unlike
Speaker 1: his brother who he had overthrown, Shakes I had actually
Speaker 1: did spend Abu Dhabi's oil money on development. So as
Speaker 1: soon as the road was built, of course, the justification
Speaker 1: was there because now the money was flowing throughout the
Speaker 1: entire region, and all of the political reasons why the
Speaker 1: road had been built in the first place, we're now
Speaker 1: kind of irrelevant because suddenly everyone had almost an overabundance
Speaker 1: of money. You know, people returned from Kuwait and Bahrain
Speaker 1: and so on to take up jobs at home. The
Speaker 1: political situation had changed absolutely degrees. So suddenly you get
Speaker 1: this oil boom essentially and all this money flowing in.
Speaker 1: You have this one big road, but lots of other
Speaker 1: roads obviously get built in subsequent decades. In fact, a
Speaker 1: lot of people nowadays say that the UAE is pretty
Speaker 1: much at driving culture in some senses. It's like living
Speaker 1: in Texas, right, no one walks anywhere, You have to
Speaker 1: have a car. How did that change society over here, Well,
Speaker 1: there's a lot of there's a lot of things that
Speaker 1: happened that changed. First you can look in cities like
Speaker 1: well like Dubai for example, where you have an urban
Speaker 1: core around Dubai Creek, which, of course now there are
Speaker 1: streets and roads, very narrow ones, but was built for walkability,
Speaker 1: was built before cars were prevalent in the region, and
Speaker 1: the urban forum and street patterns in bur Dubai and
Speaker 1: Darra have buy and large been kept. Abu Dhabi is
Speaker 1: a different case because the old Abu Dhabi was was
Speaker 1: completely demolished and the only building left really is Cassarl
Speaker 1: Hussan and now it's a city on a on a
Speaker 1: grid with with these huge city blocks and so on.
Speaker 1: But one of the things that happened was that as
Speaker 1: you know, people in these old neighborhoods around Dubai Creek
Speaker 1: and so on, you know that you could walk every
Speaker 1: day from your your home to your the homes of
Speaker 1: your brother and your sister and your extended family, and
Speaker 1: and people really knew each other and they interacted a lot.
Speaker 1: Then as people moved out as the Emirati population as
Speaker 1: they weren't known as Emeratis yet, but but the people
Speaker 1: who would become Emierati citizens, as they got cars and
Speaker 1: so on, these neighborhoods became unsuited for modern living and
Speaker 1: the houses were small and and so on, so they
Speaker 1: moved out to more suburban neighborhoods. And this is a
Speaker 1: pattern that's seen in the U a E. Among Emierati
Speaker 1: citizens from the nineteen sixties and it continues until today
Speaker 1: that they continually have moved out of the urban core
Speaker 1: further and further and further, continually leaving older neighborhoods, which
Speaker 1: then expatriots move into and so on. And of course
Speaker 1: automobiles are what makes this possible. Perhaps some day we'll
Speaker 1: see and return of Emierraates to to the urban core,
Speaker 1: and you know, maybe Emirati artists and hipsters and so
Speaker 1: on will gentrify older neighborhoods. And yeah, hearing you talk
Speaker 1: about that, it kind of reminded me. I was born
Speaker 1: in Detroit and people talk a lot about the big
Speaker 1: highway that intersected the city, and you know, there was
Speaker 1: a massive white flight and the core of Detroit was
Speaker 1: sort of emptied. And then now after decades, there is
Speaker 1: some very tiny reverse migration going on. But it seems
Speaker 1: like this is a pattern we see around the world,
Speaker 1: destabilizing effects of giant highway projects on city corps. Yes, yes,
Speaker 1: I mean this is not something that's unique to the
Speaker 1: Emirates at all. It's it's happened all over the world.
Speaker 1: Um that I think one of the things that is
Speaker 1: maybe a little bit different in the u a e.
Speaker 1: Is that you have the that you have immigrants coming in,
Speaker 1: you know, expatriate workers who are renting out these houses
Speaker 1: and older neighborhoods, and the homes are still owned emeraate citizens,
Speaker 1: so they're actually so one thing that actually prevents emerants
Speaker 1: or from moving back is that the homes that they
Speaker 1: used to own, including in some cases very old homes,
Speaker 1: are rented out and there are source of income to
Speaker 1: the family. So of course you don't want to move
Speaker 1: back because then you'd lose that that source of income,
Speaker 1: which is not necessarily the case in in American cities
Speaker 1: and there. And of course there is the cultural difference
Speaker 1: as well, which I mean you see with white flight
Speaker 1: here it's fairly similar, just a different mix of cultures there.
Speaker 1: Of course, one of the things that maybe is a
Speaker 1: little bit similar here, like the way people talk about
Speaker 1: old Brooklyn, for example, with everyone playing stickball in the
Speaker 1: streets and so on, and people say, well, it's not
Speaker 1: like that anymore, and emerant is certainly say the same
Speaker 1: thing about the new suburban neighborhoods out in you know,
Speaker 1: they tend to be out inland in the desert, whereas
Speaker 1: most of the older generation of emanates actually grew up
Speaker 1: near the beach, so it's a very different physical environment.
Speaker 1: A lot of older emerants say that, you know, people
Speaker 1: don't visit each other like they used to, especially in
Speaker 1: the big cities and Abu Dhabi and Dubai in the
Speaker 1: northern Emirates where the distances aren't as large, and in
Speaker 1: many cases people haven't moved as far into the suburbs.
Speaker 1: And in some of the smaller towns, I mean, they're
Speaker 1: still living in basically the same location, just in a
Speaker 1: newer home with modern utilities and a paved road and
Speaker 1: cars outside. But in some places people still do walk
Speaker 1: and visit every day, so that tradition has been maintained
Speaker 1: by something. All right, But you know, we had the
Speaker 1: oil boom, we had the development, we had the infrastructure spending.
Speaker 1: But it seems like there is a little bit of
Speaker 1: a trade off in terms of losing I guess some
Speaker 1: of the cohesiveness in places like Dubai and Abu Dhabi
Speaker 1: that there used to be. Yes. Yes, Actually, one of
Speaker 1: one story I've heard about why people have such bad
Speaker 1: driving habits in the U a e U that everyone
Speaker 1: complains about all the time, is that why people drive
Speaker 1: very fast is as an attempt it or originates and
Speaker 1: attempts to maintain that cohesiveness. Because of course, in the
Speaker 1: old days, you know, before the sixties behind large, you
Speaker 1: used to be able to walk and visit everyone you
Speaker 1: needed to visit pretty much every day. But as people
Speaker 1: moved out, people still wanted to visit each other every day,
Speaker 1: which just meant now you had to drive quite frequently
Speaker 1: and quite rapidly, uh, pretty fast all the time. So
Speaker 1: that's one theory I've had. I've heard about why people
Speaker 1: drive so fast in the u A. I'm not sure
Speaker 1: that it's actually true or or anything. Maybe it's just
Speaker 1: because people have nice cars on nice roads. All right, Matthew,
Speaker 1: thank you so much for joining us today. Thank you,
Speaker 1: thank you. Thanks so Joe. Now you probably know more
Speaker 1: than you ever wanted to about that road, right, I do. Well,
Speaker 1: I mean, you know, I didn't have any expectations of
Speaker 1: how much I wanted to know about the E eleven Road.
Speaker 1: But I'm glad that I learned about that. And it
Speaker 1: is interesting thinking about these decisions of infrastructure and how
Speaker 1: to design a city, and how universal some of these
Speaker 1: patterns are. Right. The thing I like about the story
Speaker 1: is the idea that we had oil wealth in certain
Speaker 1: parts of the Gulf and that sort of fermented some
Speaker 1: political discord, some social dissatisfaction, and then that erupted in
Speaker 1: this geopolitical crisis that ends up being fought over a
Speaker 1: single road, a single highway, uh in the U A E.
Speaker 1: Or what wasn't even the U A E. Back then.
Speaker 1: It's kind of funny to think about. Yeah, I was
Speaker 1: amused by that aspect of the story as well, just
Speaker 1: sort of seemingly a random domino path of effects that
Speaker 1: led to the current situation, which again I knew nothing about.
Speaker 1: All Right, so you'll have to come visit me in
Speaker 1: Abu Dhabi and I'll take you for a drive. I will.
Speaker 1: I can't wait, and I will drive along the road
Speaker 1: and I'm just again, I just wanna you know this
Speaker 1: idea of you know, you think of these cities, at
Speaker 1: least from my perspective in New York, never having been
Speaker 1: there like you are, but Dubai and Abu Dhabi, and
Speaker 1: you don't think about these sort of commonplace concepts like
Speaker 1: people moving out to the suburbs and people changing culture.
Speaker 1: We just sort of have these id static ideas of
Speaker 1: what these cities are like, but it's sort of a
Speaker 1: reminder of how little most people on the outside probably
Speaker 1: understand about these geographies. Well, come to visit. I will,
Speaker 1: I will, I promise. All right, Well that uh, that doesn't.
Speaker 1: For today's Odd Lodge podcast, I'm Joe Wisnthal. You can
Speaker 1: follow me on Twitter at the Stalwart, and I'm Tracy Alloway.
Speaker 1: I'm on Twitter at Tracy Alloway. Thanks for listening.