toivotuo Tuomas Toivonen
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Wednesday, 22 July 2009
Tuesday, 24 March 2009
Monday, 2 March 2009
Sunday, 1 March 2009
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Probably not collapsing, but not doing too well either. My taxi driver from the airport was kind of happy: he'd been in Dubai 14 years and said that the traffic jams were back to the levels last seen five years ago. So there is a serious slowdown in activity (traffic, of course, is still a nightmare). Also the property bubble is deflating fast. A lot of building activity is suspended and left half built (maybe to be resumed in 2010 or so). The taxi driver had a rule of thumb: 20% of the money for new developments has been the developers' own capital, 20% received from the purchasers of apartments etc. and the remaining 60% financed from the capital markets which - surprise surprise - are totally shut. The developers' are having huge difficulties getting their hands on latter tranches of agreed upon credit and anyhow the David Beckhams of the world already have Dubai property or are not feeling liquid enought to acquire some.
But I'd guess Dubai will bounce back, but not like it was in past decade. It will still be a trade hub and possibly attract some manufacturing industry. The property boom I would have to say is not likely to return as it used to be. A classic classic boomtown bubble: nice while it lasts - and Burj Dubai, after all, is hell of an impressive landmark. (Other towers around Sheikh Zayed road no so much, imho. Standard "Gulf chic" but ultimately rather lacking in soul.) Dubai still has a very long way to become one of the post-industrial city states like Singapore or Hong Kong.
For a poignant leftist critique of Dubai and its free market, anti-democratic political economy, see Mike Davis: "Fear and Money in Dubai" (New Left Review 41, Sept-Oct 2006): http://www.newleftreview.org/?view=2635
(End of micro blog abuse by a macro rant.)
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