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 Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community 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.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.