Caplan’s Errors on the UAE and Open Borders

Arguments advanced to support a political position often fail to withstand the slightest scrutiny. Rather, they are meant to make an impression on the impressionable—those who lack the context required to make an evaluation—and draw large numbers of the uninformed to one side of a political debate. Such is the case with libertarian economist Bryan Caplan’s recent article in favor of unrestricted immigration, wherein he uses the United Arab Emirates as a supposed template for open borders policy.

As an Arabic speaker and former resident of the UAE—I lived and worked there for five years, managing a large portfolio of hotel investments owned by the sovereign wealth fund of Dubai—I have a particular context that Caplan does not, having only passed through on his way to India.

With that context, I do not intend to evaluate the respective merits of either side of the libertarian broader debates on restricted versus unrestricted immigration, nor do I intend to dissect Caplan’s entire position on this debate. My aim is to point out the factual inaccuracies in Caplan’s latest article and suggest that irrational entrenchment on one side of an argument often comes with desperate leaps in judgment, leading to sloppy analysis.

Misreading the Situation 

Caplan begins by praising the UAE, and for good reason. The UAE has made good use of its current or former natural resource wealth (depending on the emirate), and recognized its limitations—mostly in terms of human resources—while aiming to mitigate them. It’s generally clean and safe, and has many of the qualities desirable in a destination country.

Caplan then identifies what he believes is the “key ingredient of Emirati success,” namely, that 88 percent of its population is foreign-born. He says this is the case because the “UAE is closer to open borders than any country on earth.” Here I must digress to give Caplan the benefit of defining, in his own words, the terms he uses. “Open borders,” as he explained in a recent interview, means “[the customs agents in a particular country] just let anybody in whose passport isn’t on a watchlist for crime.”

Back to Caplan’s point about the UAE. He starts with an assertion that the UAE is essentially an open borders country. But does the UAE meet his own definition of the same? Certainly not.

The UAE is highly restrictive in its immigration policy. Nobody is allowed to enter the country for more than a limited time on a tourist visa without being explicitly invited by an employer. And, since the largest employers in the UAE are the royal families through their many companies, invitations to live and work in the UAE are at their pleasure. Once inside the UAE, employees who lose their jobs are ineligible to stay unless they find a new position with a sponsoring company in a short period of time. Either they work and produce, thus benefiting the UAE directly, or they are deported back home.

After dismissing Caplan’s premise that the UAE has open borders, the conclusion that its success hinges on a high foreign-born population is evidently invalid. Imagine the UAE with the same proportion of foreign-born residents, but without the pre-existing wealth from natural resources. Or imagine the UAE comprising 88 percent Haitians instead of its current mix of Third-World laborers and mostly Western expat executives. Would it be the same UAE? Obviously not.

The UAE’s high foreign-born population goes hand-in-hand with its rapid buildout, but the link to Caplan’s idea of open borders is nonexistent. The UAE’s native population has never had the human resources capable of such buildout. Being able to acquire such resources has proven helpful, no doubt, but Caplan conflates this transactional policy with open borders.

Rather, the UAE’s success is more credibly attributed to a combination of natural resource wealth and a private property mindset on the part of its ruling families—a recognition that, as absolute and hereditary rulers, the country is essentially their property and long- and short-term investments must be made to maintain or improve that property.

Caplan’s next point is that the rulers of the UAE were not nativist and, therefore, chose to forego the interests of native-born Emiratis by allowing high levels of immigration into their country. This is a gross misreading of the ruling psychology in the UAE.

It is naïve to suggest—as Caplan does—that the interests of UAE citizens, including the royal families themselves, were not foremost in the minds of Emirati rulers when embarking on their various plans of economic diversification. Recognizing a lack of human resources and declining natural resource wealth over time—dwindling quickly in the case of Dubai—importing labor to achieve the broader plan of economic diversification was, and is, essential. Emiratis have benefited tremendously from this state of affairs, and that’s by design. Immigrants facilitate various goals of the UAE rulers and citizens, but they do not participate in the political process—as it is an absolute monarchy—and their rights are considerably restricted compared to those of Emirati citizens. That is also by design.

Next, in an apparent attempt to undercut a natural argument against open borders—that they are incongruous with a welfare state—Caplan points out the UAE’s “overflowing welfare state.” But at the end of this paragraph, almost as an aside, Caplan admits the “overflowing welfare state” does not exist for immigrants, only for Emirati citizens, who comprise a small minority of the population. He then contradicts his prior description by suggesting that nobody would describe this state of affairs as a “generous welfare state.” Okay, then.

Caplan’s next point is both confusing and erroneous. He appears to preempt the “assimilation” argument against open borders—that cultures will clash—by suggesting that, rather than immigrants adopting Emirati values, the opposite has happened, namely, that native Emirati Muslims and Third World migrants have been “Westernized” by the small but influential Western expat community in the UAE.

Unfortunately, he provides no evidence for this assertion. It’s hard to imagine what he’s referring to, but any visitor to a workforce housing facility in the UAE would be hard-pressed to find any signs of “Westernization” among the Third World migrants cloistered there.

Reality Check

Caplan’s admiration for the UAE is understandable. It is undeniable that most of the immigrants who choose to work and reside temporarily in the UAE—especially the manual laborers from the Indian subcontinent—are making a better living than they would in their native country. But the numerous factual errors—reflecting an ignorance of life and law in the UAE—and leaps of logic that comprise his article fall far short of illustrating a proof of concept for open borders, by Caplan’s own definition. As such, it comes off as a desperate and intellectually lazy attempt to defend his flagship position rather than a thoughtful analysis.

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