Monday, January 04, 2010

Du-Bye-Bye and Niceland

Today marks the opening of world's tallest building, the Burj Kalifa tower in Dubai. Until now, it's final height has been a closely watched secret, as if the builders hadn't decided whether to slap on another extension. At an impressive 2,717 feet or 828 meters, slightly more than a half mile toward the sky, it leaves every other structure in the dust. However, it couldn't have opened at a more awkward time as Dubai is in the middle of financial chaos. Most of the dedicated office space in the gigantic tower will take a long time to fill, and although many of the apartments have been sold, few will be filled with occupants as such investments were based speculation that prices would keep on climbing. Like much of this city from the Arabian Nights, illusion has had little to do with reality.

Some have compared Dubai to Iceland which for a number of years boasted a financial empire far beyond its size. However, the two worlds couldn't be farther apart. Whereas in this part of the United Arab Emirates artificial islands were man-made, in the North Atlantic they occasionally rise from the ocean on their own as a result of volcanic activity. Dubai was built with what many call slave labor from nations such as Pakistan and India. Icelandic people are hard-working and stubborn Vikings who have only welcomed foreign workers in the years before the global collapse, because they didn't have enough people to accomplish all their projects. Yes, in both countries the financial dreamers were traveling by magic carpets, but there is a major difference between Western and Islamic banking. For one thing, Islam with its Sharia laws doesn't allow collecting interest, and profits have to be made in ways foreign to Westerners. A bank might buy a house or a car and then resell to its customer at a higher price, thus avoiding charging interest. There are always means to circumvent rules, as the Ultra-Orthodox Jews of Jerusalem do in order to obey the laws of Sabbath. Special elevators stop on every floor, eliminating the need to press buttons.  A heavy drape can be drawn in front of a light so that G-d won't get angry for turning the bulb on and off; the refrigerator's compressor will wait after its door is closed before restarting as if by magic. How intelligent we humans are, outsmarting even the Almighty!

The United States and other Western nations often pointed to Dubai as an example for other nations in the area to see what an American-influenced Islamic paradise would look like. It is hard to think of another place on earth with such excesses. Now the fun is over and time for judgment has arrived. In order to prevent a total collapse, neighbors such as Abu Dhabi have agreed to help. The question now becomes what will happen to the religious and behavioral freedom Dubai has enjoyed. Abu Dhabi, like the other neighbors, is very conservative compared to the Paradise City, and will most likely want to curb some of the Western-influenced bad behavior and sinful lifestyle.

Iceland, too, lived for many years in a fairy-tale existence. A number of young financial geniuses were schooled in the United States and decided to turn their island state into another Luxembourg or Monaco. It seemed bizarre that banks from a country of just 300,000 inhabitants would be major players in global economy, at least in certain markets. As the country is not a member of the European Union and has its own currency, it was probably hit harder by the bursting bubble than any other nation I can think of. The Icelandic currency was devalued by about a half, forcing the closure of the Reykjavik's three McDonalds among other things. But the average income was so high before the economic crisis hit that people still manage to live enviably well. A year ago Reykjavik became a shopper's paradise because of the exchange rate, but the smart Icelanders started thinking in Euros instead and tourists were soon paying close to what the price level had been before. The people have lived through far worse situations and I expect them to bounce back in no time at all. The greedy bankers have long since departed, and the banking industry is overseen by the government, for quite a while I suspect. In the meantime people have gone back to what they know best, working hard in fishing and related industries.

Last summer on our way back from Finland my youngest daughter Sarah and I decided to spend three days in that country. Obviously in such a short time we couldn't see very much of what the large island has to offer, but nevertheless the place left quite an impression. We both continuously visit there in our dreams, among the endless number of sheep and horses and with landscapes that seem to be from another world. Just a couple nights ago I was accompanying an Icelandic piano concerto, performed twice for a native audience. I compose well while asleep! Reykjavik doesn't boast skyscrapers like Dubai, quite opposite: most of the buildings in the old city have just a few stories. But while Dubai has barely touched the idea of democracy, Iceland can claim the world's oldest one, dating back over a millennium.

A few things seemed a bit odd to us, such as a shortage of parking spaces and lack of ATM's (they do exist but are not plentiful like here or in my native Finland). The Leifur Eriksson terminal in Keflavik, a former NATO base, is huge, yet we had to wait for 30 minutes at a Hertz rental car desk. Everyone drives, but gas stations are few and far apart. They don't accept American credit cards, as we don't have a smart chip embedded in them like in Europe. One seemingly cannot pay with cash inside the station either: it is necessary to insert Icelandic bills into the dispensers. With the final receipts one can get a refund from the attendant. But why make everything easy?

We were so taken by the mystical world of trolls and other spirits that both of us are already talking about our next trip. If I were younger, I could even picture my family living there. My Sarah would gladly have spent a whole week in one of the geothermal pools; I in turn welcomed the solitude, peace and quiet. No Icelander will openly admit that the country was once covered with forests. Growing up, I was taught that the country's climate was too windy for trees to grow, but based on the old sagas that wasn't the case. In a cold climate there always was a need for fuel to burn, especially before people learned to harness the seemingly endless reserve of volcanic heat.

While Dubai may end as Du-bye-bye and return to being a much more humble place, Iceland represents a true Niceland to me. Its serious, hard-working and well-educated people deserve to succeed again.

Burj Kalifa; Icelandic sheep