Dubai has had a very modest, nondescript past. Long before the leading corporations of the world set up their regional office in its glitzy towers, which have brought the emirate the honour of being considered the world’s capital for modern architecture, besides being home to world-beating entities such as the Emirates airlines, the tallest tower Burj Khalifa, and several others, Dubai was a hamlet of poor fishermen and pearl divers.

But there was one business that flourished all along: smuggling of gold, mainly to India, the big brother trading partner that provided all the essential supplies to the emirate. That Dubai did not have even electricity until early 1970s shows the extent to which it was dependent on India for supplies, including kerosene to light the lamps.

And yet for long, Dubai has been considered the best place to buy gold, not only from the price point of view as there were no taxes and no restrictions whatsoever on the amount of the precious metal that one could buy. Nor were any questions asked as to where the money came from.

Dubai never frowned upon the so-called smuggling of gold as it considered the business only as export, which did not violate any rule in the country, of which there were not many at that time. It became smuggling only on account of restrictions in the destination, which did not concern the place where the trade originated. In the absence of any treaties, the Dubai authorities were not obliged to do anything that prevented the flow of gold into India.

In fact, gold trade was one of the most promising ‘greenfield’ businesses for the emirate’s businessmen, most of them hailing from either Iran or India. The emirate had an interesting model for the trade, in which the authorities sponsored ‘safe passage’ for the launches that shipped the gold, as the area was infested with sea pirates, who often plundered the precious cargo.

The then ruler of Dubai, Sheikh Rashid Al Maktoum, widely recognized as the founder of modern Dubai, had pioneered the concept of ‘crowd-funding’ in that age to finance the shipments. He would announce a new trip and solicit contributions from local businessmen, many of them from India, to fund the operation. Rewards were distributed on the basis of each contribution. In principle, the charge was for ensuring safe passage to the cargo, but it often got intertwined with ownership of the cargo as well.

At one stage, the formalisation of trade ties between India and the United Arab Emirates, Dubai and Abu Dhabi being the major players, had hit a roadblock due to the large number of cases involving gold smuggling into India. But all these have been sorted out and the two countries have strategic partnership in a number of fields, trade being just one of them.

The latest case of gold smuggling through the diplomatic channel seems like an action replay. Some 200 kg of gold is believed to have been smuggled into the country through diplomatic bags, purportedly meant for the UAE consulate in Thiruvananthapuram. The discovery followed the interception of one packet, which had 30kg of gold, hidden in sanitary pipes, earlier this month. And the operators have had deep connection with the consulate, as at least two of them have been its former employees. The UAE government has denied any wrong doing on the part of its consulate as it asserts that it was a cargo sent by an individual to another individual. Probably, the diplomatic channel was used through forgery of documents.

The case has serious implications, which could have spoiled the relations between the two friendly countries, although some prompt firefighting by both sides have contained the damage. While the UAE has no problems with the cargo as it tends to view it only as an export, the misuse of diplomatic channels is a serious issue that affects the reputation of the country. The authorities have apparently recalled both the consul general and the attache, in whose name the intercepted cargo had arrived through diplomatic channel.

Perhaps even more insulting is the low amount that has been quoted as compensation paid for the alleged involvement of the consulate. Swapna Suresh and Sarith, the two ex-employees of the consulate, who have been nabbed by Customs and the investigating NIA sleuths as the kingpins of the clandestine operation, have reportedly claimed that for every kilogram of gold smuggled in through the channel, they had paid $1,500.

So far it remains only a claim by the suspect. But if it is proved to be correct, an act of treason, committed for such a lowly amount, is a bigger embarrassment for the UAE than the act of smuggling itself. (IPA Service)