Emirates Palace. Flickr / Agenda for the New Millennium

Somewhere on the highway, heading southwest through a desert sandstorm, we crossed from the emirate of Dubai into the emirate of Abu Dhabi. A short time later, somewhere on the outskirts of the city of Abu Dhabi, we crossed from the Arabian mainland onto an island.

Neither transition was obvious.

Yet when we arrived at our hotel, it was clear we had reached a place significantly different from glitzy Dubai - more established, more staid. We could also appreciate, from the top floor, something of the city's disrupted geography. It sits amid an archipelago of 200 flat, sandy islands laced with narrow channels and mangroves.


Abu Dhabi.Flickr / aekpani

Abu Dhabi's fortunes have turnedon two valuable discoveries. The first in the 18th century, when Bedouin tribesmen dug down on one of the islands and struck the most precious of all desert commodities: fresh water. Then, in 1958, while the territory was administered by Britain, a vast oilfield was found.

The earliest settlers had primarily looked to the sea for a living - fishing, pearl-diving and trading by dhow. In a small boatyard, we found a gang of shipwrights building a traditional wooden dhow while, immediately behind them, a modern skyscraper was taking shape. The boatyard was an anachronism - one of the last fragments of the old way of life.

Modern Abu Dhabi has been shaped by petrodollars. This emirate, which is the largest and wealthiest of the seven United Arab Emirates, boasts more than 9 percent of the world's oil reserves. In Dubai, where the oil and gas will run out within a decade, there has been a concerted effort to diversify the economy, with heavy investment in real estate and tourism. For more than a decade from the early 1990s, Abu Dhabi resisted the breakneck development of its near neighbor, and there was an effective moratorium on construction. That changed with the death of the country's founding president, Sheikh Zayed bin Sultan Al Nahyan, in 2004. His son succeeded him, and has opened the floodgates for ambitious new mega-projects.

More than $100 billion worth of real estate plans are currently under way, fueled by pent-up demand and the recent relaxation of restrictions on foreign ownership (expatriates can now purchase 99-year leases on Abu Dhabi property). When one proposed plan for 338 beachfront villas was unveiled recently, they sold out within 45 minutes.

Added to the liberalization of the property market, Abu Dhabi also is seeking to develop - virtually from scratch - a tourism industry. More than 17,000 new hotel rooms are planned for the next 10 years, and a host of attractions is under development.


Abu Dhabi Airport. Flickr / Andrea Peverali

The most significant is Saadiyat Island, adjacent to downtown Abu Dhabi, where $27 billion is being invested in luxury resorts, golf courses, condominiums, marinas, a theater, and museums, including the 300,000-square-foot Guggenheim Museum of Modern Art, designed by Frank Gehry, scheduled to open in 2011. An airline, Etihad Airways, was launched in 2003, and is projected to carry 3 million passengers this year. Meanwhile, Abu Dhabi International Airport is undergoing a $6.8 billion expansion.

On a balmy evening, we took a stroll along the waterfront Corniche. Stars twinkled overhead, the city lights twinkled around us. From dozens of mosques, loud speakers called the faithful to prayer.


Dhow Harbour. Flickr / boulanger.IE

Modern Abu Dhabi is cosmopolitan and also proudly Arabian. You will find state-of-the-art shopping malls and traditional markets. Dhows being built next to skyscrapers. Muezzins calling from mosques while pop music plays on car stereos. There is no obvious transition between East and West. In Abu Dhabi, the two worlds are intertwined.