By Sumayyah Meehan MMNS Middle East Correspondent
The news coming out of Dubai is not good. In fact, itâ€™s downright alarming. Layoffs are coming just as fast and furious as they are over in America with employers trimming expenditures as deftly as a surgeon with a razor-sharp scalpel. More than half of the current building projects in the emirate have either been cancelled completely or put on an indefinite hold. The malls are just about empty and the streets resemble somewhat of a ghost town. Tourism is down and not expected to rise any time soon. The government is even planning to implement a tax system, which is unheard of in what has always been considered the freest market in the Middle East. Dubai is just the latest victim in the worldâ€™s economic crisis to bite the dust, putting a giant dent in an otherwise stunning armor.
For years, Dubaiâ€™s economic growth has boggled the mind with dizzying feats of architectural design going up seemingly overnight and unprecedented interest from global investors looking to get rich quick. As a result of the economic boom, skilled laborers were imported from all over the world to ensure that Dubaiâ€™s growth continued at its Earth-jarring pace. Now these very laborers fates lay in the balance of a financial crisis that took everyone by surprise. The housing market is already down by 4% and even the prices for rented properties are plummeting. The combination of rigid credit markets, negative commentary from global investors and spooked buyers has created a perfectly catastrophic storm in the region. The effects of which are expected to ripple straight across the GCC with countries like Kuwait already seeing the tides roll in.
Citizens and expatriates of the Dubai find themselves as strange bedfellows entrenched in the turmoil created by giant corporations and â€˜big businessâ€™. The fear of joblessness and an insecure future resonates with all humans, transcending the barriers of language, race and socioeconomic standing. There is a vivid sense of a collective holding of the breath to see what happens next. Everyone is gripping their wallets tighter and nipping unnecessary expenditures from the monthly budget. The initial impact of the crisis is expected to reach critical mass after the first quarter, as the bulk of the foreign labor force makes a quick exit back to their home countries thus adding fuel to the fire of a decline in the demand for goods and services.
There is, however, a sliver of light at the end of the tunnel, with at least one group of people exuberant over the current credit crunch. Emirati nationals, who make up a mere 10% of the kingdomâ€™s population, see the exodus of expatriates as a means to a cultural end. Many Emiratis have felt a loss in their cultural traditions over the years as the cultures of foreigners in the country have taken precedence. Nationals see the expulsion of foreign labor as a chance to reinvigorate their culture and give the best jobs to Emiratis. However, without foreign spending and investment to sustain the local economy, Emiratis can look forward to cuts in the social welfare system that has provided nationals with free education, health care and other monetary perks for decades.