Dubai Bites The Dust
Fast Company had a great article in September on Dubai fast collapsing economy, called Bye, Bye Dubai.
“So what they have been able to produce is a miracle.” Or was it a mirage?
Today, an estimated 50% of the slated developments are frozen or canceled. Banks have stopped lending. Housing prices fell 41% in the first quarter of 2009 and are expected to drop to preboom levels. The stock market has plunged 70% from its peak. And people across the socioeconomic spectrum are being laid off — and fleeing — in droves. But even fleeing is harder than it sounds: When foreigners, who once made up perhaps 80% of Dubai’s 1.7 million residents, lose their jobs, their work visas are rescinded and they generally have 30 days to pay their debts and leave. Those who fail to pay risk debtor’s prison. And debt here is now as deep and ubiquitous as the sand itself.
The wealthy, like the Emiratis, remain well cared for. Designer Roberto Cavalli, asked why he spent $30 million on his new Cavalli Club during a financial crisis, replied, “What financial crisis?”
The comments on this article took Fast Company to task for even doing the story:
August 15, 2009 at 10:07am by Shoaib Gill
After reading all the comments posted by other readers it is obvious that your view of Dubai is one sided. Governemnt is super efficient here and they proactively work on every challenge. Even in this downturn this place is stable, all job losses is just an indication of market fluctuation. Any company would go for restructuring to steer the company through difficult times.
You should have given an unbiased view of Dubai.
- THE VIEW NORTH, NEAR BURJ DUBAI | Photograph by Lauren Greenfield
Today, the prospect of a complete collapse in Dubai drove the markets down significantly (S&P 500 equity futures contract show a potential drop on Wall Street of 2.2 per cent tomorrow)… and over the next week we may have another Iceland on our hands.
There’s a lot of abandoned wealth there also:
Police have found more than 3,000 cars outside Dubai’s international airport in recent months. Most of the cars – four-wheel drives, saloons and “a few” Mercedes – had keys left in the ignition.
This video was made in February.. and it’s been a fast downward spiral since.
It shows that the “too big to fail” assumption is just plain wrong, and it is a preclude of things to come.
They should have used a New York Credit Repair company to help.
