Dubai is the land of the exotic. Structures that seem like the overactive imagination of a child have materialised in Dubai.
Initially, Dubai seemed unaffected by the late 2000 recession that originated in US and had repercussions all over the world. Countries around the world felt its impact deeply, yet Dubai seemed unperturbed. It continued building mega structures, alluring and enticing the world with its dreams. Constantly reinventing itself, Dubai managed to seize revenue by the daring and vision of its sheiks. They saw opportunity when the world saw uncertainty. But this picture changed soon.
After its tourism boom that lasted 6 years, Dubai was deflated. Abu Dhabi bailed out decadent Dubai by contributing $15 billion to shoulder its debt. This gave Dubai a breathing space for the next 4 years. But there is unease about Dubai’s ability to pay back its debt as it does not have oil reserves that Abu Dhabi boasts of. Dubai was lined up for construction of some of the world’s iconic structures. Most of these mega structures had to be abandoned, while the future of some seems uncertain. The on going constructions have suddenly come to a halt. One such case that stands out is the much hyped ‘The World‘. As of now it has only one ’show home’ on it, with no construction on any of the islands. Property prices have fallen down and unemployment is rampant. Dubai has huge amount of debt maturities in 2011. Yet, Dubai continues, head buried deep in the sand. Or is it?
Although Dubai’s revenue now is mostly from real estate, tourism and service sector, it was on oil, that Dubai made this steady climb. Oil contributes less than 6% of Dubai’s gross domestic product today. This scenario may change soon. The newly discovered offshore oilfield ‘Al Jalila’ named after Sheikh Al Maktoum’s daughter has entered in the picture. This oil field is expected to start its operations anytime in 2011. Dubai’s economy may lead to a tremendous boost by this discovery. Will this be the much needed answer to Dubai’s prayers?
The Dubai tourism desperately needs to reassert itself to gain ground. Considering Dubai’s past history, Dubai may yet surprise the world after all.