There are increasing signs that the emirate of Dubai is on a tight schedule due to a combination of factors, notably the conflict in the Gulf region and the saturation of the real estate market in the emirate.
Officially, economic estimates indicate that the emirate will grow its gross domestic product (GDP) by 3.3% in 2018, up from 2.8% last year, but these "rosy" figures conceal troubling indicators, according to Economist.
Dubai's index fell 20% year-on-year, the worst performer in the Middle East, and confidence was shaken by the recent collapse of the Abraaj Group, the largest company in the Dubai International Financial Market. Employment movement shrinks for the first time in emirate statistics.
Economist pointed out that Dubai is blocking the necessary statistics for a sovereign credit rating, but the companies owned by the emirate give a picture of the credit situation. Standard & Poor's lowered the credit rating of two of the emirate's companies in September.
Aliens are leaving
The Economist article pointed to other worrying indicators, saying that some schools of foreigners in the emirate are closed, taking into account that foreigners make up more than 90% of the population of Dubai.
Furniture companies say the number of travelers exceeds the number of arrivals, while real estate brokerage offices complain about the vacancy of apartments, while the real estate companies build more of these apartments.
With rents falling, Dubai was the second-worst-placed global real estate market in 2017 and Emaar Properties, Dubai's biggest property developer, fell 38% in one year.
| Shares of Emaar Properties fell 38% in one year (Reuters) |
The Economist pointed out that Dubai is subject to the policies of "confrontation" adopted by Crown Prince of Abu Dhabi, Mohammed bin Zayed, who described him as the de facto ruler of the UAE.
She added that Mohammed bin Zayed and Saudi Crown Prince Mohammed bin Salman had led the war in Yemen and besieged the State of Qatar, thus losing Dubai as a trading partner, stopping flights between Doha and Dubai.
The article said that instead of taking a share of the work generated by Qatar's bid to host the 2022 World Cup, the UAE is trying to derail the tournament.
In spite of all the above, "optimists" believe that the UAE's foreign adventures may create opportunities for the country according to Economist. The UAE's control of ports in Yemen has opened up new lines of trade. The same could happen in the Mediterranean thanks to the alliance with the retired Libyan general Khalifa Hafer.
The magazine also noted the UAE presence in the territory of Somaliland, and relations between the UAE and the regime of Bashar al-Assad in Syria in secret may bring them contracts for reconstruction.
But the article concluded at the end that the more the UAE engulfed the political conflicts in the region, the more Dubai withdrew with it. "Today, Dubai may be a victim of this unrest, although it has benefited from it for many years before" when it was a safe haven.