Economic Growth of Dubai

Is Dubai Playing It Right?
Nowadays there doesn’t seem to be an end to human needs. People aspire for prosperity prosperous life, a good job, a good house, to drive a well manufactured car, and even to have a huge Bank account!!
These aims may be a little bit crashed because of the economic crisis that has recently hit the world. Many countries after this crisis tried to recover and rebuilt their economy and return to be stronger and face this crisis. Others couldn’t do that as this economy crisis hit it very hard as this country resources are not good enough or rich enough to get over it. From the countries that were hit by this economic crisis is Dubai. “Dubai is a very fast growing country economically, it is the meeting point between the East and the West, it links between western modern life and eastern hospitality. Dubai is one of the seven emirates of the United Arab Emirates UAE. There is nothing you can’t find in Dubai from beautiful beaches and clear aqua blue seas to indoor activities, an underwater hotel and skyscrapers, there is never a shortage of things to do in Dubai. It has the biggest airport in the world, the largest man-made port in the world, the largest Mall in the world, the only 7 Stars Hotel in the World, the largest Skyscraper in the world and finally the largest Theme Park in the world which is about 3 times bigger in size than Disney World in Orlando !!” as came in DubaiCondoProperty.com. The question is; is it a right way to become a leading economic country at this short time? People might think that it is not the best path for development; because there are some barriers. First, resources being under stress. Second, large amounts of loans leading to debts, and Third, people that might lose their jobs and companies that might shut down if the economy falls down.

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One of the reasons that support this point of view is that any developing country it should have enough resources for investment especially if we are talking about the UAE, many of these countries contain Oil resources except Dubai “This city state is purely a business city wholly depending upon tourism and other business. Dubai World, attract world entrepreneurs that started spending more and more on building fine roads, and 7 Star Hotels.” Prasadjain said in an article entitled “Financial crisis in Dubai, reasons and effects.” So Dubai is not an Oil Country and depend mainly on money that it earns from these investments especially tourism sector. ” But immediately after this economic crisis a rumor spread that after the Atlantis opening ( which cost about 1.5Bn Dollars ) the hotel was only charging 10 percent of the original price and has only about 26 percent occupancy as mentioned in “Diversification Dubai’s Downfall” by Helena Axelson Fisk. Also it was published that Dubai began to pronounce a plan for building two more villages like Al Nakheel (Palm Island) “which is a group of Islands on the shape of a Palm that cost about 110Bn Dollars” before it was even completed! As published in BBC News website.
Huge investments surely need massive amount of money, this condition is not available in Dubai, it tend to Borrow money from Banks all over the world, leading to debts then failure to repay. UAE faces up to $184 Billion total debt according to estimates by Bank of America Merrill Lynch, also the Bank said that “Dubai only faces almost $50 billion of debt amortization in the next three years: $12 billion in 2010, $19 billion in 2011 and $18 billion in 2012″as mentioned by Sebastian Tong in article entitled “UAE faces up to $184 billion total debt: BofA-Merrill Lynch”. Also there are many Banks that were hit because of Dubai inability to repay “Banks were hit particularly hard on concerns over Dubai’s ability to pay back its debts” as came on BBC News, some of these Banks are “Barclays which was the biggest faller down by 8%, followed by Royal Bank of Scotland, which lost 7.8%.” Dubai asked for a six-month delay on debt repayments it was due to repay $3.5Bn in December.
Other reason that strengthens my position is that a fast economic growing country should have a strong market study and economic plan to preserve people’s jobs as when it falls down, people might lose their jobs and companies might shut down, that’s what happened in Dubai when it was hit by economic crisis. Nowadays a lot of people were fired and lost their jobs because companies couldn’t pay them.” Lots of people have left – my neighbor, an architect from the US, was fired and her whole company was shut down.” A western journalist said as mentioned in BBC News. Other witness to these incidents “A lot of our friends have lost jobs, particularly senior management in human resources and information technology, some have stayed here, but others have left,” says Grace, in an article by Michael Buchanan. It reached that people leaving Dubai and parking their cars in the airport. “On a recent walk around the car park at Dubai Airport, there were more than two dozens cars that looked completely abandoned by their owners. Some people wrote little messages on the layers of sand that have gathered on the vehicles. One says “Gone 4 Ever”, and another says “He will return Inshallah” This was mentioned by Michael Buchanan as well. Concerning losing jobs as well Buchanan mentioned that “The competition for jobs is fierce now, whereas there would be two people for one job before, I think there is ten now. The opportunities aren’t there as much – and the salaries aren’t there.” It’s just getting worse and worse!
On the other hand, some people might disagree with this point of view and assure that Dubai will make it and survive peacefully from this economic trap as Abu Dhabi; Dubai’s Twin has just lent it $ 10Bn to repay her debts as mentioned by Margaret Coker in an article entitled “Dubai’s Rescue Boosts Others”. But it would be the same and the circle would not stop as it’s going to be a Series of Debts.
Finally, Dubai should take step by step in her economical growth and not jumps, plus it’s not the top needs of citizens to have this luxurious fantasy life, by this amount of money Dubai might have done many important projects to help the 3rd World Countries, these amounts of money can be charged to many productions that might aid the needs of people all over the world.
Works Cited

Title: UAE faces up to $184 billion total debt: BofA-Merrill Lynch

Site: www.reuters.com
Date Published: 27 Nov. 2009
Date Access: 15 Dec. 2009
URL http://www.reuters.com/article/idUSTRE5AQ28C20091127

Name: Prasdjain

Title: Financial crisis in Dubai Reasons and Effects
Site: www.hubpages.com
Date Access: 17 Dec. 2009
URL http://hubpages.com/hub/FINANCIAL-CRISIS-IN-DUBAI-REASINS-AND-EFFECTS

Title: Shares hit by Dubai debt problems

Site: www.bbcnews.com
Date Published: 26 Nov. 2009
Date Access: 15 Dec. 2009
URL http://news.bbc.co.uk/2/hi/8381258.stm

Name: Helena Axelson Fisk

Title: Diversification Dubai’s Downfall
Site: www.global-economy.suite101.com
Date Published: 30 Nov. 2008
Date Access: 15 Dec. 2009
URL http://global-economy.suite101.com/article.cfm/diversification_dubais_downfall

Title: Views from Dubai ‘ The end of the dream’

Site: www.bbcnews.com
Date Published: 27 Nov. 2009
Date Access: 15 Dec. 2009
URL http://news.bbc.co.uk/2/hi/8381363.stm

Name: Michael Buchanan

Title: Time of transition in Dubai as construction work cut
Site: www.bbcnews.com
Date Published: 6 Dec. 2009
Date Access: 17 Dec. 2009
URL http://news.bbc.co.uk/2/hi/business/8397832.stm