Bursting the Bubble

http://archive.gulfnews.com/articles/08/11/12/10258962.html

So after reading this article, I remembered a conversation my dad and I were having on our way to Abu Dhabi, it was just weeks since the U.S. market collapsed and I was speculating that there definitely will be an effect on the U.A.E. economy, yet many seemed to be skeptical, living in the “Dubai Bubble” as I would like to call it.

It is important to note that one of the reasons that this can be dangerous for U.A.E. in the long run is that it is a small country, dependant much on the global market. As you can tell from the article, real estate projects and construction (which is unbelievingly outrageously growing like termites) is going down amongst other sectors, this is a problem as the U.A.E. has no domestic economy to rely on, in contrast to let’s say Saudi, making it volatile to global conditions.

This will have a great impact on expatriates (us) with layoffs; people with no jobs will not be able to get loans hence, unable to pay for rent. The problem is that people are not really aware of these things until they hit and directly affect them, in my opinion, many people will start rethinking staying in the country, especially if the drawbacks outweigh the benefits of staying.

We definitely know that when layoff starts, it will be with the expatriates first of course the high quality work force on the top, that the economy is relying on, such as consultants etc, will probably be kept. In regard to nationals as from what I know and heard, a lot of them own stocks, which don’t look too bright either.