http://www.economist.com/news/finance-and-economics/21569036-gulf-emirate-flashy-ever-it-still-has-structural-problems
This article describes Dubai's aspirations to expand the economy by kicking off a massive project to "create a city within the city, a development bigger than anything that has gone before." However, this comes just three years after a financial crisis which threatened to cause the collapse of the entire economy. In addition, many economists feel that the city relies too much on outside sources for labor- only 10% of the working-age population is made up of nationals. Though the local economy has been improving (GDP is rising, the property market is improving, hotel occupancy rates at 80%) there is still some uncertainty that must be resolved in order for it to continue to succeed and grow in the future.
Dubai may have the world's tallest building, but the reality is that it was designed, built and continues to be maintained by foreigners. Until Dubai can rely on local firms they will have trouble growing the economy into a successful one. They need to rely on nationals for work instead of going to an outside firm. Dubai was bailed out once, will it happen again?
ReplyDeleteEven though this article spells bad news for Dubai, I have a feeling Dubai will be just fine in the long run. Along with Qatar, Abu Dhabi, and maybe 1 or 2 others, Dubai is seen as the "New York City" of the Middle East. Dubai never had massive oil reserves, so it never reaped the enormous incomes other Middle Eastern countries enjoyed. They built a metropolis on foreign investors from the sand. Dubai is only trying to attract more tourists, income, trade, business, etc. with the new developments and I believe they will do just that, all they need is time.
ReplyDeleteRecently, UAE made changes and a large number of foreign workers were made redundant in an effort to be self reliant.
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