"We were twenty days in Abu Dhabi, a quiet national of more or less two thousand inhabitants. Every morning there was visiting the sheik and slow steps in the fort, we talked for hours drinking coffee and delicious Arabic sweets. Then when we left we went to the market where, sitting cross-legged in the shops, we were to chat and drink more coffee. In the afternoon we wandered to the beach where the dhow sailors caulk with fat to prepare them for shark fishing season of the pearls. Children were playing in the water and fishermen landed their catch of the day.
I think the bubble, however, has never really exploded, as some you are emptying quickly. The pace of life decreases day after day like a balloon laundry but I seemed to hear bangs and now I think more has been given.
There are two ways to read the crisis in Dubai. The first is through the collapse of buildings and blocking international loans, two events - these are explosives - which have crippled two areas that certainly will not recover its 'short-it' in the medium term. The second viewing angle is rather to consider the whole economy of the city-state, which was not born yesterday and that leverages the competitive advantages of its geographical location and its first class infrastructure. From this point of view is not difficult to foresee that in the medium term the growth of Dubai will remain high, although the peak of the unsustainable boom years are destined to never to return.
Between 2008 and 2009, the financial crisis of U.S. sub-primes has spread rapidly into a global economic crisis. Dubai economy is (relatively) small and heavily dependent on external demand. In fact, this froze instantly, despite the proclamations of the sheikhs who were trying to deny the obvious. The tumbling price of oil fell from 140 to 40 dollars a barrel, many companies suspended all projects stifling economic growth as the breath of the Emirate in which they no longer flowed 'capital will' work force.
The housing bubble began to become a concern in late 2008, when tighter credit conditions and falling confidence index dissipated demand. Just at the same time the frenzy of construction sites open a few years earlier was coming to put on the market a huge amount of buildings despite an excess supply that was starting to become clear. The manufacturers obviously decided to complete at least the jobs that were now nearing the end, accelerating to place the property before others see them ended. Maybe I can make more clear with a simple esmpio: Chiara (may Allah bless and protect) lives in a tower in a new megappartamento than sixty plans, pay half of what they had asked last year and the entire building for the moment there are only three families. In short, the new towers if they simply remain there half empty, it will take years before the bid realigns with demand. I would say that the prospects for real estate in Dubai are very bad.
icing on the cake, or rather on the dynamite fuse, all this was built by funding long-term investments with short-term debts. Now without being Tremonti or a Nobel Prize for Economics just a Bedouin of those who accompanied Thesiger in the desert without too many difficulties to see a considerable financial risk in the enterprise. In fact, the slumbering dragon has finally awakened to the end of 2009 when the largest local real estate - the now infamous Dubai World - has collapsed under the weight of its debts and was forced to renegotiate the structure of its financing. The result was clearly intended to deprive the confidence international investors now deny credit to projects in the emirate, which finds itself so short of capital.
Once we recognize this undeniable fact can not but fail to realize that Dubai is not born yesterday with the housing bubble.
"I said goodbye to my traveling companions and I went to Sharjah to Dubai where I was the guest of Edward Anderson. They lived in a large house on the creek, the strait that divides the city into two. Dubai was the largest city on the coast, with about twenty five thousand inhabitants. Many boats were moored in the creek or were doing in the hull in dry mud on its banks. C ' were dhow, jaulabauts, there were Kuwaitis Boowa and elders from Sur. baghila had an old one side decorated with monograms Christians who were probably copied from the projects Portuguese galleons that had been handed down unchanged from generation to generation. (...)
I would have been able to bring in air from Sharjah to Bahrain but I preferred to do it on a dhow sailing from Dubai (...) The first night we were taken by a storm and had to repair under the Persian coast where he sailed for nearly three days because the wind dropped as we came straight on the bow. Whilst waiting for the wind was running we were joined by others who were returning from Zanzibar dhow. The dhow boats are solid, heavy, made to sail the ocean Indian Ocean. The their captains were rowing alongside, we ate with rice, dates, and a large fish that had just caught and smoked shisha and we spoke of their trip but not a lot of words I could understand them.
The next day the wind shifted and we started en route to Bahrain. It was exciting to see the big dhow that exceeded slicing through the waves of the Gulf. They were the last commercial vessels that sail the world ancoralunghe sailing routes only. A little later would be gone.
When we were almost in sight of the coast the wind dropped and we were to roll in the heat for four endless days. The short spring Arabic was over, the sky was clear and the sun beat down vertically. Humidity enveloped us like a hot towel, warm water in the tank was rusty and the time it seemed. The crew, like all Arabs, had an enviable ability to sleep when there was nothing else to do: it is wrapped in a sail, all'sitante asleep and slept for long hours. (...) The Arabs were a great seafaring race and I was dhow ride that because I wanted to see them with my own eyes. The their dhow had sailed along the coasts India to Indonesia and further afield. In the nineteenth century the ports of the Emirates who had recently left were better known as the Pirate Coast, much less a century ago in these waters Jasim pirates had held in check the British Navy for a long time. (...)
Finally got a breath of wind that seemed to hold. The captain shouted to the crew that came out of his endless slumber and began to hoist the sails and pull off singing and clapping rhythmically feet on deck.
arrived in Bahrain 28 May 1953, the former commandant nearly went blind landing passing sailing full between moored boats. Eventually we broke a couple of low order and went to the beach right next to one of the dhows that were with us in the Persian coast a week earlier "
More than fifty years here it works to diversify the economy and establish itself as a reference in the Gulf region. In the 60s it was dredged and widened the Creek and early '70s had built Port Rashid, in '80 we realized the huge port and free zone of Jebel Ali was born in 1985 and the national airline, the famous Emirates Airlines. Geographically central in trade between Europe and Asia, Dubai is the city with the highest quality of life in the region: Mercer puts 75 th best city in the world as quality of life, the first front in the Middle East in Abu Dhabi (83) , Musqat (the capital of Oman, 100) and Doha in Qatar (110). The UAE in general are considered by the Economist the fifteenth country in the world for quality of life, the best in the Gulf ahead of Kuwait (23), Bahrain (24), Oman (32) and Saudi Arabia (38). And the same crisis building in a sense is a boon for business. Today it is estimated that about 35% of properties in Dubai are empty, this percentage is likely to touch 50% in the coming months when the last work in progress will be completed. Rents senseless and uncontrollable costs in 2008 which led many companies to shift their interest towards the center of Abu Dhabi, Doha and Musquat have been halved and stabilized. Today put an office or rent a house in Dubai is extremely convenient. In recent years the shortage of apartments and their inordinate and uncontrollable costs had led many to look for a house in nearby Sharjah and Ajman. Today, this flow is reversed, and even some people working on Abu Dhabi and chooses to take home in the south of Dubai, about an hour's drive from the office.
So, in my opinion is more or less difficult to predict what will happen. In the coming years, the economy of this part of the world will grow at a rate almost twice the global average (eg the reconstruction of Iraq alone will represent a huge economic opportunity) and Dubai will be - as always - in the best position to take advantage. If anything, the real risks they will face the small but prosperous economy of the Emirate will be external ones: the European crisis of the public debt, doubts about the sustainability of Chinese growth model, the geopolitics of the Middle East region will influence significantly the ability of Dubai to bounce along with the rest of the world economy.
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NOTE: Both quotations in this post are as always to Wilfred Thesiger, from "Arabian Sands" (written in 1953 and published for the first time in London in '58) . The second in particular I added later, because I wanted to make a gift to Fra ', trendaduesima benvenutissima reader and dedicate it to my wife, a great sailor and sea life that I love and I say good luck for their new navigation in the hills.
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