Is Dubai’s culture of excess too good to last?

South KoreaIndia,  Canada, Mexico – you’ll struggle to find a market that hasn’t woken up to the here we go again syndrome today. 

A leading state-owned firm in Dubai has announced  it will be delaying debt repayments for six months, plunging markets into mayhem.

Are we about to embark on global financial crisis  ’round two’? And after decades of lavish living, is it time to say bye bye to Dubai?

‘It wasn’t supposed to end this way’ blogs Mound of the Sound.  ‘The Emirate of Dubai was supposed to be the playground of billionaires, not their graveyard.’  But for many inside Dubai who have been emailing the BBC, it still is.

‘I have full faith in the economy here, I strongly believe that it will gradually and steadily bounce back within the next 12-18 months’ writes Khaled.

Ex-pat Paul remains equally as optimistic.
‘It’s all over now, this a time for Dubai as a city to mature. This is a good thing, I am staying as I know Dubai will come back as a vibrant, successful and truly amazing place to live.’

Is it just Dubai’s turn to have a taste of the financial crisis? Or is this the first domino of a new crash just when the world thought things were getting better?

This article thinks we shouldn’t worry; Abu Dhabi cannot afford to let Dubai fail. Here’s where Dubai’s debt lies – the diagram highlights how much the world relies on Dubai.

But Sohail in the UK believes Dubai got what was coming.

‘Whatever goes up also comes down. Dubai is a city built on slavery and crass capitalism. When expats working in Dubai are treated as second class citizens with no safety net whatsoever, they also have no qualms in leaving their liabilities behind and take the next flight back home. ‘

Do you agree with him – is Dubai getting what it deserves? Is this is the end of  this Emirate’s dream?

9 Responses to “Is Dubai’s culture of excess too good to last?”

  1. 1 Roberto
    November 27, 2009 at 11:30

    RE “” Dubai is a city built on slavery and crass capitalism. “”

    ———— Not to worry, slavery and crass capitalism will continue to thrive long after Dubai’s demise.

    Satan’s minions will move on to the newest playground for the rich and famous.

  2. November 27, 2009 at 12:09

    Dubai was the pearl at the top of the mortgage bubble. That bubble has burst.

  3. 3 T
    November 27, 2009 at 14:50

    Spacious flats, a nice car. A maid. Big salary.

    I’ll make a prediction. Despite ALL of this, various expats who have these things will do anything it takes to not have to give this up. What about the have nots? Does anybody care what happens to them?

  4. 4 Poe
    November 27, 2009 at 16:36

    Sometimes you have to go back to go forwards. The modern world has realised that, so although Dubai plays a massive part in the mordern world it will only progress after what one may consider to be a backwards step.

  5. 5 Gary Paudler
    November 27, 2009 at 18:07

    Please just let Dubai fail. What contribution to the well-being of mankind will be made by a “completed” Dubai? All the greed-heads who were certain that it made sense to build a cost-is-no-object playground in a 54-degree Celsius (130F) country with no resources but oil and money should take a lesson. Turns-out they don’t have money or oil either. Let’s say they manage to resume debt service in 6 months, that’s just interest, then what? What will be the business model that promises debt-repayment and profitability? Please make sure that all the laborers imported under false pretenses are repatriated with fair severance pay and let the big-shots enjoy their big, empty shells. The world will be no poorer without Dubai.

  6. 6 Tom K in Mpls
    November 27, 2009 at 18:51

    Think of this, Dubai is a collection of low lying man made islands. It is supposedly financed by oil ( or credit ). Now, supposedly, oil is arguably the single biggest cause of global warming. Well at least the human caused facet of any warming. This in turn is supposed to cause ocean levels to rise. Does anyone else appreciate the ironic humor to be found in the future of Dubai?

  7. 7 Tan Boon Tee
    November 28, 2009 at 05:12

    Dubai had been the playground of “poker games” for the super rich. It has hardly any natural resources, not even oil, relying mainly on the other oil abundant states in the emirate for its port facility.

    Clouded and blinded by the oil price boom, Dubai plunged boldly into excessively numerous gargantuan hyper constructions and projects, borrowing relentlessly from banks in the West and neighbouring countries.

    It is still too early to assess the extent of the impact of the huge financial failure, if it would trigger a second round of global economic crisis. In any case, the other members of the emirate would certainly help to ease the nasty situation.

  8. 8 David
    November 30, 2009 at 15:14

    It is when you are sterving that you remember you should have saved some food for later. At this point is in most cases too late.

  9. November 30, 2009 at 22:03

    Interestingly, Dubai is calling the creditors to recognize their responsibility. For more, see http://euandus3.wordpress.com/2009/11/30/when-flexibility-is-contrary-to-ones-nature-the-modern-banker/

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