As my Indian driver steers our golf cart down a path from the Burj’s partner hotel, the much cheaper Jumeirah Beach (where I’m staying), we’re accosted at three checkpoints by stern-looking guards in white uniforms, who demand to see identification proving I’m a guest at the seaside resort complex.

Just ahead, the 1,000-foot-tall tower looms like a fantasy from the Arabian Nights: silver laser beams cascade down its sleek white facade, illuminating the helicopter pad and the 50th-floor sky bar. At last, I’m ushered up to the hotel entrance, where two Rolls Royce Silver Shadows disgorge the hotel’s newest arrivals: a Saudi Arabian minister draped in his traditional white dishdash robe and a cattle baron from Texas. My driver, Kumar, lets me off at the curbside. “I can go no further, sir,” he tells me. “They won’t let me inside.”

These may be trying times in the Middle East, but you’d never know it from a weekend spent in Dubai. True, the Sheiks who rule this tiny emirate pay lip service to the Palestinian intifada: a few weeks back, thousands of Arab children marched through the sweltering streets to pay tribute to the “struggle against the Zionist oppressors.” In reality, however, they’re pursuing a different agenda: transforming this former sandpile into a shoppers’ and sun worshippers’ paradise.

They seem to be doing a pretty good job. Oil revenues now account for just 15 percent of the emirate’s wealth. The rest, nearly $12 billion a year, pours in from customs duties on consumer goods, plus tourism and “leisure” activities-including everything from bungee jumping clubs to the annual Dubai Desert golf tournament to the $6 million Dubai World Cup, the richest horse race in the world. The economic transformation that began with the influx of wealthy Kuwaitis after the Iraqi invasion in 1990 has now reached a fever pitch, culminating with the opening of the “seven star” Burj Al Arab two years ago.

Dubai has long been a thriving entrepot at the edge of nothingness. Built alongside a silty creek that spills into the Persian Gulf, creating a natural harbor, the city was described by a British writer in the ’50s as “the marketplace of Arabia.” Here, he wrote, “you can buy anything, gold or silver by the ton, rice and carpets from Kashmir, guns from Europe, machinery from America, even slaves.” Except for the slaves, you still can.

Lured by 4 percent customs duties and a total absence of corporate taxes, nearly every franchise in the world has an outlet in Dubai. Along the Corniche, a glittering strip that parallels the beachfront, I passed Pizza Hut, Rodeo Drive, Fuddruckers, Benihana, Reebok, Nike, Nokia, and Starbucks-all on one block. Dubai’s latest gimmick is a monthly “Shopping Fair” that lures tens of thousands of consumers with such attractions as the Kodak School Photo Talent Search, the Lexus Mega Raffle Draw, the Dubai City of Gold Raffle Draw, Planet Pepsi, Barbie House and the Visa Internet Cafe.

This orgy of consumerism reflects the vision of Crown Prince Mohammed ibn Rashid al Maktoum, younger brother of the ruling Sheik. A British-educated billionaire whose passions range from breeding race horses to the Internet, the Crown Prince “wants Dubai to be the Arab Hong Kong or Singapore,” a Reuters correspondent who has lived in Dubai for five years told me. Over last couple of years the Prince has been on a development frenzy. His company, the Jumeirah Corporation, is now the biggest owner of real-estate in Dubai, with properties including the Emirates Towers Hotel, the Jumeirah Beach Hotel, The World Trade Center Hotel Dubai, and Wild Wadi Water Park-a giant amusement complex which features simulated thunderstorms, earthquakes and tidal waves. His latest innovation, Internet City, is designed to make the emirate the cyberspace capital of the Middle East. When it’s up to full speed later this year, this busy campus in downtown Dubai will house 200 big-name computer makers and software designers, including regional operations for Oracle, Microsoft and Canon.

Then there’s the Crown Prince’s piece de resistance: Burj Al Arab, a sort of cross between Donald Trump’s Taj Mahal Hotel and the set of Star Trek. Guests glide through the 70-story atrium, past marble-and-gold fixtures, giant tropical fish tanks, dancing laser beams and a cascading fountain, up to their $1,500-a-night duplex suite that hovers over the Persian Gulf. For bigger spenders, there’s the Sultan’s Suite: a 10-thousand-square foot penthouse that goes for $8,000 a night.

Of course, the average visitor to Dubai can only gape at the Burj Al Arab, but there are plenty of options more within reach. Dubai has dozens of five-star hotels, many laced with landscaped gardens and artificial lagoons filled with water provided by the Emirate’s several desalination plants. Last year, 10 million visitors passed through Dubai Airport, now the third biggest airport in the world. “Every month they are expanding,” my escort told me as he whisked me through a futuristic terminal that puts Denver’s vaunted new airport to shame. The influx runs the gamut from vacationing British oil workers, holiday makers on package tours from Scandinavia, well-heeled Indians from Kenya, and, most of all, Saudi Arabians. “The women love the big hotel shows,” the Reuters reporter told me. “The men come here to drink.”

And drink they do. Dubai has among the most liberal liquor laws in the United Arab Emirates: booze is freely available in all hotels, and liquor licenses are easy to come by-as long as you can prove that you’re not a Muslim.

The Crown Prince’s paradise does have its downside. Life may be sweet for Dubai natives, who comprise just 10 percent of the population: they get free medical care, free education, free job training programs, plus a $30,000 grant and a house plot when they marry. But it’s a different story for the other 90 percent, who mostly consist of affluent exiles from less liberal Arab countries and laborers from India, Sri Lanka and other poor lands. I spoke to one Dubai resident, the wife of a Libyan exile who fled the country in 1978 after two of his closest friends were hanged by Libyan leader Muammar Kaddafi.

After a decade in Houston, where the exile ran the Libyan opposition movement, he suffered a heart attack. Seeking a more relaxed life, he packed up his family and moved to Dubai, where he opened a coffee shop. “We thought Dubai was the America of the Persian Gulf,” his wife told me. “But we were wrong.”

They discovered that they have no right to own property or start a business without a local Dubai partner, she said. Their daughter was denied entrance to the emirate’s medical school, she claims, because she wasn’t a Dubai native. And there’s no guarantee of citizenship for their grandchildren, even though they were born in Dubai.

All that is of little concern to the tens of thousands of visitors who pour in each week from every corner of the planet. At the poolside bar of the Jumeirah Beach Hotel, I sipped a mango daiquiri beside three burly Shell Oil workers from Yorkshire, England, and an emir who was chatting up a voluptuous Russian, perhaps one of the many prostitutes from the former Soviet Republics who arrive in Dubai each year. I drifted through the lobby past some of the hotel’s 18 restaurants, including La Parilla, featuring tango performances and Argentine steaks, Al Khayad, with a nightly Lebanese belly dancing show, and Der Keller, with its lederhosen-clad waiters and nightly special of rostbratwurst with sauerkraut and apfelstrudeln. Posters in the lobby advertised a big new amusement park called-what else?-the Global Village, where the Native American exhibit was currently drawing huge crowds. The local Arabs loved the show, the Gulf News reported, because “like the Bedouins, Native Americans are a very kind and humble people who are totally down to earth.” Just like the crowd at the Burj Al Arab.