In a recent Reuters piece, I have to admit finding this paragraph to be pretty darn funny:
In an online interview this year that epitomized the progressive image Dubai has tried to present, Sheikh Mohammed rejected the suggestion he was a “Superman” who ran the freewheeling emirate alone.
“The ‘Superman’ phenomenon you are talking about does not exist in our organizations and institutions,” he told the questioner — before going on to discuss how his poetry and horse-racing fit into his 24-hour-a-day schedule. [source]
The article is a sharp critique of Dubai’s ruler, Sheikh Mohammed, with its author Andrew Hammond seeming to put most of the blame for Dubai’s “recent” financial troubles squarely on the Sheikh. The highlight of course centers on the apparent economic miscalculation that has arisen as of late:
Sheikh Mohammed, whose face and words grace posters all over town, told the [world economic] forum this month that the worst had passed for Dubai which was well-placed to pursue its development plans. The news that investment vehicle Dubai World could not pay a $3.5 billion bond was released just before the Muslim Eid al-Adha holiday and UAE national day on December 2. Local media have almost entirely avoided comment on the debacle.
Good governance has never been the forte of leaders in this region so the results, especially in dire economic times, are less than surprising. Dubai has always been sold to the world, and indeed the region, as the Atlantis of an exotic Middle East. With tall shiny buildings and a vanity industry so enormous that it dares one’s gag reflexes, Dubai has always been this promising economic oasis. For Jordanians the attraction was the opportunities such an oasis created. Dubai has long been a brain drain for Jordan, and for a long while, I suppose this was a good thing. Remittances are still a savior for Jordan’s economy.
But it has been interesting to see how perceptions of Dubai have changed recently. Only two or three years ago, it was difficult to find a young professional Jordanian who didn’t dream of going to Dubai. In fact, it wasn’t so much of a dream as a tangible reality for most. The post 9/11 era did seem to have an impact on local youth who once dreamed of green cards and a land abundant with job opportunities; attention was shifted from the west and on to the Gulf where tall tales of 20-something year olds making massive amounts of money hypnotized fresh graduates. For the longest time, all I heard was “Dubai, Dubai, Dubai”. Today, since the advent of the global financial downturn, no one ever seems to say a thing about it.
Naturally, the Gulf is still perceived to be filled with opportunities for young Jordanians, but talk of immigration has died down in recent months.
I don’t know if Dubai’s fate will be, metaphorically-speaking, akin to that of Atlantis, but I doubt it. Markets rebound, adjustments happen. But I still find it interesting how the hype has died down in Jordan. It might extend beyond just Dubai, and indeed the whole concept of setting up camp in a foreign country during uncertain economic times.
The British and American banks were the ones responsible for this economic downturn at the beginning they’re the ones who started it all with un realistic crediting and unsane policies which affected all the economic regions afterward!!! including Dubai which was dependdant on foreign investments
Dubai has taken the Blow you can’t change that but what i still think is a very smart move by sheikh Mo is the refusal to pay the money to these Banks now which in my opinion is a political move, they desteroyed Dubai’s economy for the time being by being reponsible for the world economic downturn and that’s how dubai hit back …..
Arab leaders are just puppets of both American and British empires that they will answer to , Dub and Sheik Moi will not only have to pay every penny but will be forced to pay all the interest and services of ill thought out loans that they blunders , building fake snow mountain in Dubai is an example of his stupidity and lack of knowledge of economic developments.. what you plant you will harvest.
I can not see how building fake snow mountain in Dubai is an example of Moe’s stupidity! See, it is full all of the time, with an entrance fees of 100 DHS! Which is 20 JD! So in a way, if u want to say that this is stupid, then Disney land is the ultimate stupidity!
Regarding jobs! I can not see Jordan as a place to kick of start ur life in these days!
I was having a conversation with a friend of mine 2 years ago! I was about to graduate, and he was following me soon! I told him that we will not be able to live in Jordan as fresh graduates in the cursed field of engineering where 1% of our beloved Jordanian population!
He told me that he will live in Jordan no matter what! This guy and others has worked in Jordan using all of their possible “was6at” to work in any place for 200 JDs, where at the end of the month, 50 JDs would be deducted for the water in the coolers and other things (still applies even if u bring ur nastle bottle with u)! All of these guys are now in the gulf and am laughing my ass hard at this guy who wanted to live in Jordan no matter what! he could not hold for a 1 month of working there!
Besides, I believe that because Jordan is a country of a one city where u get to spend 100% of ur life in if u decided to stay there, we need to migrate to learn and become more open minded and get to know what life really is! (Just my opinions up there)!
Haitham If you think building fake snow mountain is not stupid blunders of people’s resources then i think you have lots problems in understanding sustainable economic development .
i actually see it in 2 different lights …
when it was once the option for jordanians to kick start their careers they are now left with no options at all. jordan ain’t exactly the employment or career haven.
The other side of the situation is who in their right mind thought that the craziness that is going on in dubai (or on a smaller scale in jordan) would be sustainable?
Some how the explanation is that its a plot to bring down a successful muslim nation, or the hints of that in the top 2 comments are absurd ! It was their folly to invest risk fully and its their mistake not anyone else, and if they don’t own up to their loans, they will default. once that happens cash loans will dry up…
@bambam: a valid point. but do you think that in a globalized world, there is something to be said about the domino effect of the marketplace. dubai’s risky behavior may have passed had the heart of the crisis not originated in the US banking system.
Actually i think it would have happened earlier if it wasn’t for the injection of money they got from abu dhabi .
The reason they are in trouble at this point is 2 fold, partly due to the recession and multi nationals being more conservative and withdrawing part of the investments. Thats why there was a huge job loss in dubai, but at this point the reason for Dubai woes is entirely different.
The contractors over there and developers were working on accommodating growth in the population calcualted at the peaks of about 300,000 per year. if they only consulted any actuary or economist then they would have known better (they might have heard it and decided to go forth)
The limited supply in the market at the time created a real estate bubble, where real estate prices where increasing and the consumers thought they will keep on rising. Given that situation people where using real estate as a investment and flipping houses and taking loans to flip more houses and when they were fired they couldn’t meet their payments. in turn the developers that estimated that those payments could keep them running and self finance the project couldn’t make their payments either creating a domino effect of the blind leading the deaf ….
the tell tale signs where all there … its just its too somber to be told that things will come crashing eventually when things are booming.
I can not see how a communist is talking about sustainable development! Again, these mountains are for fun, and are bringing money!
Just like Disney land! It is for fun and not FOR FREE! Just believe me u have to pay a lot for that, and westerners are the number one users of these mountains because they apparently miss cold weathers!
So tell me, what is the blunder in that?!
i agree with Bambam.. if Dubai World doesn’t service its loans, its their fault and they will pay the consequences. it is very naive to think that defaulting on a loan to western bank may somehow benefit you. you default now, no one will want to lend you more anymore and if they do lend you, the cost of the loan will skyrocket which it already did not only for Dubai but for the entire Arab world.
Dubai’s problem was an asset bubble just like Japan in the 90s and the U.S. now.. but it is really a business cycle, the severity depends on the leverage but it was bound to happen..
“I can not see how a communist is talking about sustainable development! Again, these mountains are for fun, and are bringing money!”
HAVE GONE SKYING LATLELY TO Dubai hAITHAM?
OK Haitham, Let us talk about facts how much they paid for those fake slopes and how many visitors and tourists they have received , I can assure the cost out weight the revenues..
Sheikh Mo soon will be become a police chief of a ghost town,, And ILOVE IT