The rise, fall and salvation of Dubai
The First Post has a great background piece on the rise and, much exaggerated, fall of Dubai.
It features a potted history of how Dubai became so wealthy and why the emirate chose to take the direction it did – because its oil resources were predicted to be exhausted by the 2020s for those who don’t know.
For all the tales of hugely ambitious projects like artificial islands and word’s tallest buildings, four percentages tell the story of the Dubai boom years:
0% rate of income tax in Dubai
25% proportion of the world’s cranes active in
Dubai at one stage
90% proportion of Dubai’s population who were
foreign
700% increase in GDP from 1996 to 2008
Until late last year it seemed that Dubai was going to coast through the credit crisis, then it all suddenly caught up with the emirate. Property, one of Dubai’s most important sectors, suddenly slumped with major projects being delayed or cancelled and many premium developments losing half their value in six months.
Instead of the familiar stories of riches and opulence, the gleeful foreign media was now full of doom laden tales of sinking islands, cockroaches in taps and cars in their hundreds abandoned at the airport by fleeing ex-pats. The car rumour has since been scotched by the government, never a fan of press freedom, which has tellingly responded by passing a law which allows it to fine anyone who damages the emirate’s reputation up to $275,000.
In Dubai loss of work is accompanied by loss of visa, and once unemployed foreign workers only have a month to leave the emirate. In addition to this debt is punishable by jail, so I’ll leave you to draw your own conclusions as to whether the car story is true or not.
Dubai reportedly now has debts of $80bn, equivalent to 2008’s GDP. But all is not bleak for the Vegas of the Gulf, it’s much wealthier neighbour Abu Dhabi is supporting it through the crisis and, no doubt, Dubai will emerge at the other end of the global recession ready to boom again.
Related posts:
- Dubai aiming to spend its way out of recession
- Dubai Formula One theme park delayed due to lack of funding
- Dubai scales down growth and records its first budget deficit
- Unemployed expats flee Dubai to avoid jail
- Happy New Year to all Dubai Dreams Blog Readers