When I wrote recently, ” London is Unwell – What’s the Prognosis?”, little did I realise how far the disease called RECESSION had begun to affect other parts of the world. The fall of the Icelandic government to bankruptcy is an example.
Another patient just about to be afflicted with the recessionary disease is Dubai, that jewel in the United Arab Emirates, where there has been a dizzying economic boom in the last 7 years or so. A blogger colleague, Fidel, on a recent visit, had written how impressed she was with the massive skyscrapers, huge megamalls and innovative hotels, having not visited this city for the last 9 years.
Personally, we had visited and held discussions with officials of the Dubai Healthcare City project some 6 years ago and was impressed with their visionary ideas but, even then, we held reservations on its sustainability. There’s a limit to what money can buy; and to expect world-class surgeons to uproot themselves from the mainstream centres of medicine worldwide was asking a bit too much, we thought.
Today, Dubai is not spared the ill-effects of recession. Out of the 4.5 million people in Dubai, expats make up 3.6 million or 80% of the population. According to the Times of London,
8% population decline is predicted this year, as expatriates leave
1,500 visas is cancelled every day in Dubai
62% of homes are occupied by expatriates & 60% fall in property values is predicted
50% slump in the price of luxury apartments on Palm Jumeirah
25% reduction in luxury spending among UAE expatriates.
Now, faced with crippling debts as a result of their high living and Dubai’s fading fortunes, many expatriates are abandoning their cars at the airport and fleeing home rather than risk jail for defaulting on loans. Police have found more than 3,000 abandoned cars in recent months that include BMWs, Mercedes and Porsches.
Will the shifting sands of fortune cure Dubai? It remains to be seen..
1. Skyscrapers and the Curse of Recession: One useful indicator of when countries will slip into recession or economic downturn is the completion dates of major skyscrapers. The Empire State Building (1931-the Great Depression), London’s Canary Wharf Tower (1991-UK recession), Malaysia’s Petronas Twin Towers (1998- Asian Economic crisis) and now Dubai’s Burj Dubai in 2009.
2. The Queen of England Cancels state visit to Dubai: The Times reported on Feb 7 2009 that the proposed State visit next month to the Middle East has been cancelled, in a move which shocked observers as such trips are planned up to a year in advance. It is the first time in recent memory that a state visit has been cancelled for reasons other than war or terrorism.