Welcome to Marinagrad, Dubai

Embraced by some and resented by others, the Russian presence is changing life in Dubai

April 28, 2023

Until a few weeks ago, my local hairdresser in Dubai Marina had a sign painted on the window announcing it to be “English gentleman hairdresser.” Now it reads “Бapбеp из Мocквы здесь” – the Moscow barber is here.

No wonder my neighbours have started to call the place “Marinagrad”. Many of the Russians who have come to the UAE since February 2022 have zeroed in on the Marina as the place to be in Dubai.

The oligarchs and super-wealthy may opt for the luxuries of the Palm Jumeirah or Bluewater Island, but the average middle-class Russian seems to prefer the 5km long lagoon just off the Sheikh Zayed Road.

Most of the Russian emigres who join the evening waterside “passeggiata” are young and apparently single, though you do occasionally see three-generation families too.

The UAE is a welcoming place, so there is no reason why these new arrivals should not be embraced warmly by citizens and residents alike. The Dubai “salad bowl” is big enough to take in some new ingredients.

But these are not ordinary times we live in, and the circumstances of these new arrivals are not straightforward. Most of them have left Russia to escape the domestic consequences of the invasion of Ukraine – western economic sanctions, harsh new laws on personal freedoms, and possible conscription into the army fighting so brutally in Ukraine.

To those, Dubai has been a safe haven in the geopolitical storm. From the conversations I’ve had with some – many do not want to talk about the subject even privately – their attitude towards Putin’s war is a mixture of embarrassment that their country could behave in such a way, and condemnation of the regime that has brought it about.

But not all. A small number are openly supportive of Russia’s war, which can have extreme consequences. A row in a local shop over queue jumping between two men of military-looking build turned into a clenched-fist confrontation and an invitation to “fight the Russian army”. It was defused.

This being Dubai, there are no overt symbols of allegiance in the war – no Ukrainian flags like there are across Europe and north America, and no Russian Z logos either, that I have seen.

But there is a muttered resentment among other expat groups at the Russian presence and how it is changing life in Dubai, especially for the more established expatriate groups.

There is rental and real estate inflation, with house prices (especially of big villas and town houses) substantially higher and rents also on the rise. Other items, like car rental, are also significantly higher.

Of course, inflation is a global curse, and the UAE’s rate of price increase is well below most parts of the world. And, indeed, there is no direct evidential link between the Russian influx and higher prices. But the perception is that asset flight from Russia has fuelled an inflationary rise in the emirate’s cost of living.

There are other grumblings too. “They don’t have the same business culture as us” is quite a common theme, implying that Russia’s buccaneering corporate practices may be imported to the UAE.

That will be a challenge for the UAE regulators but I’m sure they are aware and capable of handling it, should it be an issue going forward.

Perhaps the biggest potential problem of the Russian influx is how it will complicate an already tetchy relationship between the UAE and western financial authorities.

The Financial Action Task Force (FATF) has put the UAE on a ‘grey list’ of countries that are subject to increased monitoring to prevent money laundering, terrorism financing or proliferation funding.

The actions of some Russian banks and companies in the UAE have already attracted the attention of western authorities, and an increased volume of Russian-related transactions will likely harden FATF’s attitudes towards an early removal from the list.

The UAE authorities, again, are aware of the issue. Sanctioned Russians cannot do business in the UAE, and even the average Marina refusenik, who does not want to serve in the army in Ukraine, reports stringent bank due diligence on opening accounts and conducting attractions.

Whether the newly arrived Russians are here to stay, or whether they will return to their motherland once the war is over or their holiday visas expire, is difficult to say.

I’m told some Russians have taken to calling Dubai “the dacha”, which implies they regard the emirate as a comfortable place for rest and relaxation, a weekend retreat, rather than a permanent home.

For those hard-working and law-abiding Russians who decide to stay, there will be the usual warm Dubai welcome.

Frank Kane is AGBI’s Editor-at-Large