DUBAI IS the ultimate city of contrasts. A place where you can dine in luxury at the world's only seven-star hotel, and an hour later be riding a camel in the desert. Where Muslim culture forbids alcohol but where Westerners throng to the big hotels for boozy all-day, all-you-can-drink champagne "brunches". Where bikini-clad tourists are watched on the beach by local women covered from head to toe in black robes.

For all that, and probably because of it, Dubai is a strangely intriguing place. It begins on arrival, when it appears you're landing on a giant sandpit. It's astonishing that this high-rise desert city did not exist a couple of decades ago. Obviously, no Resource Management Act here.

And although the construction frenzy is waning thanks to the recession, the building work still in play in this Arabian Gulf tax haven is apparently nearly the equivalent of the US stimulus package.

If that's staggering, consider what's already been built. The world's tallest building, and biggest shopping mall. One of the world's biggest indoor ski slopes. The most ridiculously extravagant resorts entry to one is via an undersea tunnel; another is planning a refrigerated beach so guests are not forced to lie on scorching sand (this, apparently, is the kind of luxury demanded by "top people", a spokesman told one newspaper).

When your fortune is built on oil, the world is your over-the-top oyster.

DUBAI IS one of seven sheikhdoms that make up the United Arab Emirates, which was formed when the British withdrew from the Gulf in 1971. The UAE is one of the world's wealthiest countries, and has the globe's third-largest proven oil reserves.

But Dubai's ruler, Sheikh Mohammed bin Rashid al-Maktoum, knew the oil wouldn't last forever, and began pouring money into Dubai, determined to make it a commerce capital and a tourism mecca. He wanted the biggest and best of everything - including an iconic symbol. Hence the seven-star hotel, the sail-shaped Burj al Arab, which rises out of the sea on Jumeirah beach, dominating the Dubai skyline.

Then there are the $40 billion fantastical man-made islands. "The World" goes 9km out to sea and is 300 islands made in the shape of, you guessed it, the world. The 5km long Palm Jumeirah (a long trunk with fronds) boasts 2500 villas and 40 boutique hotels (although Donald Trump's $100 billion luxury resort is on hold thanks to the recession).

Another $50-plus billion is being spent on free-trade micro cities where elite operators are encouraged to gather. There's Aviation City, Healthcare City and Sports City (home to a Manchester United Soccer Academy and the International Cricket Council).

Then there's the newly opened airport which can cater for 120 million people a year double the capacity of London's Heathrow. It is part of Dubai World Central, a huge residential and commercial development with its own golf courses and beach.

And while the buildings went up faster than you could build a Lego tower, the ex-pats poured in, attracted to the tax-free salaries and year-round sunshine. Today's 1.5 million population is 80% ex-pat, 20% Emirati, and predictably there have been some tensions between the liberal Westerners and conservative Muslims. Last year two Brits were convicted for having sex on a Dubai

beach, prompting the UK to warn its residents to not so much as kiss in public there, never mind have sex outside marriage.

The Westerners had it good for a while. They partied, they shopped and made fortunes on the back of the property boom. But now the recession is biting and the value of property is falling along with the sharemarket: the ex-pats are abandoning their luxury cars at the airport and leaving their debts behind.

But with 80,000 new hotel rooms due in the next two years, the sheikh is betting there will always be tourists chasing the sun, sand and shopping.

FOR KIWIS, Dubai is the new Hong Kong/LA/Singapore a place to break the hell journey to Europe. I spent two days there on the way home from Italy, and discovered the key to enjoying the experience is choosing your timing wisely. I didn't, and arrived in August when the mercury had risen to a spirit-sapping 45C , with a sopping 90% humidity. Outside was like being in a hot, steamy bath. Even the locals said they spent August inside.

The three three main areas to explore are Jumeirah beach (when the weather's cooler), the old town and the new town (think shopping malls). Shopping is almost a religious experience in Dubai malls are a social gathering point and stay open until about 10pm. Leave before then, though, or it's hell getting a taxi (which are cheap, and a good way to get around in the heat).

I also did a city tour with a walking component a great way to see the old town's vibrant spice and gold souks and a fabulous, if touristy, desert safari. An hour out of the city we went dune bashing in 4WDs, rode a camel and experienced the Bedouin culture with a barbecue and belly-dancing.

As my plane left the sandpit, I decided Dubai was like an annoying younger sibling. Precocious, loud, over-the-top - but secretly you admire what it can get away with.

* Miriyana Alexander travelled courtesy of Emirates and House of Travel.