News / Economy

Dubai Booming in Region of Turmoil

The islands of Dubai viewed from International Space Station March 20, 2013 (Col. Chris Hadfield)
The islands of Dubai viewed from International Space Station March 20, 2013 (Col. Chris Hadfield)
Phillip Walter Wellman
There is a sense of déjà vu in Dubai. Three-and-a-half years after a major debt crisis, the city appears to be booming once again, as investors and tourists see it as a safe haven in a region fraught with instability.

Known for its man-made palm islands and having the world’s tallest building, Dubai was possibly one of the most visibly affected cities of the 2008-09 global recession. Not only did it witness an exodus of expatriate workers, but a number of major construction projects were also put on hold, leaving a landscape littered with half-completed structures.

Today, work on many sites has resumed and the sound of construction work is ubiquitous.

One of the latest developments underway is Mohamed bin Rashid City, named after Dubai’s ruler, which will eventually boast up to 100 hotels, five theme parks and the world’s largest shopping mall - outdoing the Dubai Mall, which is currently the biggest in the world.

Just this week, officials announced the creation of another district that will act as a hub for global luxury, fashion and design brands. And on Monday, the city added to its list of superlatives by opening the world’s tallest twisted tower.

While Dubai’s leaders say they never questioned the renaissance of their sheikhdom, one of seven that make up the United Arab Emirates, experts say the quick rebound would have been impossible without the unrest and bloodshed seen in neighboring nations.

"There is some real pickup in economic activity, which obviously is attributable to the status of the UAE as a safe haven. In a period of turmoil in the rest of the region, Dubai acts as a magnet to people and capital and the data reflect that," said Giyas Gokent, chief economist and head of research at the National Bank of Abu Dhabi.

Latest figures show Dubai’s economy grew by 4.4 percent last year, its best performance since 2009.
.
Real estate prices reflect the current optimism; they have been steadily increasing since dropping 50 percent after the financial crisis.

While analysts agree Dubai has benefited from turmoil in other Arab states, Stephane Garelli, director of the IMD World Competitiveness Center in Switzerland, says authorities in the emirate must also be credited for handling their internal issues in a way that pleased investors.

"Sometimes crises are very good because they test the robustness of the model, they test also the ability of governments to react quickly on events and I think this is what has happened with the United Arab Emirates. Two, three years ago there were a lot of question marks and I think the ability of the government to confront the facts, to react to them very quickly and to put in place a number of measures was very welcomed by the market," Garelli said.

But the grand scale of proposed projects in Dubai has led some to question whether officials have learned from past mistakes. Details on how many of the mega developments will be financed have not been released and sceptics doubt all of them will come to fruition.

Last month, developers planning to build a giant replica of the Taj Mahal in Dubai pushed back the launch date by a year.

There also are concerns for the laborers building the new projects. Rights groups say many workers, most of whom are from South Asia, are subjected to substandard living and working conditions. Some have even been described as virtual slaves.

Abdul Rahim Yousif al-Awadi, Assistant Foreign Minister for Legal Affairs says the country is committed to preventing the exploitation of its foreign laborers.

"We have the laws and we have the people trained to combat or discover these types of crimes and I think we are ready for whatever is coming," al-Awadi said.

As regional unrest continues, Dubai looks set to reap the rewards.

"What is clear is that the Arab Spring is a multi-year process unfolding and it means that much of this capital coming into the UAE is likely to stay long term rather than being put here for a short term basis," said Nick Tolchard, the head of Invesco Middle East.

Global index compiler MSCI on Tuesday upgraded the United Arab Emirates from a frontier market to an emerging market. U.K.-based HSBC says capital flows into the UAE could increase by $370 million per year after the decision comes into effect next May.

You May Like

Video Analysts: Beijing Parade a 'Bazaar' of Stolen Technology

Show commemorating victory over Japan in World War II involved long, medium and short range missiles, a range of tanks and 200 fighter aircraft More

Bernie Sanders Surge Reflects US Shift on Socialism

Although most analysts say it is unlikely he will get the Democratic nomination, Sanders' campaign opens up questions and issues that are otherwise marginalized More

Video On IS Frontline, Kurdish Fighters Ready for Offensive

Peshmerga soldiers say although they need more heavy artillery, they are poised to take the fight to the Islamic State extremists on their turf More

This forum has been closed.
Comment Sorting
Comments
     
by: Muhamad the Idiot from: Iran
June 13, 2013 5:45 PM
yeah... sure... and how long will that last...?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Drowned Migrant Toddler Photo Triggers European Outragei
X
Henry Ridgwell
September 04, 2015 11:36 AM
The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Drowned Migrant Toddler Photo Triggers European Outrage

The harrowing picture of a drowned three-year-old Syrian boy washed up on a Turkish beach appears to have galvanized Europe’s leaders into doing more to address the refugee crisis. France, Germany and Italy issued a joint call Thursday for compulsory quotas of refugees for all EU states. But there were chaotic scenes in Hungary as police tried to force migrants off a train heading for Austria. Henry Ridgwell has more. And a caution, some of the images in this report may be disturbing.
Video

Video Russians Observe 11th Anniversary of Beslan School Attack

This week, Russians have been observing the 11th anniversary of the attack by Islamic militants on a school in Russia's North Caucasus region that killed more than 330 hostages, including 186 children. The three-day siege and massacre that started on September 1, 2004 took place in Beslan, a town in the republic of North Ossetia, and is one of the bloodiest terrorist acts ever in Russia. VOA's Mike Richman reports.
Video

Video Native Americans Debate: Father Serra, Saint or Sinner?

Pope Francis will canonize an 18th century missionary to Spanish California during a papal visit to the United States this month.  But some Native Americans have criticized the elevation to sainthood of the missionary priest, Junipero Serra. VOA's Mike O’Sullivan has more from Los Angeles.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video China Announces Troop Cuts at WWII Parade

Chinese President Xi Jinping Thursday announced plans to cut the world’s largest military force by 300,000 troops. The announcement was made during a massive military parade to commemorate victory over Japan in World War II. The event was shunned by most Western leaders and for some is raising fresh concerns about China’s military ambitions. VOA’s Bill Ide has more from Beijing.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.

VOA Blogs

World Currencies

EUR
USD
0.8905
JPY
USD
120.20
GBP
USD
0.6541
CAD
USD
1.3262
INR
USD
66.242

Rates may not be current.