La zone, c'est moi!

"Jurisdiction hacking" in the UAE

Louis XIV. Hydryphantidae, Public domain, via Wikimedia Commons

The United Arab Emirates has mastered the art of what I call “jurisdiction hacking”: passing business-friendly laws and building targeted infrastructure to attract industry to specific, bounded areas (the architect and theorist Keller Easterling calls this “extrastatecraft”). Each of the nation’s seven emirates is largely in control of its own legal fate, and can create multiple regulatory regimes within its borders. Dubai, for instance, has famously made itself home to more than 30 “zones” including Dubai Media City, Internet City, International Academic City, Studio City and Knowledge Village (you can make your own conclusions about why “knowledge” was downgraded to mere village status.) Many of these zones are owned by the holding company, Dubai Inc.; they are at once physical places, legal fictions, and products. And while that sounds kind of exotic in theory, they’re mostly just a bunch of buildings with fast wifi. The sales pitch is if you’re looking to start a company, pay very little in the way of taxes, and work out of what consultants like to call a “hub” (ugh) or “cluster” (yuck) of likeminded people, chances are Dubai has a zone for you.

How does it work? Prospective tenants—companies, individuals, or organizations—can choose from a set of regulations in the same way they’d pick out office space with a nice view, or good amenities. Media City, for instance, promises various features, both physical and legal, that are attractive to firms producing news and “content”, managing marketing, or doing P.R : visa laws for workers are relaxed, digital infrastructure is excellent, and the zone supposedly has freer speech and Internet laws than the rest of the emirate. It has been known to compromise these standards under pressure—for all the emphasis on “freedom” you are still on Emirati soil, so maybe don’t, like, film a porno—but there are presumably perks you wouldn’t find in another place, at least in the form of low taxes or easy paperwork. It’s the perks wrapped in a place—or a place wrapped up in perks?—that they are selling.

The UAE far from unique in its willingness to make up different rules for different players in different places: you can find versions of this (famously) in China, in some African countries, and in the U.S, where businesses can apply for exemptions from federal customs duties or get from tax breaks for setting up in designated zip codes. But the system has been especially important for the Emirates. The country has a small native population; it is not naturally endowed with a great climate, walkable urban centers or any of the things that typically make a city attractive to people looking to relocate. Throw in a conservative culture and Westerners’ post-9/11 fears of Islam, and attracting people and money from abroad wasn’t really a sure bet.

The move, then, was to create concessions to make everyone feel special: to adopt a legal system that could theoretically accommodate every kind of business on the planet, and position itself a kind of haven for international finance, with low taxes and plenty of direct flights in and out of major regional and international cities. And with a little help from his friends at McKinsey, Sheikh Mohammed bin Rashid al Maktoum, now the vice-president, turned his country into a kind of artisanal regulator—like Etsy, but for laws (they’ve even passed laws recognizing property in outer space!)

These guys make no bones about tweaking regulations to enrich themselves, improve their country’s global standing, and ultimately spruce up their repressive image. It’s refreshingly shameless. This is, after all, a country that bought 40,000 foreign passports for its disenfranchised stateless population because it did not want to make them Emirati citizens and have to give them real rights. Whatever you think of the ethics of such a scheme, you’ve gotta recognize the Emiratis’ brazenness in challenging all of our assumptions about citizenship, sovereignty and statehood all while sticking to the letter (if not the spirit) of the law. They’ve done more in that respect than several generations of critical theorists—and for that we must respect!

From a Western perspective—which carries a quasi-religious attachment to the unification of law, land and people—the decoupling and fragmentation of territory and law looks downright heretical. It feels unfair, arbitrary, undemocratic to have rules for me and not for thee. In many cases, of course, it is.

But laws and borders (not to mention states and their sovereignty!) are human constructions, not natural facts. If you rule a country, and especially if you rule it autocratically, there is nothing to stop you from having twenty different sets of rules in the same ten square miles (this reminds me of the classic Onion bit: Everyone In Middle East Given Own Country In 317,000,000-State Solution.) And as a sovereign country sitting on zillions of dollars of oil and the geopolitical influence that comes along with it, the UAE can comfortably write its own rules and have them recognized by everyone else. Some countries actually sustain themselves much in this way, and I often wonder if the business of loopholes will ultimately surpass the oil trade. I’m sure the guys in Dubai have thought about it, too.

Which brings us to this report about the country’s latest attempt at “liberalization”. Instead of applying different rules to spatially discrete zones, like a Media City, new laws governing divorce and inheritance will come attached to people instead. If my husband and I move to Dubai and choose to split up—not something we’re planning, for the record—we wouldn’t be bound by local Islamic divorce law, but rather, the rules under which we married, in New York City. And if one of us dies, the inheritance regime will default to the countries of our birth–for me, Canada, and for him, the United States (I don’t know what happens to joint assets in the event of a murder-suicide.) It’ll also be easier to get away with drinking and cohabitation, but regrettably and obviously not if you’re an Emirati woman. The goal, as per usual, For Make Benefit Glorious Nation of Emirates.

The new code is a fascinating evolution of the idea of a “free” zone (la zone, c’est moi?), and a great example of extraterritoriality. I’ve written before about how borders aren’t only around countries anymore, but rather, around people, money, and things, and I think this illustrates that phenomenon well. I’ll be following how this works out for the Emirates with great interest. What happens there tends to pop up elsewhere before too long.