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In Dubai, riches take a tumble

Construction has been booming in Dubai, in the United Arab Emirates, drawing professionals from around the world, but the worldwide financial crisis is starting to catch up with the city.

Associated Press

Construction has been booming in Dubai, in the United Arab Emirates, drawing professionals from around the world, but the worldwide financial crisis is starting to catch up with the city.

For Americans seeking a brighter future, the rallying cry used to be "Go west, young man!

Now it's: "Go east!''

With jobs disappearing faster than you can say "credit default swap,'' many young professionals are heading to Asia and the Middle East. According to the New York Times, the number of American lawyers working abroad since last year is up 52 percent in Istanbul, 48 percent in Hong Kong, 23 percent in Saudi Arabia and a whopping 81 percent in Dubai in the United Arab Emirates.

Meanwhile, New York magazine recently found a bunch of young American capitalists enjoying life in Dubai and fielding calls from out-of-work friends back home. "In the last few months it's just snowballed,'' James Ruiz, a transplanted banker, told the magazine.

There's just one problem with this latest migration: The global financial crisis is hitting Asia and the Mideast, too. And few places are feeling it more than glitzy Dubai.

"How Dubai's fantasy skyline tumbled to earth,'' ran the headline on a Guardian of London story that noted many projects have been put on indefinite hold as real estate prices plunge as much as 50 percent. Embaar, the company behind the Burj Dubai, the world's tallest building, has seen its shares drop 80 percent.

It's yet another jarring turn for a place that 50 years ago was little more than a collection of pearl-fishing villages.

Knowing their limited oil reserves wouldn't last forever, the rulers of Dubai decided to make it a major tourism and financial center. Dubai now boasts some of the world's most striking office towers, luxurious hotels and over-the-top developments, including artificial islands that viewed from the air look like palm trees and a map of the globe.

But having been to Dubai several times — usually on the way to poorer, if newsier places like Afghanistan — I have never fully understood the appeal of this Disney-meets-Arabian Nights fantasy land. Sure, it's fun to wander through the gold souk, block on block of shops glittering with 18-karat gold bracelets and chains. And unlike many places in the conservative Muslim world, you can get a martini or a glass of wine.

But Dubai is hot — 110 in the summer, with humidity that makes Florida feel like a desert. And the traffic is terrible. Speeds on the superhighway between Dubai and neighboring Abu Dhabi go even higher than the temperature, with gruesome pileups the inevitable result.

For those of us who like authentic travel experiences, it's also depressingly rare to find a native Emirati, let alone any trace of local culture or heritage. Most of Dubai's 1.4-million residents are Bangladeshis, Sri Lankans and other foreigners who staff the banks, drive the cabs and build all those architectural marvels like the sail-shaped Burj al Arab, the world's tallest hotel.

Dubai's spectacular growth — fueled in good part by oil money from elsewhere in the region — is making for a spectacular collapse as oil prices plunge. But the emirate has its advantages.

For one thing, it is a veritable oasis of stability. That means a lot of rich people from Iraq, Iran, Pakistan and other troubled countries have business interests in Dubai, helping ensure its role as a financial and banking center.

Dubai also is a major crossroads between East and West.

"This is the area through which much of the global trade and manufacturing is routed,'' says Vanessa Rossi, an expert on international economics at London's Chatham House. "They've always had a large franchise in this kind of world trade logistics and I don't think that franchise goes away.''

And while the new Atlantis resort, with its $35,000-a-night rooms, may have opened at an inauspicious time, it seems there are many people (unlike me) who see sterile, sweltering Dubai as an ideal vacation spot.

"From a European perspective, we have a lot of gray winter weather even in Spain and the Mediterranean,'' Rossi says. "So if you're going for winter tourism there's always been a large opportunity for these farther south regions to grab part of that market. In terms of sun, sand and sea, Dubai is a logical place to go.''

For Americans, though, it may be yet another place where good jobs are fast drying up.

Susan Taylor Martin can be contacted at susan@sptimes.com.

In Dubai, riches take a tumble 12/06/08 [Last modified: Monday, December 8, 2008 11:48am]

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