LETTER FROM DUBAI:FLIGHTS TO and from Dubai are fully booked. Airport duty free is thronged with incoming and outgoing travellers shopping, which is Dubai's national sport, writes MICHAEL JANSEN
Lines are long at the visa counter. But most of those waiting are East Europeans, rather than Asians.
Visitors poured in for the air show and golf tournament, even though its prize money had been cut from $10 million (€6.6 million) to $7.5 million.
The World Economic Forum’s Global Agenda brought 700 experts and scholars for two days of expenses-paid talk.
Traffic jams fill the wide highways. Lights flicker on Christmas trees in well stocked supermarkets as large ladies wheel carts of loot to waiting late model cars. Shopkeepers in the “little India” districts of Karama and Bur Dubai remain steadfast; their middle-class customers are staying on. Dubai is the good life.
In spite of the veneer of normality, Dubai is a land of confusion.
Official statistics show the population grew by 1.9 per cent to 1.7 million during the second quarter of the year. Most jobless foreign workers left last spring. Officials claim the total number who departed was 50,000; locals say this figure is too low.
No one knows how many went to oil-rich Abu Dhabi or gas-exporting Qatar, or carried home contracts to return if and when Dubai’s real estate sector recovers. The property crash is the main cause of the emirate’s financial difficulties.
Overblown property prices fell by 40-50 per cent since the slide began in November last year, and are expected to dip by another 20 per cent.
Rents are plunging in new luxury neighbourhoods. Canny foreigners come looking for bargains.
Expats who have lost high-paying public sector jobs are consulting, teaching and freelancing. One businessman, who launched his own consultancy, observed: “We know how to manage when times are difficult. We are flexible. We spend less and wait to see what will happen.” A friend who arranges barter deals says business is brisk.
Nevertheless, Dubai is in waiting mode.
Cranes hover over scores of unfinished buildings. Road works and other infrastructure projects are on hold.
A source at Dubai World, responsible for $59 billion of Dubai’s $84 billion debt, says the state-owned conglomerate is “restructuring”.
At least 12,000 of its 70,000 employees have been sacked. That figure could be as high as 20,000. There will be more job losses during 2010.
Dr Abdel Khaleq Abdullah, a leading Emirati commentator, dismisses reports of Dubai’s economic demise as “exaggerated”. Dubai no longer enjoys a growth rate of 14 per cent, but most countries would be delighted with its 5 per cent, he argues. The slump “was not a knock out. The business model is going through tough times, but this will not last for too long.”
The model is viable and resilient, as the experience of Singapore shows.
The government’s announcement that it will not bail out Dubai World could put recovery off for months.
But the authorities in Dubai and Abu Dhabi, the senior member of the seven-emirate federation, cannot afford to allow the conglomerate to sink.
Meanwhile, Dubai remains the Gulf’s shining city.
At nine minutes past nine on the morning of September 9th, 2009, Dubai inaugurated its modern metro, the answer to traffic snarls.
On January 4th, 2010, on the anniversary of the assumption of rule by Shaikh Muhammad bin Rashid al-Maktoum, the world’s tallest building, Bourj Dubai, is set to open.
The handiwork of Indian labourers, Bourj Dubai is 800 metres tall, has 160 floors and contains offices, shops, restaurants and 30,000 homes.
The Bourj, or tower, is a slender, tapering silver structure, dubbed the “Almighty Needle” by Australian writer Germaine Greer during a recent visit.
It looms over elegant two- and three-storey cream-coloured blocks built in traditional Arab style and the squat bulk of the Dubai Mall, the world’s largest shopping centre.
Next door, at Souq al-Bahr (Market of the Sea), a handsome mall modelled on ancient Arab markets, customers lunch on continental cuisine in restaurants beside a pool featuring fountains which fire water high into the air with the sharp crack of a pistol shot or the flat thump of a mortar.
Dubai is down, but fighting for its place in the sun.