Since the late 90’s Dubai and the United Arab Emirates have been experiencing an outrageous development, but how long will this illusion last?
In the early twenty-first century financial analysts could not believe in the fall of Dubai, but when the crisis of 2009 struck the richest emirate of the Arab Emirates, Abu Dhabi came to the rescue of Dubai to avoid the explosion of the urban bubble that it had been experiencing due to the massive debt of 80,000 million. It was then that we all realized that the Emirates could not just let Dubai go because it could cause a chain reaction. By 2015 the debt has grown up to 140,000 million, or 140 billion – as Americans would say, and no one knows for how long all of this can be put up with after restructuring the debt.
At the moment, when the price of an oil barrel is at its minimum and the petrodollar is really affected, one better hope Sheik Mohamed Al-Maktoum’s plans concerning the new industry based on tourism and economic bridge between East and West go well, so that Dubai would stay solid. This provided that none of their dangerous neighbors (Saudi Arabia, Yemen, Syria, Iraq and Iran) would decide to get the Emirates involved in their risky geopolitical strategies and thrust the country into a new war. The mirage could fall like a real-life house of cards, and we would watch just stay and watch how tourism and investments, who always look for solidity and security, disappear from the buildings, hotels and shopping centers.
At this point, not even Abu Dhabi’s bailouts based on petrodollars (devaluated) could cope with the economy of Dubai fading as a mirage, 1001 nights style. In a country where the non-payment of debts is punishable by imprisonment, we can’t make sure Dubai won’t imprison itself… You have been warned.