Dubai’s Boom and Bust
Although I began a blog on Dubai’s pro’s and con’s, I instead started to tell a story about Dubai’s boom and bust. So now, my intention is to describe Dubai’s background and transition into a pro’s and con’s piece later this week. My hope is that if this sort of mindless boom were ever to develop again, someone, somewhere would remember Dubai and retell its story.
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Although a lot of Dubai’s boom investment came from foreign sources, Dubai had a ton of cash even prior to the FDI. The city’s royalty owned plentiful rights to oilfields, but eventually sold all of it in order to finance their dream city. Before the construction began, the only visible wealth was Sheiks who lived in lavish compounds and drove around in fleets of bombproof G- Wagons.
Initially, Dubai’s rulers had their fundamentals in order. For one, there was no income tax. They built a huge port and surrounded it with an even larger tax free zone. Corporate regulation was loose, and customs inspections were, and still are, easy-going. They laid out 5-lane wide highways, and built a decently sized airport. A beautiful canvas was created; the only thing missing was the paint.
I lived in heart of Jumeriah Beach from 1997 to 2002. In that time frame, I feel like I woke up one morning and witnessed a small city on the gulf instantly turn sand into steel. To further illustrate my point, between 2001 and 2006, about 25% of all the world’s construction cranes were located in Dubai. Today, the majority those cranes are gone, and have left many buildings unfinished.
During a time defined by excess and greed, Dubai was the decade’s poster boy. Financial firms located regional headquarters in a noisy financial district, celebrities bought into man-made islands like the Palm, and to bring everything full circle, Russian prostitutes arrived by the boatload. In a part of the world where countries vigorously oppressed vice, gorgeous escorts surrounded financial analysts nightly; all while Dom Pérignon endlessly flowed to the worlds best DJ’s.
Ultimately, a manic desire to build the world’s tallest building was the straw that broke the camel’s back. In the midst of the global financial crisis, Dubai requested an $80 billion dollar bailout from Abu Dhabi, a more frugal, neighboring city. Abu Dhabi had a list of compliance requests, but some where at the top of that list was a slap in the face. Abu Dhabi said that if Dubai wanted to complete the world's tallest building, that was OK, they just could not name it "Burj Dubai". Instead, the monstrosity would be renamed Burj Khalifa, after Abu Dhabi’s leader, Sheik Khalifa bin Zayed al-Nahyan. To Dubai’s glorious rise, nothing could signal a more shameful end.
Comments
Great blog. What are the laws
Great blog. What are the laws like Dubai? Are they very strict like other Middle Eastern places or would it actually be possible for a Westerner to live comfortably there, without having to change their normal behaviour?
Good questions. If any other
Good questions.
If any other monkeys have more questions, please just list them here and i will answer them in a pro's and con's piece about living in Dubai tomorrow.
See my WSO blogs here.
M Friedman wrote: Good
Good questions.
If any other monkeys have more questions, please just list them here and i will answer them in a pro's and con's piece about living in Dubai tomorrow.
Does being arab help get me an internship/job there? lol
Would I absolutely need to
Would I absolutely need to know the language to find a job in dubai or would english suffice for a career in the financial industry?
How fucking tall is that
How fucking tall is that building. I know its actual height, but in person?
How great is the demand for
How great is the demand for Western-educated individuals in the financial industry in Dubai? Also, my dad recently went to Dubai, and from the videos he recorded, it looks like a very fancy ghost town....
-O.K.
I have mixed feelings about
I have mixed feelings about this. Dubai was an awesome display of capitalism and the ability for the Islamic world to modernize. For the Middle East, it was the "shining city upon a hill". Granted, they did have significant natural resources...but they tried to develop the country into more than just another OPEC exporter.
Then again, they also made some really bad investment decisions...to embrace capitalism is to be punished for foolishness.
I wanted to work in Dubai for years...the idea of basically living in a seaside Las Vegas with no taxes seemed awesome. The cost of labor was low enough that Then I started to realize that:
(a) you live in an awesome city, but you are surrounded by some really scary countries
(b) the country is only liberal (and therefore habitable to the average westerner) because it has a liberal sheik
(c) it would be hard to transition back to the USA
(d) although they love Western $$$, you are still an outsider and occupy a caste below the emirates and
(e) the whole thing looked really unsustainable.
Would I absolutely need to know the language to find a job in dubai or would english suffice for a career in the financial industry?
I briefly had a neighbor who worked for an oil co., and often did stretches of time in Dubai. Apparently everything for business is done in English, and most people speak English fluently. Of course, knowing Arabic helps get you the job, but apparently the language is really dialect heavy, not to mention incredibly complex. He compared learning Arabic to get a job in Dubai is like learning Mandarin to get a job in Hong Kong. Of course, this was during the good times...I am not sure anybody is getting jobs there now.
What do you think was the
What do you think was the fuel ( no pun intended) for the boom in Dubai?
I thought that it was mostly based on the energy industry in the Middle East and since oil prices dipped during 08' that affected Dubai since it was the financial nexus of the ME. Now that Gas and energy prices are rising once again, do you think that there would be another boom? Especially after the Arab Spring where more Arab governments would need financing.
Powa23 wrote: What do you
What do you think was the fuel ( no pun intended) for the boom in Dubai?
I thought that it was mostly based on the energy industry in the Middle East and since oil prices dipped during 08' that affected Dubai since it was the financial nexus of the ME. Now that Gas and energy prices are rising once again, do you think that there would be another boom? Especially after the Arab Spring where more Arab governments would need financing.
One of my profs told me that they now, generate more money from their financial markets activities than from oil & gas.
It's clear that Dubai grew
It's clear that Dubai grew too fast through the past decade and there is a reasonable amount of infrastructure there that has been/will be a waste of capital.
However, I do believe the city has asserted itself as one of the leading/main tourist destination in the Middle east for Western tourists. I believe there is a large amount of westerners looking to travel to the area (for the novelty/unexplored romance of the region), but Dubai is one of the only cities that can provide the safety and amenities for those of us looking to travel there.
In all honesty, where would you rather visit in the middle east without having to worry about your head being blown up on any given street corner?
In the war against you and the other qualified candidates out there, the best arsenal is to prove that you have outdone yourself.
Its interesting to see that
Its interesting to see that property has been at the heart of most of modern day collapses.
Ireland
US
UAE
Interestingly enough - Canada's and Australia's house prices are still quite high on a wide range of measures but they didnt experience a meteoric rise such as that in the above 3.
Remember that the Dubai from
Remember that the Dubai from 1997 to 2002 is far different to what it is now. I was a monkey of various levels based in Abu Dhabi and Dubai, and worked most of the region from 2006 to 2010. The difference between when I got there and when I left was night and day, I'd expect even more so from 2002 to now.
“I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are.”
- Hicks
Man, if property bubble is
Man, if property bubble is the fault of its collapse, I do fear greatly for Canada and certain cities like Vancouver and Toronto where real estate is astronomical
Interesting. These Persian
Interesting.
These Persian Gulf arabic countries went on a spending spree and ultimately failed.
Building man-made island is not only stupid but also hurts the Persian Gulf waters due to pollution etc..
I forsee a long decline in these countries especially with the numerous US bases located there.
Dubai was just crap sugar wrapped and presented to everyone to be the next Hongkong.
The fact of the matter is, the future's whore houses will be located here.
Anyone know anything about
Anyone know anything about life at ADIA? I had an acquaitence in college whose family worked for ADIA and he said he could get me an interview there if I would like but I kind of lost touch with him. He said compensation for Americans out of undergrad was $120-150k with low taxation. Seems a bit high to me.
My name is Nicky, but you can call me Dre.
aempirei wrote: Anyone know
Gate_Crasher wrote: aempirei
aempirei wrote: Anyone know
“I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are.”
- Hicks
I'm also happy to answer