View From The Wadi - A Dubai Banker Speaks Out

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last updated: 26 May 2009

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Here's a post from a senior investment banker based in Dubai.

'The media has now jumped on the 'bashing Dubai' bandwagon. It seems to be the latest thing. Hell, some journalists have even penned critical articles from their cosy offices abroad, and haven't yet even ventured into the country!

I've no idea what type of 'journalism' comes from writing articles without visiting the place, but I guess it's the sign of a very journalistic desire to wait for something hugely successful to lose it's way before laying into it with all guns blazing. Just like the media does with celebrities.

And Dubai is a geographical celebrity - a Peter and Jordan or Posh and Becks of a place sat in the Middle East. It is WAG city for many, with it's shiny malls and 7 star hotels, and villas built in the ocean; a place of contradictions, which many find vulgar, yet others simply adore.

Like most everywhere else at the moment, Dubai is finding life tough. 4000 cars left by departing expats at the airport last Xmas; 405,000 work visas have been cancelled since October 2008! And as the local Emirati population enjoy full employment protection, it's safe to say that most of those 405,000 unfortunate souls have headed home by now if they haven't found another role locally, as you have just 4 weeks to exit Dubai if you lose your job once your employer has informed the authorities you are off the payroll.

Dubai is a place which is only 37 years old, yet has achieved so much. And, despite the economic downturn and the financial crisis which has seen foreigners flee and property values fall, the authorities here remain confident that prosperity will return, along with the tourists and the foreign workers.

With a reported $80bn of debt, but assets far outstripping that figure, Dubai is actually not badly placed. Key to the future is three main things - the steady and still rising price of oil, a pick up in the tourist industry which indirectly accounts for 32% of Dubai's income and, of course, an uptick in the financial services sector (Dubai's aims to be a leader - in the top five with New York, London, Tokyo and Frankfurt).

There is also a lot of pride at stake. Those who understand Arab culture will know that this so called 'experiment in the desert' isn't just about Dubai. It's about all Arab nations which rely on oil at the moment as their lead wealth generator. This won't be the case forever. They all need to find a way forward, and they all look at Dubai. It only has 3% income from oil reserves, so had no choice but to find new and different ways to generate it's wealth.

Remember the headlines last year - 'Dubai, Mumbai, Shanghai or Goodbye.' Those may not be the headlines any more, but it would take a brave man to bet that the good times won't return to Dubai some time soon'.

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