In June 2002, Al Qaida wrote a letter to the government of United Arab Emirates [UAE] stating that the government was well aware of the fact that Al Qaida had infiltrated the UAE’s security, censorship and monetary agencies. It was also reported that several notorious terrorists including Dawood Ibrahim, Adnan Khashogi and others, were sheltered in United Arab Emirates and they were even running various business establishments there without much interference from the government.

Dubai, population 800,000, is a self-described "door to a market of more than 1 billion consumers". Its drive had been to fashion itself not only as the first post-oil economy in the Persian Gulf but as one of the great postmodern world cities. Dubai represented the essence of globalization at work - globalization, of course, interpreted as the ineluctable triumph of Western laissez faire, where world trade means economic rights trump political rights.

Sheikh Zayed bin Sultan al-Nahyan founded the Persian Gulf nation styled the United Arab Emirates - composed of seven city-states - in 1971. When he died in early November 2004, he was a multibillionaire owner of banks, industries and villas on Spain's Costa del Sol and Switzerland's Lake Geneva.

Most of all, he had every reason to be proud of his family's intuition and business acumen - as already in the 1940s they had decided to drain Dubai's port while competitors were sleeping. And he was certainly proud of the way Dubai had evolved, a Hong Kong-by-the-desert with loads of glitz, no "war on terror" and, of course, no free elections. Sheikh Zayed was promised as he lay dying that Dubai would continue to flourish - even without gambling casinos.

During the Middle Ages, Gulf port cities were the essential node in the Arabian Peninsula's monopoly on trade between Europe and Southeast Asia. Dubai as a city-state/world port city by the "Arabian Gulf" [locals wouldn't be caught dead referring to the "Persian Gulf"] was positioning itself as the essential trade crossroads of Europe, Africa, the Middle East and the South Asian subcontinent. The richest of the seven city-states in the UAE may be the capital, Abu Dhabi, floating on a sea of oil. But 63% of the country's income had derived from commerce and tourism, and the bulk transited through Dubai.

In this mish-mash of wealthy Arab women covered in silk black chadors, Indian families in saris, young poseurs with Iranian pop T-shirts, armies of men in dishdashas and fake gold Rolexes, phalanxes of Japanese minibuses and American delivery vans, and the frenzy of trading simultaneously in English, Arabic, Bengali, Urdu, Turkish, Farsi, Russian, German, Tagalog, Thai, Gujarati, Afrikaans or Swahili, the lingua franca is indisputably English, not Arabic.

In the totally deregulated airport, anyone may still land piloting any sort of aircraft. As much gold as is extracted all over the world still transits every year through Dubai, legally or through smuggling. Even as it strove to replicate Singapore, Dubai felt more like Houston - but with better restaurants, much better cars, much smoother roads and much more alluring state-of-the-art architecture.

Only 25% of the multicultural 2.4 million people living in the UAE were citizens - or "nationals", as they are known in local lingo. In Dubai they represented only 15%. No wonder Dubai boasted no fewer than 85 foreign private schools.

Dubai might have been run like a huge corporation. But unlike a US multinational that delocalizes to profit from cheap labor, Dubai imported cheap labor in droves. The result was immigration without citizenship - a model that fascinated assorted Americans with the added bonus that unlike Mexicans and Central Americans in the US, immigrants to Dubai totally renounced their political rights on the altar of economic improvement. People referred to Dubai as proof that Islam was not incompatible with globalization.

It is fair to argue what distinguishes a citizen from a non-citizen in a state where there's no democracy at all. The power of Dubai's absolute ruler, Sheikh Mohammed bin Rashid al-Maktoum, could be defined as Genghis Khan-like. But if you are an immigrant coming from Iran's theocratic nationalism, India's bureaucratic nightmare or Pakistan's barely disguised dictatorship, the last thing you would want is an interventionist state. So Deng Xiaoping's dictum - "to get rich is glorious" - ultimately prevailed. Lee Kwan Yew applied it in Singapore - and it worked marvels.

Racism in Dubai - as in the US south - was pervasive, but off-limits to discussion, even as the fragile social pact between citizens and foreign residents, which in essence means "shut up and do your job", was faltering. A 15% minority could not possibly impose either its language or religion on a cosmopolitan majority - especially when religion is the Wahhabi interpretation of Islam.. Thus [Western and Arab] men could get drunk in licensed bars, pubs and restaurants and [Western only] women could wear bikinis on the beach.

Every night an army of multicultural girls - from Southeast Asia, from behind the former Iron Curtain, and elsewhere - officially staying in Dubai as "kindergarten teachers" or "domestic help" descended in miniskirts, halter tops and high heels on the Cyclone nightclub and behaved as if they were in Bangkok's bars. At the same time some Internet sites were blocked "due to incompatibility with the religious, cultural and moral values of the United Arab Emirates". A famous Dubai joke had a real-estate agent telling a client to "buy a house in Jumeirah Beach. It was the safest place to be. Half the bin Laden clan lived there." Whatever its compromises, Dubai's empirical globalization process always seemed to veer toward an optimum: a society of apolitical consumers.

For a Salafi Jihadist, Dubai might have been worse than Sodom and Gomorrah put together. An Al-Qaida attack in Dubai would instantly have turned the overbuilding capitalist frenzy into ashes. So why did it not happen? First and foremost because Al-Qaida and assorted Salafi Jihadist funds still transited through Dubai.

Money-laundering in the financial Mecca of the Persian Gulf had been virtually uncontrollable. The US government's case against Zacarias Moussaoui documented how money to finance the attacks of September 11, 2001, was laundered through the UAE. During the mid- to late 1990s, the air path from the UAE to Kandahar was crammed with private jets taking Arab notables on falcon-hunting trips in Taliban-controlled Afghanistan. Frequent fliers included UAE and Saudi rulers - the UAE and Saudi Arabia, along with Pakistan, were the only countries that recognized and maintained normal relations with the Taliban regime. Return flights were laundries for Taliban and al-Qaida operatives.

Despite the tremendous economic growth and under the blanket of a rather free society with pub, nightclub and girls on call, United Arab Emirates had become one of the major avenues for terrorists, as well as Al Qaida, in making investments in several hidden or semi-exposed projects, cashing millions of dollars.

After the Taliban took control of the area around Kandahar, Afghanistan, in September 1994, prominent Persian Gulf state officials and businessmen, including high-ranking United Arab Emirates and Saudi government ministers, such as Saudi intelligence minister Prince Turki al-Faisal, frequently secretly flew into Kandahar on state and private jets for hunting expeditions.

General Wayne Downing, Bush's former national director for combating terrorism, said: "They would go out and see Osama, spend some time with him, talk with him, you know, live out in the tents, eat the simple food, engage in falconing, some other pursuits, ride horses.

Both bin Laden and Taliban leader Mullah Omar sometimes participated in these hunting trips. Former US and Afghan officials suspect that the dignitaries' outbound jets might also have smuggled out Al-Qaida and Taliban personnel.

More than half of the Sept. 11 hijackers flew directly from Dubai to the United States in the final preparatory stages for the attack; Osama bin Laden's operatives are most likely still using this freewheeling city as a logistical hub.

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