‘Russia outside Russia’: For elite, Dubai becomes a wartime harbor

Nail services at the Russian beauty chain Sugar in the Marina District of Dubai, United Arab Emirates, on March 4, 2023. (Photos: NYTimes)
DUBAI, United Arab Emirates — On an artificial island on the edge of the Persian Gulf, Dima Tutkov feels safe.اضافة اعلان

There are none of the anti-Russian attitudes that he hears about in Europe. He has noticed no potholes or homelessness, unlike what he saw in Los Angeles. And even as his ad agency turns big profits back in Russia, he does not have to worry about being drafted to fight in Ukraine.

The skyline and Marina District of Dubai, United Arab Emirates.

“Dubai is much more free — in every way,” he said, sporting an intricately torn designer T-shirt at a cafe he just opened in the city, where his children are now in a British school. “We are independent of Russia,” he said. “This is very important.”

A year into a historic onslaught of economic sanctions against Russia over its invasion of Ukraine, Russia’s rich are still rich. And in Dubai, the United Arab Emirates’ biggest city, they have found their wartime harbor.
“Why do business somewhere that they’re not friendly to you?” said Tamara Bigaeva, who recently opened a two-story outpost of a Russian beauty clinic... “In Europe, they clearly don’t want to see us.”
Among the city’s waterfront walkways, palatial shopping malls, and suburban cul-de-sacs, Russian is becoming a lingua franca. Oligarchs mingle in exclusive resorts. Restaurateurs from Moscow and St. Petersburg race to open there. Entrepreneurs like Tutkov are running their Russian businesses from Dubai, and opening up new ones.

Where war feels far awayDubai’s new Russian diaspora spans a spectrum that includes multibillionaires who have been punished with sanctions and middle-class tech workers who fled President Vladimir Putin’s draft. But to some extent, they share the same reasons for being in the Emirates: It has maintained direct flights to Russia, staked out neutral ground on the war in Ukraine, and, they say, displays none of the hostility toward Russians that they perceive in Europe.

“Why do business somewhere that they’re not friendly to you?” said Tamara Bigaeva, who recently opened a two-story outpost of a Russian beauty clinic that is already welcoming longtime clients. “In Europe, they clearly don’t want to see us.”

Indeed, a major draw of Dubai is that it is apolitical, according to interviews with Russians who have settled there. Unlike in Western Europe, there are no Ukrainian flags displayed in public and no rallies of solidarity. The war itself feels far away. Anyone in Dubai harboring anti-Russian sentiments would most likely keep them to themselves, anyway; protests in the Emirates’ authoritarian monarchy are effectively illegal, and freedom of assembly is severely limited.

Inside the Marina Mall in Dubai, United Arab Emirates.

The presence of wealthy Russians in Dubai at a time when they have been largely been cut off from the West shows how Putin has been able to maintain the social contract that is key to his domestic support: In exchange for loyalty, those close to power can amass enormous riches.

In fact, one political scientist, Ekaterina Schulmann, said Putin has been signaling to businessmen that he is prepared to remove still more obstacles to enrichment. A recent law, for example, frees lawmakers from having to make public their income and property.
“We were exchanging into dollars and transferring them here. In dollars, we were getting colossal excess profits, you understand? And everyone was doing this.”
“Yes, we’ve cut you off from the First World, but things won’t get any worse for you,” Schulmann said, describing how she sees Putin’s revised contract with the elite. “First of all, there are many other countries that are friendly to us. Second, you’ll have plenty of opportunities to get even richer, and we will no longer prosecute you for corruption.”

Refuge for the richPublicly, Putin has been calling on jet-setting Russian elites to refocus their lives and their investments inside Russia. But the rich who have relocated to Dubai have other ideas.

“For all of us, this is an island of safety for a certain period of time,” said Anatoly Kamenskikh, a Russian real estate salesman who brags that his team sold $300 million worth of property in Dubai last year — the vast majority to Russian citizens. “Everyone is trying to park their assets somewhere.”

Kamenskikh’s real estate developer, Sobha Realty, celebrated Dubai’s Russian-driven real estate boom by setting up a miniature St. Basil’s Cathedral and artificial snow outside the sales office. A section of the artificial island called the Palm Jumeirah is lined with Russian restaurants and nightclubs, one of which was packed on a recent Wednesday night as guests ordered $1,200 bottles of Dom Pérignon Champagne that dancing servers delivered with lighted sparklers.

When one drunken guest yelled out, “Glory to Ukraine!” the bouncers swiftly saw him out.

“You get the feeling that they have their head in the sand,” Dmytro Kotelenets, a Ukrainian entertainment producer who moved to Dubai with his family, said of the Russians around him. “They either don’t want to notice what’s happening between Russia and Ukraine, or they think that nothing has changed.”

In his state-of-the-nation speech last month, Putin called on Russia’s wealthy to “be with your Motherland” and to bring their financial assets home, rather than to view Russia “as simply a source of income” from abroad.

In fact, many of Russia’s rich are simply shifting their lives to the United Arab Emirates, which — like the rest of the Middle East — has refused to join the West’s sanctions against Moscow.

“I’m in Dubai, I’m chilling,” go the lyrics to the current No. 1 song in Russia, according to Apple Music. “Yeah, I’m rich, and I don’t hide it.”

Destination: DubaiThe Emirates has a population of about 10 million, of whom only about 1 million are Emirati citizens. The rest are expatriates, including millions of Indians and Pakistanis, and smaller numbers of Europeans and Americans.

A New York Times analysis of flight records last spring found that the United Arab Emirates became the top destination for private flights out of Russia in the weeks after the invasion, which began February 24, 2022. Since then, by all accounts, the country’s allure has only grown.

Russian government statistics show that Russians took 1.2 million trips to the Emirates in 2022, compared with 1 million in the pre-pandemic year of 2019. Many of those visitors put down roots: Russians were the leading nonresident buyers of Dubai real estate in 2022 by nationality, according to Betterhomes, a Dubai brokerage.

First, there are the tycoons. Andrey Melnichenko, a Russian coal and fertilizer billionaire, moved to the United Arab Emirates last year after sanctions forced him to leave his longtime home in Switzerland. Last month, in the hushed lobby of an exclusive resort, another penalized Russian businessman said he was in town for a birthday party.

Dima Tutkov, who owns an ad agency in Russia and is a founder of the cafe Angel Cakes, at the Bluewaters Island location in Dubai, United Arab Emirates, on March 3, 2023.

Russian officials and their families also visit, though they try to avoid calling attention to their presence, and for good reason: In the northwest Russian region of Vologda, the pro-Kremlin United Russia party expelled two local lawmakers after social media posts placed them in Dubai. One of them, Russian journalists studying their posts reported, was vacationing there with Ksenia Shoigu, the daughter of the Russian defense minister.

The elite cross paths at Angel Cakes, an Instagram-friendly cafe that Tutkov, the advertising entrepreneur, opened on an artificial island called Bluewaters in the shadow of the world’s tallest Ferris wheel. One frequent guest of the cafe, the former president of a major Russian company, quipped, “Dubai is becoming a part of Russia outside Russia.”

What sanctions?Tutkov dismissed as an “illusion” the idea that sanctions had wrecked the Russian economy. His advertising agency, he said, was profiting as companies race to fill the vacuum left by Western corporations that pulled out of Russia. His clients include Haier, a Chinese home appliance maker trying to break into a market that had been dominated by more established brands.
To make music, Zoteyeva said in an interview on a roadside bench, “you need to be in a good mood”. Dubai, she goes on, is a “sunny place” where the war “doesn’t affect you”.
Sanctions on the financial system also proved no hindrance. Last summer, the ruble soared to historic highs against the dollar. Tutkov said he took advantage of the exchange rate by using Russian banks that had not been placed under sanction to move some of his ad agency’s profits to Dubai.

“We were exchanging into dollars and transferring them here,” he said. “In dollars, we were getting colossal excess profits, you understand? And everyone was doing this.”

Emirati officials say that their banks follow all US sanctions-related rules. Indeed, many Russian émigrés say that among the hardest parts about moving to Dubai is opening a bank account, attributing monthslong waits to the banks’ exacting compliance requirements.

“There are many Russians who are not sanctioned and are interested in safer havens,” Anwar Gargash, a diplomatic adviser to the Emirates’ president, told reporters last year.

Among those who found a haven in Dubai last year is the Russian pop star Daria Zoteyeva, the singer of Russia’s current No. 1 hit. She now lives in an unfinished luxury housing development in the desert. At night, a light show flashes across the Burj Khalifa, the world’s tallest skyscraper, in the distance.

To make music, Zoteyeva said in an interview on a roadside bench, “you need to be in a good mood”. Dubai, she goes on, is a “sunny place” where the war “doesn’t affect you”. She refuses to take a position on the war, which she calls “this whole situation”.

“It’s to avoid letting go of my audience, and to make money,” she said, explaining her silence. “Because it’s a lot of money. It’s a lot of money.”

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