Dubai: Glittering Underworld
Fadil, Magda Abu, The Middle East
Dubai is one of Asia's major trading centres for the gold trade. Magda Abu Fadil reports on its brilliant prospects and the criminal aspects of a largely unregulated business.
The fluctuations of the gold market may unnerve many investors. After sinking to a seven-year low at the beginning of the year, it has surprised many speculators with a display of rude health in the summer. Whatever its fortunes on the markets, however, gold remains the king of metal commodities in the Middle East, smugglers abound and regulation of its trade is a distant prospect.
Despite efforts in the Gulf Arab states to try to legislate specifications for gold and silver, officials admit that market manipulation, speculation and illegal trading require a gargantuan effort and an army of law-enforcement personnel to regulate trading.
A case in point is the involvement of the Memon brothers of India, suspected of involvement in the March bomb explosions in Bombay which killed about 300 people and injured 1,250. Indian authorities said the two men had fled to Dubai, where more than 150,000 Indians live, a day after the blast. Diplomats in the region were surprised that the UAE police had not arrested Yakub and Ismail Memon. But the UAE has no extradition treaty with India.
The Memon brothers have been described as notorious smugglers who apparently hatched the plot to avenge the large-scale deaths of Muslims a few months ago in Hindu-Muslim rioting, which also affected their flourishing meat trade. Indians in Dubai speculate that the authorities may have repatriated the Memons or ordered them to leave in order to end the fuss about the case discreetly. Diplomats commenting on India's efforts to lay its hands on the brothers note however that they seemed curiously unconcerned about another prime suspect - the Bombay underworld chieftain, Dawood Ibrahim, who has resided in Dubai for about 10 years.
Indian businessmen who know Ibrahim say he has a big office in a Dubai high rise building and has sponsored residence permits for hundreds of compatriates working in the UAE. He has been described as a billionaire in his thirties whose wealth was amassed primarily from illegal gold and currency trading.
"He denies illegal activities, but his business is widely believed to cover gold and currency," says one Indian businessman. "He smuggles large quantities of gold from Dubai to Bombay, mostly by sea. Dubai has got nothing against him because there are no restrictions on exporting gold." According to this businessmen, Ibrahim is well known and influential in both Bombay and the UAE and is often visited by politicians and other noted Indian figures.
According to official figures released in the UAE, Dubai's imports of gold jewellery surged by nearly 39% in the first nine months of 1992 due mainly to a sharp increase in exports to India. Imports stood at 22.3 tons, worth $268m dollars, compared with 16 tons worth $192m in the first nine months of 1991, said a report by the Dubai Chamber of Commerce and Industry. Dealers said the rise was the result of an increase in exports to India after it eased restrictions on gold imports last year as part of its economic reforms. "India has remained the biggest gold importer from Dubai in …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Dubai: Glittering Underworld. Contributors: Fadil, Magda Abu - Author. Magazine title: The Middle East. Issue: 225 Publication date: July-August 1993. Page number: 31+. © 2009 IC Publications Ltd. COPYRIGHT 1993 Gale Group.
This material is protected by copyright and, with the exception of fair use, may not be further copied, distributed or transmitted in any form or by any means.