The Economic Crisis and Dubai

Dubai, located in the United Arab Emirates, has become a symbol of modern architecture and is full of amazing feats of engineering from the palm tree islands completely made by man in the ocean, and an amazing ski resort in a mall in the middle of a desert. There are plans for several buildings, each claiming the title of the world's tallest from its predecessor. The sheiks that rule Dubai have billions of dollars of oil revenues that they are using to diversify their income from oil to real estate and tourism. Amongst all of this wealth and ingenuity, no one thought that Dubai would be affected from the broadening global economic crisis. Unfortunately, no one has been able to avoid this crisis, including Dubai.

Dubai's banks base their interest rates off of US currency. Because these rates have stayed the same while prices in Dubai have increased, investors are not making wise loans ("Not-so-hot Property"). Another factor is that the majority of people who are moving to Dubai are workers for the building projects, not people who are going to be paying for the luxury condos and apartments that have been built ("Not-so-hot Property). Investors in Dubai had been banking on the US dollar's continuing decline, expecting to make money from Dubai's strong currency. Recently, the dollar has begun to strengthen again, so these investors have been losing money. One of Dubai's most prominent banks was also recently accused of corruption, contributing to a drop in confidence. The article tells us, "So far this year, shares in the Dubai Financial Market have lost 48% of their value. Emaar, a high-profile developer, fell from a high of 15.7 dirhams to 5.5 on October 9th. In another sign that not all is well, the Dubai authorities merged two Islamic mortgage lenders, Amlak Finance and Tamweel" ("Not-so-hot Property). Because of the crisis, the government in Dubai has been forced to take measures that are similar to those that United States has taken. The outlook for Dubai is not totally negative though. The government controls the property so they can control the supply end of supply and demand, keeping the prices high ("Not-so-hot Property).

How does this relate to what we are learning in Language arts? First of all, it relates to our theme of overcoming obstacles. All of the major economies in all of the countries on earth are going to have to face this crisis. We don't know yet how they are going to overcome it or how long it will take, but we know that it will be overcome eventually. In Siddhartha, by Hermann Hesse, the character of Siddhartha must also overcome obstacles in his life and must find his own path to enlightenment. All of the major countries are going to have to test different plans until they find one that works and stabalizes the economy. For now though, the global economic crisis does not seem to be lessening.



"Not-so-hot Property" The Economist. 9 October 2008.
<http://www.economist.com/world/mideast-%20africa/displaystory.cfm?story_id=12381473>.