Dubai’s tourism
industry has
exploded. The
city’s profusion
of quality hotels,
long stretches of
beach, warm win-
ter weather, shop-
ping incentives,
desert activities
and relative toler-
ance of Western
habits have
helped it become
the leading tourist
destination in
the Gulf.T
OURISM
S
UC
CESS
o nE BurSt BuBBlE
Until September 2008 it looked as though Dubai had the Midas touch.
But then the world financial crisis struck and the emirate’s economy
collapsed like the proverbial house of cards. Real estate was particu-
larly hard hit, with prices plummeting as much as 50%; Dubai was
left with a staggering debt of at least US$80 billion. When the govern-
ment announced, in November 2009, that it would seek a six-month
delay in repaying its debt, including a US$4 billion Islamic bond due
in December, it sent worldwide stock markets into a tailspin. Markets
stabilised quickly after the Abu Dhabi government rode to the rescue
with a US$10 billion loan, which seems generous until you realise that
oil-rich Abu Dhabi has a balance sheet of US$600 billion. As a sign
of gratitude, in January 2010 Sheikh Mohammed named the world’s
tallest building – which had thus far been referred to as Burj Dubai –
Burj Khalifa in honour of the UAE president and ruler of Abu Dhabi,
Sheikh Khalifa bin Zayed al-Nahyan. It remains to be seen whether
the loan was merely a stopgap measure or whether it will buy enough
time for Dubai to restructure its finances and put itself on a slower but
more sustainable growth path. On a positive note, in 2012 the emirate
benefited by around $30 billion of maturities, which will doubtless
be used to regain access to international markets and ease liquidity
pressures.
oncE a traDEr, alWayS a traDEr
Throughout history, trade has been a fundamental part of Dubai’s
economy. The emirate imports an enormous amount of goods, pri-
marily minerals and chemicals, base metals (including gold), vehicles
and machinery, electronics, textiles and foodstuffs; the main import-
ers into Dubai are the US, China, Japan, the UK, South Korea and
India. Exports are mainly oil, natural gas, dates, dried fish, cement
and electric cables; top export destinations are the other Gulf States,
India, Japan, Taiwan, Pakistan and the US. Dubai’s re-export trade
(where items such as whitegoods come into Dubai from manufactur-
ers and are then sent onwards) makes up about 80% of the UAE’s
total re-export business. Dubai’s re-exports go mainly to Iran, India,
Saudi Arabia, Kuwait, China and Afghanistan. Dubai is home to the
world’s largest man-made harbour and biggest port in the Middle
East. Called Jebel Ali, it’s at the far western edge of Dubai, en route
to Abu Dhabi.
The road To deMocracySlowly but surely, the uAE is taking tentative steps towards democracy� Since 2006,
half the country’s Federal National Council (FNC), a 40-person body established to
review and debate legislation, has been elected; the other 20 are appointed by each
emirate� But the FNC has no real power (it can only advise the government) and only
6689 people – less than 1% of Emiratis and a tiny fraction of the uAE’s total popula-
tion – have been hand-picked to vote for candidates from a list approved by the gov-
ernment� Eight FNC members are women, although only one was elected� While full
democracy in the uAE may be decades away, there are plans to grant the FNC some
legislative powers and eventually to give the vote to all uAE citizens�PoliTics &e
co
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