CAMPBELL: It was once an outpost of camels and nomads. Now, the ships of the desert come with fuel-injected four-wheel drives. The desert has become a weekend diversion for these sons of nomads. In just one generation, they’ve turned a wasteland into an international trading hub. Beyond the sand dunes is a city unlike anything the Middle East has ever seen.

RASHID AL HABTOOR: We are a unique experience. We have mixed the orient, the west and the Arabic civilisation altogether in one formula to produce something that we call Dubai. We do not have the pyramids, we do not have the Taj Mahal, we do not have the Petra of Jordan, but in our unique way we have created a new formula.

CAMPBELL: Part of that formula is being an oasis of hedonism in the Arab world. Dubai is a state of the conservative Islamic country, the United Arab Emirates. But every night its clubs fill with a United Nations of rich fun-seekers. Arabs come from neighbouring Iraq and Saudi Arabia to do things they could never do at home. Businessmen come from the west to make money from the Arabs, women come from Russia and Asia to make money from everyone. It’s been a wild few years for this Middle East boomtown, but for many the party’s over. 

CEM BAYULEN: There are thousands and thousands of unfinished properties lying around on the desert, unattended. People either just dump them or they can’t make the payments. It’s a big dilemma for everybody now.

CAMPBELL: Cem Bayulen is a Turkish investment banker. He arrived in Dubai three years ago when the boom was at its height. For the past year, he and his American wife Ceren have been struggling to survive the crash.

CEREN: We actually signed for the loan on this big house and then found out I was pregnant and then the crash happened so it all happened one after the other. It was quite a stressful time for us for sure.

CAMPBELL: The global recession sent giant cracks through Dubai’s glittering façade. The city went into panic in November when the state owned property developer defaulted. Many foreigners who came to make easy money have fled the country.

CEM BAYULEN: So many people lost their jobs and subsequently their homes and their cars, etcetera. One thing that differs Dubai probably from the rest of the world is that this is an expat driven country so people actually have the option of just leaving everything behind and go back to their country.

CAMPBELL: Some just drove to the airport and dumped their cars, leaving their businesses and debts behind. Their impounded cars are now gathering sand inside the city’s police academy. Now no one can say how many people left this way but estimates run into the hundreds, even the thousands. And there’s good reason why some people would want to flee because if you can’t pay your debts here, even if you bounce a cheque, you won’t just be stopped from leaving the country, you can end up in jail.

Dubai’s prisons now hold scores of once successful entrepreneurs who didn’t escape in time. When the market crashed and their businesses folded, some were imprisoned to force them to pay their debts. Others were jailed over financial disputes. Australian businessman Marcus Lee spent nine months in prison and is no on bail. He and his wife Julie are confident the charges will be dismissed but in the meantime they can’t leave the country. The case and their lives have been on hold for several months because the government witness keeps failing to turn up at court. Like others trapped in Dubai, the Lees declined to be interviewed for this story for fear of jeopardising the case.

HERVE JAUBERT: I heard some westerners in jail that got tuberculosis or you know infectious diseases. Imagine those people two years from now, three years from now. They might die over there. Dubai is not an open society. It’s not an open country. It’s really, really a cage. Believe me when I say that. It is a cage.

CAMPBELL: Herve Jaubert escaped by boat before he was arrested for debts he claimed he never owed. He now lives in the US state of Florida.

HERVE JAUBERT: I tried to fight it but in Dubai there’s no way, absolutely no way. I realised that quickly that you cannot fight it. You cannot have a fair hearing, you cannot have a fair trial. If you are in that kind of situation, you are going to lose.

CAMPBELL: Like Dubai itself the court system appears modern and sophisticated. At this recent opening of a new courthouse, we were shown the latest in high tech facilities and user-friendly software. But foreigners are now finding that the laws they enforce have changed little since Dubai was a desert outpost. There is no such thing as bankruptcy, financial disputes are treated as crimes. 

HERVE JAUBERT: When they put you in jail it’s not for three or five years, they put you in jail until you pay what they want you to pay. So if you don’t pay or if you cannot pay – regardless of the reason – they keep you in jail indefinitely.

CAMPBELL: Jaubert came to Dubai to develop recreational submarines for tourists and rich Emiratis. 

COMMENTARY OVER SUBMARINE FOOTAGE: A revolutionary line of submersibles by Herve Jaubert.

CAMPBELL: He soon found himself hob-nobbing with Dubai’s finest, including its feudal ruler, Sheik Mohammed bin Rashid al Maktoum. But when the company went under, his investors demanded nearly a million dollars in compensation.

HERVE JAUBERT: All the money that was spent was spent by them. I knew then that those people, they’re nothing but gangsters and there was no way, absolutely no way I would pay anything to those bandits.

CAMPBELL: Jaubert claims to be a former French covert military operative and his escape by boat to India was like something from a spy novel. He donned an abaya, worn by Emirati women, to sneak onto and disable a navy patrol boat.

HERVE JAUBERT: I never thought in my life that one day I would be walking the lobby of a hotel in full combat gear covered with a woman’s disguise. It was like being a ghost.

CAMPBELL: Then he sailed out to sea in a small dinghy to a yacht that was waiting to spirit him away.

HERVE JAUBERT: I escaped on a Friday at eleven o’clock in the morning when I know everybody’s at the mosque.

CAMPBELL: After a nervous ten days at sea he reached India safely and has now written a book called ‘Escape from Dubai’.

HERVE JAUBERT: I exposed the truth of what is really Dubai. They are not used to that. They don’t want that. They want to silence people like me and what I did to them is worse than a crime to reveal that Dubai’s just smoke and mirrors, and expose their frauds and their lies.

CAMPBELL: Dubai’s rich and powerful insist the economy is still riding nicely, thanks to its booming port and its Emirates airline. Rashid al Habtoor’s family owns a string of profitable hotels and construction companies, but he concedes Dubai may have gone too far too fast.

RASHID AL HABTOOR: We should have had a more regulated market. There as so much speculation. There was so much buying and selling and trading. Dubai property market because like a stock market of just buying…. just the same thing like you buy shares, buy it and sell it, same thing happened in the property market. There was too many speculators, too many cowboys.

CAMPBELL: The biggest developer was the State owned company Dubai World. It not only built on land, it even built on the sea, dredging mountains of sand for offshore developments. The grandest project was called ‘The World’, a series of artificial islands shaped as countries four kilometres out to sea. Four years ago it was expected to become one of the biggest developments on the planet.

We took a boat to see how the project has fared, sailing along artificial canals that two years earlier were desert. While security boats kept us away from the islands, it was clear the world was flat. 

Well four years on it doesn’t actually look much different, just a bunch of empty, artificial, insanely expensive islands. Now we’re assured that the countries have been sold and that eventually the mansions and hotels and boutiques will be built, but the cost of these follies has left Dubai World with multi dollar billion debts that will never be recouped. You can only marvel that a State owned company ever imagined this was a good idea.

CEM BAYULEN: At some point I felt like this was becoming a surreal environment. I mean the signs were there, however once, as you are in it you can’t see it. You know you have to be outside of it and then of course the crash came just like any sane person would have predicted.

CAMPBELL: And bizarrely huge projects are coming on line. In January, Dubai completed the world’s tallest building, a 160 storey tower that’s 320 metres higher than its nearest rival. It’s not just the peak of Dubai’s achievement, many critics see it as the height of its folly. It gives a panoramic view of the empty desert and the abandoned building sites. But for Emiratis and many expatriates, it was something to celebrate – a sign that Dubai was back in business.

DEREK KHAN: This country has been extraordinary and it is still on the move and it’s still on the rise. Dreams definitely can come true in Dubai without a doubt.

CAMPBELL: Derek Khan is a Jamaican born fashion designer who moved here from the US. 

DEREK KHAN: The good thing about the recession, it got rid of a lot of the trash from the country straight up. You come here for a greedy purpose, you come here to better yourself but at the same time you have to understand the culture and give back to what is good to you. This country has been extraordinarily kind to me. I have no intentions of moving. I love it and I couldn’t imagine being anywhere else other than Dubai.

CAMPBELL: Derek Khan makes his money at the top end of town. A former stylist for Madonna, he’s been adopted by the Emirati elite, despite a chequered past. He spent two years in prison in New York after pawning borrowed jewellery to pay mounting debts.

DEREK KHAN: It was a very stupid ridiculous thing I did and guess what it was a scheme to defraud and in the US that is a serious crime. They asked me to design a collection of jewels. I thought, hold on a second, what do you want? You know my first impression was like no, this is not happening. I was completely upfront, and sure they told me they knew who I was and they had understood what had happened and basically everyone deserves a second chance and they were great enough to give it to me.

CAMPBELL: This is the strange duality of Dubai. All Emiratis have to follow the same criminal and Sharia laws, but Dubai’s elite like to indulge in what some would call western decadence and it usually turns a blind eye to what foreign business people do behind closed doors. But when offences are brought to the attention of police the results can be shocking as we found during our filming.

Just a few days ago a distraught British woman reported to police that she’d been raped by a waiter at her engagement party. Police quizzed her about sharing a room with her fiancée and she was charged with having sex outside marriage. But even more disturbing than cases like this is the way the scales of justice are balanced. What you’re about to see almost defies belief.

This is not a re-enactment. It’s a home video of an Emirati sheik torturing a debtor. His name is Issa bin Zayed al Nayhan, a member of the country’s royal family. His victim an Afghan grain merchant named Shapoor. The Sheik ordered police to bring Shapoor to his farm in Abu Dhabi. They stood by as he filled Shapoor’s mouth with sand, fired bullets around him and drove a car over him. Sheik al Nayhan was so proud of himself he rang his business partner, a Lebanese American Bassam Nabulsi, to boast of what he’d done.

BASSAM NABULSI: And he was telling me all about what he did and honestly it was so unbelievable I disregarded it, I dismissed it, I didn’t think it was true. But shortly after he hung up my mother called me and said we have a man… he’s dying… on the farm, and we have to take him to the hospital.

CAMPBELL: That was five years ago. But Sheikh al Nayhan wasn’t even charged until his former partner Nabulsi released the tape publicly during a bitter business dispute. The Sheikh hired a prominent lawyer, Habib al Mulla to mount a seemingly impossible defence. 

HABIB AL MULLA: We believe that film is totally distorted and tampered with.

CAMPBELL: Are you suggesting the tape was doctored or computer altered?

HABIB AL MULLA: That could be one way. I’m sure that today there are a lot of softwares that can achieve such a result.

CAMPBELL: But the tape does show him doing things like firing a gun, putting sand in his face, what appears very much to be torture.

HABIB AL MULLA: We totally deny that.

CAMPBELL: Dr al Mulla claimed Nabulsi and his brother were the real culprits. He accused them of drugging the Sheikh to make him behave this way so that they could blackmail him.

HABIB AL MULLA: Our client was not in a mental capacity that he could be held liable for his actions.

CAMPBELL: The court not only found the Sheikh not guilty, it issued an arrest warrant for Nabulsi in the US.

BASSAM NABULSI: Well to start with his acquittal is a joke. I mean the royal family of the UAE managed to make a big mockery of their own judicial system with such an acquittal. I mean the man is guilty, a hundred per cent, and to be acquitted and in turn also I turn out to be the bad guy? That’s unbelievable.

ANTHONY BUZBEE: If you can be caught on tape sticking a cattle prod into someone’s anus, running over someone with a SUV and then be acquitted and the individual who released the tape to the world is convicted, I would say that that justice system is really non existent and the justice system in Abu Dhabi and in the UAE is truly a joke.

CAMPBELL: If there’s rough justice for rich foreigners, there’s no justice for the poor. Most of the expatriate population are construction workers from south Asia. They live in squalid compounds like this, out of sight of the wealthy and they’ve been the biggest losers from the property collapse. 

(TO BANGLADESHI WORKERS) Hello…Ozman…. How are you? …Pleased to meet you. So this is where you all sleep? How many people?

WORKER: Eighteen people.

CAMPBELL: Eighteen people ….in this room…?

These Bangladeshi workers came here to make money to send home to their families. Now only two of them have jobs and even they haven’t been paid in six months.

MAN: After not being paid by one supplier we went to another, hoping we’d get paid there – but they wouldn’t pay either. With no hope, we’re just passing time. We eat once a day, skip meals and live on bread. That’s how life is. Our life is very hard. 

CAMPBELL: All want to return home, but they can’t. The construction companies took their passports and are now demanding they buy them back. 

MAN: If we complain to the police they say, go to the court to get the passport from the company. We don’t have money. We can’t even afford to take a taxi. Where to go? We don’t know where to go.

CAMPBELL: But for some foreigners, the good times continue to roll. Every Friday, Derek Khan takes to the water in Abu Dhabi to enjoy the Muslim holiday. Thanks to oil, Abu Dhabi is the richest state in the United Arab Emirates and its loaned 25 billion dollars to its brash neighbour to service its astronomical debts. Like Derek Khan, Dubai has been given a second chance.

Is that reassuring for people here?

DEREK KHAN: Oh absolutely. I mean after the bad press and everything that started coming obviously we were all afraid there might be a rush on the banks and all of that but no, Abu Dhabi came to the rescue and as we say here, Hamdala.

CAMPBELL: It remains to be seen what lessons have been learnt from this debt-fuelled binge. Those who fled Dubai or are caught in its harsh legal system will only see this as a place of nightmares. But for some this strangest of desert states, remains a city of dreams.