Tech & Biz

Dubai in financial freefall?

by car1edb | February 24, 2009 at 04:13 pm

249 views | 2 Recommendations | 4 comments

Quote

A six-year boom that turned sand dunes into a glittering metropolis, creating the world's tallest building, its biggest shopping mall and, some say, a shrine to unbridled capitalism, is grinding to a halt. So too are British expatriates. Many of the estimated 100,000-strong community came here expecting to make millions in property, and to soak up a lavish lifestyle living alongside footballers, actors and supermodels. Local police have found at least 3,000 automobiles — sedans, SUVs, regulars — abandoned outside Dubai International Airport in the last four months. Police say most of the vehicles had keys in the ignition, a clear sign they were left behind by owners in a hurry to take flight. ... On the night of December 31, 2008 alone more than 80 vehicles were found at the airport.

Paul Lewis

I heard a lot of projects were being put on ice or being outright canceled in the UAE, many of which are a staple diet for numerous western companies including those here in Vancouver. Guess it's like they said today its a global crisis now. Knock on effects being felt in every country.

Quote

The desert sheikdom, the second-largest of seven states that make up the United Arab Emirates federation, said it would raise money by selling $20 billion in government bonds to "secure the necessary funding for Dubai to meet its financial obligations and continue its development program." The first $10 billion were all bought by the UAE Central Bank, which is based in the capital, Abu Dhabi. There has been no word on buyers for the rest.

ADAM SCHRECK / AP

They're selling off their bond bubble, even jumping on the gold bandwagon, -things must be pretty bad.

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Roy C

at 23:37 on February 24th, 2009

This is amazing.

car1edb

at 14:15 on February 26th, 2009

its crazy... people are like sheep sometimes, anywhere there might be a nice carrot in front of their nose, they flock. Till it gets taken away. Then find out they have over indulged and haven't a leg to stand on.

james l (not verified)

at 02:16 on March 1st, 2009

I suppose it is very similar to the US.

People have lived beyond their means. Bought cars or houses which they could not afford by acquiring loans which the bank should not have given.

Now some people have to pay for their mistakes or they just opt for leaving the country and their debt behind.

by the way, some of the figures are probably quite exagerated. The story about the 3,000 cars having been found at the airport... That number grew from dozens to hunders to thousands each time someone told the story to a friend. Would take those numbers with caution.

Then again, I would also take with caution what the government "officially" announces, as they will avoid making Dubai look bad.

So you have people who come up with stories to make Dubai look bad working against the government who tries to tell everyone there is no problem.

The truth lies in between and I would say Dubai hasn't been hit nearly as bad as other places. Judging form the packed malls and restaurants, spending hasn't dropped too dramatically (apart from the property and automobile market, of course, which is probably unavoidable).

mogulxlnc (not verified)

at 08:13 on May 24th, 2009

I fully agree with Mr. James. There is so much liquidity available with the Government, I guess it can take recession 3 times and never break a sweat. Word of mouth has been against the government, I believe people just like to comlpain. I think Emirates is just taking a second look at pace it should grow.