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

Uganda Court Annuls Anti-Gay Law

Court says law was passed in parliament without enough members present for a full quorum More

Multimedia Thailand Makes Efforts to Improve Conditions for Migrant Laborers

In Thailand, its not uncommon for parents to bring their children to work; one company, in-collaboration with other organizations, address safety concerns More

In Indonesia, Jihad Video Raises Concern

Video calls on Indonesians to join Islamic State of Iraq and the Levant, ISIL 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.
In Thailand, Some Efforts to Improve Conditions For Migrant Laborersi
X
Steve Herman
August 01, 2014 6:22 PM
Thailand has been facing increasing international scrutiny as a hub of human trafficking and slave labor. Some of the kingdom’s companies are striving to improve working conditions, especially for the millions of migrant laborers from surrounding countries. VOA Correspondent Steve Herman in Bangkok takes a look at one initiative for children at construction sites
Video

Video In Thailand, Some Efforts to Improve Conditions For Migrant Laborers

Thailand has been facing increasing international scrutiny as a hub of human trafficking and slave labor. Some of the kingdom’s companies are striving to improve working conditions, especially for the millions of migrant laborers from surrounding countries. VOA Correspondent Steve Herman in Bangkok takes a look at one initiative for children at construction sites
Video

Video Public Raises its Voice on Power Plant Pollution

In the United States, proposed rules to cut pollution from the nation’s 600 coal-fired power plants are generating a heated debate. The U.S. Environmental Protection Agency, charged with writing and implementing the plan, has already received 300,000 written comments. As VOA’s Rosanne Skirble reports, another 1,600 people are lining up this week at EPA headquarters and at satellite offices around the country to give their testimony in person.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video China Investigates Powerful Former Security Chief

The public in China is welcoming the Communist Party's decision to investigate one of the country's once most powerful politicians, former domestic security chief Zhou Yongkang. Analysts say the move by President Xi Jinping is not only an effort to win more support for the party, but an essential step to furthering much needed economic reforms and removing those who would stand in the way of change. VOA's Bill Ide has more from Beijing.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.