The flash of Dubai has captivated the world for the past decade. But thoughts of skyscrapers built on sand with borrowed cash rather than a concrete future has been incepted into the minds of the world. The opulent structures have created a city within a city – an oasis surrounded by relative poverty. Consequences of such lifestyles and myopic philosophies are not latent in nature; they may be apparent tomorrow, next year, and even for the next generation. While the world outlook for 2013 is positive in many ways, it would be arrogant to assume all liabilities will be paid by the end of this year.
The key problem is that Dubai’s businesses, in congruence with its government, are developing an unsustainable business model that is completely input-driven. It’s growing by mainly pulling in capital, resources, ideas and people without investment into education, infrastructure, or healthcare. With international real-estate and tourism the lion’s share of revenue, the inhabitants of the city are mostly temporary. In fact, merely 10% of Dubai’s working-age population is nationals, or “Emiratis”.
With a debt of $50 billion (of which, at least $9.4 in 2013) that must be paid off or renegotiated to retain consumer and investor confidence, Dubai is in quite a dilemma. The education and employment of locals are vital to the city’s long-term success because at some point maintaining and displaying an overall economic agility.
The premise of “Bigger, Higher, Glitzier” is not in the best interest of the state. Economic prosperity does not have to come at the price of compromised social institutions. What are your thoughts on what Dubai is doing? Any predictions for Middle East’s Oasis in 2013?