Dubai: Foreclosure of a Dream

Abstract

Glitzy Dubai, long considered the new Monte Carlo or the Las Vegas of the Middle East, has suff ered one of the worst crash landings of this global recession. Dubai might be considered a bellwether of the global credit crunch. Until recently touted as a beacon of progress in an otherwise unstable region, the tiny emirate’s seemingly innovative economic and political model is now unravelling, with no end in sight to the uninterrupted stream of bad news. Construction has ground to a shuddering halt, unemployment is rising, sovereign debt is exposed, lawsuits are being prepared, and the population is decreasing, as those who moved to Dubai in search of a better life have either lost their jobs or are cutting their losses and leaving. To make matters worse, as the city empties itself out, traffi c thins, and cars and credit cards are abandoned at the airport, the embattled authorities have embroiled themselves in fresh controversies by introducing protectionist policies for their citizens and a new media law that forbids criticism of the economy, and earning Dubai an anti-Semitic branding in the sports world by denying a visa to an Israeli athlete. With investor confi dence in tatters and debt repayments looming, its humiliated rulers have had little choice but to turn to their wealthier neighbors. But although help has fi nally arrived, it is by no means the lifeline that the emirate really needs, and Dubai’s future hangs in the balance.