Dubai Goes Icelandic

Firstly I will quote Auto320 who explained Dubai very well less than 2 years back.

askaboutmoney.com/showthread … post410412

bloomberg.com/apps/news?pid= … refer=home

I heard the place has gone into meltdown over there. Jobs being lost left right and center.
It will be very interesting to see how this is managed. Will the locals be saved at the expense of the foreigner? Let’s wait and see.

I know some people living there and they have said (only in emails) that the place is still booming? One said he reckons the property market there is seriously f@#k3d but that they are still building, i’d say they might be in our 2006 at the moment?
who knows, what i can say is that all the oil in the world won’t stop the tide from coming in.

skyscrapercity.com/forumdisplay.php?f=377

The property market there was still booming until about July or August. It has taken a sharp downturn since then because it has all been built using borrowed money (very little oil in Dubai…it accounts for only 6% of its GDP). Due to the credit crunch the developers are being squeezed at both ends because they are finding it difficult to borrow and also the speculators who were buying the properties cannot borrow money. This has caused property prices to fall and this in turn has frightened off many of the speculators and flippers. It will also lead to the postponement of developments.

However to someone living there who is not paying much attention to the news or the press it may seem like business as usual because they have continued to build. This is because if they have already started a project and invested a lot of money in it they will continue to finish it unless they run out of money or unless they think that they will loose more money by continuing it.

Some of these developments are absolutley huge. For example, there are three palms being built in the sea. One of these palms was going to be big enough to accomodate 1 million people.

More info can be found here:
guardian.co.uk/business/feedarticle/8072766

gulf-daily-news.com/Story.as … ueID=31246

dividend.com/blog/?p=3431

gulfnews.com/business/Real_E … 59786.html

gulfnews.com/opinion/editori … 59176.html

thenational.ae/article/20081 … 05029/1135

All it takes is one major Al Qaeda attack on western interests in Dubai and this house of cards will collapse.

Above when I said I heard the place had gone into meltdown. Was relaying the words of a person I know who currently lives and works over there. He bought a fancy apartment and is now fearfull.

It is a house of cards built on soft sand!

Interesting article on Dubai:

cnbceb.com/country-regional-city … state/856/

yes but also Eire - the world is the world. One people after all and that will be soon the way of the future

…lots of talk over the years of a deal being done with Bin Laden, Al Qaeda to stay away from Dubai…

Here is another good article:

usa.mediamonitors.net/content/view/full/58509

Why Dubai?

no one has been able to answer this for me.

As Dubai has nearly run out of oil (currently 6% of GDP) the Sheik has been encouraging investment in other areas in order develop the economy and secure its future. The main focus has been to turn Dubai into a main trading hub by building a new port and a new airport, enouraging the expansion of the financial services industry, and trying to turn it into an up-market tourist destination with 7 star and 5 star hotels (not sure what happend to the 6 star!) and by building upmarket shopping centres - some shopping centres only sell gold, silver and diamonds! One shppping center even has a 450 meter ski slope with manufactured snow

The following points are also relevant:

  1. Because of its location it is a trading hub between the Middle East and Asia so there has always been a port there (small in the past but now huge)
  2. The UAE is one of the few stable regions of the Middle East so most of the rich Lebanese and Iraquis fled when the wars in their countries broke out and came to Dubai.
  3. Kuwait was a major financial centre whose financial expertise was used by the other oil rich Gulf nations for investments. This was brought to a halt when Sadam Hussein invaded and much of the expertise and money again fled to the Dubai. Many Western banks are present.
    4)Dubai is a tax free - no corporation tax, no income tax, no capital gains tax or VAT.
    5)The large development companies in Dubai are mainly owned by the State (although some of their shares are traded) so the rulers will have been behind most of the big developments. However they have had to rely on borrowed money to finance this expansion.
    6)Westerners were not allowed to buy property anywhere in the UAE until the Sheik of Dubai changed the law in 2002 - this led to a flood of speculators coming in.

what i dont get about dubai being a hub is its location, Saudi Arabia could have a revolution and if the US/ israel attacks iran u can see missiles falling all over the gulf with the shipping lanes being blocked etc

Geographically it is in a good position for a hub because

  1. It is close to the mouth of the Persian Gulf so large ships can stop here to transfer cargo that is destined for other Gulf states;
  2. It has a natural harbour;
  3. As far as flying is concerned, it is often difficult to get a flight from some Western Countries to certain Middle East states so Dubai is used to get connecting flights;
  4. It is in a conveneint position for certain long distance flights from Australasia to Europe to stop over for refuelling;
  5. UAE is one of the few stable countries in the region;

However, as you have said, there are several problems and potential problems in the region and they could easily spill over into Dubai. Dubai is only a very short distance accross the Gulf from Iran, for example. Other Arab countries are also not very happy with the Westernisation of Dubai (bars, tourists sunbathing etc) so you can never tell what some fanatics might do.

mikey wrote:

Er, d’ya think that was a wise name? Didn’t something bad happen to the last Atlantis? :stuck_out_tongue: