The Story of Dubai's Fall From Grace

The story of Dubai's fall from grace is quite similartravelled to the shores of Dubai. The rising oil
to what we see in the corporate world whereprices had to some extent insulated Dubai from
gargantuan transactional corporations failed despitethe crash but not for long as global demand for oil
their enormous size. The rulers of Dubai harbour aplummeted; plunging prices to an all time low in a
similar illusion which the chief executives of failedspan of four months.
corporations used to have-that they were too bigGold prices, dipped as a consequence further
to fail and were proved wrong by the ravages oferoding the confidence of investors in the
time.solvency of Dubai's economy and its ability to
Visitors to the city confess that one could see ameet its obligations. Vast majority of people were
pall of gloom enveloping the Emirate during mostrendered unemployed and migrant workers sent
parts of 2009 with empty ports, unfinishedback home. The resultant slowdown exposed the
skyscrapers, vacant commercial complexes thatindebtedness of Dubai's economy which was
outlined the story of a bubble going burst. Therunning a debt of $80 billion on an asset base of
desperation is palpable as the carnage hasnearly $350 billion. Foreign institutional investors
exposed the overleveraged character of Dubai'spanicked and began rethinking their investments in
economy. It became clear that Dubai is a classicthe emirate leading to major construction projects
instance of syndrome which affects emergingbeing stalled in Dubai.
markets. The kind of hot money which descendsThe recession somehow hasn't dampened the
into an economy to gain the highest returns andappeal of this desert paradise amongst holiday
then disappears just as fast at the slightest hintmakers. Millions of tourists even today visit online
of a slowdown, a kind of malaise which afflictedtravel portals to search for cheap holidays in
the Asian Tigers in the bloodbath years ofDubai. Travel agents know that Middle East still
1997-98remains their best bet for customers looking for
Dubai has suffered badly from the recklessshort haul destinations and continue to offer
speculation in real estate markets by its elite whocheap holiday deals to Dubai. However, as the
were used to buying and selling property within ayear 2009 ended and 2010 began, one could see
matter of weeks by leveraging free-flowingDubai's economy stirring back to life with share
mortgage money. Dubai was not only theprices of most companies experiencing an upward
recipient of foreign capital but had invested heavilyswing.
in promising investment destinations all across theEconomist's hope that Dubai, in the next few
globe. But the interconnected nature of today'smonths, will reclaim its economic might and
global economy ensured that the carnage whichbounce back as the 'Land of Opportunity' it once
hit financial markets in Europe and Americawas.