Dreams of Dubai Turning Into a Nightmare For Foreign Workers as Recession Hits Hard
All the stories about Dubai in the past few years have been so exciting: the palm-shaped island, the indoor ski slopes, the huge shopping malls the sci fi architecture all combined to make it a hot destination for tourism and investment capital. But the recession has finally hit
Dubai. Large numbers of the foreign workforce are being layed off in droves as the space age construction sites lose funding. If the workers don't find a new job quickly, their visas aren't renewed and they have to leave the country. Most would rather stay and get a new job, but jobs are scarce. The parking lots at the airports are filled with nice cars that foreigners had to leave behind. And in Dubai, if you don't pay off a loan, you go to debtor's prison.
Sofia, a 34-year-old Frenchwoman, moved here a year ago to take a job in advertising, so confident about Dubai's fast-growing economy that she bought an apartment for almost $300,000 with a 15-year mortgage.
Now, like many of the foreign workers who make up 90 percent of the population here, she has been laid off and faces the prospect of being forced to leave this Persian Gulf city — or worse.
"I'm really scared of what could happen, because I bought property here," said Sofia, who asked that her last name be withheld because she is still hunting for a new job. "If I can't pay it off, I was told I could end up in debtors' prison."
With Dubai's economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills). Some are said to have maxed-out credit cards inside and notes of apology taped to the windshield.
The government says the real number is much lower. But the stories contain at least a grain of truth: jobless people here lose their work visas and then must leave the country within a month. That in turn reduces spending, creates housing vacancies and lowers real estate prices, in a downward spiral that has left parts of Dubai -- once hailed as the economic superpower of the Middle East -- looking like a ghost town.
No one knows how bad things have become, though it is clear that tens of thousands have left, real estate prices have crashed and scores of Dubai's major construction projects have been suspended or canceled. But with the government unwilling to provide data, rumors are bound to flourish, damaging confidence and further undermining the economy.
Instead of moving toward greater transparency, the emirates seem to be moving in the other direction. A new draft media law would make it a crime to damage the country's reputation or economy, punishable by fines of up to 1 million dirhams (about $272,000). Some say it is already having a chilling effect on reporting about the crisis.
What a nightmare. Dubai is friendlier to westerners than many of its Middle Eastern neighbors and for awhile there it looked like it was going to be the city of the future. But if the economy doesn't turn around quickly, Dubai's downward spiral may be unstoppable.
There are even rumors that the fabulous Palm Jumeira is sinking into the ocean and that when you turn on the taps in the luxury hotel, only cockroaches come out. Of course, that's only a rumor, but with the government cracking down on independent reporting people are going to think the worst.
