Dubai: Was the Desert Miracle a Mirage?

According to a British publication in February, more than 3,000 cars sit abandoned by foreigners in the parking lot at Dubai's airport. Based on this report, the world press has been quick to report the emirate's collapse. Some of the more pessimistic have gone as far as to state that the miracle of the desert is now practically a ghost city.

Yes, Dubai is in trouble, but the situation is not that dire. Examination of the airport's parking lot reveals the total number of cars deserted in the past year to be only 11. The city was alive and well in February and March, as active as any other international center, and it hosted many events, including the Rugby World Cup, the Dubai Tennis Championships, the International Poetry Festival, Desert Rock Festival, and the International Advertising Festival.

But aggressive investment in the past four to five years has driven its total debt to US$74 billion. That seems particularly huge given the small size of the city state, which has a population of 1.5 million, and the US$10 billion bailout package from Abu Dhabi and others. There are reports of unemployment exceeding 80 percent, mostly driven by foreigners. It is true that the majority of development projects have been halted and the number of visitors has dropped significantly. But who hasn't been hit by the financial crisis?