Can Dubai Come Back? (Opinion)

It’s official: the recession has hit the United Arab Emirates, especially Dubai, hard. Well, maybe not official official, but I’m convinced. It’s not always easy to tell what’s happening in that part of the world. With rampant intermingling of public and private funds and little transparency over who owns and owes what, appearances can be deceiving.

Most of the economic and business numbers have been pretty grim, but losses can easily be moved around, as in a game of three-card monte. For every big real estate project mothballed or scrubbed during the past six months, other highly visible projects like the Dubai Metro have continued apace, and new ones are still being announced. Even as property values started to spiral downwards and huge property companies began to look distinctly wobbly towards the end of last year, there was still so much cash sloshing around and so many big projects still being announced and built the picture was pretty unclear.

Dubai, which has built a gleaming 21st-century economy based on real estate, trade, and services literally on a patch of desert sand, has for so long defied common logic and perhaps even the laws of physics, and has produced such contradictory news since the onset of the financial crisis and recession, we might as well have tried to figure things out by reading our coffee grounds.