Posts Tagged ‘dubai’

Share markets across Europe opened over 1% lower this morning as worries over Dubai’s debt problem hit investor confidence. With news from Dubai World that it will delay paying some of its debt, the Asian markets took a sharp dent too.

Not so long ago, Dubai was synonymous with success and prosperity. If there was an extravagant building going up, a bridge ridiculous in ambition falling into place or an absurdly luxurious hotel spring out of the sand, you could bet it was in Dubai. However, problems with Dubai World and Nakheel have thrown a dark cloud over the future of the emirate.

dubai

In fact, this image of a playground of the rich and haven of opportunity was behind hundreds of thousands of people moving to Dubai.  Only recently did figures indicate that 25,000 people a month moved to Dubai in a way not seen since the California gold rush.

However, Dubai World – the conglomerate which led the emirate’s giant expansion drive – had a total $59bn of liabilities. A majority, then, of the $80bn total of Dubai. The news has shocked markets and even – perhaps as a stroke of good news – the prices of oil have fallen 4.5%.

Of course, speculation being the wonderful thing it is, there’s a concern growing that Dubai World will prove unable to pay back its debtors and Nakheel will be unable to finish work on the Palm Jumeriah (that lovely palm-tree shaped development island) and prices and values have started that sharp journey to rock-bottom.

Now though the spiralling price of property and fears as the once staggering-future of Dubai becomes questionable, the biggest fear is that, with banks and builders set to take a big hit, the fall of Dubai’s fortunes could throw the global recession back into the downward swing.

It’s certainly strange to think of this happening in Dubai when it was so very recently seen as development-central, with such over-the-top buildings as the Burj Dubai, being seen as an example of how countries can move away from reliance on oil (albeit in a somewhat tasteless sense) and pulling in money from tourism and investment.

Such a shame.

It’s strange how fast some places can develop, almost scary. Take Dubai: I’d never heard of it as a kid, even into the nineties I don’t recall it being mentioned that much, certainly not in terms of  “wow, have you seen what they’re building out there?”dubai

Now though, the emirate’s constantly changing skyline and rapid development is famous and barely a week goes by without one of those emails showing some stupidly ambitious development or building arriving. Accordingly, it’s attracting a lot of foreigners and not just on holiday terms.

Not so long ago I took a TEFL course and there were some pretty impressive salaries available over in Dubai but I’m not one for high temperatures. But that’s just me. Of all the people moving overseas, 25,000 of them move to Dubai every month. Staggering, but the tax advantages, heat and way of life mean the population there is expected to go from 1.6 million now to 4 million by 2020.

25,000 a month… that equates to 800 a day. Or 33 every hour! No wonder it’s changing so fast – is it a case of meeting demand for property or people going because there’s so much available property. While it’s not quite a chicken / egg case it’s a quandry. I would say “won’t they run out of room?” but that doesn’t seem to be a concern as fast as they’re building outwards they’re building upwards too.

It’s one of those places that’s so remarkable I’d really like to visit it, though I’m still pretty sure I wouldn’t want to live there.